SEC to Allow Shareholders to Submit Proxy Access Proposals for 2012 Season: SEC Will Not Appeal Court Decision Vacating Mandatory Proxy Access Rule But Will Allow Revised Rule 14a-8 to Become Effective; Significant Shareholder Proposals Expected

Sullivan & Cromwell LLP - September 7, 2011

The Securities and Exchange Commission has announced that its revisions to the proxy rules to allow shareholders to propose proxy access bylaws and other election or nomination procedures will become effective shortly. The SEC also confirmed that it will not appeal the recent court decision vacating its mandatory proxy access rule. These developments mean that U.S. public companies will not be subject to a mandatory proxy access standard but must permit shareholder proposals that either request that the board implement proxy access or that bypass the board and directly amend the company’s bylaws to implement proxy access. We anticipate a significant number of shareholder proposals in this area in the 2012 proxy season.