As Proxy Season Begins, What Constitutes A Proxy "Solicitation"?

Soliciting proxies is at the heart of any shareholder activist campaign or issuer defence. However, while defined very broadly, authoritative guidance regarding what constitutes a proxy "solicitation" remains relatively thin. As proxy season begins, we review the meaning and implications of this key legal concept for the benefit of both shareholders and issuers.

Our key practical takeaways include:

• What constitutes a "solicitation" of proxies is approached "inclusively", and the nature, context and purpose of the communication is key.
• While an individual communication may not amount to a solicitation, multiple communications considered together may cross the line.
• An issuer's public response to an activist campaign will generally be viewed in that context and thus be afforded some latitude to defend both the issuer and its directors before crossing the solicitation threshold.