SIDLEY CORPORATE GOVERNANCE REPORT...While proxy access has been the subject of shareholder...

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SIDLEY CORPORATE GOVERNANCE REPORT

Proxy Access Reaches the Tipping Point: Adopted by Just Over 50% (251) of S&P 500 Companies as of December 31, 2016 January 3, 2017

Overview ..................................................................................................................................................................... 1

The SEC’s 2010 Proxy Access Rule .......................................................................................................................... 2

Recent Uptick in Shareholder Proxy Access Proposals ............................................................................................. 3

First Attempt at Using Proxy Access Is Promptly Withdrawn ................................................................................................ 3

Emergence of Fix-It Proposals Seeking to Amend Existing Proxy Access Bylaws ............................................................... 5

Institutional Investor Support for Proxy Access .......................................................................................................... 5

Proxy Advisory Firm Policies on Proxy Access .......................................................................................................... 8

ISS Negative Vote Recommendations Against Directors – Focus on Secondary Provisions ............................................... 9

New ISS QualityScore Factors Relating to Proxy Access .................................................................................................. 11

Grounds for Exclusion of Shareholder Proxy Access Proposals ............................................................................. 12

SEC Staff Guidance on Excludability of Directly Conflicting Shareholder Proposals .......................................................... 13

Voting Results on Proxy Access Proposals ............................................................................................................. 16

Adoption of Proxy Access Provisions And Typical Parameters ............................................................................... 18

A Moving Target – Amendments to Previously Adopted Provisions ................................................................................... 19

Potential Impact of Proxy Access on Corporate Governance .................................................................................. 24

International Perspectives on Proxy Access ....................................................................................................................... 25

Practical Considerations ........................................................................................................................................... 25

Appendix A – Select Terms of Proxy Access Provisions Adopted Since January 1, 2015

Appendix B – Summary of Proxy Access Bylaw Amendments Sought by Shareholder Proponents - NEW

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In late December 2016, proxy access reached the tipping point in terms of adoption by large companies – just over 50% of S&P 500 companies have now adopted proxy access. Through the collective efforts of large institutional investors, including public and private pension funds, and other shareholder proponents, shareholders are increasingly gaining the power to nominate a portion of the board without undertaking the expense of a proxy solicitation. By obtaining proxy access (the ability to include shareholder nominees in the company’s own proxy materials), shareholders will have yet another tool to influence board decisions.

As a follow-up to our previous reports on proxy access, this update reflects recent developments on the topic, including:

• the continuing and increasing pace of proxy access bylaw adoptions and the convergence toward standard key parameters (most commonly 3% for 3 years for up to 20% of the board (at least 2 directors) with a nominating group size limit of 20);

• the first attempt to utilize proxy access at a public company in the U.S. – which was promptly withdrawn;

• a new Appendix B that summarizes recent shareholder proposals seeking specified revisions to existing proxy access provisions (so-called “fix-it” proposals) and additional responses from the Staff of the SEC’s Division of Corporation Finance (SEC Staff) to requests to grant no-action relief to companies seeking to exclude such proposals; and

• new questions relating to proxy access that ISS will consider for purposes of its newly-updated QualityScore corporate governance ratings tool.

We have also updated Appendix A which highlights, on a company-by-company basis, various terms of proxy access provisions adopted by 342 companies in 2015 and 2016 (including, among others, S&P 500 companies). This data includes the terms adopted by 79 companies since we published our last Sidley Corporate Governance Report on proxy access on September 22, 2016.

Snapshot of Proxy Access Provisions Adopted Since January 1, 2015 (See Appendix A for these and additional provisions, presented on a company-by-company basis)

Prevalence of Selected Alternatives

Shareholder Viewpoints*

Proxy Advisory Firm Policies and Council of Institutional

Investors (CII) Position

Ownership Threshold and

Duration

• 3% / 3 years – 339/342 (99%); included in SEC vacated rule

• 5% / 3 years – 3/342 (1%)

• Nearly all favor 3% • Shareholder proposals

more likely if company adopts at 5%

• ISS and Glass Lewis support 3%

• CII supports 3% and views 5% as “troublesome”

Proxy Access Nominee Limit

(Max. % of Board)

• Greater of 2 or 20% – 228/342 (67%)

• 20% cap – 68/342 (20%) • Greater of 2 or 25% –

23/342 (7%) • 25% cap – 23/342 (7%);

included in SEC vacated rule

• Most favor 20-25%

• ISS and Glass Lewis support 25%

• If adopted after majority-supported shareholder proposal, ISS may issue negative vote recommendations against directors if less than 20%

• CII favors ability to nominate at least 2 candidates

Nominating Group Size Limit

• No limit – 8/342 (2%); included in SEC vacated rule

• 50 – 1/342 (<1%) • 30 – 2/342 (1%) • 25 – 13/342 (4%) • 20 – 311/342 (91%) • 15 – 3/342 (1%) • 10 – 3/342 (1%) • 5 – 1/342 (<1%)

• General consensus that limit of 20 is reasonable

• Possibility of shareholder proposals seeking removal of limits or specifying a particular nominating group size (e.g., 40 or 50)

• ISS favors minimal or no limits • If adopted after majority-supported

shareholder proposal, ISS may issue negative vote recommendations against directors if less than 20

• CII views any limit as “troublesome”

* Derived from publicly available voting policies as well as preferences expressed through engagement and voting results.

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While proxy access has been the subject of shareholder proposals for several years, 2015 was a watershed year, following the private ordering pattern of majority voting in uncontested director elections. Many companies received proposals for their 2015 annual meetings requesting that the board amend the bylaws to allow large, long-standing shareholders (or groups of shareholders) to nominate directors and include those nominees in the company’s own proxy statement and related materials. The 2015 proxy season saw a significant increase in the number of shareholder proxy access proposals and shareholder support for such proposals (see box below), as well as an increased frequency of negotiation and adoption of proxy access via board action—including an accelerating trend towards board adoption without receipt of a shareholder proposal. This trend continued in 2016 and appears to be continuing into 2017.

Proxy access initiatives had limited levels of success prior to 2015. However, shareholder support started to increase in 2014 as proponents began to focus on the 3% for 3 years ownership requirement adopted by the SEC in its 2010 rulemaking efforts (as described below).

Key Highlights of Shareholder Proxy Access Proposal Voting Results1 Shareholder Proxy Access Proposals 2014 2015 2016

• Voted On 18 91 77

• Passed 5 (28%) 55 (60%) 40 (52%)

• Average Support 34% 55% 51%

In 2015, with a major initiative from public pension funds led by New York City Comptroller Scott M. Stringer and with encouragement from major investors, such as TIAA, and the large institutional investor industry group, the Council of Institutional Investors (CII), proxy access took hold. Adding to the momentum was the SEC Staff’s refusal to grant no-action relief in situations where a company intends to put forward its own competing proposal. Proxy advisory firm policies supporting proxy access added to the momentum. Moreover, in August 2014, the CFA Institute published a report discussing the potential economic benefits of proxy access; this report has been cited by Comptroller Stringer, CalPERS and other proponents in their proposals.1 In early 2016, a business law professor published a policy brief criticizing the CFA Institute report as being “deeply flawed” and urging that it not be used as support for mandatory proxy access.2

The broad-based shareholder campaign for proxy access on a company-by-company basis, and the momentum that continues to accelerate among targeted companies and other leading companies to respond by taking action to adopt proxy access (with or without first receiving a shareholder proposal), is reminiscent of the campaign several years ago for companies to replace plurality voting with majority voting in the uncontested election of directors. Both issues relate to the ability of shareholders to influence the composition of the board, and both campaigns show the power of concerted efforts at private ordering.

THE SEC’S 2010 PROXY ACCESS RULE

The SEC has unsuccessfully sought to adopt a market-wide proxy access rule for decades. Most recently, in 2010, the SEC adopted a proxy access rule (Exchange Act Rule 14a-11) that would have given shareholders the ability to nominate candidates through the company’s proxy materials if a shareholder (or a group of shareholders without any limit on the size of the nominating group) held 3% of the company’s shares for at least three years. Under the rule, a nominating shareholder (or group of shareholders, with no limit on the size of the group) could nominate one proxy access director, or 25% of the board, whichever is greater. Rule 14a-11 was adopted shortly after Section 971 of the Dodd-Frank Act confirmed the SEC’s authority to promulgate a proxy access rule. The

1 Data points in this report with respect to proxy access proposals are derived from SharkRepellent.net, last accessed on December 31, 2016. All voting results in this report are calculated on the basis of votes cast “for” the proposal divided by the sum of votes cast “for” and “against” that proposal (not taking into account abstentions). For purposes of this report, references to “shareholder proxy access proposals” mean proposals seeking a proxy access right rather than proposals seeking amendments to an existing proxy access provision.

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SEC issued final rules mandating proxy access in August 2010, which were scheduled to become effective in November 2010. In addition, the SEC also amended Exchange Act Rule 14a-8(i)(8) to allow shareholder proposals relating to proxy access and certain other director election mechanisms.3

In September 2010, Business Roundtable and the U.S. Chamber of Commerce challenged the validity of Rule 14a-11. In 2011, the U.S. Court of Appeals for the District of Columbia Circuit vacated Rule 14a-11 on the grounds that the SEC had acted “arbitrarily and capriciously” in promulgating the rule and failing to adequately assess its economic impact.4 The SEC did not appeal the court’s decision and has not re-proposed any proxy access rule since that decision; however, the amendment to Rule 14a-8 described above became effective in September 2011, thereby opening the door to shareholder proposals seeking proxy access.5

RECENT UPTICK IN SHAREHOLDER PROXY ACCESS PROPOSALS

In public comments on the SEC’s proposed Rule 14a-11, several commenters expressed the view that the matter should be left to shareholders and companies to decide on a company-by-company basis through private ordering.6 Private ordering may take place, for example, pursuant to Section 112 of the Delaware General Corporation Law.7

Fifteen companies adopted proxy access prior to 2015, including a few large companies, such as Hewlett-Packard Company (now known as HP Inc.), The Western Union Company and Verizon Communications Inc., which each adopted proxy access after receiving a shareholder proposal on the topic, as well as some companies that have since gone private. In addition, proxy access with a 5% for 2 years ownership threshold has been mandatory for companies incorporated in North Dakota since 2008; and we are aware of one public company that reincorporated to North Dakota from Delaware several years ago with the stated purpose of taking advantage of this and other “shareholder-friendly” provisions.8 To date, no shareholder has included a director nominee in the proxy materials of a U.S. company pursuant to a proxy access right.9

FIRST ATTEMPT AT USING PROXY ACCESS IS PROMPTLY WITHDRAWN In November 2016, GAMCO Asset Management Inc. and Gabelli Funds, LLC, entities affiliated with activist investor Mario Gabelli (collectively, GAMCO), attempted to utilize proxy access to nominate a director at National Fuel Gas Company’s 2017 annual meeting. National Fuel had adopted proxy access in March 2016 on standard terms (i.e., 3% for 3 years for up to 20% of the board with a nominating group size limit of 20). GAMCO, which disclosed ownership of 7.8% of National Fuel’s common stock in its Schedule 14N, had owned greater than 3% for more than 3 years.10 Two weeks after the Schedule 14N filing, National Fuel disclosed in a Form 8-K that it had sent a letter to GAMCO rejecting its proxy access nominee on the grounds that GAMCO could not comply with the terms and conditions set forth in the proxy access bylaw to submit a proxy access nominee.11 Specifically, National Fuel’s proxy access bylaw included a typical requirement that the nominating shareholder acquired the shares “in the ordinary course of business and not with the intent to change or influence control of the Corporation, and does not presently have such intent.” National Fuel argued that GAMCO could not comply with that requirement because its Schedule 13D filings throughout its investment reflected a control intent and it had previously pressured the company to spin-off certain of its assets, including by submitting a shareholder proposal for the company’s 2015 annual meeting requesting that the board engage an investment banking firm to effect a spin-off of the company’s utility segment (which proposal received 17.8% support). Five days after the Form 8-K filing, GAMCO disclosed that its proxy access nominee had withdrawn his nomination at National Fuel and that “GAMCO will not pursue Proxy Access.”12

The first attempt to use proxy access at a U.S. company by a known activist was surprising given the nomination restrictions relating to control intent – although the end result was not a surprise. It serves as a reminder to companies considering adopting proxy access bylaws to thoughtfully consider the eligibility requirements applicable to nominating shareholders and proxy access nominees.

