What Is SEC Form DFAN14A?

The term SEC Form DFAN14A refers to a filing made with the Securities and Exchange Commission (SEC) for non-management proxy solicitations not supported by the registrant. SEC Form DFAN14A covers "definitive additional proxy soliciting materials filed by non-management." Put simply, the form is designed to provide information to all parties involved—investors, financial professionals, and other key personnel—about proposed changes such as nominations to a company's board of directors made by a third party.

Key Takeaways

  • Form DFAN14A is designed to provide information about proposed changes such as nominations to a company's board of directors.
  • Changes outlined in the form are normally made by a third party—entities not affiliated with the company itself—such as an institutional investor.
  • The form must identify the filer, their investment position in the company, the action to be taken, and what they wish to achieve.

Understanding Form DFAN14A

SEC filings are financial documents and statements that must be completed and submitted to the agency on a regular basis so investors have the most accurate information about companies when they make their investment decisions. The SEC requires regular filings from public companies, brokers, and certain individuals—notably, people with insider information such as board members, people on the executive team, and other key company personnel.

The most common types of SEC filings are the 10-K and 10-Q statements. The 10-K is a company's annual report, while the 10-Q is a company's quarterly report. Other forms outline changes in stock ownership, notice to file initial registration, registration of securities, filing of sales literature, revised proxy statements, initial public offering (IPO) registration, and amendments to other filings. Each form is identified with a series of letters and numbers and can be found on the agency's EDGAR database.

SEC Form DFAN14A must be filed by someone—usually a third party—whenever they want to take any definitive action that would make changes to a company such as nominating members to the company's board of directors or to enact new advisory agreements.

The form identifies the party taking action, that party's investment position in the company, the action to be taken, and the desired result of such action. The purpose of the form is to ensure that timely information is distributed to all interested parties since the intended result is to force a change not proposed by the company.

Special Considerations

A proxy fight is a term used to describe a battle between a company and a shareholder or a group of shareholders to win a shareholder vote. SEC Form DFAN14A can signal a proxy fight for board control or another initiative, such as changing management compensation or rejecting a takeover bid. Activists may seek a proxy fight for a variety of reasons, including looking to replace management or to force the sale of a company. The proxy materials in SEC Form DFAN14A are meant to help persuade shareholders to vote in favor of the activist’s board nominees or initiatives.

A DFAN14A filing may signal a proxy fight for board control or another initiative, such as changing management compensation or rejecting a takeover bid.

As noted above, SEC Form DFAN14A is filed when someone other than company management is nominating members for the board. This generally happens when investors—notably activist investors—seek board representation when they feel the board is failing at its job. They may feel management oversight is lacking, hence, an investor may ask that shareholders vote new members onto the board. These board nominees can be direct members or affiliates of the activist investor or individuals that the investor thinks could bring value to the board. Nominees that don’t have a direct relationship with the activist investor are considered independent board nominees.

SEC Form DFAN14A vs. SEC Form DEF 14A

SEC Form DFAN14A is a subset of SEC Form DEF 14A, which must be filed every time a shareholder vote is required, per section 14(a) of the Securities Exchange Act of 1934. SEC Form DEF 14A is the key document that lays out the information about the company’s board of directors. It also contains details about the shareholder meeting, including the time, date, and location of the vote. Form DEF 14A is filed by the company or another party on its behalf. It's an important form that many investors tend to ignore but shouldn't.