Colorado § 7-107-203 - Proxies.

§ 7-107-203. Proxies.

(1) A shareholder may vote the shareholder's shares in person or by proxy.

(2) Without limiting the manner in which a shareholder may appoint a proxy to vote or otherwise act for the shareholder, the following constitutes valid means of appointment:

(a) A shareholder may appoint a proxy by signing an appointment form, either personally or by the shareholder's attorney-in-fact.

(b) A shareholder may appoint a proxy by an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization, or similar agent duly authorized by the person who will be the holder of the proxy to receive the transmission. The transmission must set forth or be submitted with information from which it can be determined that the shareholder authorized the electronic transmission. If it is determined that an electronic transmission is valid, the person making that determination shall specify the information upon which the person relied.

(3) An appointment of a proxy is effective against the corporation when received by the corporation, including receipt by the corporation of an appointment transmitted pursuant to subsection (2)(b) of this section. An appointment is valid for the term specified in the appointment form and, if no term is specified, is valid for eleven months unless the appointment is irrevocable under subsection (5) of this section.

(4) A copy, facsimile, telecommunication, or other reliable reproduction of the document, including any electronic transmission, created pursuant to subsection (2) of this section may be substituted or used in lieu of the original document for any and all purposes for which the original document could be used if the copy, facsimile, telecommunication, or other reproduction is a complete reproduction of the entire original document.

(5) An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of any of the following persons or their designees:

(a) A pledgee;

(b) A person who purchased or agreed to purchase the shares;

(c) A creditor of the corporation who extended credit to the corporation under terms requiring the appointment;

(d) An employee of the corporation whose employment contract requires the appointment; or

(e) A party to a voting agreement created under section 7-107-302.

(6) The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment.

(7) An appointment made irrevocable under subsection (5) of this section is revoked when the interest with which it is coupled is extinguished, but such revocation does not affect the right of the corporation to accept the proxy's authority unless:

(a) The corporation had notice that the appointment was coupled with that interest and notice that the interest is extinguished is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment; or

(b) Other notice of the revocation of the appointment is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises the proxy's authority under the appointment.

(8) The corporation shall not be required to recognize an appointment made irrevocable under subsection (5) of this section if it has received a writing revoking the appointment signed by the shareholder either personally or by the shareholder's attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment. This provision shall not affect any claim such other person may have against the shareholder with respect to the revocation.

(9) Unless an appointment otherwise provides, an appointment made irrevocable under subsection (5) of this section continues in effect after a transfer of the shares and a transferee takes the shares subject to the appointment; except that a transferee for value of shares subject to an irrevocable appointment may revoke the appointment if:

(a) The transferee did not know of its existence when the transferee acquired the shares; and

(b) The existence of the irrevocable appointment was not noted on the certificate representing the shares or on the information statement for shares without certificates.

(10) Subject to section 7-107-205 and to any express limitation on the proxy's authority appearing on the appointment form, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

Source: L. 93: Entire article added, p. 770, § 1, effective July 1, 1994. L. 96: (3) amended, p. 1318, § 20, effective June 1. L. 2004: (6), (7)(a), (7)(b), and (9) amended, p. 1496, § 250, effective July 1. L. 2019: (3) and (9) amended, (SB 19-086), ch. 166, p. 1927, § 31, effective July 1, 2020. L. 2021: IP(2) and (2)(b) amended and (4) R&RE, (HB 21-1124), ch. 41, p. 168, § 16, effective April 19.

ANNOTATION

Law reviews. For article, "Organizational Problems of the Small Business Corporation", see 27 Dicta 79 (1950). For article, "One Year Review of Corporations, Partnerships, and Agency", see 34 Dicta 129 (1957).

Annotator's note. Since § 7-107-203 is similar to § 7-4-116 as it existed prior to the 1993 recodification of the "Colorado Business Corporation Act", articles 101 to 117 of title 7, cases construing that provision and its predecessors have been included in the annotations to this section.

Shareholder has right to vote one vote for every share. Under this section, unless otherwise provided in the articles of incorporation, every shareholder of record of a corporation shall have the right at every shareholders' meeting to vote one vote for every share standing in his name on the books of the corporation, even though at some time in the future he intends to dispose of his stock. Fehr v. Hadden, 134 Colo. 102, 300 P.2d 533 (1956) (decided under repealed § 31-2-7, CRS 53).

But denial of voting rights to one class of common stock in an election for directors of a corporation does not violate public policy. Hampton v. Tri-State Fin. Corp., 30 Colo. App. 420, 495 P.2d 566 (1972).

The term "trustee" means a person who holds the legal title to stock for the benefit of some third party who is the stock's equitable owner and entitled to the dividends thereon and whose property, whether held in trust or otherwise, is chargeable with whatever liability may result from the ownership of the stock. Persons holding stock in trust for married women, minors, insane persons, spendthrifts, and the like would be included by the term "trustee". Nat'l Bank of Commerce v. Allen, 90 F. 545 (8th Cir. 1898).

Pledgor has right to vote his stock. Where stock is placed in the hands of a person by the real owner to be held merely as collateral security for a debt due from himself to a third person, the stock involved is really held in pledge, and the right to vote the same, in the absence of an express agreement to the contrary, remains with the pledgor. Miller v. Murray, 17 Colo. 408, 30 P. 46 (1892); Nat'l Bank of Commerce v. Allen, 90 F. 545 (8th Cir. 1898).