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The private ordering effort is now in full swing. Shareholder proposals seeking proxy access were the defining feature of the 2015 and 2016 proxy seasons, and we expect shareholder proposals seeking the adoption of proxy access or amendment of an existing proxy access provision to be prevalent in the 2017 proxy season. 115 shareholder proxy access proposals were submitted for the 2015 proxy season, which was more than four times the number submitted for the 2014 proxy season. Based on the success of private ordering efforts in 2015, more than 200 shareholder proxy access proposals were submitted for the 2016 proxy season, well surpassing prior-year levels.

The New York City Pension Funds, with approximately $160 billion under management, accounted for the majority of the proxy access proposals submitted for the 2015 proxy season. In November 2014, Comptroller Stringer announced the “Boardroom Accountability Project,” targeting 75 companies with non-binding shareholder proxy access proposals.13 The proposals request that the board adopt, and present for shareholder approval, a bylaw to give shareholders who meet a threshold of owning 3% of the company’s stock for three or more years the right to include their director candidates, representing up to 25% of the board, in the company’s proxy materials, with no limit on the number of shareholders that could comprise a nominating group. According to Comptroller Stringer, the targeted companies were selected due to concerns about the following three priority issues:

• Climate change (i.e., carbon-intensive coal, oil and gas and utility companies).

• Board diversity (i.e., companies with little or no gender, racial or ethnic diversity on the board).

• Excessive executive compensation (i.e., companies that received significant opposition to their 2014 say-on-pay votes).

On January 11, 2016, Comptroller Stringer announced that the New York City Pension Funds expanded the Boardroom Accountability Project by submitting proxy access proposals at 72 companies for the 2016 proxy season.14 36 companies that had received proxy access proposals from Comptroller Stringer’s office in 2015 were targeted again for 2016 because they had not yet adopted proxy access at a 3% ownership threshold (two companies that had adopted a 5% proxy access bylaw received a binding proposal from the New York City Pension Funds for 2016, each of which has since amended its proxy access bylaw to reduce the required ownership threshold from 5% to 3%15). Another 36 companies were newly targeted for 2016, with a focus on the New York City Pension Fund’s largest portfolio companies, coal-intensive utilities and companies selected due to concerns about board diversity and excessive CEO pay. The form of proxy access proposal submitted by Comptroller Stringer for the 2016 proxy season did not differ substantively from the template submitted for the 2015 proxy season except that it no longer specifically sought shareholder approval of proxy access bylaws. The form of proposal for the 2017 proxy season was revised to indicate that the number of proxy access nominees shall not exceed the larger of two or 25% of the board.

As of December 31, 2016, 97 of the 110 companies targeted by the New York City Pension Funds for 2015 and 2016 have adopted proxy access.16 Such companies are identified by an + in Appendix A to this report.

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INSTITUTIONAL INVESTOR SUPPORT FOR PROXY ACCESS

Proxy access is supported by many institutional investors, including the following:

• BlackRock – will review proxy access proposals on a case-by-case basis and generally support them provided that their parameters are not “overly restrictive or onerous” and “provide assurances that the mechanism will not be subject to abuse by short-term investors, investors without a substantial investment in the company, or investors seeking to take control of the board.”17

• California Public Employees’ Retirement System (CalPERS) – indicated that proxy access was one of its strategic priorities for the 2015 proxy season and supported proxy access proposals at 100 companies in 2015.18 In February 2016, CalPERS announced that proxy access will continue to be a strategic priority in 2016 and that it will continue to support shareholder proposals at the 3% for 3 years threshold and will issue adverse votes against director nominees at companies where proxy access proposals passed in 2015 and that implemented provisions that restrict or limit the use of proxy access.19 Finally, CalPERS updated its Global Governance Guidelines in March 2016 to recommend that companies adopt proxy access at the 3% for 3 years threshold to nominate up to 25% of the board.20

• California State Teachers’ Retirement System (CalSTRS) – supports proxy access at the 3% for 3 years threshold, capped at a minority of board seats.21

EMERGENCE OF FIX-IT PROPOSALS SEEKING TO AMEND EXISTING PROXY ACCESS BYLAWS

Following the flood of shareholder proposals asking companies to adopt proxy access, shareholder proponents began submitting proposals in 2016 requesting that companies make specific revisions to their existing proxy access bylaws. These so-called “fix-it” proposals were voted on at only eight companies in 2016. The proposals passed at two companies (in each case where the proponent requested a reduction of the ownership threshold from 5% to 3%, among other amendments) and average shareholder support was approximately 44% (compared to shareholder proposals to adopt proxy access which have received average support of 51%). While they are typically non-binding, a few fix-it proposals have been binding, none of which were approved by shareholders. The initial variety of fix-it proposals requested some combination of the following amendments:

• the ownership threshold would be 3%; • the number of proxy access nominees would be the greater of 25% or 2 directors (or, at some

companies, 25%); • loaned shares would count toward the ownership threshold so long as they are recallable; • there would be no limit on the size of the nominating group; • there would be no restriction on the re-nomination of a proxy access nominee based on the number or

percentage of votes received in a prior election; • there would be no requirement to hold shares after the annual meeting (e.g., for one year) or to

express any intention to do so; • the board would not have the power to amend the proxy access bylaw; and • the board would defer decisions about the suitability of shareholder nominees to a shareholder vote.

Appendix B sets forth the specific proxy access bylaw amendments requested in the fix-it proposals submitted to date, as well as details about voting results on the proposals and the status of requests for no-action relief, where applicable. Based on recent SEC Staff determinations discussed below, some shareholder proponents are refining their shareholder proxy access proposals or fix-it proposals to limit them to a single issue, making it less likely for a company to be able to exclude them on the basis of substantial implementation. For example, some shareholder proponents are asking companies to adopt proxy access or amend their proxy access bylaws with a specific limit on the size of the nominating group (e.g., 40 or 50).

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• State Street Global Advisors – will review proxy access proposals on a case-by-case basis evaluating the company’s specific circumstances and the proposal’s potential effect on shareholder value, taking into account “the ownership thresholds and holding duration proposed in the resolution, the binding nature of the proposal, the number of directors that shareholders may be able to nominate each year, company governance structure, shareholder rights and board performance.”22

• TIAA (formerly TIAA-CREF) – wrote to the 100 largest companies in which it invests in February 2015, encouraging them to adopt proxy access at the 3% for 3 years threshold.23 In addition, TIAA submitted proxy access proposals at some companies for the 2016 proxy season.

• T. Rowe Price – supports proxy access proposals at the 3% for 3 years threshold and opposes “significant impediments” to a proponent’s ability to aggregate holdings with other shareholders to qualify for proxy access. For the 2016 proxy season, T. Rowe Price added to its Proxy Voting Policies that it will generally recommend votes against shareholder proposals to amend existing proxy access bylaws if the company’s bylaw meets the 3% for 3 years threshold and does not impede aggregation.24

• United Brotherhood of Carpenters – sent letters to 50 companies in late 2015 seeking a proxy access right in the event that the board refuses to accept the resignation of an incumbent director who fails to receive majority support.25 The letters were sent to companies with a majority voting standard and a director resignation policy and that had shareholder proxy access proposals on the ballots for their 2015 annual meetings, whether or not those proposals received majority support.

• Vanguard – announced in February 2016 that it amended its proxy voting guidelines to decrease the ownership threshold for likely support from 5% to 3%. Vanguard stated that the policy change was informed by engagement over the past year and “the critical mass of access adoption at the 3 percent ownership level by an increasingly wide range of companies.” Vanguard will continue to evaluate proxy access proposals on a case-by-case basis but will now generally support proposals at the 3% for 3 years threshold, capped at 20% of board seats.26

Fidelity generally votes against management and shareholder proposals to adopt proxy access.27

Several institutional investors have adopted proxy access, shedding light on the terms they presumably find acceptable.28 The table below shows the key parameters of the proxy access provisions adopted by major institutional investors since late 2015. All were adopted by the board by unilateral bylaw amendment, except where otherwise indicated.

Institution Ownership Threshold and Duration

Nominee Limit (Max % of Board)

Nominating Group Size Limit

The Bank of New York Mellon Corp. (adopted on 10/13/15)

3% for 3 years 20%

(≥2 directors) 20

BlackRock, Inc. (approved by shareholders and adopted on 5/25/16; amended on 7/20/16) 3% for 3 years 25% 20

The Goldman Sachs Group, Inc. (adopted on 10/23/15)

3% for 3 years 20%

(≥2 directors) 15

JPMorgan Chase & Co. (adopted on 1/19/16)

3% for 3 years 20%

(≥2 directors) 20

Morgan Stanley (adopted on 10/29/15)

3% for 3 years 20%

(≥2 directors) 20

State Street Corporation (adopted on 10/15/15)

3% for 3 years 20% 20

T. Rowe Price Group, Inc. (adopted on 12/10/15)

3% for 3 years 20%

(≥2 directors) 20

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CII has long supported proxy access, favoring a broad-based SEC rule imposing proxy access. Absent such a rule, Section 3.2 of CII’s Corporate Governance Policies states that a company should provide access to management proxy materials for an investor or a group of investors that have held in the aggregate at least 3% of the company’s voting stock for at least 2 years, to nominate less than a majority of the directors.29

In August 2015, CII issued guidelines setting forth what it considers best practices for companies adopting proxy access provisions. The guidelines highlight seven provisions that CII finds “troublesome” in that they could “significantly impair shareowners’ ability to use proxy access, or even render access unworkable.”30 The provisions that are of most concern to CII are:

• An ownership threshold of 5%.

• The percent or number of board members that may be elected could result in fewer than 2 proxy access nominees.

• Aggregation of shareholders to form a nominating group is limited to a specified number.

• Not counting loaned shares (that meet certain conditions with respect to recall and voting) toward the ownership threshold during the holding period.

• A requirement for a nominating shareholder to continue to hold the requisite percentage of shares after the annual meeting.

• Re-nomination restrictions in the event a proxy access nominee fails to receive a specified minimum percentage of votes.

• Prohibitions on third-party compensation arrangements with proxy access nominees (although CII supports disclosure of such arrangements).

When the guidelines were issued, the interim executive director of CII stated that every proxy access provision in effect at the time included at least one of these “troublesome” provisions.31 Two of these provisions are very commonly included in the proxy access bylaws that have been adopted to date – a limit on the number of shareholders that can comprise a nominating group and re-nomination restrictions based on a failure to obtain a specified percentage of votes in a prior election.

