Agenda for Proxy Process Roundtable, May 7, 2007

For shareholders of public companies, the rights granted to them by state corporation law to propose and to vote on the election of directors, amendments to by-laws, and other matters are critical to their ability to protect their investment. When Congress charged the SEC with regulating the proxy process, it created a federal role in vindicating shareholders' state law rights. Executing this responsibility requires, first, an answer to the question: what exactly is the scope of shareholders' voting rights under applicable state law? What limitations should there be to the shareholders' ability to govern the corporation? What should be the relationship of federal and state law in this area?

Moderators
John W. White, Division of Corporation Finance
Martin P. Dunn, Division of Corporation Finance

Participants

1. Stephen Bainbridge (UCLA School of Law)
2. R. Franklin Balotti (Richards, Layton & Finger, P.A.)
3. John C. Coffee (Columbia Law School)
4. Roberta Romano (Yale Law School)
5. Leo E. Strine, Jr. (Court of Chancery of the State of Delaware)

The federal regulation of the proxy process was intended by Congress to permit shareholders to exercise their state law rights to propose by-law amendments, nominate directors, and vote just as if they were present in person at a meeting. Do the federal proxy rules in fact operate this way? Or do they instead influence the exercise of shareholders' state law rights? How have the proxy rules affected the ability of shareholders to make proposals on subjects that fall within the rights of shareholders under state law? How have they affected the ability of shareholders to make non-binding proposals on subjects that fall within the province of the directors and management under state law?

Moderators
John W. White, Division of Corporation Finance
Martin P. Dunn, Division of Corporation Finance

Participants

1. Jill E. Fisch (Fordham University School of Law)
2. Stephen P. Lamb (Court of Chancery of the State of Delaware)
3. Donald C. Langevoort (Georgetown University Law Center)
4. Ted White (Knight Vinke Asset Management)
5. John C. Wilcox (TIAA-CREF)

Should the federal proxy rules serve to facilitate shareholder proposals on subjects concerning which shareholders cannot direct management or the board of directors under state law? If shareholder access to the corporate proxy were broadened, would this create a higher incidence of non-binding proposals not contemplated by state corporate laws? What benefits accrue from the current system of allowing certain non-binding proposals and not others? What are the detriments? Are there better ways to give voice to shareholder concerns on matters that state laws do not entrust to them to decide or direct, which do not rely upon the proxy process? Are there ways in which the Internet and other recent advances in communication can be used to promote discussion about non-binding proposals among shareholders, corporate managements, and boards of directors?

Moderators
John W. White, Division of Corporation Finance
Martin P. Dunn, Division of Corporation Finance

Participants

1. Richard J. Daly (BroadRidge Financial Solutions, Inc.)
2. Amy L. Goodman (Gibson, Dunn & Crutcher LLP)
3. Stanley Keller (Edwards Angell Palmer & Dodge LLP)
4. Cary Klafter (Intel Corporation)
5. Paul M. Neuhauser (University of Iowa College of Law)

Do the federal proxy rules fully vindicate shareholders' rights in those areas which are most clearly the responsibility of shareholders under state law -- viz., proposing and voting on by-law amendments, and nominating and voting on directors? Are there examples of proposals that shareholders would have the right to make under state law, but for the operation of the federal securities laws and the proxy rules? Should the Commission revise the proxy rules to permit shareholders to offer any proposal that may be made binding under state or foreign law?

Moderators
John W. White, Division of Corporation Finance
Martin P. Dunn, Division of Corporation Finance

Participants

1. Joseph A. Grundfest (Stanford Law School)
2. James J. Hanks, Jr. (Venable LLP)
3. Larry E. Ribstein (University of Illinois College of Law)
4. William Underhill (Slaughter and May)
5. Ann Yerger (Council of Institutional Investors)

Modified: 05/04/2007