Under the California General Corporation Law, a shareholder
whose shares are pledged is entitled to vote those shares until the
shares have been transferred into the name of the pledgee. Cal.
Corp. Code § 702(c). There are at least three exceptions to
this general rule.
First, the parties may agree otherwise in writing. Cal. Corp.
Code § 702(c). While the parties may agree otherwise, the
corporation may nonetheless treat to the holder of record as the
person exclusively entitled to vote until the shares are duly
presented for transfer. Cal. Comm. Code § 8207.
Second, the pledgee's entitlement to vote is subject to
Section 705, which governs proxies. Thus, a pledgor may grant a
proxy to the pledgee to vote the shares and that proxy may be
irrevocable. Cal. Corp. Code § 705(e)(1). However, if the
shares are held of record by the pledgee, the pledgee is required,
upon demand and payment of necessary expenses, to issue to the
pledgor a proxy unless provided otherwise