Some institutional investors that favor proxy access coordinated their efforts during the 2015 proxy season in an attempt to increase investor support for the proxy access proposals they sponsored. Specifically, the New York City Pension Funds, CalPERS and other large labor-affiliated pension funds each filed Form PX14A6Gs with the SEC enabling them to communicate in support of their proxy access proposals (but not collect actual proxies) without such communications being subject to the proxy solicitation rules. The New York City Pension Funds partnered with CalPERS again in 2016 to conduct exempt solicitations in support of proxy access proposals.

According to a report on the 2016 proxy season by Broadridge and PricewaterhouseCoopers, institutional investors are four times more likely to support proxy access than are individual investors: 60% of votes cast by institutional investors were in favor of proxy access in the first half of 2016, compared with only 15% of those cast by individual retail investors.32 The report also indicated that retail investors voted only 28% of the shares they own (compared with 91% of institutional investors). These findings suggest that companies facing a shareholder proxy access proposal should seek out opportunities to engage with retail investors and encourage them to vote.

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PROXY ADVISORY FIRM POLICIES ON PROXY ACCESS

Both Institutional Shareholder Services (ISS) and Glass, Lewis & Co. generally favor proxy access for significant, long-term shareholders.

ISS

Shareholder and Management Proxy Access Proposals

ISS generally recommends in favor of shareholder and management proxy access proposals with all of the following features:

• An ownership threshold of not more than 3% of the voting power.

• A holding period of no longer than 3 years of continuous ownership for each member of the nominating group.

• Minimal or no limits on the number of shareholders that may form a nominating group.

• A cap on the number of available proxy access seats of generally 25% of the board.33

ISS will review any additional restrictions for reasonableness. ISS will generally recommend a vote against proposals that are more restrictive than the ISS guidelines. ISS policy does not specifically address how it evaluates competing shareholder and management proposals. In 2016, ISS recommended votes in favor of the shareholder proposals and for the management proposals with 3% ownership thresholds but against the management proposals with 5% ownership thresholds. In 2015, ISS recommended in favor of the shareholder proposals and against the management proposals, as described below.

Board Responsiveness to a Majority-Supported Shareholder Proposal34

ISS issued FAQs in December 2015 clarifying when it may issue negative vote recommendations against directors of companies that do not implement a majority-supported shareholder proxy access proposal substantially in accordance with its terms.35 In evaluating a board’s response to a majority-supported proposal, ISS will examine:

• Whether the major points of the shareholder proposal were implemented.

• Additional provisions that were not included in the shareholder proposal in order to assess whether such provisions unnecessarily restrict the use of a proxy access right.

ISS may recommend votes against individual directors, nominating/governance committee members or the entire board if the proxy access provision implemented or proposed by management contains material restrictions more stringent than those included in the shareholder proposal with respect to the following:

• Ownership thresholds above 3%.

• Ownership duration longer than 3 years.

• Aggregation limits below 20 shareholders.

• Cap on proxy access nominees set at less than 20% of the board.

ISS may issue negative vote recommendations against directors if the aggregation limit or cap on proxy access nominees differs from the terms of the shareholder proposal and the company has not disclosed its shareholder outreach efforts and engagement.

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If the proxy access provision contains restrictions or conditions on proxy access nominees, ISS will review it on a case-by-case basis and consider the following restrictions as “potentially problematic,” particularly when used in combination:

• Prohibitions on resubmission of failed nominees in subsequent years.

• Restrictions on third-party compensation of proxy access nominees.

• Restrictions on the use of proxy access and proxy contest procedures for the same meeting.

• How long and under what terms an elected shareholder nominee will count towards the maximum number of proxy access nominees.

• When the right will be fully implemented and accessible to qualifying shareholders.

ISS views the following restrictions as “especially problematic” in that they “effectively nullify the proxy access right”:

• Counting individual funds within a mutual fund family as separate shareholders for purposes of an aggregation limit.

• The imposition of post-meeting shareholding requirements for nominating shareholders.

ISS policy does not address the unilateral adoption or amendment of proxy access bylaws.

ISS NEGATIVE VOTE RECOMMENDATIONS AGAINST DIRECTORS – FOCUS ON SECONDARY PROVISIONS

As discussed in a report on proxy access bylaws issued by ISS in August 2016 (the ISS Proxy Access Report),36 ISS initially issued negative vote recommendations against certain directors at three companies in 2016 for failure to adequately respond to majority-supported 2015 shareholder proxy access proposals by adopting proxy access bylaws that ISS deemed to be “significantly more restrictive than the shareholder proposal.”

Company Affected Directors CBL & Associates Properties, Inc. (ISS Report dated 4/13/16)

Lead independent director and Governance Committee chair

Cheniere Energy, Inc. (ISS Report dated 5/20/16)

Governance & Nominating Committee members

Cloud Peak Energy Inc. (ISS Report dated 4/28/16 and Proxy Alert dated 5/2/16)

Governance Committee members

In each case, the company originally adopted a proxy access bylaw with standard key parameters—3% for 3 years for up to 20% of the board with a group size limit of 20. However, ISS took issue with restrictive secondary provisions in the proxy access bylaws when combined with (i) inadequate disclosure regarding the rationale for some of the additional restrictions or shareholder engagement efforts when developing the proxy access bylaw and (ii) the companies’ two-thirds vote requirements for shareholder-approved bylaw amendments.

Restrictive Provisions Noted by ISS Companies

• Group size limit of 20 shareholders (versus no limit in the shareholder proposal) without disclosure of shareholder outreach indicating a preference for such limit

CBL, Cloud Peak Energy

• Cap on proxy access nominees of 20% of the board (versus 25% in the shareholder proposal) without disclosure of shareholder outreach indicating a preference for the 20% cap

Cloud Peak Energy

• The number of proxy access nominees will be reduced by the number of nominees who were proxy access nominees at either of the preceding 2 annual meetings and whose nomination has been submitted by the board

CBL, Cheniere Energy

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Proxy Access Nominees

The FAQs ISS issued in December 2015 also clarify that when evaluating proxy access nominees, it will take into account any relevant factors, including:

• Nominee/nominator specific factors:

- Nominators’ rationale.

- Nominators’ critique of management/incumbent directors.

- Nominee’s qualifications, independence and overall fitness for directorship.

• Company specific factors:

- Company performance relative to its peers.

- Background to the contested situation (if applicable).

- Board’s track record and responsiveness.

- Independence of directors/nominees.

- Governance profile of the company.

Restrictive Provisions Noted by ISS Companies • The maximum number of proxy access nominees will be reduced by (i) the number of

director candidates nominated other than those nominated as proxy access nominees; and (ii) any proxy access nominee whom the board decides to nominate as a board nominee

Cloud Peak Energy

• The board may omit proxy access nominees if it receives notice that any shareholder intends to nominate a director pursuant to the advance notice procedures or if the nominator intends to participate in a proxy contest at the same meeting

CBL, Cheniere Energy

• If the company receives notice that a shareholder intends to nominate (other than via proxy access) 50% or more of the directors to be elected at a meeting, no proxy access nominees will be included in the company's proxy materials

Cloud Peak Energy Inc.

• A nominator must agree not to engage in a solicitation and may not participate in another party's solicitation

Cloud Peak Energy

• A proxy access nomination deadline of 150-120 days prior to the last annual meeting’s proxy issuance anniversary (versus 120-90 days for other matters)

Cheniere Energy

• The nominator must certify its intention to hold the required shares for one year following the annual meeting

CBL

• The company may omit a proxy access nominee who is or has been an officer or director of a competitor in the past 3 years

CBL, Cheniere Energy, Cloud Peak Energy

• The board may omit a proxy access nominee who was nominated at either of the last 2 meetings and received a vote of less than 25% of the shares of common stock entitled to vote for such nominee

Cheniere Energy

• The board will have broad and binding authority to interpret the proxy access provision and make necessary determinations

CBL, Cheniere Energy, Cloud Peak Energy

ISS reversed the negative vote recommendations against directors at Cloud Peak Energy Inc. after the company amended its proxy access bylaw to (i) eliminate the aggregation limit of 20 shareholders, (ii) increase the cap on proxy access nominees from 20% to 25% of the board and (iii) remove all of the secondary provisions that ISS deemed overly restrictive. At the other two companies, the affected directors were elected by the shareholders, albeit with a relatively lower percentage of support (i.e., approximately 75% support at CBL & Associates Properties, Inc. and between 88-91% support at Cheniere Energy, Inc.). Cheniere Energy, Inc. subsequently amended its proxy access bylaw to, among other things, remove the provision permitting the company to exclude a proxy access nominee who received less than 25% support at one of the two preceding annual meetings.

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- Evidence of board entrenchment.

- Current board composition (skill sets, tenure, diversity, etc.).

- Ongoing controversies, if any.

• Election specific factors:

- Whether the number of nominees exceeds the number of board seats.

- Vote standard for the election of directors.

ISS did not make any updates to its proxy voting policies regarding proxy access for the 2017 proxy season.

Glass Lewis

Glass Lewis’ proxy voting policies provide that it will review on a case-by-case basis shareholder proxy access proposals and the company’s response, including whether the company offers its own proposal in place of, or in addition to, the shareholder proposal. Glass Lewis will consider:

• Company size.

• Existing or proposed proxy access provisions. (New factor for consideration added for 2017.)

• Board independence and diversity of skills, experience, background and tenure.

• The shareholder proponent and the rationale for the proposal at the target company.

• The percentage of ownership requested and the holding period requirement (although note that Glass Lewis policy does not specify a preferred percentage).

NEW ISS QUALITYSCORE FACTORS RELATING TO PROXY ACCESS As discussed in a previous Sidley Update,37 in November 2016, ISS added to its QualityScore corporate governance ratings tool the following new scored questions relating to proxy access:

• What is the ownership threshold for proxy access? (ISS notes that most companies have adopted a 3% threshold.)

• What is the ownership duration threshold for proxy access? (ISS considers a holding period of longer than 3 years to be excessive.)

• What is the cap on shareholder nominees to fill board seats from proxy access? (ISS notes that generally investors have approved a range of 20-25% of the board, and that many companies have adopted a “greater of 2 directors or 20% of the board” standard.)

• What is the aggregation limit on shareholders to form a nominating group for proxy access? (ISS notes that an aggregation limit of 20 shareholders has generally been considered a minimal restriction.)

These questions supplement a factor ISS added in November 2015 asking whether or not the company has adopted proxy access, which was previously tracked on a “zero-weight” basis for informational purposes only but is now scored for QualityScore purposes.

Now that ISS QualityScore reports are available, we are beginning to see how ISS views certain proxy access features. In the QualityScore report of a company that had adopted proxy access on standard terms (i.e., 3% for 3 years for up to 20% of the board (at least 2 directors) with a group size limit of 20), ISS gave the company a “star” for each of the four new scored questions relating to proxy access, designating that the company scored in the top of the possible range of points with respect to such questions. Notably, for companies that have atypical proxy access provisions that ISS has objected to (e.g., a 5% ownership threshold or a group size limit of 10) or that have not adopted proxy access at all, ISS has left the field blank (meaning that the “factor has no meaningful impact on the pillar’s absolute score”) rather than giving the company a “red flag” for the applicable question (meaning that the “factor negatively impacts the pillar’s absolute score”).

http://www.sidley.com/~/media/update-pdfs/2016/11/iss-qualityscore-updates-sidley-update.pdf

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• The shareholder base in both percentage of ownership and type of shareholder (such as a hedge fund, activist investor, mutual fund or pension fund).

• Board and management responsiveness to shareholders, as evidenced by progressive shareholder rights policies (such as majority voting or board declassification) and reaction to shareholder proposals.

