Law Summary

1. Voting by Mail

• Legal Principle/Provision: This section outlines the procedures for stockholders to vote at stockholders' meetings by mail or in person.
• Key Definitions Introduced:
  • Proxy: An individual designated by a stockholder to vote on their behalf.
• Important Requirements/Procedures:
  • Stockholders can vote either in person or by proxy.
  • Proxies must be dated; if undated, the date of postmark or electronic dispatch will be considered.
  • In cases of multiple proxies from the same stockholder, the latest time indicated will prevail if they are undated.
  • If a stockholder designates several proxies, the number of shares each proxy represents must be specified.
• Relevant Timeframes/Deadlines: Proxies must be dated; the postmark or electronic dispatch date applies if undated.
• Consequences: Proxies that do not specify the shares will lead to equal distribution among proxies.

2. One Share-One Vote Policy

• Legal Principle/Provision: Establishes that each share of common stock is entitled to one vote, with voting based on the number of shares held.
• Key Definitions Introduced:
  • Common Shares: Shares that carry full voting rights.
• Important Requirements/Procedures:
  • Voting must be based on the number of shares, not the number of stockholders.
  • Corporations cannot issue multiple voting or non-voting shares.
• Relevant Timeframes/Deadlines: This provision is effective immediately upon adoption.
• Consequences: Violations can result in the inability to limit voting rights inappropriately.

3. Outstanding Capital Stock

• Legal Principle/Provision: Preferred shares retain voting rights in specific key corporate actions, ensuring their participation in significant corporate decisions.
• Key Definitions Introduced:
  • Outstanding Capital Stock: Includes preferred shares as defined under Section 137 of the Corporation Code.
• Important Requirements/Procedures:
  • Preferred shares cannot be deprived of voting rights in certain scenarios, including amendments to articles of incorporation and corporate mergers.
• Relevant Timeframes/Deadlines: This provision is effective immediately upon adoption.
• Consequences: Preferred shares must be allowed to vote in stipulated corporate actions; failure to comply may result in legal challenges.

Key Takeaways

• Stockholders can vote in person or by mail, with specific procedures for proxy voting outlined.
• The principle of one share-one vote is strictly enforced, prohibiting multiple voting rights per stockholder.
• Preferred shares retain voting rights in critical corporate decisions, maintaining their influence in corporate governance.
• This Memorandum Circular is effective immediately and aims to enhance transparency and equity in corporate voting practices.