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An Introduction to the Law of Corporations: Cases and Materials, Fall 2017

14a-8 Shareholder Proposals

Headnote

A “proxy statement” is a required disclosure document that publicly traded companies must send to all beneficial stockholders prior to any meeting of the stockholders. The proxy statement lays describes for beneficial stockholders the business of the upcoming meeting and include a voting proxy that a beneficial stockholder can return to the record holder. The most common business at a meeting is the annual election of directors. However, a board can bring any business or question to the stockholders for consideration and a vote.

The contents of this document are laid out in a series of rules under the ‘34 Act. The rules governing how a stockholder can get access to a corporation's proxy statement for the purpose of presenting proposals to fellow shareholders for their consideration at annual shareholder meetings are presented below in a unique FAQformat. 

The default rule is that any proposal put forward by an eligible stockholder in a timely manner must be included in the corporate proxy.  However, the board is not required to include all proposals in the proxy. There are a number of very important exceptions to the inclusion requirement, and they are laid out in the 14a-8 rules that follow.