Rule text

• If I have complied with the procedural requirements, on what other bases may a company rely to exclude my proposal?
  
  ***
  
  1. Improper under state law:
  
  If the proposal is not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization;
  ____________
  Note to paragraph (i)(1):
  
  Depending on the subject matter, some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders. In our experience, most proposals that are cast as recommendations or requests that the board of directors take specified action are proper under state law. Accordingly, we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise.
                                                                   

1998 rule changes

• All of Rule 14a-8 was rewritten in a Plain English Q&A format
• Former Rule 14a-8(c)(1) was redesignated as
  Rule 14a-8(i)(1)

• Final release 34-40018 II
• Proposal release 34-39093 III.A

• The note formalizes an SEC staff position taken in many no-action letters

For prior versions of the rule, see
Rule 14a-8 Historic Rule Changes

For summary and SEC releases, see
Rule 14a-8 Regulatory History and SEC Releases

SLB 14B   2004

• Section E   Re: Supporting counsel opinion

• SLB 14 also indicates that the staff will generally permit amendments of mandatory proposals in order to convert them to recommendations.

Excludable

• Wachovia  2.07.07

• Proposal to require director nominees to be either holders of company shares or representatives of funds that hold shares, may be omitted from the company's proxy material under rule 14a-8(i)(1) as an improper subject for shareholder action under state law, unless the proponent provides the company, within seven calendar days after receipt of the staff's response, with a proposal recast as a recommendation or request
• Proposal may be omitted under rules 14a-8(i)(8) or (i)(9) to the extent that implementation of the proposal may disqualify certain nominees for director at the upcoming annual meeting unless the proponent provides the company, within seven calendar days after receipt of the staff's response, with a proposal revised to apply only to nominees subsequent to the 2007 annual meeting
• Proposal may not be omitted under rule 14a-8(i)(6) or (i)(8)

Withdrawn

• General Mills  6.29.07

• Proposal re director compensation
• Withdrawn
• Company invoked Rule 14a-8(i)(2) and Rule 14a-8(i)(1)

Excludable

• DPL  12.12.06

• Proposal re: executive compensation
• Mandatory, rather than precatory
• SEC concurs, unless proponent recasts proposal

• Becton Dickinson  11.14.06

• Re: preventing investment in cigarette companies
• Mandatory, rather than precatory
• SEC concurs, unless proponent recasts proposal

• Enzo Biochem  10.27.06

• Proposal from Kinder Investments
• Re: limits on director terms
• Mandatory, rather than precatory
• SEC concurs, unless proponent recasts proposal

• Peregrine Pharma (Petrellese)  7.28.06

• Proposal to cap management compensation until the company's market capitalization reaches certain levels
• SEC concurs, unless proponent recasts proposal

Not excludable

• Weldotron Corp.    5.23.91

• Proposal recommending sale of company

• Greenpoint Financial  2.09.96

• Proposal recommends that the board of directors sell this company for cash and/or securities valued at no less than $45 per share

Withdrawn

• Monsanto  10.05.06

• Proposal from Harrington Investments
• Re: mandatory bylaw re: director liability
  for environmental and human rights violations
• Proposal withdrawn

Shareholder Access - Rule 14(a)(8)