Md. Code Regs. 31.04.07.12

Current through Register Vol. 51, No. 22, November 1, 2024

Section 31.04.07.12 - Special Provisions Applicable to Election Contests

A. Solicitations to Which this Regulation Applies. This regulation applies to any solicitation by any person or group for the purpose of opposing a solicitation subject to this chapter by any other person or group with respect to the election or removal of directors at any annual or special meeting of security holders.

B. Participant or Participant in a Solicitation.

(1) In this regulation, "participant" and "participant in a solicitation" include:

(a) The issuer;

(b) Any director of the issuer, and any nominee for whose election as a director proxies are solicited; or

(c) Any other person, acting alone or with one or more other persons, committees, or groups, in organizing, directing, or financing the solicitation.

(2) In this regulation, "participant" and "participant in a solicitation" do not include:

(a) A bank, broker, or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of securities, and who is not otherwise a participant;

(b) Any person or organization retained or employed by a participant to solicit security holders, or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties;

(c) Any person employed in the capacity of attorney, accountant, advertising, public relations, or financial adviser, whose activities are limited to the performance of duties in the course of that employment;

(d) Any person regularly employed as an officer or employee of the issuer or any of its subsidiaries or affiliates who is not otherwise a participant; or

(e) Any officer or director of, or any person regularly employed by, any other participant, if the officer, director, or employee is not otherwise a participant.

C. Filing of Information Required by Schedule B.

(1) A solicitation subject to this section may not be made by any person other than the issuer unless at least 5 business days prior, or a shorter period as the Commissioner may authorize upon a showing of good cause, there has been filed with the Commissioner, by or on behalf of each participant in the solicitation, a statement in duplicate containing the information specified by Schedule B and a copy of any material proposed to be distributed to security holders in furtherance of the solicitation.

(2) Within 5 business days after a solicitation subject to this regulation is made by the issuer, or a longer period the Commissioner may authorize upon showing of good cause, there shall be filed with the Commissioner, by or on behalf of each participant in the solicitation other than the issuer, a statement in duplicate containing the information specified by Schedule B.

(3) If any solicitation on behalf of the issuer or any other person has been made, or if proxy material is ready for distribution, before a solicitation subject to this regulation in opposition, a statement in duplicate containing the information specified in Schedule B shall be filed with the Commissioner, by or on behalf of each participant in the prior solicitation, other than the issuer, as soon as reasonably practicable after the commencement of the solicitation in opposition.

(4) If, after the filing of the statements required by §§A, B, and C of this regulation, additional persons become participants in a solicitation subject to this regulation, there shall be filed with the Commissioner, by or on behalf of these persons, a statement in duplicate containing the information specified by Schedule B, within 3 business days after the person becomes a participant, or a longer period the Commissioner may authorize upon a showing of good cause.

(5) If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amendment to the statement shall be filed promptly with the Commissioner.

(6) Each statement and amendment filed pursuant to this section shall be part of the public files of the Commissioner.

D. Solicitations Before Furnishing Required Written Proxy Statement. Notwithstanding the provisions of Regulation .04A of this chapter, a solicitation subject to this regulation may be made before furnishing security holders a written proxy statement containing the information specified in Schedule A with respect to the solicitation, if:

(1) The statements required by §C of this regulation are filed by or on behalf of each participant in the solicitation;

(2) No form of proxy is furnished to security holders before the time the written proxy statement required by Regulation .04A of this chapter is furnished to these persons; however, §D(2) of this regulation does not apply if a proxy statement meeting the requirements of Schedule A has been furnished to security holders;

(3) At least the information specified in §C(2) and (3) of this regulation of the statements required by §C of this regulation to be filed by each participant, or an appropriate summary, are included in each communication sent or given to security holders in connection with the solicitation; and

(4) A written proxy statement containing the information specified in Schedule A with respect to a solicitation is sent or given to security holders at the earliest practicable date.

E. Solicitations Before Furnishing Required Written Proxy Statement-Filing Requirements. Two copies of any soliciting materials proposed to be sent or given to security holders before the furnishing of the written proxy statement required by Regulation .04A of this chapter shall be filed with the Commissioner in preliminary form at least 5 business days before the date definitive copies of the material are first sent or given to the persons, or a shorter period the Commissioner may authorize upon a showing of good cause.

F. Notwithstanding the provisions of Regulation .04B of this chapter, two copies of any portion of the annual report referred to in Regulation .04B of this chapter which comments upon or refers to any solicitation subject to this regulation, or to any participant in any solicitation, other than the solicitation by the management, shall be filed with the Commissioner as proxy material subject to this chapter. This portion of the report shall be filed with the Commissioner, in preliminary form, at least 5 business days before the date copies of the report are first sent or given to security holders.

Md. Code Regs. 31.04.07.12

Regulations .12 adopted effective February 12, 2007 (34:3 Md. R. 303)