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By Yin Wilczek
Feb. 18 — Whole Foods Market Inc., after the withdrawal of SEC no-action relief for a shareholder-submitted proxy access resolution, has postponed its annual meeting while it ponders how to proceed.
In a Feb. 13 Form 8-K filing, the company said the annual meeting was originally scheduled for March 10.
“The Company had planned to file its definitive proxy on January 22, 2015, a date which would have ensured all applicable deadlines for the March 10, 2015 Annual Meeting were met and that a quorum was obtained,” Whole Foods said. “Given this reversal by the SEC, the postponement of the Annual Meeting is necessary to ensure the Company can meet applicable deadlines and allow the Board adequate time to review and evaluate the Company’s alternatives.”
The company said it will announce a new meeting date and related deadlines once “a final decision has been made.”
Whole Foods spokesperson Kate Lowery Feb. 18 declined to comment, saying the company did not have a statement beyond what is in its filing.
Whole Foods was the first—and thus far only—company to obtain no-action relief for a shareholder proxy access proposal under 1934 Securities Exchange Act Rule 14a-8(i)(9), which allows issuers to omit from their proxy materials shareholder proposals that directly conflict with a management resolution.
However, the Securities and Exchange Commission suspended its no-action process under the provision in January, following investor protests that numerous companies were using the provision to avoid putting shareholder-submitted access proposals to a vote.
On the same day that the SEC announced the suspension, its Division of Corporation Finance also reconsidered its position on Whole Foods' application.
Moreover, the staff announced that it will express no views on the application of Rule 14a-8(i)(9) this proxy season.
Companies that filed for no-action relief under the rule—including those on matters other than proxy access—now face a quandary as to how they should proceed with their conflicting proposals.
Some investors have indicated that they will vote against boards that act in bad faith with respect to shareholder access proposals.
Whole Foods' shareholder access resolution—submitted by activist James McRitchie—proposed giving shareholders who own at least 3 percent of the company stock for three or more years the right to list their director candidates on the company's ballot. Whole Foods' management resolution initially proposed a 9 percent/five-year threshold.
The company later unveiled a less stringent 5 percent/five-year threshold in its preliminary proxy statement filed Dec. 30.
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The filing is available at http://www.sec.gov/Archives/edgar/data/865436/000110465915010409/a15-3810_18k.htm.
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