• Company performance and steps taken to improve poor performance (such as appointing new executives or directors or engaging in a spin-off).

• Existence of anti-takeover protections or other entrenchment devices.

• Opportunities for shareholder action (such as the ability to act by written consent or the right to call a special meeting).

Beginning with the 2016 proxy season, Glass Lewis considers the following factors when making vote recommendations with respect to conflicting management and shareholder proposals:

• The nature of the underlying issue.

• The benefit to shareholders from implementation of the proposal.

• The materiality of the differences between the terms of the conflicting proposals.

• The appropriateness of the provisions in the context of a company’s shareholder base, corporate structure and other relevant circumstances.

• A company’s overall governance profile and, specifically, its responsiveness to shareholders as evidenced by its response to previous shareholder proposals and its adoption of “progressive shareholder rights provisions” (which Glass Lewis has not defined).38

Except as noted above, Glass Lewis did not make any updates to its proxy voting policies regarding proxy access for the 2017 proxy season.

GROUNDS FOR EXCLUSION OF SHAREHOLDER PROXY ACCESS PROPOSALS

Under the SEC’s proxy rules, a company may exclude a shareholder proposal relating to proxy access from its proxy materials if the proposal fails to meet any of the procedural and substantive requirements of Exchange Act Rule 14a-8. A company may seek no-action relief from the SEC Staff pursuant to which the company can exclude the proposal from its proxy materials. Two substantive grounds that have been relied on by companies seeking to exclude a shareholder proxy access proposal are that the proposal directly conflicts with a management proposal (Rule 14a-8(i)(9)) or has already been substantially implemented by the company (Rule 14a-8(i)(10)).39 However, as discussed below, the SEC Staff issued guidance in the fall of 2015 that has made it more difficult for a company to obtain no-action relief under Rule 14a-8(i)(9) on the grounds that a shareholder proxy access proposal directly conflicts with a management proxy access proposal. Therefore, companies that have adopted proxy access have argued “substantial implementation” when seeking to exclude proxy access proposals from their 2016 and 2017 proxy statements and have generally been successful as discussed below. However, as discussed below, recent responses to no-action requests illustrate that the SEC Staff will distinguish between proposals seeking to adopt proxy access with specified parameters versus fix-it proposals requesting that specific revisions be made to an existing proxy access bylaw.

Directly Conflicting Proposals

In December 2014, the SEC Staff granted no-action relief to Whole Foods Market, Inc. on the basis that a 3% for 3 years shareholder proxy access proposal directly conflicted with a 9% for 5 years management proposal.40 When Whole Foods filed its preliminary proxy statement with the SEC after this relief was granted, the ownership threshold in the management proposal was reduced from 9% to 5%.

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In the wake of the no-action relief granted to Whole Foods, it was broadly expected that companies would counter shareholder proxy access proposals by putting forward management proxy access proposals with higher minimum ownership thresholds, and obtain no-action relief on the basis that the proposals were conflicting and therefore excludable. However, following the grant of no-action relief to Whole Foods, James McRitchie, the proponent of the Whole Foods proposal, appealed the grant to the SEC and a letter-writing campaign by incensed institutional investors followed.

In January 2015, SEC Chair Mary Jo White reversed course. In an unusual development, Chair White directed the SEC Staff to review Rule 14a-8(i)(9) as a basis for exclusion. As discussed in a previous Sidley Update,41 following Chair White’s direction, the Division of Corporation Finance announced that it would not express a view on the application of Rule 14a-8(i)(9) for the remainder of the 2015 proxy season with respect to all shareholder proposals—not just those seeking proxy access—and withdrew the no-action relief granted to Whole Foods.42

Business Roundtable and other commentators expressed concern that the SEC Staff’s approach forced companies faced with a shareholder proxy access proposal that are considering a management proposal to either include the shareholder proposal in the proxy materials, even though it will compete with the similar management proposal and possibly lead to confusion, or omit the shareholder proposal, creating a heightened risk of litigation and negative targeting by certain pension funds and proxy advisory firms. As described below, seven companies included competing shareholder and management proxy access proposals on the ballot in 2015 and five companies did so in 2016. In a speech in June 2015, SEC Chair White noted that, notwithstanding concerns that shareholders would be confused by two competing proposals, “shareholders were able to sort it all out and express their views.”43

SEC STAFF GUIDANCE ON EXCLUDABILITY OF DIRECTLY CONFLICTING SHAREHOLDER PROPOSALS

In October 2015, the SEC Staff issued Staff Legal Bulletin No. 14H (CF) (SLB No. 14H)44 which provided new guidance on the excludability of shareholder proposals that “directly conflict” with management proposals under Rule 14a-8(i)(9). As discussed in a previous Sidley Update,45 after reviewing the history and intended purpose of Rule 14a-8(i)(9) per SEC Chair White’s request, the SEC Staff announced in SLB No. 14H that it will interpret the rule more narrowly than it has in the past. The SEC Staff will permit a company to exclude a shareholder proposal as directly conflicting with a management proposal only “if a reasonable shareholder could not logically vote in favor of both proposals, i.e., a vote for one proposal is tantamount to a vote against the other proposal.” A non-binding shareholder proposal seeking proxy access on terms different from management’s proxy access proposal will generally not be excludable under Rule 14a-8(i)(9). Proposals seeking a similar objective (e.g., proxy access) but on different terms (i.e., a different means of accomplishing the same objective) would not “directly conflict,” as a reasonable shareholder could logically vote in favor of both proposals.

SEC Staff Example of Proxy Access Proposals That Do Not Directly Conflict Management proposal with a 5% for 3 years ownership threshold and limit on nominees of 10% of the board

Shareholder proposal with a 3% for 3 years ownership threshold and limit on nominees of 20% of the board

The SEC Staff does not believe that a reasonable shareholder would logically vote for two binding shareholder and management proposals that contain two mutually exclusive mandates. In the case of such a “direct conflict,” the SEC Staff could, in its no-action response, allow a shareholder proponent to revise its proposal to make it non-binding rather than binding, and therefore potentially not excludable under Rule 14a-8(i)(9). In light of the guidance, competing proxy access proposals continued to appear on ballots during the 2016 proxy season. In a situation where both the management and shareholder proposals are approved by shareholders, the board may have to consider the effects of both proposals; the SEC Staff does not consider such a decision to represent the kind of “direct conflict” the rule was designed to address. In SLB No. 14H, the SEC Staff noted that, to minimize concerns about shareholder confusion, any company that includes shareholder and management proposals on the same topic on its ballot can include proxy statement disclosure explaining the differences between the two proposals and how the company would expect to consider the voting results.

http://www.sidley.com/en/news/2015-01-21_corporate_governance_update

http://www.sidley.com/en/news/10-23-2015-corporate-governance-update

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Substantially Implemented Proposals

Proposals to Adopt Proxy Access

Companies that adopt proxy access can seek to omit a shareholder proxy access proposal on the grounds that it has been “substantially implemented” by the company. In March 2015, the SEC granted General Electric Company no-action relief allowing it to exclude a shareholder proxy access proposal on these grounds. The shareholder proposal had sought an ownership threshold of 3% for 3 years, for up to 20% of the board’s seats but was silent on the number of shareholders that could comprise a nominating group. General Electric adopted a provision with the same 3% for 3 years threshold for up to 20% of board seats, but limited to 20 the number of shareholders that could compromise a nominating group.46

Substantial implementation under Rule 14a-8(i)(10) has been the primary basis of exclusion asserted by companies when seeking no-action relief to exclude shareholder proxy access proposals received for their 2016 and 2017 annual meetings. A number of companies that adopted proxy access on relatively standard terms sought to exclude proposals for 2016 filed by John Chevedden arguing that their proxy access bylaws implement the “essential objectives” of his proposal even though his proposal contains (i) a higher percentage of board seats available to proxy access nominees (25%), (ii) no limit on the size of the nominating group and (iii) no restrictions on proxy access nominees that are not also applicable to other director candidates.

In 2016, the SEC Staff granted no-action relief to more than 40 companies that sought to exclude shareholder proxy access proposals from their 2016 proxy statements on the grounds that they had been substantially implemented by the company. Each of the companies adopted a proxy access bylaw with a 3% for 3 years ownership threshold mirroring the threshold requested by the proponent, even though the company-adopted bylaw deviated from the specific terms of the proposal in various other respects. In February 2016, the SEC Staff denied no-action relief to three companies that implemented proxy access with a different ownership threshold (5%) than that sought by the proponent (3%). The SEC Staff’s responses provide clarity to companies concerning their ability to exclude shareholder proposals asking them to adopt proxy access with specified parameters by subsequently adopting their own proxy access provisions. In this situation, the responses suggest that companies have some flexibility to adopt proxy access bylaws tailored to their particular circumstances so long as they track the ownership threshold and duration set forth in the proposal. Based on the SEC Staff determinations, no-action relief will be available in this context even if the company’s proxy access bylaw (i) includes a limit on the number of shareholders that may aggregate to form a nominating group (e.g., 20 versus an unlimited number per the terms of the proposal) or (ii) includes a lower percentage or number of board seats available to proxy access nominees than specified in the proposal (e.g., 20% (rounding down) versus “the greater of 25% of the board or two” per the terms of the proposal). See our previous Sidley Update for more information.47

James McRitchie, the proponent at Whole Foods and several other companies that have since adopted proxy access, expressed his disappointment with the SEC Staff’s determinations, specifically their apparent conclusion that the provision in his template proposal explicitly providing for no nominating group size limit is not an “essential element” of the proposal. He vowed to file binding bylaw resolutions in the future at companies that have adopted what he considers to be “proxy access lite bylaws” in an effort to “obtain the same robust proxy access promised under vacated Rule [14a-11].”48 McRitchie’s initial attempts to reform “proxy access lite” saw a setback when his proposal failed to receive majority support at Apple’s annual meeting in February 2016 (it received 33% support) despite a favorable recommendation from ISS. His non-binding proposal had requested Apple’s board to adopt a proxy access bylaw with no limit on the size of the nominating group (rather than 20 as set forth in Apple’s proxy access bylaw) and the number of board seats available to proxy access nominees as the greater of 25% or 2 directors (rather than 20%).

http://www.sidley.com/news/2016-02-19-corporate-governance-update

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Proposals to Amend Proxy Access Provisions

The SEC Staff takes a different approach when evaluating whether a company has substantially implemented a fix-it proposal requesting that specific revisions be made to an existing proxy access bylaw. In July 2016, for the first time, the SEC Staff denied no-action relief to a company that sought to exclude a fix-it proposal under Rule 14a-8(i)(10) after finding itself “unable to conclude that H&R Block’s proxy access bylaw compares favorably to with the guidelines of the proposal.” In that case, the shareholder proposal submitted by McRitchie requested that the board make four specific revisions to the company’s existing 3%/3 years/20%/20 proxy access bylaw: (i) the number of proxy access nominees would be the greater of 25% or 2; (ii) loaned shares would count toward the ownership threshold so long as they are recallable, (iii) there be no limit on the size of the nominating group and (iv) there be no restriction on the re-nomination of a proxy access nominee based on the number or percentage of votes received in a prior election. The proposal received less than 30% support at H&R Block’s annual meeting in September 2016 despite a favorable recommendation from ISS.

Following the situation at H&R Block, in the fall of 2016, the SEC Staff similarly denied no-action relief to five companies that sought exclusion of fix-it proposals on the basis of substantial implementation under Rule 14a-8(i)(10). These recent determinations suggest that companies will not be able to rely on substantial implementation under Rule 14a-8(i)(10) as a basis to exclude fix-it proposals if they do not make any changes to the bylaws in response to the shareholder proposal. In other words, the SEC Staff will not consider the company’s original adoption of proxy access as substantially implementing the essential objective of the fix-it proposal.

