Within the text on a proxy card are the words: "The shareholder appoints certain people (collectively, the proxy committee) with full power of substitution to vote the shares." If the security holder strikes out this phrase, the proxy cannot be voted if there is a change in the designated proxy committee.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A situation in which a shareholder gives his/her proxy to a proxy committee but states that he/she will withdraw proxy if there is a change in the makeup of the proxy committee. Most of the time, when a shareholder gives proxy to a committee, he/she automatically agrees to let the committee vote for him/her regardless of who actually sits on it. If the shareholder wishes to withdraw this permission, he/she must expressly state so; this is called a no substitution situation.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved