FOR IMMEDIATE RELEASE
Washington, D.C., October 8, 2003 The Securities and Exchange Commission today approved rule proposals that would require companies to include in their proxy materials the names of nominees for director that are submitted by certain shareholders, as well as disclosure relating to those nominees. The proposals follow the recommendations made by the Division of Corporation Finance in its July 15 staff report, Review of the Proxy Process Regarding the Nomination and Election of Directors. The staff report is available on the Commission's website at http://www.sec.gov/news/studies/proxyreport.pdf.
Today's proposed rules would create a requirement for companies subject to the Commission proxy rules, including registered investment companies, to include in their proxy materials the names and certain other information regarding security holder nominees for election as director. The requirement would arise in cases where:
The number of nominees about whom a company would be required to include information in its proxy materials would vary depending on the size of its board of directors, Companies having eight or fewer board members would be required to include information regarding one nominee, companies with between nine and 19 board members would be required to include information regarding two nominees, and companies with boards of 20 or more members would be required to include information regarding three nominees.
The proposed procedure would require a company to include information regarding a security holder nominee for election as a director where:
Chairman William H. Donaldson said, "This year, for the first time in its history, the Commission has proposed rules that would provide shareholders a procedure that promotes access to the proxy process. Today's proposed rules, which build upon rules proposed in August, would strengthen the proxy process, directly benefiting shareholders, while carefully and thoughtfully balancing concerns about proper management and operation of our public companies. We look forward to receiving public comments on today's proposals as we continue working to improve the proxy process for companies and shareholders."
The Commission is soliciting comment on today's proposals for a 60-day period following their publication in the Federal Register. The proposals are expected to be available on the Commission's website within the next few days.
On August 8, the Commission proposed new rules designed to implement the staff report's other major recommendations:
Those rule proposals can be found on the Commission's Web site at http://www.sec.gov/rules/proposed/34-48301.htm.