John Jenkins at DealLawyers.com took note of this recent blog by Professor Ann Lipton concerning the stockholder vote at The Tribune Publishing Company. The gist of both these blogs was the decision by a 24% stockholder in the Tribune to return a signed, but unmarked proxy card. John concludes:
When you’re drafting a proxy statement, it’s easy to get bogged down trying to process the implications of abstentions and broker non-votes, but the bottom line is that if arecordholder returns a signed but unvoted proxy card, that’s neither an abstention nor a non-vote. Instead, it’s an authorization for the proxy holders to exercise their discretionary authority in the manner laid out in the card. If you’re a record holder, sometimes not to decide is to decide.
It turns out that the Securities and Exchange Commission has a rule that go that prescribes the treatment of executed, but uninstructed proxies. Rule 14a-4(b)(2)(iv) provides:
Note that this rule applies only to the election of directors. The Tribune stockholders' meeting was a special meeting and there was no vote on the election of directors. Presumably, the authority of proxy holders to vote an executed, but uninstructed proxy is left to state law. The Tribune Publishing Company is a Delaware corporation and most lawyers would assume that Delaware law would apply to the proxy, but see my post questioning this assumption: Should A Proxy Card Specify A Choice Of Law?
Such form of proxy also may provide a means for the security holder to grant authority to vote for the nominees set forth, as a group, provided that there is a similar means for the security holder to withhold authority to vote for such group of nominees. Any such form of proxy which is executed by the security holder in such manner as not to withhold authority to vote for the election of any nominee shall be deemed to grant such authority, provided that the form of proxy so states in bold-face type.