In contrast, in November 2016, the SEC Staff granted no-action relief to a company that sought to exclude a fix-it proposal under Rule 14a-8(i)(10) when the company implemented some but not all of the revisions to the proxy access bylaw sought by the proponent. In that case, John Chevedden submitted a non-binding fix-it proposal seeking six specific revisions to Oshkosh Corporation’s proxy access bylaw. In response, Oshkosh’s board amended the bylaw to (i) reduce the ownership threshold from 5% to 3%, (ii) eliminate the requirement for the nominating shareholder to state an intention to maintain qualifying ownership for one year beyond the meeting and (iii) delete the 25%/2 years re-nomination restriction. The board did not make the other three revisions requested by the proponent, specifically that (i) the number of proxy access nominees would be the greater of 25% or 2 (rather than the greater of 20% or 2), (ii) loaned shares would count toward the ownership threshold so long as they are recallable (rather than recallable on five business days’ notice and recalled upon notice that the nominating shareholder’s proxy access nominee will be included in the proxy statement) and (iii) there be no limit on the size of the nominating group (rather than a limit of 20). In this context, the SEC Staff found that “Oshkosh’s policies, practices and procedures compare favorably with the guidelines of the proposal and that Oshkosh has, therefore, substantially implemented the proposal.” It is unclear what revisions, alone or in combination, would have been sufficient to persuade the SEC Staff that Oshkosh had substantially implemented the proposal. That being said, we believe that the reduction of the ownership threshold from 5% to 3% was critical to the SEC Staff’s determination. See Appendix B for details about the status of requests for no-action relief with respect to the fix-it proposals submitted to date.

It is possible that others will join McRitchie and Chevedden in submitting future shareholder proposals that specifically seek removal of the nominating group size limit or other modifications. The public pension funds led by New York City Comptroller Stringer have also expressed concerns about certain “unworkable” proxy access provisions adopted to date, including provisions which limit the number of shareholders who can aggregate to form a nominating group.49 Comptroller Stringer’s template proxy access proposals for 2015, 2016 and 2017 did not limit the number of shareholders that can comprise a nominating group. Even if fix-it proposals are not able to be excluded from annual meeting ballots, they are unlikely to be approved by shareholders if the existing proxy access bylaw has standard terms (e.g., 3% for 3 years).

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VOTING RESULTS ON PROXY ACCESS PROPOSALS

Key Highlights of Shareholder Proxy Access Proposal Voting Results Shareholder Proxy Access Proposals 2014 2015 2016

• Voted On 18 91 77

• Passed 5 (28%) 55 (60%) 40 (52%)

• Average Support 34% 55% 51%

Shareholder Proposals

77 shareholder proxy access proposals were voted on in 2016, averaging support of approximately 50.9% of votes cast. 40 of the proposals (52%) received majority support, while 37 did not pass. Average support declined in 2016 compared to 2015 because several targeted companies had adopted proxy access prior to their 2016 annual meetings. Average support at the 40 companies where proxy access proposals passed was 69%. ISS supported all but two of the shareholder proposals. ISS recommended against the proposal at CSP Inc. because its “greater of 20% or 2 directors” provision would have enabled a shareholder to gain control of 40% of the company’s five-member board. ISS recommended against the proposal at Peoples Financial Services Corp. because its “1.5% for 2 years” ownership threshold is “less robust than the prevalent market standards.” Management recommended against all but five of the shareholder proposals.50

91 shareholder proxy access proposals were voted on in 2015, averaging support of approximately 55% of votes cast; 55 proposals (60%) received majority support while 36 (40%) did not pass. Management opposed all but four of the proposals—it supported three of the proposals and provided no recommendation with respect to one proposal. ISS supported all of the shareholder proposals, most of which included a 3% for 3 years ownership threshold (such as Comptroller Stringer’s proposals).51

Voting results on shareholder proxy access proposals appear to have been influenced by various factors:

Factors Increasing Shareholder Support Factors Decreasing Shareholder Support • Company did not adopt proxy access prior to the meeting • Company adopted proxy access prior to the meeting;

significantly lower support if previously adopted at 3% ownership threshold

• No competing management proxy access proposal on the ballot

• Competing management proxy access proposal on the ballot

• Less insider ownership • Greater degree of insider ownership • More shareholders that vote in line with proxy advisory

firm recommendations • Less shareholders that vote in line with proxy advisory

firm recommendations • Less voting retail shareholders • More voting retail shareholders • Combative tone of corporate disclosure around proxy

access concept • More conciliatory/open tone of corporate disclosure

around proxy access concept • Concerns relating to corporate performance, shareholder

rights and/or compensation • Lack of concern relating to corporate performance,

shareholder rights and/or compensation Management Proposals

25 management proxy access proposals were voted on in 2016, averaging support of 88.3% of votes cast. 21 proposals (84%) passed while four (16%) did not pass. Of the four management proposals that failed, two were competing with shareholder proposals with 3% (rather than 5%) ownership thresholds that passed and two received majority support but fell short of the companies’ 75% and 80% supermajority vote requirements. ISS recommended votes in favor of 22 of these proposals (which followed the 3% for 3 years formulation) and against three of these proposals (two of which included a 5% for 3 years ownership threshold and one of which specified an aggregation limit of only 10 shareholders).

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12 management proxy access proposals were voted on in 2015, averaging support of 62% of votes cast. Seven proposals (58%) passed while five (42%) did not pass (including one that received majority support but fell short of the company’s supermajority vote requirement). ISS recommended votes in favor of five of these proposals (which followed the 3% for 3 years formulation) and against seven of these proposals (six of which included a 5% for 3 years ownership threshold; one included a 3% for 3 years threshold (as discussed below)).

Competing Shareholder and Management Proposals

Shareholders voted on competing proxy access proposals at five companies in 2016, including two companies (Chipotle Mexican Grill Inc. and SBA Communications Corporation) where competing proposals were also on the ballots for the 2015 annual meeting. As shown in the table below, in 2016 the management proposal passed at three companies and the shareholder proposal passed at two companies. There were no instances where both proposals passed. At three companies, ISS recommended votes in favor of both proxy access proposals indicating that the “proposals are not mutually exclusive” and that “strong support for the shareholder proposal could convey to the board a preference for a proxy access right without a limit on share aggregation, and one that does not contain added restrictions.”

2016 Competing Proposals

Shareholder Proposals Management Proposals

Company Parameters ISS Rec.

% Support Parameters ISS Rec. %

Support Subsequent Adoptions

Chipotle Mexican Grill, Inc.

• 3%

• 3 years

• 25% cap

• No limit on size of nominating group

For

57.4 5% • 3 years • 20% cap • limit of 20 (Binding) Against 23.7

Adopted on 10/4/16 3% • 3 years • 25% cap

(≥2) • limit of 20

Cummins Inc. 31.6 3% • 3 years • 25% cap (≥2) • limit of 20 (Advisory) For 97.1

Board approved on 10/11/16 subject to

shareholder approval at 2017 annual meeting

Kate Spade & Company 22.6 3% • 3 years • 20% cap

(≥2) • limit of 20 (Binding) For 81.8 Adopted on 5/19/16

3% • 3 years • 20% cap (≥2) • limit of 20

Knight Transportation, Inc.

22.3 3% • 3 years • 20% cap (≥2) • limit of 20 (Binding) For 93.7


(≥2) • limit of 20

SBA Communications Corporation

Amend bylaw to reduce 5%

to 3%, increase cap to 25% and

eliminate limit of 10

For 67.6 Approval of existing bylaw:


Against 29.4 N/A - no change made

to existing bylaw adopted on 7/28/15

Average % Support

40.3

65.1

At seven companies shareholders voted on two proxy access proposals at the 2015 annual meeting—a shareholder proposal with a 3% ownership threshold and a management proposal with an ownership threshold of 5% (at six companies) or 3% (at one company). ISS recommended in favor of all seven shareholder proposals. ISS recommended against all seven management proposals, including at the one company which proposed a 3% for 3 years threshold but imposed more restrictive terms than the shareholder proposal. Specifically, the management proposal at that company included a cap of 20% of board seats (compared with a 25% cap in the shareholder proposal) and a limit of 20 shareholders in the nominating group (compared with no limit in the shareholder proposal).

As shown in the table below, the management proposal passed at three companies, the shareholder proposal passed at three companies, neither proposal passed at one company and there were no instances where both

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15 5 11 3 11

33

55 71

31 24 17

39 42

0 10 20 30 40 50 60 70 80

Pre-2015 Jan/Feb 2015

Mar/Apr 2015

May/Jun 2015

Jul/Aug 2015

Sep/Oct 2015

Nov/Dec 2015

Jan/Feb 2016

Mar/Apr 2016

May/Jun 2016

Jul/Aug 2016

Sep/Oct 2016

Nov/Dec 2016

Pace of Proxy Access Adoptions

proposals passed. As noted above, SEC Chair White stated in June 2015 that, despite the concerns of some commentators, there did not appear to be shareholder confusion with respect to competing proposals.

2015 Competing Proposals

Shareholder Proposals Management Proposals

Company Parameters ISS Rec.

% Support Parameters ISS Rec. %

Support Subsequent Adoptions

The AES Corporation

• 3%

• 3 years

• 25% cap

• No limit on size of nominating group

For All

66.4 5% • 3 years • 20% cap •

monitoring peers and soliciting shareholder input when fixing limit (Advisory)

Against All

36.2 Adopted on 11/25/15

3% • 3 years • 20% cap • limit of 20

Chipotle Mexican Grill, Inc.

49.9 5% • 3 years • 20% cap • limit of 20 (Binding) 34.7


(≥2) • limit of 20

Cloud Peak Energy Inc. 71.1 5% • 3 years • 10% cap •

limit of 1 (Binding) 25.9


(≥1) • limit of 20 (Subsequently amended)

Exelon Corporation 43.6 5% • 3 years • 20% cap •

limit of 20 (Advisory) 52.6 Adopted on 4/26/16


Expeditors International of Washington, Inc.

35.0 3% • 3 years • 20% cap • limit of 20 (Advisory) 70.3


• limit of 20

SBA Communications Corporation

46.3 5% • 3 years • 20% cap • limit of 10 (Advisory) 51.7


(≥1) • limit of 10

Visteon Corporation 75.7

5% • 3 years • 20% cap • monitoring peers and

soliciting shareholder input when fixing limit (Advisory)

21.2


(or 25% if <10 directors) • limit of 20

Average % Support

55.4

41.8

ADOPTION OF PROXY ACCESS PROVISIONS AND TYPICAL PARAMETERS

Since January 1, 2015, 342 companies have adopted proxy access, and they have done so in a range of circumstances as described in Appendix A. All companies adopted proxy access in their bylaws except for one company (PayPal Holdings, Inc.), which incorporated it into the certificate of incorporation upon its spin-off, and

|–––––––––––––– 118 in 2015 –––––––––––––| |––––––––––––––– 224 in 2016 ––––––––––––|

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another company that amended both its certificate of incorporation and bylaws to provide for proxy access (Kate Spade & Company). One additional company has disclosed that it plans to adopt proxy access bylaws in connection with an upcoming spin-off.

