Hogan Lovells Partner and Society member Alex Bahn prepared and shared at the Society's recent Securities Law Meeting at our conference in San Francisco these practical takeaways from the SEC's recent invitation-only Rule 14a-8 Stakeholder Meeting:
- Proxy card descriptions of proposals: The staff has continued to pay attention to how companies describe shareholder proposals on their proxy cards following CDI 301.01 under Rule 14a-4. While the staff has observed progress, it is clear there are still examples of deficiencies. Companies and counsel should make sure to keep this on their proxy review checklists going forward.
- Timing of correspondence: The staff reiterated that they appreciate being apprised of developments following the submission of a no-action request (such as letting them know of an intention to respond to correspondence from the other side, whether the proposal is being negotiated for a likely withdrawal, etc.). In some cases, the staff has seen correspondence from proponents or their representatives that expresses an intention to respond to a no-action request in a certain period of time. If the staff views that period of time as too long they will reach out to the proponent and ask for a faster response.
- What to include in no-action submissions: In cases where a company sends a proponent a deficiency notice after receipt of the proposal, often the no-action request submitted to the SEC attaches a copy of the deficiency notice (as relevant correspondence). The staff has observed that many issuers include as attachments to the deficiency notices, in addition to the required copy of Rule 14a-8, copies of the staff’s SLBs on Rule 14a-8. The staff stated that when submitting no-action requests to the SEC, if a copy of the deficiency notice is included, there is no need to also attach the copy of Rule 14a-8 or the SLBs. Rather, if the no-action request contains an argument to which the deficiency notice is relevant, companies can simply make clear in the no-action request that the copy of the Rule and the SLBs were provided (noting which SLBs in particular).
Access numerous additional resources on our Shareholder Proposals and Annual Meeting topical pages.