Rule 14a-4(a)(3) requires that the form of proxy “identify clearly and impartially each separate matter intended to be acted upon.” The SEC has issued a Compliance and Disclosure Interpretation, or CDI, on how a registrant should describe a Rule 14a-8 shareholder proposal on its proxy card.
According to the CDI, the proxy card should clearly identify and describe the specific action on which shareholders will be asked to vote. This same principle applies to both management and shareholder proposals. For example, it would not be appropriate to describe a management proposal to amend a company’s articles of incorporation to increase the number of authorized shares of common stock as “a proposal to amend our articles of incorporation.” Similarly, it would not be appropriate to describe a shareholder proposal to amend a company’s bylaws to allow shareholders holding 10% of the company’s common stock to call a special meeting as “a shareholder proposal on special meetings.”
The CDI gives several other examples of inadequate descriptions for other matters.
Unfortunately, the CDI does not tell us what an adequate description is, other than “A shareholder proposal to amend the company’s bylaws to allow shareholders holding 10% of the company’s common stock to call a special meeting.” But proxy cards aren’t that well suited for lengthy descriptions.