The SEC's two mutually exclusive alternative proposals on shareholder access

At its Jul 25, 2007 meeting, the SEC revisited the issue of "shareholder access". In two separate split votes, the SEC released opposing sets of proposed rules on the controversial topic, which involves granting shareholders the right to use a company's proxy materials directly to nominate candidates for the board of directors. Shareholders electing to utilize the new procedure to propose a shareholder access bylaw will be subject to new reporting requirements in their Schedule 13G filings. The proposed rules contained in the long proposal would amend Rule 14a-8 to permit binding shareholder access bylaw proposals in the company's proxy materials. In addition to the proposed rules on shareholder access and electronic shareholder forums, the long proposal contains a general request for comments on the subject of non-binding shareholder proposals, including the appropriate role of Rule 14a-8 in facilitating the raising of these proposals at shareholder meetings.