MEMORANDUM

To:
Subject: Changes in Revised Corporation Code re:
Proxies and Voting Trusts
From:
Date: 18 June 2019

Upon review of the Revised Corporation Code, there seems to be no change in the
provisions for proxies or voting trust agreements.

Section 57 of the Revised Corporation Code provides:

“SECTION 57. Manner of Voting; Proxies. – Stockholders and members

may vote in person or by proxy in all meetings of stockholders or members.

When so authorized in the bylaws or by a majority of the board of

directors, the stockholders or members of corporations may also vote through
remote communication or in absentia: Provided, That the votes are received
before the corporation finishes the tally of votes.

A stockholder or member who participates through remote communication

or in absentia, shall be deemed present for purposes of quorum.

The corporation shall establish the appropriate requirements and

procedures for voting through remote communication and in absentia, taking into
account the company’s scale, number of shareholders or members, structure and
other factors consistent with the basic right of corporate suffrage.

Proxies shall be in writing, signed and filed, by the stockholder or

member, in any form authorized in the bylaws and received by the corporate
secretary within a reasonable time before the scheduled meeting. Unless
otherwise provided in the proxy form, it shall be valid only for the meeting
for which it is intended. No proxy shall be valid and effective for a period
longer than five (5) years at any one time.

For comparison, Section 58 of the old Corporation Code states:

“Section 58. Proxies. – Stockholders and members may vote in person or

by proxy in all meetings of stockholders or members. Proxies shall be in writing,
signed by the stockholder or member and filed before the scheduled meeting with
the corporate secretary. Unless otherwise provided in the proxy, it shall be valid
only for the meeting for which it is intended. No proxy shall be valid and effective
for a period longer than five (5) years at any one time. (n)”

Section 58 of the Revised Corporation Code is a direct reproduction of Section 59 of the

old Corporation Code. Section 58 states:

SECTION 58. Voting Trusts. – One or more stockholders of a stock

corporation may create a voting trust for the purpose of conferring upon a trustee
or trustees the right to vote and other rights pertaining to the shares for a period
not exceeding five (5) years at any time: Provided, That in the case of a voting
trust specifically required as a condition in a loan agreement, said voting trust
may be for a period exceeding five (5) years but shall automatically expire upon
full payment of the loan. A voting trust agreement must be in writing and
notarized, and shall specify the terms and conditions thereof. A certified copy of
such agreement shall be filed with the corporation and with the Commission;
otherwise, the agreement is ineffective and unenforceable. The certificate or
certificates of stock covered by the voting trust agreement shall be cancelled and
new ones shall be issued in the name of the trustee or trustees, stating that they are
issued pursuant to said agreement. The books of the corporation shall state that
the transfer in the name of the trustee or trustees is made pursuant to the voting
trust agreement.

The trustee or trustees shall execute and deliver to the transferors, voting
trust certificates, which shall be transferable in the same manner and with the
same effect as certificates of stock.

The voting trust agreement filed with the corporation shall be subject to
examination by any stockholder of the corporation in the same manner as any
other corporate book or record: Provided, That both the trustor and the trustee or
trustees may exercise the right of inspection of all corporate books and records in
accordance with the provisions of this Code.

Any other stockholder may transfer the shares to the same trustee or
trustees upon the terms and conditions stated in the voting trust agreement, and
thereupon shall be bound by all the provisions of said agreement.

No voting trust agreement shall be entered into for purposes of

circumventing the laws against anti- competitive agreements, abuse of dominant
position, anti-competitive mergers and acquisitions, violation of nationality and
capital requirements, or for the perpetuation of fraud.

Unless expressly renewed, all rights granted in a voting trust agreement

shall automatically expire at the end of the agreed period. The voting trust
certificates as well as the certificates of stock in the name of the trustee or trustees
shall thereby be deemed cancelled and new certificates of stock shall be reissued
in the name of the trustors.

The voting trustee or trustees may vote by proxy or in any manner

authorized under the bylaws unless the agreement provides otherwise.”