To assist public companies with proxy statement voting standards disclosure we have prepared the following memo. The memo contains sample disclosures that may be useful in preparing proxy statements or in ensuring that proxy statement disclosure is accurate.
It is essential to properly disclose in proxy statements the vote required to approve a particular proposal and the treatment and effect of broker non-votes, abstentions, and withhold votes. We also recommend disclosing whether a particular matter is routine or non-routine under NYSE Rule 452, which applies to both NYSE and Nasdaq-listed companies.
Erroneous proxy statement voting standards disclosure has been the subject of litigation in Delaware. The proposals that in our experience have resulted in the greatest number of stockholder demand letters are charter amendments for an increase in authorized shares of common stock and reverse stock splits, so it is important to be extra careful with these proposals and really any other proposal that requires an amendment to the company's certificate of incorporation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.