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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Rules and Regulations G. Formatting and Presentation of the Universal Proxy Card 1. Proposed Rules The Commission proposed Rule 14a 19e to include the following presentation and formatting requirements for universal proxy cards:
The proxy card must set forth the names of all duly nominated director candidates;
The proxy card must provide a means for shareholders to grant authority to vote for the nominees set forth;
The proxy card must clearly distinguish among registrant nominees, dissident nominees, and any proxy access nominees;
Within each group of nominees, the nominees must be listed in alphabetical order by last name on the proxy card;
The same font type, style and size must be used to present all nominees on the proxy card;
The proxy card must prominently disclose the maximum number of nominees for which authority to vote can be granted; and The proxy card must prominently disclose the treatment and effect of a proxy executed in a manner that grants authority to vote for more nominees than the number of directors being elected, in a manner that grants authority to vote for fewer nominees than the number of directors being elected, or in a manner that does not grant authority to vote with respect to any nominees.
In addition, where both parties have presented a full slate of nominees and there are no proxy access nominees, the Commission proposed Rule 14a19f, which would allow but not require the universal proxy card to provide the ability to vote for all dissident nominees as a group and all registrant nominees as a group.

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2. Comments Received The formatting and presentation requirements for the universal proxy card and whether each party in a contest should be permitted to customize and use its own universal proxy card were the subject of multiple comments. Many commenters expressly supported the Proposed Rules presentation and formatting requirements.137 Some favored a more prescriptive approach, including standardized colors for registrant and dissident proxy cards, noting that priority should be afforded to standardization and uniformity to 137 See letters from Colorado PERA; CalSTRS;
SBAFL; Carpenters; NY Comptroller; AFSCME;
UPWG; ISS.

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avoid shareholder confusion.138 Several commenters favored mandating identical or similar universal proxy cards,139 including specific requirements for font, style, and text size across both cards.140
3. Final Amendments We are adopting the formatting and presentation requirements for universal proxy cards as proposed. As under current rules, each side will disseminate its own proxy card. Each side will be free to choose the design of its card, subject to the requirements of the final rules.
As discussed in the Proposing Release, we considered the merits of creating a system whereby the registrant and dissident distribute an identical card, with the only difference being the persons given proxy authority on the card. In our view, such a system would be inferior to the one adopted in this document for the reasons discussed in the Proposing Release.141 While we recognize the potential benefits of more prescriptive requirements for the universal proxy card, the final rules, as adopted, appropriately strike a balance between ensuring clarity and fairness on the one hand while preserving flexibility on the other. Under current proxy rules, each side in a contest has the ability to design and use its own proxy card, subject to the requirements set forth in the proxy rules. This ability will continue under the new rules we adopt. Rather than specifically mandating a set format for each card or requiring that each sides universal proxy card look identical to the others, we are allowing each party some latitude in designing and distributing its own universal proxy card. However, we note that the font type, style, and size must be consistent for all nominees presented on the same card. This should avoid concerns about bolding or otherwise drawing attention to certain candidates. The goal of our adopted rules with respect to the formatting and presentation of the universal proxy cards is to ensure clarity and fairness in presentation, so that the cards allow shareholders to make an informed voting decision, while at the same time providing flexibility for each side in a contest to craft its own card, as under current rules.
Though we understand the concern of commenters who worry about the potential for shareholder confusion in 138 See letters from Sidley; OPERS; CFA Institute;
UPWG; CII.
139 See letters from Mediant; ISS; Broadridge Financial Solutions, Inc.; Bulldog.
140 See letter from SIFMA.
141 See Proposing Release at Section II.B.6.

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the absence of additional formatting and presentation requirements, including the standardization of proxy card colors, we disagree that such additional regulation is necessary. Existing disclosure requirements, such as the Rule 14a4a requirement that the proxy card prominently identify whether the card is sent by the registrant or dissident, along with the new presentation requirements described above, will sufficiently inform shareholders as to the party sending the card and mitigate any potential confusion resulting from the universal proxy cards. We do not believe it is necessary to limit each soliciting party to a specific color proxy card to ensure shareholders know which party is soliciting their vote, and we note that this is not a limitation under current rules. Furthermore, any potential confusion over which side may be sending a particular card may be less consequential, as each sides card will list the full group of nominees from both sides.
In addition, permitting each side to use its own proxy card will preserve each sides ability to exercise discretionary authority under Rule 14a 4c. As explained in the Proposing Release, we did consider a system whereby the registrant would distribute a single universal proxy card that would include the names of the registrants nominees and the dissidents nominees, as well as all other proposals to be considered at the meeting.142 However, our reasons for rejecting that idea in the Proposing Release still hold.143
Finally, we adopt, in slightly modified form, the rule that permits but does not require the universal proxy card to allow a shareholder to grant authority to vote for all of the nominees of either the dissident or the registrant as a group, so long as the card also provides a similar means by which a shareholder can withhold authority to vote for such group of nominees and so long as the number of nominees of the registrant or the dissident is less than the number of directors being elected.144
142 See
Proposing Release at Section II.B.6.
addition to the reasons set out in the Proposing Release, we agree with the reasoning set out in the letter from UPWG: We believe both of these alternative models could cause unnecessary disruption for market participants accustomed to the circulation of two competing cards. The core improvement we seek is the ability of shareholders to use any proxy card they choose to vote for any combination of board nominees they prefer.
144 See Rule 14a19f. Under the final rules and to avoid shareholder confusion, where the form of proxy includes one or more shareholder proxy access nominees, the form of proxy may not confer the ability to vote for the registrant and dissident nominees as a group.
143 In
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