Shareholder proposals

(a)

Definitions

In this section:(1)

Accelerated filer; large accelerated filer

The terms accelerated filer and large accelerated filer have the meanings given the terms in section 240.12b–2 of title 17, Code of Federal Regulations, or any successor regulation.(2)

Commission

The term Commission means the Securities and Exchange Commission.(3)

Material

The term material, when used to qualify a financial risk or financial return—(A)means a financial risk or financial return in which there is a substantial likelihood that a reasonable investor would attach importance when—(i)evaluating the potential financial risks or returns of an existing or prospective investment; or(ii)exercising, or declining to exercise, any rights with respect to securities; and(B)does not include—(i)furthering nonpecuniary, environmental, social, political, ideological, or other goals or objectives; or(ii)any portion of a financial risk or financial return that primarily relates to events that—(I)involve a high degree of uncertainty regarding what may occur in the long-term future; and(II)are systemic, general, or not investment-specific in nature.(4)

Non-accelerated filer

The term non-accelerated filer means an issuer that is not an accelerated filer or a large accelerated filer.(b)

Amendments required

Not later than 180 days after the date of enactment of this Act, the Commission shall amend section 240.14a–8 of title 17, Code of Federal Regulations, or any successor regulation, to provide that the shareholder proposals that a company includes on the proxy card of the company, and includes along with any supporting statement in the proxy statement of the company, shall be determined in accordance with the following:(1)A company shall determine the proposals to include with respect to any 1 annual or special meeting of shareholders as follows:(A)Subject to paragraph (2), if the company is a non-accelerated filer, the company shall not be required to include more than 2 proposals submitted by shareholders.(B)Subject to paragraph (2), if the company is an accelerated filer, the company shall not be required to include more than 4 proposals submitted by shareholders.(C)Subject to paragraph (2), if the company is a large accelerated filer, the company shall not be required to include more than 7 proposals submitted by shareholders.(2)A proposal may not be included under paragraph (1) unless the proposal has a material effect on the financial performance of the applicable company.(3)The method for determining which proposals to include under subparagraphs (A), (B), and (C) of paragraph (1) shall be—(A)determined by the company; and(B)disclosed to the Commission.(4)The order in which the company receives the proposals shall have no bearing in determining whether a proposal is so included.(5)If any 2 or more proposals submitted are substantially similar, all such proposals shall be considered to be a single proposal for the purposes of this subsection.(6)No proposal submitted by a member of the board of directors of the company may be so included.(c)

Rules of construction

Nothing in this section may be construed—(1)to require a company to include a shareholder proposal in the proxy statement of the company if, under rules prescribed by the Commission, the proposal otherwise is not required to be included in the proxy statement; (2)to authorize or approve any Commission rule or claim of authority to require a company to include the proposal of a shareholder in the proxy statement of the company; or(3)to restrict the ability of the Commission to repeal any rule requiring a company to include the proposal of a shareholder in the proxy statement of the company.