The SEC has confirmed that it will not seek a rehearing or Supreme Court review of the decision by the U.S. Court of Appeals in Washington, D.C. to vacate Rule 14a-11, which would have required that public companies include shareholders’ director nominees in their proxy materials under certain circumstances. The SEC adopted amendments to Rule 14a-8 at the same time that it adopted Rule 14a-11, which amendments require companies to include in their proxy materials shareholder proposals that would amend a company’s governing documents regarding director nomination procedures or disclosures related to such nominations.
These amendments were not challenged in the litigation, although the SEC voluntarily stayed the effective date of these amendments at the time it stayed the effective date of Rule 14a-11. The SEC's stay order provides that the stay of the effective date of the amendments to Rule 14a-8 and related rules will expire without further SEC action when the court's decision is finalized, which is expected to be September 13, 2011.
The effectiveness of the amendments to Rule 14a-8 leaves the door open for companies and their shareholders to establish proxy access standards on a company-by-company basis, rather than according to a specified standard such as that contained in Rule 14a-11.