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Univ. of Toledo College of Law

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Monday, May 23, 2011

Carpenters Union Petitions SEC for Rulemaking to Eliminate "Withhold Authority" Vote

The United Brotherhood of Carpenters and Joiners of America filed a petition with the SEC to initiate a rulemaking to amend Rule 14a-4(b)(2)3 (Requirements as to proxy) to eliminate the "withhold authority" vote on proxy forms used for the election of corporate directors.  According to the petition,

the "withhold authority" vote," or so-called "withhold" vote, established decades ago to "provide greater opportunities for shareholders to exercise their right of suffrage ... ," has outlived its intended purpose. The widespread adoption of a majority vote standard in director elections provides shareholders a valid opposition vote ("against") that has a "legal effect" in determining whether a nominee is elected. The symbolic "withhold" vote, a vestige of a plurality vote standard era, is not a valid vote option under any vote standard and its continued use contributes to confusing and misleading proxy communications that threaten the integrity of director elections.

http://lawprofessors.typepad.com/securities/2011/05/carpenters-union-petitions-sec-for-rulemaking-to-eliminate-withhold-authority-vote.html

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