Contested Meetings Under Universal Proxy – Standard Operating Procedures

Broadridge’s Standard Operating Procedures for processing contested proxy solicitations.

The following procedures meet or exceed applicable rules and guidelines established by the SEC, stock exchanges, and applicable law. They are aimed at providing processing compliance, vote accuracy, transparency, and equal treatment for all parties who rely on SEC rules for Universal Proxy.

Broadridge Special Processing Team manages daily operations and proxy distributions. It can be reached by email at: SpecialProcessing@Broadridge.com, or by calling 631-254-7067 and selecting option 4.

Key processes include:

1. Creation of Voting Instruction Forms (“VIFs”) for all Soliciting Parties (Soliciting Parties in a proxy contest include issuers and other soliciting persons).

(a) VIFs are created, for each Soliciting Party, to mirror the language they provide on the proxy cards that they file with the SEC. The VIFs accompany all full proxy statement distributions (“full package mailings”) to shareholders. Each soliciting party is responsible for providing the content of the VIF to Broadridge, including solicitation recommendations, proposals, individual nominee wording and order of listing, and specific voting instructions.

(b) Each party is assigned a specific color for their VIF based on standard color choices. Broadridge makes every effort to provide soliciting parties with the color of their choosing.

(c) Digital voting channels, including Proxyvote.com, Broadridge’s ProxyVote app and Proxy Edge, are configured to match the information on the VIF.

(d) When a soliciting party chooses to rely on the Notice & Access distribution method, the proxy notices will mirror the language on each party’s VIF.

(e) It is the responsibility of each party to ensure that all materials provided, inclusive of the VIF, Definitive Proxy Statement, shareholder letters, and inserts and backers, are compliant with all applicable rules (SEC, applicable stock exchange, etc.).

2. Job Set-Up on Broadridge Systems

(a) Each “round” of proxy solicitations is set up on Broadridge’s systems based on written instructions provided by each soliciting party, in the format utilized by Broadridge. Any instructions, verbal or written, that deviate from the prescribed formats will not be acted upon.

(b) Broadridge does not proactively share any information on solicitation strategies. Once solicitation information and mailing instructions are provided to us in the prescribed format, the information is entered into Broadridge’s systems and can be shared with other soliciting parties, when requested.

(c) Mailing instructions for each distribution need to be provided by designated agents of each soliciting party using Broadridge’s Job Entry Form. This form indicates the material type included in the distribution, postage rate, share-range stratification, card color, whether e-delivery will be utilized, as well as other instructions needed to process the distribution.

3. Reported Positions, Audit for Completeness

(a) For contested meetings, any intermediaries (Broadridge’s custodian bank and broker-dealer clients) who fail to report positions for the record date are notified with subsequent follow-ups. In addition to client outreach from Broadridge’s Network Operations team, an email will be sent, and follow-up phone contacts are made by Broadridge’s Bank and Broker Client Services team.

4. Contest Reconciliation Process

(a) Many of our custodian bank and broker-dealer clients subscribe to Broadridge’s Overvote/Over-reporting Prevention service which contains their vote entitlement as represented by DTCC (Depository Trust & Clearing Corporation) and Omnibus positions. Out-of-balance conditions are communicated to clients within 5 business days after record date, and up to and through the meeting date. These clients are asked to adjust, add, or delete any accounts to bring their reported positions in line with their voting entitlements. Any votes cast in excess of the entitled positions are pended, until resolved, and released once corrected.

5. Distributions – Physical and Electronic

(a) For physical distributions, Broadridge’s print and production process begin only after we have received an approved VIF (for the first distribution only), written distribution instructions, and a full shipment of all enclosures for the mailing. The distribution process does not initiate until all materials are received by Broadridge.

(b) Vote instructions on all materials provided must be consistent with the SEC’s voting guidelines (see Voting section below for more details).

(c) Broadridge starts the clock on the SEC’s 5-day turnaround requirement for distributions once the requirements in 5a, above, have been met. Soliciting parties have the option of using the Accelerated Mail Date (“AMD”) service offered by Broadridge (for a fee) to shorten the turnaround timeframe. The AMD service will not change Broadridge’s execution of instructions for soliciting parties who do not choose to use the service nor cause any delays to them.

