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The SEC Adopts Final Proxy Access Rules

September 20, 2010

By Michael L. Zuppone & Meagan S. Olsen

On August 25, 2010, the United States Securities and Exchange Commission (the SEC) adopted comprehensive revisions to the federal proxy rules in order to facilitate shareholders ability to exercise the rights afforded to them under state law to nominate and elect directors. In summary, the new proxy access rules create a substantive federal right that requires public companies to include shareholder nominees in their proxy statements and proxy cards and thereby provide an inexpensive means for opposing managements slate and seeking the election of up to a quarter of the seats that make up the entire board. The SEC also adopted special exemptions from its proxy solicitation rules that allow shareholders to actively campaign in favor of election of their nominees.