“To be legally sufficient, a proxy must be written, not oral, but no particular format is specified. In addition, the written proxy form must be signed and dated by the shareholder, and it must authorize the proxy-holder to act on the shareholder’s behalf. A facsimile of a signature is legally sufficient.
“Most cooperatives rely on their lawyers and managing agents to prepare their election materials, including proxy forms, so these materials usually meet the above mentioned legal requirements. On the other hand, it is not unusual for hand-written proxy forms submitted by dissident shareholders to fail to meet these basic legal requirements, and votes cast via such defective proxies do not have to be counted.
“In addition to helping to ensure their legal sufficiency, some incumbent boards utilize pre-printed proxy forms prepared by their attorneys or managing agents to give themselves a competitive advantage against their opposition. This is accomplished by distributing pre-printed proxy forms, which designate a proxy-holder of the board’s choice. The pre-printed proxy forms are typically sent to shareholders with the notice of the annual meeting along with instructions advising the shareholders to return the proxy forms to the cooperative’s management office prior to the annual meeting—if the shareholder cannot attend the meeting in person. Because the proxy-holder designated on the pre-printed proxy forms is someone chosen by the board (usually an existing board member), it can be assumed that such proxy holder will vote the proxies in a manner prescribed by the board. This will generally increase the number of votes by proxy in favor of candidates whose interests are aligned with those of the board.”