Corp Fin has posted several new or revised CDIs that address exempt solicitations under the proxy rules. With certain exceptions, Rule 14a-2(b)(1) exempts “any solicitation by or on behalf of any person who does not, at any time during such solicitation, seek directly or indirectly, either on its own or another’s behalf, the power to act as proxy for a security holder and does not furnish or otherwise request, or act on behalf of person who furnishes or requests, a form of revocation, abstention, consent or authorization.” Under Rule 14a-6(g), a person who engages in an exempt solicitation under Rule 14a-2(b)(1) and beneficially owns over $5 million of securities of the class that is the subject of the solicitation is required to mail or furnish to the SEC, not later than three days after the date the written solicitation is first sent or given to any security holder, five copies of the Notice of Exempt Solicitation (Rule 14a-103). The Notice (Form PX14A6G) must attach as an exhibit all written soliciting materials “required to be submitted.” The new CDIs are summarized below. Something new and helpful: for revised CDIs, the SEC has provided a mark-up of the CDI showing the revisions.
Section 126. Rule 14a-6
Revised Question 126.06 The requirements of Rule 14a-6(g)(1) are applicable only to soliciting persons who beneficially own more than $5 million of the securities. A soliciting person who beneficially owns less than $5 million of the securities is still permitted to submit a Notice of Exempt Solicitation on a voluntary basis, provided that the written soliciting material is submitted under cover of the Notice of Exempt Solicitation and the “cover notice clearly states that:
- the soliciting person does not beneficially own more than $5 million of the class of subject securities; and
- the notice is therefore being provided on a voluntary basis.”
The revisions relate primarily to the language to be added in the cover notice.
Revised Question 126.07 Under Rule 14a-103, the Notice of Exempt Solicitation includes the name of the registrant and the name and address of the person relying on the exemption and attaches the written soliciting material to the notice. The written soliciting material (including any logo or other graphics used by the soliciting person) cannot appear in the notice before the Rule 14a-103 information is presented: Rule 14a-103 is designed to be a “cover” to which previously disseminated written soliciting material is “attached.” The revision deletes a sentence indicating that, where the notice itself is used as a solicitation, failure to present the 14a-103 information as required could be misleading.
New Question 126.08 A person may not submit written soliciting material under cover of a Notice of Exempt Solicitation on EDGAR if the written soliciting material has not yet been sent or given to security holders. That’s because submission of the Notice on EDGAR is “not intended to be the means through which a person disseminates written soliciting material to security holders. Rather, its purpose is to notify the public of the written soliciting material that the person has sent or given to security holders through other means.”
New Question 126.09 A person may not submit a Notice of Exempt Solicitation on EDGAR for a written communication that does not constitute a “solicitation” under Rule 14a-1(l); Rule 14a-6(g) applies only to solicitations made under the Rule 14a-2(b)(1) exemption. For example, a “written communication solely about matters that are not the subject of a solicitation by the registrant or a third party for an upcoming shareholder meeting generally would not be viewed as a solicitation and, therefore, should not be submitted under the cover of a Notice of Exempt Solicitation.”
New Question 126.10 Although Rule 14a-2(b)(1) exempts eligible solicitations from the proxy statement filing, delivery and information requirements, it does not provide an exemption from Rule 14a-9, which prohibits materially false or misleading statements. Written soliciting materials attached to a Notice of Exempt Solicitation remain subject to liability under Rule 14a-9.