Just over 50% of companies in the S&P 500 have now adopted proxy access. According to SharkRepellent.net, approximately 32% of Russell 1000 companies have adopted proxy access. 114 companies adopted proxy access without having received a known shareholder proxy access proposal—this trend continues to accelerate. The uptick in adoptions is also attributable to negotiated settlements with shareholder proponents and board responsiveness to majority-supported shareholder proposals in light of the ISS FAQs discussed above.

Appendix A highlights the key parameters of the proxy access provisions adopted since January 1, 2015, including the minimum ownership threshold, maximum percentage of board seats open to proxy access nominees and maximum number of shareholders that can comprise a nominating group. While market practice continues to develop, the proxy access provisions adopted by companies since January 1, 2015 include several elements that have emerged as typical, although there are some variations. The majority of proxy access provisions adopted in 2015 and 2016 include the following terms: 3% for 3 years for up to 20% of the board (at least 2 directors) with a nominating group size limit of 20.

Appendix A also highlights select terms relating to the treatment of loaned shares, representations regarding intentions with respect to post-meeting ownership, third-party compensation arrangements, nomination deadlines, exclusion of proxy access nominees if a director has been nominated under the advance notice provision, “creeping control” limitations and re-nomination restrictions. In addition, proxy access provisions delineate various procedural and informational requirements, proxy access nominee eligibility conditions and circumstances in which a company will not be required to include a proxy access nominee in its proxy materials.

A MOVING TARGET – AMENDMENTS TO PREVIOUSLY ADOPTED PROVISIONS At three companies that adopted a proxy access bylaw in 2015 prior to the annual meeting, their respective boards subsequently amended the bylaws after shareholder proxy access proposals with less restrictive terms passed at the annual meetings. Specifically, CF Industries Holdings, Inc., Marathon Oil Corporation and The Priceline Group Inc. amended their proxy access bylaws to (i) decrease the required ownership percentage from 5% to 3% and (ii) change the maximum percentage of board seats available to proxy access nominees from 20% to 25%. Amendments to The Priceline Group Inc.’s bylaw also eliminated the 20 shareholder limit on forming a group for purposes of meeting the required ownership percentage and made other modifications. More than 20 other companies have amended their proxy access bylaws in 2016, several of which disclosed that the amendments resulted from shareholder outreach and evolving market practices. In addition to the three companies named in the previous paragraph, eight companies have amended their proxy access bylaws in 2016 to decrease the required ownership percentage from 5% to 3%, which has become widely accepted (leaving just three companies that have adopted a 5% ownership percentage). Certain amendments presumably were made in exchange for withdrawal of shareholder proxy access proposals, such as (i) increasing the maximum number of proxy access nominees to 25% of the board and/or providing for a minimum of 2 proxy access nominees and (ii) removing or raising the cap on the number of shareholders that may comprise a nominating group. Other amendments were made in response to ISS’s policy with respect to board responsiveness to a majority-supported proxy access proposal which may impact director elections at future annual meetings. Several of those amendments directly addressed provisions that ISS views as “problematic” by:

• Clarifying that certain related funds will count as one shareholder for purposes of the applicable shareholder group size limit.

• No longer requiring the company to disclose its intentions to maintain ownership of the requisite number of shares for one year after the annual meeting.

• Explicitly counting loaned shares toward the ownership threshold or extending the time by which loaned shares can be recalled in order to count toward the threshold from 3 to 5 business days.

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Typical Provisions

Nomination Deadline; Limited to Annual Meetings Requests to include proxy access nominees in the company’s proxy materials typically must be received within a window of 120 to 150 days before the anniversary of (i) the date on which the company released its proxy statement for the previous year’s annual meeting (259 out of 342 companies (76%)) or (ii) the previous year’s annual meeting (24 out of 342 companies (7%)). Less commonly, the deadline is a window of 90 to 120 days before the anniversary of the previous year’s mailing date (22 out of 342 companies (6%)) or annual meeting date (9 out of 342 companies (3%)).11 out of 342 companies (3%) require that requests be received prior to the date that is 120 days before the date the company released its proxy statement to shareholders in connection with the previous year’s annual meeting (i.e., the same as the deadline for shareholder proposals under Exchange Act Rule 14a-8, which does not incorporate a window). Proxy access provisions typically specify that proxy access may only be used with respect to director elections at annual meetings (but not special meetings) of shareholders. Several companies that adopted proxy access later in 2015 or 2016 specified that the right cannot be used until 2017 or 2018, respectively.

Net Long Beneficial Ownership of 3% or 5% 3% for 3 years is by far the most common ownership threshold (339 out of 342 companies (99%)), although a small number of companies have adopted a 5% for 3 years threshold (3 out of 342 companies (1%)). As discussed above, 11 companies that initially adopted proxy access at a 5% ownership threshold subsequently amended their bylaws to decrease the required ownership percentage to 3%.

A nominating shareholder is typically deemed to own only those outstanding common shares of the company as to which the shareholder possesses both the full voting and investment rights pertaining to the shares, and the full economic interest in such shares. For example, shares subject to any derivative arrangement entered into by the shareholder or any of its affiliates would not qualify as eligible ownership for proxy access purposes. Loaned shares explicitly count as “owned” for purposes of meeting the ownership threshold in most of the proxy access provisions (322 out of 342 companies (94%)), subject to certain conditions. Where loaned shares count toward ownership, most provisions require that the nominating shareholder has the power to recall the loaned shares within a specified time frame (most commonly, on three or five business days’ notice). Several provisions require that the nominating shareholder has actually recalled the loaned shares within a specified time frame or prior to a specified time (e.g., by the record date or prior to submission of the nomination notice).

• Requiring disclosure of third-party compensatory arrangements but no longer prohibiting them. • No longer restricting the re-nomination of a proxy access nominee who failed to receive a certain level of

support (such as 25% of votes cast) in the past 2 years. • No longer including a creeping control limitation which would have banned a successful nominating

shareholder from using proxy access for 2 years. • No longer providing that the board has discretion to interpret the proxy access provision.

At Cloud Peak Energy Inc., the amendments to remove restrictive provisions were sufficient to cause ISS to reverse its negative vote recommendations against governance committee members. Finally, a few companies amended their proxy access bylaws in the summer of 2016 after shareholder proxy access proposals failed at their 2016 annual meetings but received significant (i.e., >45%) shareholder support. It is possible that we will see an increase in proxy access bylaw amendments in early 2017 in response to fix-it proxy access proposals or in light of the new factors ISS added to QualityScore relating to proxy access.

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Holding Period

All of the proxy access provisions adopted since January 1, 2015 provide that the nominating shareholder must own the requisite amount of shares for at least 3 years. A nominating shareholder is typically required to continue to own the requisite amount of shares until the nomination date, the record date and annual meeting date and, at 115 out of 342 companies (34%), is required to represent whether or not it intends to, or in some cases will, continue to own the requisite shares for at least one year after the annual meeting.

Nominee Limit and Procedure for Selecting Candidates if Nominee Limit is Exceeded Many companies have limited the number of board seats available to proxy access nominees to 20% of the board (68 out of 342 companies (20%)), 13 of which provide for a minimum of one proxy access nominee. Later in 2015 and throughout 2016, companies have increasingly limited the number of board seats available to proxy access nominees to the greater of 2 or 20% of the board (228 out of 342 companies (67%)). Some companies have adopted a 25% cap (46 out of 342 companies (13%)), 23 of which provided for a minimum of 2 proxy access nominees. In most cases, if the calculation of the maximum number of proxy access nominees does not result in a whole number, the maximum number of proxy access nominees that the company would be required to include in its proxy materials would be the closest whole number below the applicable percentage (e.g., 20% or 25%).

Nearly all proxy access provisions provide that, if a vacancy occurs on the board after the nomination deadline but before the date of the annual meeting, and the board decides to reduce the size of the board in connection with the vacancy, the nominee limit would be calculated based on the reduced number of directors. Any proxy access nominee who is either subsequently withdrawn or included by the board in the proxy materials as a board-nominated candidate typically would count against the nominee limit (including, in some cases, for a specified number of future years). Many proxy access provisions provide that the maximum number of proxy access nominees that the company would be required to include in its proxy materials will be reduced by the number of director candidates nominated by any shareholder pursuant to the company’s advance notice provisions (79 out of 342 companies (23%)).

Any nominating shareholder that submits more than one nominee would be required to provide a ranking of its proposed nominees. If the number of proxy access nominees from all nominating shareholders exceeds the nominee limit, the highest ranking qualified person from the list proposed by each nominating shareholder, beginning with the nominating shareholder with the largest qualifying ownership and proceeding through the list of nominating shareholders in descending order of qualifying ownership, would be selected for inclusion in the proxy materials, with the process repeating until the nominee limit is reached.

Limitation on the Size of the Nominating Group All but 8 companies limit the number of shareholders that are permitted to comprise a nominating group. A nominating group size limit of 20 is by far the most common (311 out of 342 companies (91%)); however, 7 companies set a lower limit (e.g., 5, 10 or 15) and 16 companies set a higher limit (e.g., 25, 30 or 50). Proxy access provisions often also provide that a shareholder cannot be a member of more than one nominating group. Many companies require that one group member be designated as authorized to act on behalf of all other group members. It is typical to provide that members of the same fund family count as one shareholder for purposes of this limit, particularly in light of current ISS policy which would deem “especially problematic” a provision that would treat such individual funds as separate shareholders.

Information Required of All Nominating Shareholders Each nominating shareholder is typically required to provide certain information to the company, including:

• Verification of, and information regarding, the stock ownership of the shareholder as of the date of the submission and the record date for the annual meeting (including in relation to derivative positions).

• The Schedule 14N filed by the shareholder with the SEC.

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• Information regarding each proxy access nominee, including biographical and stock ownership information.

• The written consent of each proxy access nominee to (i) be named in the proxy statement, (ii) serve as a director if elected and (iii) the public disclosure of the information provided by the shareholder regarding the proxy access nominee.

• A description of any arrangement with respect to the nomination between the shareholder and any other person.

• Any other information relating to the shareholder that is required to be disclosed pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.

• The written consent of the shareholder to the public disclosure of the information provided to the company.

Nominating shareholders are generally permitted to include in the proxy statement a 500-word statement in support of their nominees. The company may omit any information or statement that it, in good faith, believes would violate any applicable law or regulation.

Nominating shareholders are also typically required to make certain written representations to and agreements with the company, including in relation to:

• Lack of intent to change or influence control of the company.

• Intent to maintain qualifying ownership through the annual meeting date and, at 115 out of 342 companies (34%), for a specified timeframe (e.g., one year) beyond the meeting date.

• Refraining from nominating any person for election to the board other than its proxy access nominees.

• Intent to be present in person or by proxy to present its nominees at the meeting.

• Not participating in any solicitation other than that relating to its nominees or board nominees.

• Not distributing any form of proxy for the annual meeting other than the form distributed by the company.

• Complying with solicitation rules and assuming liability and providing indemnification relating to the nomination, if required.

• The accuracy and completeness of all information provided to the company.

Information Required of All Proxy Access Nominees

Each proxy access nominee is typically required to make certain written representations to and agreements with the company, including in relation to:

• Acting in accordance with his or her duties as a director under applicable law.

• Not being party to any voting agreements or commitments as a director that have not been disclosed to the company.

• Not being party to any compensatory arrangements with a person or entity other than the company in connection with such proxy access nominee’s candidacy and/or service as a director that have not been disclosed to the company.

• Complying with applicable laws and stock exchange requirements and the company’s policies and guidelines applicable to directors.

• The accuracy and completeness of all information provided to the company.

Proxy access nominees are also typically required to submit completed and signed D&O questionnaires.

