While the universal proxy rules won’t go live for most companies until next year, a Goodwin blog recommends including some language in this year’s proxy about next year’s deadline for submitting the names of dissident nominees and other information required under new Rule 14a-19. This excerpt provides some sample language as well as a brief explanation of why the firm is making this recommendation:
Because universal proxy will apply to contested director elections at all 2023 annual meetings, we recommend including disclosure regarding the universal proxy deadline in this year’s proxy statement, including for companies that hold their annual meeting well in advance of the September 1, 2022 mandatory compliance date.
Sample disclosure for this purpose could be as follows: “to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than [INSERT DATE THAT IS 60 DAYS PRIOR TO ONE YEAR ANNIVERSARY OF 2022 ANNUAL MEETING].
This additional voluntary disclosure could be particularly useful for companies with no advance notice bylaws or with advance notice bylaws that provide a notice deadline of less than 60 days prior to the meeting, and could also be useful for companies that have longer advance notice deadlines, but move their meeting date and thereby create new accelerated deadlines.
While the blog recommends this disclosure — which is called for under new Rule 14a-5(e)(4) — for meetings held prior to September 1, 2022, it also acknowledges that the universal proxy rules don’t require that disclosure for meetings held prior to that date. If you’re interested, check out Topic #10934 in our Q&A Forum, which notes that some major companies (including Apple and Starbucks) have opted to include similar disclosure in their proxies. You’ll also find there my half-baked musings about some other reasons to consider this kind of disclosure.
-John Jenkins, TheCorporateCounsel.net February 14, 2022