PROXY AGREEMENTS Clause Samples

PROXY AGREEMENTS. Under the proxy agreement, the pooling or voting agreement goes one step further113. Besides the existence of an agreement covering how the shareholders are suppose to vote certain matters, shareholders create irrevocable proxies which vest the power to vote their shares in one or more persons, who could be either shareholders or other persons114. The reason for the further step is a way to secure that the shares will be voted according to the terms of the agreement without delays and uncertainties115. Historically, the idea of an irrevocable proxy has been questioned116. However, statutes have established the requirements for an irrevocable proxy to be enforceable117. The requirements solve clearly many of the questions used in the past to challenge irrevocable proxies118. The statutory requirements are: i) the proxy must be in writing;119 ii) the proxy must be signed or must contained information from which it can be determined that the writing document was authorized by the shareholder;120 iii) the proxy will have a time limit, unless it provides for a longer period;121 iv) the proxy is irrevocable if it states that it is irrevocable and it is coupled 113 O’NEIL and ▇▇▇▇▇▇▇▇, supra note 6, at 5:8-9. 114 Id. 115 Id at 5:64-65 (commenting that “[a] proxy may be advantageous in a voting agreement to facilitate the carrying out of the agreement and to avoid the possibility that a suit for specific performance, with the attendant uncertainties and delays, will be necessary to implement decisions reached under the agreement”). (1) the right to vote is an essential attribute of stock, and consequently the owner cannot irrevocably detach it form the shares; irrevocable proxies are void as against public policy in that they unreasonably restrict the free alienability of the shares by preventing the purchaser form exercising one of the essential rights of stock ownership, namely, the right to vote the shares; (3) some agreements utilizing irrevocable proxies are indistinguishable in affect from voting trust and should be invalidated if they do not comply with the requirements of the voting trust statute; (4) a proxy, being an agency, is revocable unless coupled with an interest, and that is so even though it is stated to be irrevocable; and (5) an irrevocable proxy violates a statutory limitation on the duration of proxies or a statutory rule providing that all proxies shall be revocable.”). 117 See supra note 104. 118 Id. at 5:75-78. 119 See MODEL BUS. CORP. ACT...

PROXY AGREEMENTS. All ▇▇ ▇▇▇▇▇▇▇▇▇ shareholders listed in Item 11 of the 2004 Form 10K, filed June 22, 2005, shall sign a limited proxy statement for eighteen months duration allowing management of New Slide View day to day control of New Slide View. Such proxy rights shall NOT include: (i) the right to increase or decrease capital stock or to engage in a forward or reverse split of the capital stock of New Slide View; (ii) the right to issue New Slide View stock to management of Slide View and its Board beyond the amounts set forth in this Letter of Intent; (iii) the right to sell any of the intellectual property assets of New Slide View, or more than 25% of the total assets of New Slide View excluding intellectual property assets of New Slide View; ; (iv) the right to encumber any of the intellectual property assets of New Slide View by virtue of a security interest, lien or other agreement to the benefit of any member of New Slide View management or its Board, or third party related thereto; (v) the right to encumber the total assets of New Slide View excluding the intellectual property assets of New Slide View by virtue of a security interest, lien or other agreement to the benefit of any member of New Slide View management or its Board, or third party related thereto;