December 22, 2022

Universal Proxy: FAQs for Contested Elections

Debevoise recently issued this list of FAQs on universal proxy & contested director elections.  The memo walks through the various topics covered by the rule, but it also covers a few areas that aren’t addressed. This excerpt includes a couple of those:

Q:  Are there any specific rules that govern a registrant’s engagement with a dissident stockholder?

A: No. If the registrant is content to allow the dissident’s nomination to proceed, the registrant should solicit a completed “director and officer questionnaire” and other information that it deems necessary to allow its nominating committee or board of directors to make a determination as to whether to support the nominee. In the alternative, the registrant may seek a settlement with the dissident with the objective of avoiding a contested director election.

Q: Does the dissident stockholder have a legal right to speak at the meeting?

A: No. While it is customary to allow stockholders to speak at meetings of stockholders, there is no statutory requirement. The chairperson of the meeting may acknowledge the nomination as part of the annual meeting script, rather than allowing the stockholder to present the nomination.

Other FAQs covered by the memo include, among other things, notice and disclosure obligations of registrants and dissidents, responding to statements made by the dissident in its proxy materials, and preliminary proxy filing obligations for contested elections.

John Jenkins