May a company utilize a generic proxy proposal to obtain shareholder approval prior to entering into a transaction?
If shareholder approval of a transaction is required, then the proposal in the proxy should give specific details on the nature of the transaction (e.g., the number of shares offered, type of security being issued, the names of the investors and the purchase price). If the proposal in the proxy is for a non-specific transaction, NASDAQ will consider whether the shareholders have sufficient information to make a meaningful decision. For example, proposals that ask for shareholder approval to issue more than 20% of the company’s total shares outstanding or total voting power for future unspecified acquisitions would not be acceptable. Similarly, a generic proxy proposal would not suffice for shares issued as equity compensation or in a transaction resulting in a change of control.
Related Questions
- Must a company obtain approval from NASDAQ in order to utilize the "exceptional and limited circumstances" according to Listing Rule 5605(c)(2)(B)?
- Must a company obtain approval from NASDAQ in order to utilize the "exceptional and limited circumstances" according to Listing Rule 5605(e)(3)?
- May a company hire a proxy solicitor to solicit votes against a shareholder proposal?
