Shareholder proposals requesting appointment of
independent lead director

• Companies have argued to exclude proposal as "impermissibly vague and indefinite" by invoking Rule 14a-8(i)(3) or under other provisions of Rule 14a-8
• See no action letters below for cases in which SEC has granted and denied company requests for exclusion

Proposal text follows this format:

• Resolved, Shareholders request that our Board adopt a bylaw to require that our company have an independent lead director whenever possible with clearly delineated duties, elected by and from the independent board members, to be expected to serve for more than one continuous year, unless our company at that time has an independent board chairman. The standard of independence would be the standard set by the Council of Institutional Investors.
   
  The clearly delineated duties at a minimum would include:
   
  Presiding at all meetings of the board at which the chairman is not present, including executive sessions of the independent directors.
   
  Serving as liaison between the chairman and the independent directors.
   
  Approving information sent to the board.
   
  Approving meeting agendas for the board.
   
  Approving meeting schedules to assure that there is sufficient time for discussion of all agenda items.
   
  Having the authority to call meetings of the independent directors.
   
  Being available for consultation and direct communication, if requested by major shareholders.

2008

• SEC staff allowed Schering-Plough and JP Morgan Chase to omit a bylaw proposal that seeks an independent lead director
• After rejecting requests by AT&T and Boeing to exclude the same resolution
• Proponents are associated with shareholder activist
  John Chevedden
• RiskMetrics Risk & Governance Blog  3.25.08

2008: Excludable per Rule 14a-8(i)(3)
Companies argued that proposals reference to CII independence standard was vague

• Schering-Plough  3.07.08

• William Steiner, with John Chevedden acting as proxy

• JPMorgan Chase  3.05.08

• William Steiner, with John Chevedden acting as proxy

• PG&E  3.07.08

• Chris Rossi
• RiskMetrics notes that PG&E subsequently agreed to include the proposal in its proxy statement, based on failure to timely deliver copy of no-action request to proponent
• 2008 proxy statement

2008: Not excludable

• Boeing  2.20.08

• Thomas Finnegan
• Company argued that John Chevedden was trying to circumvent Rule 14a-8(c), which permits an investor to file only one proposal per shareholders meeting
• 2008 proxy statement  Item 6

• AT&T  2.19.08

• Chris Rossi
• Company argued proposal was "substantially implemented"
• 2008 proxy statement  Item No. 5

Shareholder Access