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Texas Business Organizations Code - BUS ORG § 6A.102. Disclosures if Providing Conflicting Voter Advice or Recommendations

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) For purposes of this section, "materially different," with respect to advice or a recommendation on how to vote on a company proposal or proxy proposal, means simultaneously advising or recommending that:

(1) one or more clients vote for the proposal and one or more clients vote against the proposal;

(2) one or more clients vote for a nominee for a company's governing authority and one or more clients vote against or abstain from voting for the same nominee;  or

(3) one or more clients vote for or against the proposal in opposition to the recommendation of the company's management.

(b) If a proxy advisor provides to different clients who have not expressly requested services for a nonfinancial purpose either advice or a recommendation on how to vote on a proxy or company proposal that is materially different, the advisor shall:

(1) if applicable, comply with disclosure requirements for nonfinancial proxy advisory services under Section 6A.101(b);

(2) notify the following persons, in writing or by electronic means, of the conflicting advice or recommendation:

(A) each shareholder receiving the advice or recommendation;

(B) each entity or other person receiving the advice or recommendation on behalf of a shareholder;

(C) the company that is the subject of the company or proxy proposal;  and

(D) the attorney general;  and

(3) disclose which of the conflicting advice or recommendations is:

(A) provided solely in the financial interest of the shareholders;  and

(B) supported by any specific financial analysis performed or relied on by the advisor.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 6A.102. Disclosures if Providing Conflicting Voter Advice or Recommendations - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-6a-102/

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