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Seminar on May 16

(Summary Reprort By Wang Jun Qi)
 
Time:17:30~18:30,May 16, 2011
Place:the bench in the campus
Moderator:Wang Junqi
Member:Gong shu, Liao Zhengyong, Ma HongJun


PartⅠ Presentation

Scope of the presentation: Chapter 6


Topics:
1. What does it need when determining if the vote is sufficient to take an act?What vote is required for the shareholders to take an act?

2.you can choose a topic from cumulative voting and voting by proxy, and say something about it.




We discussed the chapter six, we focused on some nuts-and-bolts issues of how shareholder do what they do in the following .
Part one: our discussion
Question 1: What does it need when determining if the vote is sufficient to take an act? What vote is required for the shareholders to take an act?
Though studying the chapter six, I think the answer is in the following. We look at the number of shares, and not the number of shareholders. To have a quorum, a majority of the outstanding must be present at the meeting. once there is a quorum, the answer depends on the issue being considered. first, if the shareholders are electing directors, all that is needed is a plurality .second, for routine matters that may be put up for shareholder vote, most states today require only a majority of the votes actually cast on the issue .third, if shareholder are voting to remove a director before her term expires, most state require the affirmative vote of a majority of the shares entitled to vote. fourth, if shareholder are voting to approve a fundamental corporate change, such as a merger, most states require the affirmative vote of a majority of the shares entitled to vote.
Question 2: you can choose a topic from cumulative voting and voting by proxy, and say something about it.
There is a lot of knowledge in this section; everyone says some important things. I want to say about the difference between straight and cumulative voting. With straight voting, each position on the board is filled in a separate election at the meeting. The holder of the majority of shares wins all seats. The difference between cumulative and straight voting may be vividly illustrated by the deadlock situation where all shares are owned equally by two shareholders, a deadlock is inevitable. No one is elected because no one got more votes than anyone else. With cumulative voting, however, the shareholders do not vote seat-by-seat. Rather, there is one at-large election. The shareholders cast their votes in one election, and the top three vote-getters are elected to the board. and cumulative voting has a story emotional appeal.
Part two: study notes
There are also some important parts in the chapter six. I want to list the basic structure: to vote or to receive a dividend ,a shareholder must be the “record owner” as of the “record date”. The shareholders act as a group, which means that they usually must act through votes at meetings .much of this chapter deals with the mechanics of voting at such meeting, including the requirement of a quorum and specialized topics of cumulative voting, voting by proxy and ways to pool shareholder voting power. We also address transferability of stock, including the possible limitation of ones ability to transfer to outsiders and provisions requiring a buy back of stock upon specified event, at last we discuss the shareholders right to inspect corporate books and records.?


Liao Zhengyong:
Question one:
When determining if the vote is sufficient to take an act,we look at the number of shares,not the number of shareholders.
This is first point,second point,what vote is required for the shareholders to take an act?To answer this question,we must get to know what issue will be considered first,it depends.
Firstly,if the shareholders are electing directors,it is quiet simple,the highest vote-getter for each cast wins,even if he or she does not get a majority of the votes cast.
Secondly,as for routine matters, most status today require only a majority of the votes actually cast on the issue.
Thirdly,if shareholders are voting to remove a director before her term expires,most status require that affirmative vote of a majority of the shareholders entitled to vote.
Last but not the least,if shareholders are voting to approve a fundamental corporate change,most status require the affirmative vote of a majority of the shares entitled to vote.
Ok,this is what I want to say about question one.
Then,question two:
Here, I want to talk something about voting by proxy,because compared with cumulative voting,voting by proxy was used more widely.
In publicly-trade corporations ,nearly all shareholders voting is by proxy.The companies hold meetings,but the vast majority of shares counted as present for quorum purposes and voting are voted by proxy.
Ok,I want to emphasize that the proxy appointment must be in the way of writing,and in most status,appointment of a proxy is effective for 11 months unless the document status otherwise.The theory is that a new appointment form should be executed before each annual meeting.
Another important question is that"can a proxy appoint be made irrevokeable".Generally speaking,the answer is "No".But,there appears a new theory that if it is"coupled with an interest",the proxy has some interest in the stock other than the interest in voting as the shareholders agent,the proxy appointment can be irrevocable.
Finally,I want to remind you to pay attention to the limitation of the use of voting by proxy because voting by proxy only used for shareholder voting,it is not allowed for director voting. So,proxies among directors for voting as directors are invalid.
Ok,that is all,thank? you !

Gongshu:
Question 1: What does it need when determining if the vote is sufficient to take an act ?what vote is required for the shareholders to take an act?
When determining if the vote is sufficient to take an act, we look at the number of shares. Each outstanding share is entitled to one vote, and a majority of the outstanding shares must be present.
The vote required for the shareholders to take an act depends on the issue being considered. When electing directors, the vote needed is a plurality. For routine matters, most states require only a majority of the votes actually cast on the issue. What’s more, when shareholders are voting to remove a director or approve a fundamental corporation change, most states require the affirmative vote of a majority of the shares entitled to vote.
Question 2: you can choose a topic from cumulative voting and voting by proxy, and say something about it.
Voting by proxy refers to an agency relationship by which the shareholder, as principal, engages an agent and the proxy to voter for her. In publicly-traded corporations, nearly all shareholder voting is by proxy, because large companies with thousands of shareholders would find it impossible to get enough shareholders together to constitute a quorum.
The proxy appointment must be in writing, and is usually effective for 11 months. What’s more, the appointment is revocable at the pleasure of the shareholder, while the Supreme Court established that an appointment will be irrevocable if it is “coupled with an interest.” And in recent decades, there has been a trend toward codification about this doctrine.?

Ma Hongjun:
1. For the first question, I think shareholders must act as a group. And an individual shareholder has no power to take any act entrusted to the shareholders. That means the shareholders will act at a meeting, which must satisfy statutory requirements for notice, quorum and voting. In my opinion, statutes also authorize shareholders to take action by written consent without holding a meeting. And most of these statutes require unanimity that all shareholders agree in writing to what act will be taken without a meeting. Usually, some states have authorized an act by the written consent of the holders of the number of shares that would be needed to take an act if a meeting were held.
2. For the second question, I just want to describe voting by proxy. In my opinion, shareholders can vote by proxy. This refers to an agency relationship by which the shareholder engages an agent, the proxy, to vote for her. In publicly-traded corporations, nearly all shareholder voting is by proxy. But large companies with thousands of shareholders and over a billion outstanding shares would find it impossible to get enough shareholders together to constitute a quorum. So at those meetings the cast majorit of shares counted as present for quorum purposes and voting are voted by proxy. And every state permits shareholders to vote in person or by proxy. The proxy appointment must be in writing and in most states appointment of a proxy is effective for 11 months unless the document states otherwise.
Finally, we emphasize that appointment of proxies is permitted for shareholder voting. But it is not allowed for director voting. Public policy requires that directors exercise their independent judgment in voting. So proxies among directors for voting as directors are invalid.



 
 




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