TheCorporateCounsel.net

Yesterday, Liz shared the update below in our Proxy Season Blog, which the SEC called out in this announcement:

Important news! Corp Fin has updated its “shareholder proposal no-actions page” to include a new form that companies and proponents are required to use for all 14a-8 no-action requests & supplemental correspondence that they submit to the Division. Previously, correspondence was submitted by email.

This form doesn’t transmit your no-action request or other submissions to the other party. Companies and proponents are still required to send their correspondence to the other party by mail or email (but remember that last year, email correspondence caused some bickering over whether procedural requirements had been satisfied). You need to check a box on the form to attest that you’ve sent the correspondence to the counterparty.

While the form doesn’t change the information that must be submitted, it does include a field to enter the company’s “anticipated proxy print date” right off the bat. Corp Fin’s landing page continues to include this reminder, which is repeated in part on the form:

Under Rule 14a-8(j), a company seeking to exclude a shareholder proposal must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission. The staff will endeavor to respond to all requests within this time frame.

My understanding right now is that the Staff really is asking for the “print date” versus the “filing date” in this field, to help manage workflow. Many companies had to follow up last year to nudge the Staff for a response in time to print. But you should know that even though the Staff understands that the print date is typically prior to the date the proxy is filed with the SEC, they also notice if there’s a wide gap between the date you give them and the filing date, and they want companies to be forthcoming with accurate info.

The form also emphasizes that no-action responses represent “informal” advice:

The Division of Corporation Finance undertakes to aid those who must comply with Exchange Act Rule 14a-8 by offering informal advice and determining, generally, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division’s staff considers the information furnished to it by the company in support of its intention to exclude the proposal from the company’s proxy materials, as well as any information furnished by the proponent or the proponent’s representative.

Although Rule 14a-8(k) does not require any communications from shareholders to the Commission’s staff, the staff will always consider information concerning alleged violations of the statutes and rules administered by the Commission, including arguments as to whether or not activities proposed to be taken would violate the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff’s informal procedures and proxy review into a formal or adversarial procedure.

It is important to note that the staff’s no-action responses to Rule 14a-8(j) submissions reflect only informal views. The determinations reached by the staff in connection with these submissions do not and cannot adjudicate the merits of a company’s position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether a shareholder proposal can be excluded from a company’s proxy materials. Accordingly, a discretionary determination not to recommend or take Commission enforcement action does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in court should the company’s management omit the proposal from the company’s proxy materials.

We continue to post new items regularly on our Proxy Season Blog for TheCorporateCounsel.net members. Following that blog is an easy way to stay in-the-know on shareholder proposal & engagement trends – and key annual meeting issues. Members can sign up to get that blog pushed out to them via email whenever there is a new post. If you do not have access the Proxy Season Blog or all of the other great resources on TheCorporateCounsel.net, sign up today.

– Meredith Ervine