The Division of Corporation Finance published Staff Legal Bulletin No. 14J (CF) in order to provide guidance on issues arising under Rule 14a-8 under the Exchange Act. SLB No. 14J expands on the types of factors that ought to be addressed in a board’s analysis of policy issues arising in connection with a no-action request on proposals that raise an issue that is “otherwise significantly related” to a company’s business, or that transcend ordinary business matters. The Division notes in SLB 14J that the Division continues “to believe that a well-developed discussion of the board’s analysis of whether the particular policy issue raised by the proposal is otherwise significantly related to the company’s business, in the case of Rule 14a-8(i)(5), or is sufficiently significant in relation to the company, in the case of Rule 14a-8(i)(7), can assist the staff in evaluating a company’s no-action request.” To that end, the Bulletin provides examples of factors that might be relevant to the analysis. The Bulletin also provides additional insight regarding the “ordinary business” exception and the framework that will be applied in evaluating requests for relief as those relate to proposals implicating compensation matters. See the full text here.
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