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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations
2. Comments Received
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Several commenters discussed the requirement that dissidents provide the registrant with the names of its nominees no later than 60 calendar days prior to the anniversary of the prior years annual meeting date.
Many commenters supported the requirement as proposed.59 Two commenters expressed concern that such requirement could have a chilling effect on any ongoing settlement discussions between the parties.60 To avoid this, one commenter suggested adopting an exception that would temporarily exempt the dissident from the proposed notice requirement while settlement discussions between the parties are taking place.61
Other commenters expressed concern that the proposed deadline would compel the board of directors to vet nominees on an accelerated timeframe, to the detriment of shareholders at large, where a registrants advance notice bylaw provision required dissidents to provide notice of their nominees before the 60-day period mandated in our proposed rules.62 One commenter expressed concern that where a registrant has an advance notice deadline that falls after the dissidents 60 calendar day notice deadline e.g., an advance notice deadline of 45 days prior to the anniversary of the prior years meeting, the proposed notice requirement would give the registrant an unfair advantage in preparing for an activist campaign, since the dissident would have to reveal the identities of its nominees before it would be required to do so under the registrants own governing documents.63 This commenter suggested adopting an exception to the proposed notice requirement applicable to registrants that have advance notice bylaw provisions, such that the dissidents notice deadline would be the later of the currently proposed deadline or the registrants own advance notice deadline.64
Several commenters supported allowing dissidents to launch a contest after the 60 calendar day deadline, as they could under existing rules, without the ability to use a universal proxy 59 See letters from CII; Colorado PERA; CalSTRS;
CFA Institute; SBAFL; Carpenters; NY
Comptroller; AFSCME.
60 See letters dated Jan. 9, 2017 and Jun. 7, 2021
from Olshan Frome Wolosky LLP Olshan;
Society.
61 See letters from Olshan.
62 See letters from CCMC; CGCIV; Society; IBC;
Sidley.
63 See letters from Olshan.
64 See letters from Olshan.

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card.65 Finally, one commenter suggested that the dissidents notice be made publicly available.66
3. Final Amendments We are adopting, as proposed, the requirement that a dissident provide the registrant with the names of the nominees for whom it intends to solicit proxies no later than 60 calendar days before the anniversary of the previous years annual meeting date.67 If the registrant did not hold an annual meeting during the previous year, or if the date of the meeting has changed by more than 30 calendar days from the previous year, Rule 14a19b1, as adopted, requires that the dissident provide notice by the later of 60
calendar days prior to the date of the annual meeting or the tenth calendar day following the day on which public announcement of the date of the annual meeting is first made by the registrant.
Rule 14a19 requires a dissident to indicate its intent to comply with the minimum solicitation threshold in the adopted rules by including in its notice a statement that it intends to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors.68 Rule 14a19 does not require a dissident to provide this notice to the registrant if the information required in the notice has already been provided in a preliminary or definitive proxy statement filed by the dissident by the deadline imposed by the rule.
Rule 14a19 also does not require a dissident to file the notice with the Commission or otherwise make the notice publicly available.
In our view, the Rule 14a19b notice requirement is necessary to provide a definitive date by which the parties in a contested election will know that use of universal proxies has been triggered and to provide the parties with a definitive date by which they will have the names of all nominees to compile a universal proxy card. The 60-day deadline provides a definitive date far enough in advance of the meeting to give the parties sufficient time to 65 See letters from CII; SBAFL; Carpenters; NY
Comptroller; CalSTRS; Colorado PERA; AFSCME.
66 See letter from Fidelity arguing that such practice could serve as a means for investors who engage in securities lending to identify a potential contest before the record date for a meeting, thereby providing them with the ability to recall loaned shares.
67 The rule also mandates that a dissident promptly notify the registrant if any change occurs with respect to its intent to solicit proxies in support of its director nominees. See Rule 14a 19c.
68 See Rule 14a19b3. See also, infra Section II.D for a discussion of the minimum solicitation requirement.

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prepare a proxy statement and form of proxy in accordance with the universal proxy requirements.69 In addition, 60
calendar days before the anniversary of the previous years annual meeting date does not represent a significant additional burden for most dissidents.
The deadline that we are adopting for the notice is 30 calendar days later than the deadline found in most advance notice bylaws, which typically require notice to be delivered no earlier than 120 days and no later than 90 days prior to the first anniversary of the prior years annual meeting.70 Based on a review of the filings for the 101
contested elections initiated from 2017
2020, we estimate that dissidents provided some form of notice of their intent to nominate candidates for election to the board of directors 60 or more calendar days prior to the first anniversary of the prior years annual meeting in 90% of the contests.71
A dissidents obligation to comply with the notice requirement is in addition to its obligation to comply with any applicable advance notice provision in the registrants governing documents.
Rule 14a19s notice requirement is a minimum period that does not override or supersede a longer period established in the registrants governing documents.72 In most cases, Rule 14a 69 For many registrants, the record date for determining shareholders entitled to notice of the meeting cannot be more than 60 days before the date of such meeting. See, e.g., Del. Code Ann. tit.
8, section 213. Thus, as a practical matter, registrants very rarely file their definitive proxy statement prior to such date.
70 See Sullivan & Cromwell LLP, Proxy Access Bylaw Developments and Trends, at 4 Aug. 18, 2015, available at https www.sullcrom.com/
siteFiles/Publications/SC_Publication_Proxy_
Access_Bylaw_Developments_and_Trends.pdf S&C 2015 Report; Wachtell, Lipton, Rosen &
Katz, Nominating and Corporate Governance Committee Guide, at 22 2015, available at http
www.wlrk.com/files/2015/NominatingandCorporate GovernanceCommitteeGuide2015.pdf. See also Arthur Fleischer, Jr., Gail Weinstein and Scott B.
Luftglass, Takeover Defense: Mergers and Acquisitions 9th ed. 2020 stating, As of December 31, 2020, over 98% of the S&P 500 firms had at least a 60-day advance-notice requirement for board nominations and/or shareholder proposals.
71 The sample contested elections sample is based on staff analysis of EDGAR filings for election contests with dissident preliminary proxy statements filed in calendar years 2017 through 2020, other than election contests involving funds.
The staff has identified 101 proxy contests involving competing slates of director nominees during this time period. For purposes of determining the earliest date the dissident provided some form of notice of its intent to nominate candidates for election to the board, staff considered disclosure in the dissidents definitive additional soliciting materials filed under Rule 14a 12, disclosure in amendments to the dissidents Schedule 13D and disclosure in both the registrants and dissidents proxy statements.
72 Several commenters expressed concern that the proposed 60-day deadline would shorten the notice
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