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Definitive Proxy Statement

Moneyzine Editor
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Moneyzine Editor
1 mins
January 15th, 2024
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Definitive Proxy Statement

Definition

The term proxy statement refers to a document companies provide to their shareholders outlining decisions the company will discuss at a special or annual shareholder meeting. The Securities and Exchange Commission requires companies to provide a definitive proxy statement to shareholders prior to a vote on important matters.

Explanation

Publicly-traded companies are required by federal securities laws to disclose certain operating and financial information on an ongoing basis. A definitive proxy statement, also known as Form DEF 14A or Statement 14A, is a document that is filed with the Securities and Exchange Commission that discloses to shareholders facts and information concerning issues that require a vote by holders of the company's stock.

A definitive proxy statement must be provided to shareholders at least forty days prior to a special or annual meeting. Typically, companies will provide a copy of the company's annual report along with this document. The types of matters usually presented on these forms include:

  • Nominees for Election to the Company's Board of Directors

  • Approval of Executive Compensation (inclusive of salaries, bonuses, stock awards and deferred compensation)

  • Ratification of an Independent Registered Public Accountant

  • Approvals of Stock Purchase Plans

  • Approvals of Incentive Compensation Plans

Companies will normally include a "catch all" topic on this statement, which will use language such as "To transact other business that may properly come before the Annual Meeting."

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Form 10-K
The term Form 10-K refers to an annual report that summarizes the business and financial performance of a company. Form 10-K is a detailed document, which is produced by companies at the close of their fiscal year. The document contains a large number of audited financial statements that publically-traded companies are required to file with the Securities and Exchange Commission each year.
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The term Form 8-K refers to a report that summarizes material events that may be of importance to the Securities and Exchange Commission or investors. The Form 8-K is used to describe a number of material events as they occur. Regulations require companies to file this report with the Securities and Exchange Commission within four days of the event.
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Annual Report
The term annual report refers to a document that summarizes the operating and financial performance of a company over the course of a year. An annual report is typically distributed to shareholders along with a definitive proxy statement approximately forty days prior to the company's annual stockholder meeting.
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