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Universal Proxy

Jan. 31, 2022

A Small Entity Compliance Guide[*]


On November 17, 2021, the Securities and Exchange Commission (the “Commission”) adopted rule and form amendments to the proxy rules to require the use of a “universal proxy card” in all non-exempt director election contests,[1] except those involving registered investment companies and business development companies.  A universal proxy card is one that lists all director nominees of all sides in a director election contest.  Additional rule changes amend the requirements for the proxy card and proxy statement disclosure applicable to all director elections, whether or not contested.  These rule amendments generally seek to clarify the voting options available for shareholders voting by proxy and the consequences of those options.

Who is affected by the amendments?

The amendments impact all sides nominating and soliciting proxies for their candidates in a director election contest.  These typically include the registrant and one or more dissidents who may nominate and solicit in support of director candidates. 

What do the amendments do?

The amendments will allow shareholders voting by proxy to choose among director nominees in an election contest in a manner that more closely reflects the choice they could make by voting in person at a shareholder meeting.  The amendments to Schedule 14A under the Securities Exchange Act of 1934 (the “Exchange Act”) facilitate the use of a universal proxy card and mandate additional disclosure and voting options in all director elections, whether or not contested.  The Commission amended the proxy rules applicable to operating companies to:

  • revise the consent required of a bona fide nominee;[2]
  • eliminate the short slate rule;[3]
  • require the use of universal proxy cards in all non-exempt solicitations in connection with contested elections;
  • establish notice and filing deadlines for both registrants and dissidents to facilitate the preparation and dissemination of proxy materials under a mandatory universal proxy system; and
  • prescribe formatting and presentation requirements for universal proxy cards to ensure information is presented clearly.

The Commission also adopted amendments that will apply to all director elections and will require disclosure regarding the effect of shareholder action to vote “against,” “withhold” or “abstain” and require that the appropriate voting options be included on the proxy card.

What specific changes were made to the rules?

  • Rule 14a-19(e)(1) requires that the proxy card in a contested director election include the names of all nominees of each side in the contest, including any proxy access nominees.
  • Rule 14a-19(e)(3) requires that nominees be grouped together on the card according to the party nominating them.
  • Rule 14a-19(e)(4) requires that within each grouping, nominees be listed in alphabetical order by last name.
  • Rule 14a-19(e)(5) requires a uniform style of presentation (font type, style and size) for all
  • Rule 14a-19(e)(6) requires that the proxy card state the maximum number of nominees that may be voted for.
  • Rule 14a-19(e)(7) requires that the proxy card describe the treatment of proxy cards that vote for too many or too few candidates, as well as how the proxy card will be voted if signed but unmarked.
  • Rule 14a-19(f) establishes parameters under which the proxy card may provide for a vote with respect to all nominees of either the registrant or the soliciting person as a group.
  • Rule 14a-4(b) provides that the proxy card in all director elections (not just contested elections) may not include an “against” voting option when there is no legal effect to such a vote.
  • Rule 14a-4(b)(4) mandates that for all director elections (not just contested elections), when state law gives legal effect to a vote cast against a nominee, then the proxy card must include “against” and “abstain” voting options in lieu of a “withhold” option. 
  • Item 7(f) of Schedule 14A has been amended to require each side to refer shareholders to the other party’s proxy statement for disclosure about the other party’s nominees, and to explain that such proxy statement is accessible without cost on the SEC website.
  • Item 21(c) of Schedule 14A requires the proxy statement to disclose how each soliciting party intends to treat proxy authority granted for the other party’s nominees, if that other party abandons its solicitation or does not comply with Rule 14a-19.
  • Rule 14a-5(e)(4) requires that the proxy statement disclose the deadline for timely notice of dissident director nominees.
  • Rules 14a-19(a) and 14a-19(b) establish notice and filing deadlines for dissidents conducting a director election contest.  Dissidents must:
    • provide the registrant with notice of the names of its nominees for director 60 days before the anniversary of the prior year’s annual shareholder meeting (except that, 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 days from the previous year, then notice must be provided by the later of 60 days prior to the date of the annual meeting or the 10th day following the day on which public announcement of the date of the annual meeting is first made by the registrant);
    • file a definitive proxy statement with the Commission by the later of 25 days prior to the meeting date or 5 days after the date that the registrant files its definitive proxy statement; and
    • solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors and include a statement to that effect in the proxy statement or proxy card.
  • The dissident’s initial notice to the registrant must include a statement that it intends to solicit at least 67% of the voting power of shares entitled to vote in the election contest.  If that intention changes, the dissident must notify the registrant promptly.  See Rules 14a-19(b) and 14a-19(c).
  • Rule 14a-19(d) requires the registrant to notify the dissident of the names of its director nominees at least 50 calendar days before the prior year’s annual shareholders meeting.
  • Rule 14a-4(c)(5) amends the definition of a bona fide nominee to include any director nominee of any party.  This change permits each side in an election contest to include the other side’s nominees on its card, thereby facilitating the use of a universal proxy card required by these amendments.  This change also permits a party that is conducting a solicitation without nominating its own director candidates to include the names of any other party’s director election candidates on its card.

What are the compliance dates for the amendments?

The amendments are effective as of January 31, 2022.  The amendments apply to any shareholder meeting involving a director election after August 31, 2022.

Other Resources

The adopting release for the new rules can be found on the SEC’s website at

Contacting the SEC Staff

The SEC’s Division of Corporation Finance is happy to assist small companies and other parties with questions regarding these amendments.  You may contact the Division for this purpose at (202) 551-3440 or at

Questions on other SEC regulatory matters involving smaller reporting companies may be directed to the Division’s Office of Small Business Policy at (202) 551-3460.


[*] This guide, dated as of January 31, 2022, was prepared by the staff of the U.S Securities and Exchange Commission as a “small entity compliance guide” under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules adopted by the SEC but it is not a substitute for the rules themselves. Only the rules can provide complete and definitive information regarding their requirements.

[1]      As used in the release, the term “contested election” refers to an election of directors where a registrant is soliciting proxies in support of nominees and a person or group of persons is soliciting proxies in support of director nominees other than the registrant’s nominees.

[2]      The “bona fide nominee rule” (Rule 14a-4(d)(1)) is a requirement in the federal proxy rules that only persons who have consented to being named in a proxy statement and to serve if elected may be included as nominees.

[3]      The “short slate rule” (Rule 14a-4(d)(4)) is a mechanism by which dissidents soliciting proxies for less than a majority of directors on a board can provide a means by which shareholders they solicit can vote for some registrant director candidates as well.  The short slate rule remains available for investment companies and business development companies but is no longer available for director election contests involving operating companies.

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