How to Write a Proxy Agreement to Vote at Shareholder or Board Meetings?
When someone buys a company’s shares, they’re not just getting a piece of the profits. They’re also getting a say in how the business runs. Shareholders can use it by voting at meetings where organizations make crucial decisions.
However, only some shareholders can go to these meetings. So, companies let them vote through someone else called a proxy. A proxy agreement lets someone else vote for the absent shareholder.
If you’re unsure how to write a proxy letter, you can read this article to learn all about it.
What Is a Proxy Agreement?
A proxy agreement is when one person permits another to do legal stuff for them. For instance, a shareholder might let someone else vote for them.
It might sound impossible to be in two different places simultaneously, but it’s not! You can go to your best friend’s wedding and still vote for the new leaders of your company. Just write an agreement letting someone you trust, like your secretary, go to the meeting and vote for you.
You can write a proxy letter, the official paper document for the company, or group members to get out of things. This letter lets someone else take your spot at a meeting and do the same things you would, like voting and sharing ideas.
How Can a Proxy Agreement Benefit My Business?
A proxy example letter allows businesses to represent themselves at crucial meetings or decision-making occasions via an authorized firm or individual.
They don’t need to send their staff members if they are busy. Instead, they can have someone fill in for them to vote or conduct other activities on their behalf.
Organizations assign proxies to save time and resources. Also, it lets them be active in many places without hassles.
What Should Be Included in a Proxy Agreement
Here are some usual parts you’ll find in these contracts. You can check out the proxy sample agreement below to see how they’re connected.
- Proxy
- Exercise of Voting Rights
- Representations and Warranties
- Liability for Breach of Contract
- Remuneration for Proxy
- Force Majeure
- Applicable Law
- Effectiveness and Termination
- Settlement of Disputes
- Proxy Term
- Miscellaneous
There is no one proxy agreement letter format you must follow. Most firms have templates to customize and send their contracts to other parties.
You may discuss the voting rights, applicable legal sections, and for how long the proxy will be in effect. However, they are optional elements based on the letter’s purpose and occasion.
How to Write a Proxy Letter for a Board Meeting
It is simple to learn how to write a letter or proxy. It’s like writing any other business letter.
A basic proxy agreement only has one page. Typically, a letter has a title, date, address, greetings, primary part, and signature. The contract has all of these, but it also has a legal agreement that affects the owner. To help you write one, follow the steps below.
Step 1: Check the Rules in the Corporation’s By-laws
Start by reading your corporation’s rules to see if you can vote by proxy. Also, look for extra instructions on how to write the proxy letter. Some groups have special rules, like using specific words or parts.
Some groups use a proxy form. Members fill it out and send it to the organization before the meeting starts. If the rules don’t discuss proxy voting, ask the organization’s leaders to be sure.
Step 2: Mention the Date
A proxy letter is a formal contract. Putting the date in it is highly crucial. It helps us check the paper or agreement later if we need to. When we write business letters, we usually write the date like this: day/month/year, like “29 May 2020.” The date should be the day we send or email the letter.
Step 3: Add Your Name, Address, and Job Title
In the first part of a proxy agreement, say who you are, where you live, and your job in the company. For example, “I’m John Doe, living at 123 Robertson Street, and I’m a member of ABC Corporation with 10,000 shares of stock.”
Step 4:Write the Proxy’s Full Name
The proxy is the one who will stand for you and vote for you at the meeting. Building on the example, you could say, “I, John Doe, living at 123 Robertson Street and a member of ABC Corporation with 10,000 shares of stock, choose Mary Grace as my proxy.”
Step 5: State the Proxy Assignment’s Purpose
If you want the proxy to vote for you at a board meeting, say what the meeting is about and when it is. You could write, “I give my proxy the power to vote for me at the board meeting to pick new officers on June 22, 2020.”
Step 6: Sign the Proxy Agreement
Lastly, mention your full name at the end of the proxy agreement and sign it above your name. Signing means you understand and agree to what’s in the letter. Once you sign it, the letter is official and can be enforced by law unless you cancel it.
Proxy Agreement Sample
Now that you know how to write proxy contracts, here is a sample of proxy letter to help you create one.
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Proxy Agreement Letter Template
[Place on Letter Head] Date: April 20, 2024 Mr. James Brody Community Development – Vice President New York Transportation Inc. Star Avenue Building 189 1st ST New York City, NY, 10005 Subject: Temporary Proxy Contract for the New York Transportation Inc. [Policy Committee] Regarding the New York Transportation Inc. policy committee meeting on [Date and time], [Name and title of your organization’s proxy] will represent us. They can talk and vote for [Organization name] during the meeting. Sincerely, [Name] [Title] [Signature] |
The above template is basic. You can add more details, similar to the proxy example letter below:
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CORPORATE PROXY AGREEMENT SAMPLE
CALIFORNIA SCIENCE FICTION CONVENTIONS. I, [Your Name], a Director, choose [Proxy’s Name] as my proxy for the Board of Directors of California Science Fiction Conventions. If [Proxy’s Name] isn’t available, I choose [Backup Proxy’s Name].
