SEC Proposes Proxy Access To Company Proxy Statements For Director Elections

Introduction

Currently, shareholders of public companies can nominate their own director nominees, but they may only do so through proxy contests of public companies in which a shareholder must, at its own expense, prepare, file with the SEC and disseminate its own proxy materials. On May 20, 2009, the Securities and Exchange Commission (the "SEC") adopted proposed amendments to its proxy rules to allow shareholders of a public company to nominate candidates for the company's board of directors and have those nominees included in the company's proxy materials.

The proposed rule would create a new Rule 14a-11 under the Securities Exchange Act of 1934 (the "Exchange Act") which would provide that certain shareholders would be able to include nominees for director in the company's proxy materials, unless otherwise prohibited. In addition, the proposed rule would amend Rule 14a-8(i)(8) to permit shareholders to include other shareholder proposals in the company's proxy