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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations
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some shareholders could receive the registrants proxy statement and submit their votes on the registrants universal proxy card before the dissidents proxy statement is available. The 25 calendar day deadline will provide those shareholders with sufficient time to access the dissidents proxy statement, once available, and to change their votes if preferred.
We acknowledge that dissidents that use the full set delivery method in a contested election have not previously been subject to a filing deadline for their definitive proxy statement, and thus this new requirement will impose a new filing deadline for such dissidents.116
Although some dissidents may be required under the final rules to prepare their proxy statements earlier than they would have otherwise, dissidents filed their definitive proxy statement 25 or more calendar days prior to the shareholder meeting date in 82% of the contests initiated in 2017 through 2020.117 Therefore, the new filing deadline should not impose a significant additional burden for most dissidents.
We are not adopting a filing deadline for registrants. State corporate statutes generally require a registrant to hold an annual shareholder meeting for the purpose of electing directors, and those statutes generally impose a quorum requirement for such meetings.118
Unlike dissidents, registrants therefore already have an incentive to file the
definitive proxy statement and proxy card 119 to solicit proxies well in advance of the meeting date to achieve a quorum for the meeting. For example, based on a review of the 101 contested elections initiated from 2017 through 2020, the staff found that registrants filed their definitive proxy statement 25
or more calendar days prior to the shareholder meeting date in over 95% of the contests.120 We also note that where the registrant nominees are incumbent directors, shareholders will have access to information about those nominees from prior Commission filings before the registrant files and disseminates its definitive proxy statement.
We recognize that it is possible that a registrant will have prepared and disseminated its definitive proxy statement, including a universal proxy card more than 25 calendar days before the meeting i.e., the general deadline under Rule 14a19 for a dissident to file its definitive proxy statement with the Commission. If a registrant discovers after disseminating its universal proxy card that a dissident failed to file its definitive proxy statement 25 calendar days prior to the meeting or five calendar days after the registrant files its definitive proxy statement,121 the registrant could elect to disseminate a new, non-universal proxy card including only the names of the registrants nominees. Where a dissident fails to comply with Rule 14a19, the new rules will not permit the dissident
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to continue with its solicitation under 17 CFR 240.14a1 through 240.14a21
and Schedule 14A Regulation 14A.
In response to the commenter who suggested we adopt a specific penalty for dissidents who fail to file a definitive proxy statement by the deadline, we believe that existing proxy rules serve as an adequate deterrent, in a similar manner to that explained above in the context of a potential violation of the new minimum solicitation requirement. If a dissident fails to file its definitive proxy statement by the new deadline prescribed, that failure would constitute a violation of Rule 14a19 and the dissident would face the same liability as if it had violated any other proxy rules.
Because a registrant may disseminate a universal proxy card before discovering that a dissident is not proceeding with its solicitation, we are requiring the registrant, as proposed, to include disclosure in its proxy statement advising shareholders how it intends to treat proxy authority granted in favor of a dissidents nominees in the event the dissident abandons its solicitation or fails to comply with Regulation 14A.122
As a result of the adopted rules described above, and as set out in the Proposing Release, the overall timing of the process for soliciting universal proxies generally would operate as follows:

Due date
Action required
No later than 60 calendar days before the anniversary of the previous years annual meeting date or, 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, 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. new Rule 14a19b1.
No later than 50 calendar days before the anniversary of the previous years annual meeting date or, 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, no later than 50 calendar days prior to the date of the annual meeting. new Rule 14a19d.

Dissident must provide notice to the registrant of its intent to solicit the holders of at least 67% of the voting power of shares entitled to vote on the election of directors in support of director nominees other than the registrants nominees and include the names of those nominees.

can access the other partys proxy statement on the Commissions website. Because this required disclosure will be included in the registrants proxy materials, which all shareholders would likely receive, the rules should ensure that even those shareholders that do not receive the dissidents proxy materials will have access to information about the dissidents nominees.
116 We understand from a proxy services provider that in the 31 proxy contests from July 1, 2018
through June 30, 2019, dissidents sent full sets of proxy materials to each of the shareholders solicited. Dissidents that elect notice and access delivery are currently required to make their proxy statement available by the later of 40 calendar days prior to the meeting date or 10 calendar days after the registrant files its definitive proxy statement.
For such dissidents, the new filing deadline will provide five fewer days to furnish a proxy statement
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Registrant must notify the dissident of the names of the registrants nominees.

where the registrant files its definitive proxy statement less than 30 calendar days before the meeting date, which we estimate occurred in 11%
of recent contested elections. Based on past practice, as described above, we would not expect a dissident to elect notice and access delivery in a contested election, although it is unclear whether this practice would change under the rules adopted in this document.
117 Based on staff analysis of the contested elections sample. See supra note 71 and infra note 219 and accompanying text. The data is based on 74 out of 101 identified proxy contests since the dissident did not file a definitive proxy statement in 27 cases.
118 See, e.g., Del. Code. Ann. tit. 8, section 211b and section 215c.
119 The definitive proxy statement, form of proxy and all other soliciting materials must be filed with
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the Commission no later than the date they are first sent or given to shareholders. 17 CFR 240.14a6b.
120 Based on staff analysis of the contested elections sample. See supra note 71.
121 A dissident could meet the deadline for director nominations under the companys governing documents and the deadline for providing notice to the registrant under Rule 14a 19 but fail to proceed with or later abandon its solicitation. This could happen for a number of reasons. For example, the dissident and the registrant may enter into a settlement agreement, the dissident may elect to discontinue its solicitation for another reason or the dissident may fail to comply with some aspect of Rule 14a19.
122 See newly-adopted Item 21c of Schedule 14A.

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