By choosing this proxy, I cancel any proxy choice I made before. This proxy choice is valid for the Directors’ Meeting of the Corporation on [Date], any time that meeting gets delayed, and if needed, for any other meetings on that day for electing officers and any delays for those meetings. The proxy can fully act for me, voting on everything at the meeting(s) where this proxy is used. They can vote however they think is best, but for specific things, they must vote like this: [list specific instructions]. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Date Signed: __________________ Vice President: ___________________________________ |
Additionally, businesses can provide proxy options using the following proxy letter format:
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PROXY LETTER SAMPLE
____________ ABC ASSOCIATION, INC. PROXY ___________ ANNUAL MEMBERSHIP MEETING I choose [Name of Proxy] or, if no one is named, the Secretary of the Board of Directors as my official proxy. They will go to and represent me at the yearly meeting of the Association on [date] at [location] at [time], or if the meeting is delayed. If the chosen proxy can’t or won’t help, they can pick someone else using the Proxy Holder Substitution form. I cancel any other proxy I gave before for the _____ Meeting of the Association. Any other proxy I gave without a date is also canceled. (CHECK ONE SECTION ONLY)
This proxy is only for making sure enough people are at the specified meeting or any delays. No one can use it to vote for me.
This proxy is for ensuring enough people are at the specified meeting and there aren’t any delays. The proxy should maintain discretion.
This proxy is for making sure there are enough people at the specified meeting. It also lets my proxy vote for me on anything that comes up during the meeting or delays during its initiation. There are ______ (__) positions available. These are the nominees we know about. We’ll also take nominations on the night of the elections. I shall tell my proxy to vote for the marked candidates in the director election. They can also decide in a runoff election if any of these candidates are involved, or if there’s a new nominee from the floor. ______ Tessa Hank ______ Ralph Ronald ______ Frank Fernando This _____ day of ____________ , 20__. Instructions: Each unit/lot can only use one proxy. If an owner comes to the meeting, this proxy becomes invalid. Only one member per unit/lot needs to sign the proxy. Turn in this proxy at the meeting or send it to the Association’s managing agent by mail or fax before 11:59 p.m. the day before the meeting. If someone hasn’t paid what they owe to the Association by the meeting date, they can’t vote. Any ballot from someone who can’t vote won’t count toward the total votes needed. If a proxy form is incomplete, has too many votes, or is hard to read, it might not be accepted for the meeting or any related votes. ___________________________________________________________________ [Owner Name] [Owner Signature] [Unit(s)/Lot(s)] If the person named as Proxy Holder can’t or won’t help, they can choose someone else to be the Proxy Holder. They should write the new person’s name here: ____________. Proxy Holder Signature: ________________ |
Here is an example of a proxy letter, wherein you assign a proxy for a different task than voting or attending a meeting:
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PROXY LETTER FOR AUTHORIZATION SAMPLE
Official Authority Memorandum TO: IOH-DC Transportation Subsidy Benefit Office From: SUBJECT: Allowing one supervisor in the Government to approve benefits at a higher level in the TRANServe Transit eApp. I, [Your Name], permit [Authorized Person’s Name] to approve Transportation Subsidy Benefit Applications for me. I also ask that the supervisor below be given higher approval rights in the Transit Benefit Electronic Application (eApp/TRANServe) system, so they can act as my proxy later. I appreciate your time and cooperation in this matter. Sincerely |
Different Types of Contract Proxies
When making a proxy letter, you must decide what the proxy can do for you. What tasks will they handle on your behalf, and how will they do them? You can give them broad or specific powers. Proxies are similar to Power of Attorney and can categorized into two groups:
General Proxy
To put it simply: Whatever you can do at the meeting, your proxy can do. With a general proxy, you’re letting your proxy vote on anything on the Board Meeting Agenda. But some groups don’t like general proxies. Their rules say only actual members can vote on specific issues.
Specific Proxy
It is also known as a limited proxy. The proxy can only do what’s written in the proxy letter. List the specific things your proxy can vote on during the meeting. For instance, the letter might only let the proxy vote against increasing membership. They can’t vote on anything else.
Direct Proxy
A direct proxy uses a Communication Plan, like phone or email. You talk directly to the proxy, telling them how to vote in ‘real-time’. The proxy tells the board your decisions at the meeting. You’ll stay updated, and the proxy can respond quickly. Unlike other proxies, even if you’re not at the meeting—you can still fully participate. Hence, please ensure to mention the specifics in your proxy agreement sample or template beforehand.
