SEC Confirms That Rule 14a-8 Will Be Available for Proxy Access Bylaw Proposals in 2012: Related Rules, Including Schedule 14N, Also Take Effect

Sullivan & Cromwell LLP - September 16, 2011

As anticipated, the Securities and Exchange Commission’s revisions to Rule 14a-8 have taken effect, allowing shareholders to use a company’s proxy materials to propose proxy access bylaws and other election or nomination procedures. Yesterday, the SEC issued an effectiveness order confirming that the existing stay of the changes to Rule 14a-8 expired upon the finalization of the court decision vacating Rule 14a-11, the SEC’s mandatory proxy access rule. These developments mean that “private ordering” of proxy access will be available to shareholders and public companies in the upcoming proxy season. The SEC’s effectiveness order relates not only to Rule 14a-8, but also to the other related rules adopted as part of the proxy access rule changes (other than Rule 14a-11). Many of these related rules seem to have no practical impact because they relate only to the now-vacated Rule 14a-11, but some of the new rules will have an impact on nominations made through a company’s proxy access bylaws.