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Several companies have adopted a provision requiring each proxy access nominee to submit an irrevocable resignation to the company in connection with his or her nomination, which would become effective upon the board determining that certain information provided by the proxy access nominee in connection with the nomination is untrue or misleading or that the nominee or the nominating shareholder breached any obligations to the company.

Exclusion or Disqualification of Proxy Access Nominees It is typical for proxy access provisions to permit exclusion of proxy access nominees from the company’s proxy statement if any shareholder (or at some companies, specifically the nominating shareholder) has nominated any person (or at some companies, one or more of the proxy access nominees) to the board pursuant to the company’s advance notice provisions (274 out of 342 companies (80%)).

In addition, the company is typically not required to include a proxy access nominee in the company’s proxy materials if any of the following apply:

• The nominee withdraws, becomes ineligible or does not receive at least a specified percentage (most commonly 25%) of the votes cast at his or her election. Such person is typically ineligible to be a proxy access nominee for the 2 annual meetings following such vote.

• The nominating shareholder participates in the solicitation of any nominee other than its nominees or the board’s nominees.

• The nominee is or becomes a party to a compensatory arrangement with a person or entity other than the company in connection with such nominee’s candidacy or service as a director that has not been disclosed to the company or, at 49 out of 342 companies (14%), under any circumstances, whether or not disclosed.

• The nominee is not independent under any applicable independence standards. Many companies require nominees to meet heightened standards of independence applicable to audit committee and/or compensation committee members under SEC, stock exchange and/or IRS rules.

• The election of the nominee would cause the company to violate its charter or bylaws, any stock exchange requirements or any laws, rules or regulations.

• The nominee has been an officer or director of a competitor (often as defined in Section 8 of the Clayton Antitrust Act of 1914) within the past three years.

• The nominee is the subject of a pending criminal proceeding or has been convicted in a criminal proceeding within the past 10 years.

• The nominee is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act.

• The nominee or the nominating shareholder has provided false or misleading information to the company or breached any obligations under the proxy access provision.

Proxy access provisions at 236 out of 342 companies (69%) include “creeping control” limitations which take various forms. A proxy access nominee elected by shareholders will typically count towards the proxy access nominee limit in future years (often 2 or 3 years after election). In addition, the limit is reduced at some companies by the number of director candidates that will be included in the proxy statement as unopposed as a result of an agreement, arrangement or other understanding between the company and a shareholder. At some companies, if a nominating shareholder’s nominee is elected to the board, then such nominating shareholder may not utilize proxy access for the following 2 or 3 annual meetings (other than with respect to the nomination of the previously elected proxy access nominee).

The board or the chairman of the annual meeting may declare a director nomination by a shareholder to be invalid, and such nomination may be disregarded, if the proxy access nominee or the nominating shareholder

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breaches any obligations under the proxy access provision or the nominating shareholder does not appear at the annual meeting in person or by proxy to present the nomination.

Many proxy access provisions grant the board authority to interpret the proxy access provision and make related determinations in good faith. As discussed in the ISS Proxy Access Report, ISS characterized any such provision as a “particularly contentious restriction.” In its ISS QualityScore Technical Document published on November 30, 2016, accessible here, ISS included “providing the board with broad and binding authority to interpret the provision” as an example of a “problematic provision” in a proxy access bylaw that would “nullify it as a practical right for shareholders.” ISS indicated that including problematic provisions in a proxy access bylaw would prevent a company from receiving “credit” for adopting proxy access for QualityScore purposes. Despite these statements from ISS, a review of the QualityScore reports of certain companies with proxy access bylaws that include broad board interpretation provisions revealed that such companies still received credit for adopting proxy access, suggesting that ISS may not view that provision alone as sufficient to nullify the proxy access right. In our view, ISS’s concern is misplaced given that boards have the ability to interpret bylaws pursuant to Delaware law whether or not such a provision is included in a proxy access bylaw. Similarly, the Society for Corporate Governance included the following in a recent publication: “Despite ISS’s concerns, empowering the board to interpret the company’s proxy access bylaw provisions is reasonable and removes any ambiguity with regard to how ownership is determined in unclear situations.”52 Note also that this provision is not included in the list of provisions that the CII considers to be problematic.

POTENTIAL IMPACT OF PROXY ACCESS ON CORPORATE GOVERNANCE

It remains to be seen what impact proxy access will have on corporate governance. At companies where proxy access has been adopted, boards and management may become more focused on the quality of shareholder relations, communications and engagement, in an effort to avoid a contested election against one or more proxy access nominees.

One of the benefits of the board self-determination that occurs absent a proxy contest or proxy access situation is the ability of the board to ensure that its composition is aligned with its view of what the company needs for effective oversight. This is not a simple matter given the mosaic of skill sets, experience and diversity that is needed on a board.

An elected proxy access director will owe the same fiduciary duties as the other directors, though some may view proxy access directors as potentially having an allegiance to the nominating shareholder’s interests. Depending on the circumstances, however, there may be a greater risk that the proxy access director is viewed by the rest of the board as an outsider or even an adversary.

Concerns about how proxy access may impact board dynamics include:

• Board fragmentation. The board may become dominated by factions that are aligned with particular segments of the shareholding body rather than the shareholding body as a whole.

• Board dysfunction. Distrust among directors may develop and lead to board dysfunction with an associated negative impact on the quality of board oversight.

Concerns about how proxy access may impact a company in general include:

• A higher risk of legal challenges. Disagreement among directors may lead to a greater risk of legal challenges, including challenges in contexts that lack business judgment rule protection, subjecting transactions to heightened standards of review.

• Joint shareholder action. Special interest shareholders could coordinate to increase their representation on the board without the shareholding body at large understanding the potential for joint action.

https://www.issgovernance.com/solutions/iss-analytics/qualityscore

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• Increased costs and distractions. Proxy access can lead to increased costs and distractions without delivering improvements in company or board performance.

• Potential withdrawal of existing directors. Incumbent directors may choose to resign rather than serve alongside a particular proxy access director.

PRACTICAL CONSIDERATIONS

Notwithstanding the concerns outlined above, proxy access will inevitably soon play a larger role in corporate governance as a result of private ordering. Companies have several alternatives when considering whether and when to adopt proxy access. Companies with a majority-supported shareholder proxy access proposal should consider proxy advisor policies (including the ISS FAQs discussed above) when implementing proxy access—specifically, the likelihood of negative vote recommendations against directors if the board has “failed to act” on a majority-supported shareholder proposal.

We expect that some companies will continue to follow a “wait-and-see” approach, particularly if they have not previously received a shareholder proxy access proposal; however, the trend towards adopting proxy access without receipt of a shareholder proposal continues to accelerate. Some companies may choose to proactively adopt a proxy access bylaw by board action or by requesting shareholder approval of a bylaw (or charter) amendment at the next annual meeting, in either case with or without a prior public commitment to adopt proxy access. This may help position the company as a proactive adopter of governance best practices—particularly if no shareholder proposal has been received—and, depending on the specific provisions, may minimize the likelihood of receiving a future shareholder proxy access proposal. A company taking this approach should ensure that it can justify any proxy access provision with thresholds that differ from the following terms which have become standard: 3% for 3 years for up to 20% of the board (at least 2 directors) with a group size limit of 20 (e.g., by disclosing preferences of its shareholders as communicated to the company through engagement).

If faced with a shareholder proxy access proposal, counsel should be prepared to help the board and management consider the full range of options available given the company’s circumstances. A proxy access proposal with a 3% for 3 years ownership threshold is likely to receive majority shareholder support at a company that has not previously adopted proxy access. Therefore, a company may consider adopting proxy access on its own terms rather than putting the shareholder proposal up for a vote. Doing so may enable a company to negotiate a withdrawal from the proponent. Alternatively, in light of the SEC Staff’s recent grants of no-action relief on the basis of “substantial implementation,” a company will likely be able to exclude the shareholder proposal so long as the company’s proxy access bylaw tracks the proposal’s 3% for 3 years ownership threshold, although this may not be the case if the proposal seeks a single specific provision that the company has not implemented (e.g., a nominating group size of 40 or 50).

INTERNATIONAL PERSPECTIVES ON PROXY ACCESS In considering how proxy access may impact corporate governance in the U.S., it may be helpful to consider international experiences. The CFA Institute Report on Proxy Access indicates that proxy access has historically been used sparingly to elect directors in countries that have adopted proxy access, including Canada, the UK, Australia, France, Germany, the Netherlands, Norway, Switzerland and Brazil. For example, the report cites to a 2009 finding that proxy access nominations at Canadian companies are often withdrawn prior to a vote because companies are “more willing and more likely to reach agreements with investors to avoid a vote.”53 The CFA Institute Report on Proxy Access also evaluates the relationship between company returns and proxy access elections in Canada, the UK and Australia, and states that “[t]o the extent that proxy access provides governance benefits from a policy perspective, a preliminary analysis suggests that adverse financial impacts are negligible.”54

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Companies that have already adopted proxy access on standard terms should bear in mind that shareholders are increasingly submitting proposals seeking to modify the terms of their proxy access bylaws. As discussed above, the ability to have such proposals withdrawn or excluded is far less certain than with respect to shareholder proposals seeking adoption of proxy access.

As companies are considering these alternatives, they should:

• Follow developments in this area and keep the nominating and corporate governance committee and the full board generally apprised.

• Know the preferences of their shareholder base (as evidenced in proxy voting policies and other public statements, and voting history on proxy access proposals) and engage with shareholders with respect to proxy access.

• Keep abreast of proxy advisory firm policies and guidance relating to proxy access.

• Stay apprised of the key parameters and other terms upon which companies are adopting proxy access.

• Be aware of the SEC Staff’s position with respect to requests to exclude shareholder proxy access proposals and fix-it proposals seeking to amend proxy access bylaws.

• Review the advance notice and director qualification provisions in their bylaws and consider whether and, if so, how such provisions may be aligned with a proxy access provision if implemented. In addition, companies that have cumulative voting in place may wish to consider eliminating (or requiring suspension of) cumulative voting if a proxy access nominee is included in the company’s proxy materials.

If you have any questions regarding this Sidley Corporate Governance Report, please contact the Sidley lawyer with whom you usually work, or

Holly J. Gregory Partner [email protected] +1 212 839 5853

John P. Kelsh Partner [email protected] +1 312 853 7097

Thomas J. Kim Partner [email protected] +1 202 736 8615

Rebecca Grapsas Counsel [email protected] +1 212 839 8541

Claire H. Holland Special Counsel [email protected] +1 312 853 7099

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Lawyers in Sidley’s Corporate Governance and Executive Compensation practice regularly advise corporate management, boards of directors and board committees on a wide variety of corporate governance matters, including shareholder activism and engagement, fiduciary duties, board oversight responsibilities, board investigations and special committees, SEC disclosure, legal compliance, corporate responsibility, board evaluation, board and committee structures and issues arising under Sarbanes-Oxley and Dodd-Frank. Our advice relates to the procedural aspects as well as the legal consequences of corporate and securities transactions and other corporate actions, including takeover defenses, proxy contests, SEC filings and disclosure issues, stock option issues and general corporate law matters. Our broad client base allows us to provide advice regarding best practices and trends in such matters as directors’ and officers’ responsibilities, board and committee practices, disclosure controls and procedures, internal controls, executive compensation and other matters.