Quorum Proxy
This type of proxy doesn’t have any authority or power. Businesses choose them to attend the board meeting to mark their presence on the Attendance Sheet. If there aren’t enough people for the meeting to start, the board might postpone to another day. A quorum proxy helps prevent this from happening.
Also Read: Notice of Cancellation Letter TemplatePrimary Rules When Issuing a Proxy Agreement
A proxy agreement is like a binding contract. For it to count, it has to follow some rules. You must write it down, have the date, and sign it.
The letter should say how long the proxy lasts and what it’s for. If the owner or shareholder gives more than one proxy, only the latest one counts. The old ones are automatically canceled.
Revoking Proxies
It’s normal for people to change their minds; it’s just how we are. You can cancel a proxy arrangement and make a new one. There’s no law against it. There are different ways to cancel a proxy.
One way is to tell the secretary of the company or group using another proxy letter sample with a revocation notice. You can email the day before the meeting saying you want to cancel the proxy and then give a new one with your new choice.
You can also cancel a proxy by attending the meeting and voting in person. It shows you don’t need the proxy anymore. But remember, you have to cast the vote yourself, not through the proxy. If the proxy votes, it means- the proxy is still valid, and their vote counts.
Finally, you can replace a proxy you gave before with a new one. For example, if you first picked Mr. A as your proxy but then sent another letter choosing Mr. B instead, the old proxy with Mr. A is canceled. So, you must write the date on your letter to know the latest authorization.
What Are the Potential Risks of Not Having a Proxy Agreement?
Businesses risk missing significant meetings or not participating in specific tasks if they don’t use a proxy letter sample and enter into a contract. Since voting matters for corporate shareholders, staying prepared before these meetings is essential.
Also, it can impact the business growth because you cannot represent the brand anywhere. Shareholder meetings are an excellent way to spread awareness, and you might miss out on them!
Another risk is encountering disputes or conflicting interests among stakeholders. They might question your operations and demand answers. Hence, leveraging a proxy letter example to get an agreement beforehand is significant to companies in all sectors.
Also Read: Triggered Direct Mail AutomationHow Can PostGrid Allow You to Send Proxy Agreements?
Firms need a reliable and confidential method of sending a proxy letter for authorization sample to intended recipients. Of course, direct mail is at the top of the list. It lets companies send the contracts using the postal services.
Since the law legally protects postal mail, you can be confident that your agreements do not end up in the wrong hands.
PostGrid’s direct mail API lets you leverage the U.S. postal services in the best possible way. You can use our in-built templates to create the proxy agreement sample and make changes until the last minute. Don’t stress about contacting printing vendors and sending files back and forth for production.
Also, we ensure your envelopes go to the correct delivery address. Thus, you can maintain confidentiality and protect private data.
You can track the mailers using your dashboard and get campaign analytics. The best part is you may select a plan that best suits your needs!
Sign up to experience the features yourself and send the proxy agreement to whoever you need!
FAQs
How do I vote using a proxy?
A few months or days before voting starts, the company will send you a letter or email with all the details. It will tell you what you’ll be voting on at the meeting and if you can vote by proxy. Please recheck your organization’s rules if it doesn’t say anything about proxy voting. They usually explain how to do proxy voting. Usually, to vote by proxy, you need to write a letter permitting someone else to vote for you at the meeting.
Who can you appoint as your proxy?
A proxy can be anyone, not just shareholders or members of the company. But because a proxy is like a representative, it should be someone you trust. According to the law, a proxy should be old enough and able to make agreements.
What are the rights of a proxy?
The proxy has the same rights and duties as the members or shareholders at the meeting. They can vote, choose not to vote, raise concerns, and share their thoughts.
What makes a proxy lawful?
In the US- there’s no law against using proxies for voting in board meetings or elections. Usually, you can use proxies, but a company’s rules might limit how you use them.
How can a proxy agreement protect my interests in business transactions?
A proxy agreement sample ensures you appoint a trusted individual to attend meetings, vote, and share opinions on your behalf. It minimizes the risk of organizations making decisions without your input, which can go against your interests. Also, proxy contracts maintain business efficiency and transparency.
How can I ensure that my proxy agreement is legally binding and enforceable?
Always seek legal advice when entering into a proxy contract to ensure it is enforceable. Also, try including all necessary elements and add a witness to make the agreement more authentic.
Are proxy votes confidential?
Yes. Usually, they’re private. In a company meeting, people vote via a ballot. It keeps the votes by shareholders or their proxies private. After all the votes are in, they’re counted and announced. Unless someone says who they voted for, it’s not known.
