Also known as: proxy solicitation · solicitation of proxies · solicitations of proxies · proxy rules · soliciting proxies
Written by attorneys · grounded in primary & secondary sources — see below
Communications or materials distributed by a corporation or its shareholders to obtain voting authority from other shareholders for use at a meeting of shareholders. The process commonly arises in director elections and is subject to procedures and conditions set by corporate bylaws.
Select any source to read its text and confirm it supports the definition.
Pacific Bank adopts a bylaw requiring reimbursement of reasonable expenses for qualifying shareholders who solicit proxies in director elections. Pavel Petrov, holding the required stake, conducts a solicitation campaign and incurs documented costs. After the election, the corporation must reimburse those expenses under the bylaw terms because the record date followed adoption.
Milliken, a privately held corporation, conducts a shareholder vote without federal proxy filing requirements. Preston Pratt challenges the adequacy of disclosures made outside any proxy solicitation. The court declines to impose extra disclosure duties because no proxy solicitation triggered the federal regime.
Chris-Craft pursues a cash tender offer for control of Piper Aircraft. The target responds with proxy solicitations to rally shareholder support against the bid. The Supreme Court examines whether the Williams Act regulates the tender offer separately from the proxy solicitations already governed by section 14.
Shareholders of J. I. Case allege that a merger was approved through a misleading proxy statement. The complaint asserts that the false solicitation violated section 14(a) and deprived them of preemptive rights. The Court recognizes an implied private right of action to enforce the proxy rules.
Virginia Bankshares seeks shareholder approval of a merger through proxy materials that omit certain board motivations. Sandberg, a minority shareholder, claims the omissions rendered the solicitation misleading. The Court analyzes whether the undisclosed information meets the standard of materiality for proxy liability.
TSC Industries distributes proxy materials recommending a merger to its shareholders. Northway challenges the solicitation as materially misleading for omitting certain facts about the transaction. The Court holds that an omitted fact is material only if there is a substantial likelihood a reasonable shareholder would view it as altering the total mix of information.
Yes. The Model Business Corporation Act expressly authorizes bylaws that require the corporation to reimburse expenses a shareholder incurs when soliciting proxies or consents in connection with director elections, subject to procedures and conditions the bylaw itself sets.
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…we did not require proof that material omissions or misstatements in a proxy statement decisively affected voting, because the proxy solicitation itself, rather than the defect in the solicitation materials, served as an essential link in the transaction. See Mills v. Electric Auto-Lite Co., 396 U. S. 375, 384-385 (1970). The modern…
…on § 27 of the Act. They alleged: that petitioners, or their predecessors, solicited or permitted their names to be used in the solicitation of proxies of Case stockholders for use at a special stockholders’ meeting at which the proposed merger with ATC was to be voted upon; that the
…Rogers v. Sherman Oil Co. , Del.Super., 117 A. 122, 126 (1922). Where there is no inequitable conduct, and a board eschews the solicitation of proxies
…held that complaining shareholders proved their case under § 14 (a) of the 1934 Act by showing that misleading statements in a proxy solicitation
…as a means for achieving corporate takeovers. Prior to the 1960's, corporate takeover attempts had typically involved either proxy solicitations
Yes. Bylaws may impose reasonable procedures and conditions, such as minimum ownership thresholds and holding periods, before a corporation must include a shareholder nominee in its proxy materials for a director election.
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No. A bylaw may cap reimbursement at a percentage of the corporation's average annual revenues and add requirements such as pre-approval of budgets and post-election audits, provided the conditions promote an orderly process.
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The board's later bylaw controls for an election if adopted before the record date. The statute permits the board to establish conditions for a reasonable process even after shareholders propose broader access rules.
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No. Once a shareholder satisfies the stated procedures and supplies the required written affirmation of intent, the corporation must include the nominee. It may not add unwritten substantive tests based on extrinsic evidence of prior behavior.
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