The SEC today proposed amendments to the proxy rules to require parties in a contested election to use universal proxy cards that would include the names of all director nominees. The proposal gives shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person. The proposed rules would require proxy contestants to provide shareholders with a proxy card that includes the names of both management and dissident director nominees. In addition, the proposed rules would require management and dissidents to provide each other with notice of the names of their nominees, establish a filing deadline and a minimum solicitation requirement for dissidents, and prescribe presentation and formatting requirements for universal proxy cards.
The SEC also proposed amendments to the proxy rules to ensure that proxy cards specify the applicable shareholder voting options in all director elections and require that proxy statements disclose the effect of a shareholder’s election to withhold its vote. Under the proposed amendments, proxy cards would be required to include an “against” voting option for the election of directors when there is a legal effect to a vote against a nominee and to provide shareholders the ability to “abstain” in a director election governed by a majority voting standard. The proposed change would eliminate the current ability to provide a “withhold” voting option when it has the legal effect of an “against” vote.The full text of the proposals, which are subject to a 60 day public comment period, can be found here.