On August 25, 2010, by a 3-2 vote, the Securities and Exchange Commission adopted a new proxy rule, Rule 14-a-11, and amended Rule 14a-8(i)(8), with the goal of facilitating shareholders’ state law rights to nominate and elect directors to boards of directors. Rule 14-a-11 requires a company to include shareholder nominees to the board of directors in the company’s proxy materials if certain conditions are met. Revised Rule 14a-8(i)(8) allows shareholders to propose procedures for including shareholder nominees in a company’s proxy materials. Both rules become effective sixty (60) days after the date of publication in the Federal Register.
This Stroock Special Bulletin provides an overview of several key issues discussed in the adopting release.