SEC proposed regulations to allow certain shareholders to nominate director candidates, and include nominees in the company’s proxy materials.

SEC issued final rules on August 25, 2010, and published in Federal Register on September 16, 2010.

After lawsuit filed to halt implementation, SEC stayed enforcement, with resolution expected in late Spring 2011.

Expedited schedule ordered on October 14, 2010.

Federal

See blog post for comments on new regulations, blog post for comments on litigation, and message with latest briefs.

Proxy Access

Brief Description

Status

Issue

Comment

Executive Compensation

Corporations

Electronic Proxy Solicitation

SEC has proposed updated rules on electronic proxy solicitation.

SEC received approximately 25 comment letters.

Sen. Christopher Dodd and Rep. Barney Frank proposed comprehensive governance legislation, including proxy access.

H.R. 4173 (Dodd-Frank Act, or DFA) signed into law on July 21.

Mandates SEC promulgate proxy access regulations.

Sen. Christopher Dodd and Rep. Barney Frank proposed comprehensive governance legislation, including several executive compensation reforms.

H.R. 4173 (Dodd-Frank Act, or DFA) signed into law on July 21.

SEC issued final regulations on January 25, 2011.

Includes mandatory say-on-pay, compensation committee independence, clawbacks, and enhanced pay disclosure.

See blog post for comments.

Shareholder Mechanics or “Proxy Plumbing”

SEC issued concept release seeking input on wide range of corporate election mechanics and processes

Comment period closes on October 20, 2010.

Release covers numerous issues, including proxy advisor regulation and derivative share voting.

See blog post for comments.

Schedule 13D

Disclosure

Purpose

Threshold

Filing

Period

disclose active intent

Ownership

acquire 5% of outstanding shares

10 days after crossing threshold; 10 days after change in position

voting or beneficial

Schedule 13G

disclose passive intent

acquire 5% of outstanding shares

10 days after crossing threshold; 10 days after change in position

voting or beneficial

state business combination laws (Delaware Sec. 203)

Merger or divestiture

Limit ability to acquire shares for purpose of a hostile acquisition

acquire 15% of outstanding shares

13D filing

beneficial

Short-swing profits

Hart-Scott-Rodino

Initiate anti-trust investigation

propose $66 million in deal value

13D filing

beneficial

short-swing profits

Disgorge profits from insider trading

acquire 10% of outstanding shares

13D filing

beneficial

Shareholder rights plan (“poison pill”)

poison pill

Dilute potential acquirer’s shares

acquire 5-20% of outstanding shares

13D filing

beneficial

Schedule 13D and13G

SEC has proposed updated rules affirming current deadlines and derivative definition

SEC received three comment letters.

See blog post for comments.