(d) For electronic distributions, Broadridge uses VIF templates that are preapproved by our custodian bank and broker-dealer clients for all soliciting party emails. These templates reflect the color chosen by each soliciting party for their VIF. To preserve the strict neutrality of the electronic delivery process, customization of these emails is not permitted. Emails are sent at or about the same time as physical distributions.

6. Voting with Universal Proxy.

Vote treatment follows the guidelines that the SEC provided in Universal Proxy rules and in subsequent guidance (on Nov 17, 2023). See SEC.gov | Proxy Rules and Schedules 14A/14C :

(a) The voting agendas have a “limit” on the number of FOR votes allowed for nominee proposals.

(b) Paper VIFs/votes – SEC processing guidelines specify how vote processors are to handle 5 scenarios for nominee voting on paper VIFs. Language is included on the VIF to make clear to shareholders how their votes are handled when they return a voting card under the following scenarios:

  • i. Standard Vote Returns – Shareholder indicates FOR votes on the full number of director nominees permitted and WITHHOLD votes on all remaining nominees listed. Voting is reported as instructed.
  • ii. Undermarked Returns – Voting indications are made for one or more nominees but not all nominees. Voting will be reported as instructed on the marked nominees. A default of Withhold or Against, depending on the options provided on the VIF, will be applied to the unmarked nominees; they will not be marked FOR.
  • iii. Signed, Unmarked Returns – Shareholder returns a signed and dated VIF with NO indications on any nominees. The recommendation of the soliciting party, whose VIF is returned, will be applied.
  • iv. Overmarked Returns – When a shareholder returns a VIF with voting indications that exceed the number of FOR votes allowed for director nominees, no votes are recorded on any of the director nominees on that VIF. However, votes will be recorded for any other proposals contained on that VIF. The overmarked VIF is scanned, and the image will be returned to the respective custodian bank or broker-dealer for follow up and remediation with their customer account holder. When shareholders then correctly follow instructions for director votes, those indications are reported.
  • v. Unsigned VIF – Shareholder sends a VIF that is not signed. The scanned image of the VIF will be returned to the bank or broker to follow up with the customer account holder to indicate a vote.

(c) Digital votes – any votes returned through Proxyvote.com, the ProxyVote app, or ProxyEdge are processed as received. Broadridge’s digital voting platforms provide functionality to prevent mismarks through real-time, in-line notifications.

(d) Each solicitation is assigned a Broadridge profile number to distinguish between multiple voting agendas. This corresponds to a separate and unique control number for each profile.

(e) Broadridge provides a vote status report (i.e., “Contest Status” or ”CS” report), to each soliciting party, twice a day, for the duration of the campaign, that provides the vote status for their own and all other soliciting parties.

(f) Broadridge executes a Client Proxy (official voting) beginning 1-2 days prior to the meeting date (i.e., “Contest Vote” or “CV” report). This is also sent to all parties at the same time.

  • i. Vote returns are monitored after official voting begins. Supplemental voting is sent periodically up until the time we are informed by Management’s solicitor that the polls are closed (this is referred to as the “Contest Revised Vote” or “CR” report). Broadridge sends vote reports to all soliciting parties.

(g) The latest dated/executed vote by shareholders is reflected in all vote reporting.

7. Audit and Quality Checks

(a) Prior to distribution, each solicitation profile’s VIF and sample emails are reviewed for accuracy by Broadridge’s internal Vote Audit and Quality Control team.

(b) All paper returns are scanned and validated for signature. The presence of a signature is validated initially by the scanner, then by Broadridge’s Vote Execution team, and then again by the Vote Audit team.

(c) All voting reports (“CV” and “CR” reports) issued by Broadridge are reviewed and audited before issuance by our audit teams.

(d) At least 90% of voted shares are audited for accuracy by the audit team, including for both electronic and paper returns.

(e) All voting returns are reconciled for completeness to ensure that all valid votes received are processed by the audit team.

(f) These audits are in addition to the several reviews done by a big four accounting firm.

  • i. Quarterly vote accuracy reviews.
  • ii. Annual attestations of process integrity provided through SSAE 18 and SOC-2 audit examinations.
  • iii. Annual review of compliance with applicable NYSE/SEC Regulations.

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