Frequently Asked Questions: Universal Proxy And Contested Director Elections

With the 2023 proxy season approaching, all public companies should factor into their planning the new rules adopted by the U.S. Securities and Exchange Commission (the "SEC") requiring the use of a universal proxy card in contested director elections. These rules lower the procedural hurdles that dissident shareholders previously faced when nominating director nominees and impose additional proxy and annual meeting-related disclosure and process obligations should a contested director election ensue. Below are a number of frequently asked questions and answers on the new universal proxy rule and contested director elections.

Q: What are the new "universal proxy" rules?

A: In November 2021, the SEC adopted rules requiring registrants to use a universal proxy card in contested elections. While each of the registrant and the dissident stockholder will disseminate a separate proxy card in a contested election, the rules require each proxy card to include both