Who Opens And Closes The Polls?

One of the seemingly routine matters at stockholder meetings is the opening and closing of the polls.  Sometimes, votes are close and the outcome of a vote may turn on whether the polls are closed “early” or “late”.  For a real-life example, see In re Carver Bancorp, Inc., 2000 Del. Ch. LEXIS 12 (Aug. 28, 2000) (Shares possibly affecting outcome were not counted because the polls had closed).  In these situations, management’s ability to control this aspect of the meeting may be decisive.

The Delaware General Corporation Law addresses the issue but does so in the passive voice.  Section 231(c) provides only that “The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting.”  Notably, the statute doesn’t say who must make the required announcement or who has the authority to determine the timing of the opening and closing of the polls.

California is slightly more prescriptive.  Section 707(b) explicitly vests the authority to determine when the polls close in the inspector(s) of election.  In a Rule 14a-8 no-action letter request submitted this summer, the SEC staff considered whether a corporation could refuse to include a shareholder proposal that the company’s inspectors of election “be reminded” that it would be beneficial if the polls could remain open for at least half of the anticipated meeting length.  The staff did not concur that this proposal could be excluded under Rule 14a-8(i)(6) (absence of power/authority) but did find some basis for the issuer’s view that it could be excluded under Rule 14a-8(e)(2) because the company received it after the deadline for submitting proposals.  National Technical Systems, Inc. (Sept. 4, 2012).

Nevada is even more laconic than Delaware, California or even General Lysander, its statutes make no provision for opening and closing the polls.

 

Published In: Business Organization Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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