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last updated 15 Aug 02

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CLASS NOTES

 

IV. Corporate Governance
      B. Shareholder Role in the Public Corporation
          5. Shareholder Proposals
  • Shareholder proposal rule  
    • proper shareholder 
      • shareholding - continuous / $2000 or 1% 
      • one proposal - 500 word limt with accompanying statement 
      • timely - 120 days before last annual meeting date
    • Management obligations 
      • proper proposals:  include on ballot for SH vote 
      • improper proposals:  seek SEC review before excluding
  •  Proper topics - grounds for exclusion 
    • anti-congestion 
    • anti-crackpot 
    • lack of merit 
      • (i)(1) - "not proper purpose" 
      • (i)(5) - "not significantly related" 
      • (i)(7) - "ordinary business operations"
  • Good rule or bad? 
    • justifications for rule 
    • history of rule's use - evolution over time
Daily Thoughts

Employment applications

DESIRED POSITION:  Reclining.  Ha ha.  But seriously, whatever's available. If I was in a position to be picky, I wouldn't be applying here in the first place.

DESIRED SALARY:  $185,000 a year plus stock options and a Michael Ovitz style severance package. If that's not possible, make an offer and we can haggle.

EDUCATION:  Yes.

MOST NOTABLE ACHIEVEMENT:  My incredible collection of stolen pens and post-it notes.

REASON FOR LEAVING:  It sucked.

PREFERRED HOURS:  1:30-3:30 p.m., Monday, Tuesday, and Thursday.

DO YOU HAVE ANY SPECIAL SKILLS?:  Yes, but they're better suited to a more intimate environment.

MAY WE CONTACT YOUR CURRENT EMPLOYER?:  If I had one, would I be here?

DO YOU HAVE ANY PHYSICAL CONDITIONS THAT WOULD PROHIBIT YOU FROM LIFTING UP TO 50 LBS?:  Of what?

DO YOU HAVE A CAR?:  I think the more appropriate question here would be "Do you have a car that runs?"

HAVE YOU RECEIVED ANY SPECIAL AWARDS OR RECOGNITION?: I may already be a winner of the Publishers Clearinghouse Sweepstakes.

DO YOU SMOKE?:  Only when set on fire.

WHAT WOULD YOU LIKE TO BE DOING IN FIVE YEARS?:  Living in the Bahamas with a fabulously wealthy super model who thinks I'm the greatest thing since sliced bread. Actually, I'd like to be doing that now.

DO YOU CERTIFY THAT THE ABOVE IS TRUE AND COMPLETE TO THE BEST OF YOUR KNOWLEDGE?:  No, but I dare you to prove otherwise.

SIGN HERE:  Scorpio with Libra rising.

Problems

College Retirement Equity Fund (CREF) is the largest equity fund in the country and the biggest shareholder of Archie-Dannie-Midler (ADM), a huge grain and food processor.  CREF submits a shareholder’s proposal that urges the board to establish company guidelines on political contributions and report to shareholders annually on such contributions.  In particular, the proposal seeks “the establishment of guidelines and reporting provisions regarding ‘soft dollar’ political contributions, which are defined as financial contributions given by institutions and individuals to national and state political parties for party building purposes.”  In the past ADM and its officials have been significant contributors to the major political parties.

Party A (CREF) Argue that the proposal must be included in ADM’s proxy materials under Rule 14a-8.

Party B (ADM) Argue that the proposal may be excluded from ADM’s proxy materials under Rule 14a-8.

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