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ENDNOTES

1 Proxy Access in the United States: Revisiting the Proposed SEC Rule, CFA Institute (Aug. 2014) (the “CFA Institute Report on Proxy Access”), available here. 2 R Street Shorts: Critiquing the CFA Institute’s Report on Proxy Access, Bernard S. Sharfman (Mar. 2016), available here. 3 SEC Release No. 33-9136, Facilitating Shareholder Director Nominations (Aug. 25, 2010) (the “SEC Proxy Access Release”), available here. 4 Business Roundtable and Chamber of Commerce v. Securities and Exchange Commission (D.C. Cir. Jul. 22, 2011), available here. 5 In response to questions from U.S. House of Representatives Democrats during a congressional hearing in March 2015, SEC Chair White testified that the SEC has no “current intention” to adopt a mandatory proxy access rule. Chair White pointed to the success of the current shareholder proposal process and indicated that the SEC is very closely monitoring the private ordering process to see the direction it takes. Hearing entitled “Examining the SEC’s Agenda, Operations and FY 2016 Budget Request” before the Committee on Financial Services of the United States House of Representatives (Mar. 24, 2015), available here. In July 2015, the SEC posted to its website a working paper relating to proxy access by two economists in the SEC’s Division of Economic and Risk Analysis and a Penn State professor. The study found that the private ordering process for proxy access increases shareholder value (as indicated by such increases at firms targeted by Comptroller Stringer’s proxy access campaign in 2015) but that it “may lead to a second best outcome” as compared to universally mandated proxy access—in other words, private ordering may not efficiently deliver proxy access at the companies that need it most. The paper identifies three key findings:

• Shareholder proponents do not disproportionately target the companies that the market expects to benefit most from proxy access (as measured by stock price returns at the time the SEC announced that it would stay the effectiveness of the now-vacated 2010 proxy access rule).

• Management is more likely to resist shareholder proposals at companies that stand to benefit more from proxy access. • Shareholder proposals have been converging to standard terms (e.g., the 3% for 3 years terms of the SEC’s 2010 rule), which

suggests that the private ordering process is not tending towards the delivery of customized, company-specific solutions. Tara Bhandari, Peter Iliev and Jonathan Kalodimos, Public versus Private Provision of Governance: The Case of Proxy Access (Jul. 24, 2015), available here.

A business law professor recently published a paper critiquing this working paper and arguing that its results “lack external validity” and therefore cannot be generalized to a broader population of public companies. What Shareholder Proposals on Proxy Access Tell us About its Value, Bernard S. Sharfman, Yale Journal on Regulation Online (Aug. 4, 2016), available here.

In October 2016, the authors of the 2015 working paper published another working paper providing new evidence on the effectiveness of the shareholder proposal process by reference to the private ordering process for proxy access. The paper confirmed certain findings from the 2015 paper and described additional findings, as follows:

• Shareholder value increased by 53 basis points on average at companies targeted with proxy access proposals (as measured by stock price returns at the time the SEC announced that it would stay the effectiveness of the now-vacated 2010 proxy access rule). They found the strongest positive returns at companies for which proxy access was expected to be valuable (e.g., at a firm with more institutional holders, with weak governance characteristics or with poor performance), and much lower returns at companies for which proxy access was not expected to be valuable.

• Shareholder proposals have been converging to standard terms and shareholder proponents do not disproportionately target companies that the market expects to benefit most from proxy access.

• Management is more likely to resist shareholder proposals at companies that stand to benefit more from proxy access, suggesting that agency problems make it more difficult for shareholder proposals to deliver changes where they are needed.

• Conflicting shareholder interests affect voting outcomes for proxy access proposals. Tara Bhandari, Peter Iliev and Jonathan Kalodimos, Governance Changes Through Shareholder Initiatives: The Case of Proxy Access (Oct. 24, 2016), available here. 6 SEC Proxy Access Release at 17. 7 “The bylaws may provide that if the corporation solicits proxies with respect to an election of directors, it may be required, to the extent and subject to such procedures or conditions as may be provided in the bylaws, to include in its proxy solicitation materials (including any form of proxy it distributes), in addition to individuals nominated by the board of directors, 1 or more individuals nominated by a stockholder.” Excerpted from Section 112 of the Delaware General Corporation Law. 8 North Dakota Publicly Traded Corporations Act, N.D. Cent. Code § 10-35-08, available here. See American Railcar Industries, Inc., Definitive Proxy Statement (filed Apr. 30, 2009); Carl Icahn owned a controlling interest at the time of reincorporation in June 2009. 9 In the event that a company was required to include a proxy access nominee on its ballot, Broadridge indicated in preliminary conversations prior to the SEC’s proposed rules relating to universal proxy cards that its systems would handle such a ballot in the same manner as a universal proxy card. In this situation, Broadridge can configure Internet voting so that a voter can only vote “for” the number of directors that corresponds to the number of board seats up for election. Paper ballots are processed manually. Telephone voting is not available. The SEC proposed rule amendments in October 2016 that would require a specific format for universal proxy cards to ensure that each party’s nominees are presented in a clear and impartial manner. Specifically, a universal proxy card must:

• Clearly distinguish between registrant nominees, dissident nominees and proxy access nominees, if any, such as by listing each slate of nominees in a separate column;

• List nominees in alphabetical order by last name within each slate of nominees; • Use the same font type, style and size for all nominees; • Prominently disclose the maximum number of nominees for whom a shareholder can grant authority to vote; and • Prominently disclose the treatment and effect of any proxy card executed in a manner that indicates a vote for a greater or lesser

number of nominees than the number of directors up for election.

http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1

http://www.rstreet.org/wp-content/uploads/2016/03/RSTREETSHORT21.pdf

http://www.sec.gov/rules/final/2010/33-9136.pdf

http://www.cadc.uscourts.gov/internet/opinions.nsf/89BE4D084BA5EBDA852578D5004FBBBE/$file/10-1305-1320103.pdf

http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=398795

http://www.sec.gov/dera/staff-papers/working-papers/public-vs-private-provision-of-governance.pdf

https://works.bepress.com/bernard_sharfman/28/

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2635695

http://www.legis.nd.gov/cencode/t10c35.pdf?20150720125145

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See Sidley Update, SEC Proposes Rules to Require the Use of Universal Proxies (Oct. 28, 2016), available here. 10 Schedule 14N filed by GAMCO Asset Management Inc. and Gabelli Funds, LLC at National Fuel Gas Company (Nov. 10, 2016), available here. 11 Form 8-K filed by National Fuel Gas Company (Nov. 25, 2016), available here. 12 Schedule 13D/A filed by GAMCO Investors, Inc., et al. at National Fuel Gas Company (Nov. 28, 2016), available here. 13 Comptroller Stringer, NYC Pension Funds Launch National Campaign to Give Shareowners a True Voice in How Corporate Boards Are

Elected, news release (Nov. 6, 2014), available here. 14 Comptroller Stringer, New York City Funds, Announce Expansion of Boardroom Accountability Project, news release (Jan. 11, 2016), available here. 15 These binding proposals failed to receive majority support at Cabot Oil & Gas Corporation and Noble Energy, Inc. 16 Comptroller Stringer, New York City Funds: Boardroom Accountability Enters Next Phase as Campaign Achieves Critical Mass, news release (Apr. 26, 2016), available here; and New York City Pension Funds’ Boardroom Accountability Project Focus List, available here. 17 BlackRock, Proxy Voting Guidelines for U.S. Securities (Feb. 2015) at 7, available here. 18 CalPERS Highlights Outcome of Proxy Voting Initiatives, news release (Jul. 22, 2015), available here. 19 CalPERS, Global Governance 2016 Proxy Voting Priorities (Feb. 16, 2016) at 12, available here. 20 CalPERS, Global Governance Principles (last updated Mar. 14, 2016) at 8, available here. 21 CalSTRS, Corporate Governance Principles (last updated July 14, 2016) at 13, available here. 22 State Street Global Advisors, US Proxy Voting and Engagement Guidelines (Mar. 2016) at 4, available here. 23 See Remarks by Bess Joffe of TIAA-CREF, Proxy Access: The Halftime Show; webcast panel hosted by TheCorporateCounsel.net (Mar. 24, 2015). 24 T. Rowe Price, Proxy Voting Policies, available here. 25 Carpenters Suggests Zombie Director Trigger for Using Proxy Access, CII Governance Alert (Oct. 15, 2015). 26 Vanguard, Proxy Voting Guidelines (last updated Feb. 2016), available here. 27 Fidelity, Corporate Governance and Proxy Guidelines, available here. 28 Despite JPMorgan Chase & Co.’s adoption of proxy access at the 3% for 3 years ownership threshold, J.P. Morgan Asset Management’s Global Proxy Voting Procedures and Guidelines (Apr. 1, 2016), available here, indicate that it will generally support proposals at the 5% for 3 years level. 29 Council of Institutional Investors, Corporate Governance Policies (last updated Sep. 30, 2016), available here. 30 Council of Institutional Investors, Proxy Access: Best Practices (Aug. 2015), available here. 31 Investor Group Challenges Access to Companies’ Boards, The Wall Street Journal (Aug. 4, 2015), available here. 32 Broadridge Financial Solutions and PricewaterhouseCoopers, 2016 Proxy Season Review (3rd ed. 2016), available here. 33 ISS, 2017 U.S. Summary Proxy Voting Guidelines (Dec. 22, 2016) at 22, available here. 34 ISS launched its annual policy survey (available here) in August 2015 asking: If a board adopts proxy access with material restrictions not contained in a majority-supported shareholder proposal, which types of restrictions should be viewed as problematic enough to call into question the board’s responsiveness and potentially warrant “withhold” or “against” votes against directors? See Sidley Update, ISS 2016 Proxy Voting Policy Formulation Underway (Aug. 13, 2015), available here. ISS provided the following examples of “potentially problematic” restrictions:

• Ownership thresholds in excess of 3% or 5%. • Ownership duration greater than 3 years. • Aggregation limit of less than 20 shareholders. • Cap on proxy access nominees set at less than 20% of the existing board (rounded down). • More restrictive advance notice requirements. • Information disclosures that are more extensive than those required of the company’s nominees, by the company, the SEC or

relevant exchanges. • Re-nomination restrictions in the event a proxy access nominee fails to receive a stipulated level of support or withdraws his or her

nomination. • Restrictions on compensation of proxy access nominees by nominating shareholders.

In September 2015, ISS published the results of its annual policy survey. ISS, 2015-2016 ISS Global Policy Survey – Summary of Results (Sep. 28, 2015) at 8 and 19, available here. A majority of investor respondents were of the view that ISS should issue negative vote recommendations against directors if the ownership threshold exceeds 3% (72% of investor respondents) or 5% (90%), if the holding period exceeds 3 years, if the size of the nominating group is fewer than 20 and/or if the cap on the number of proxy access nominees is less than 20% of the current board size. Company respondents generally did not agree that directors should be penalized for imposing restrictions on proxy access after shareholders had approved a shareholder proxy access proposal, although a slight majority agreed that votes against directors could be warranted if the company established an ownership threshold greater than 5%.

http://www.sidley.com/~/media/update-pdfs/2016/10/sidley-update-on-universal-proxies-final.pdf

https://www.sec.gov/Archives/edgar/data/70145/000092189516006095/sc14n05867018_11102016.htm

https://www.sec.gov/Archives/edgar/data/70145/000092189516006095/sc14n05867018_11102016.htm

https://www.sec.gov/Archives/edgar/data/70145/000119312516776709/0001193125-16-776709-index.htm

https://www.sec.gov/Archives/edgar/data/70145/000080724916000490/nfg_10.htm

http://comptroller.nyc.gov/newsroom/comptroller-stringer-nyc-pension-funds-launch-national-campaign-to-give-shareowners-a-true-voice-in-how-corporate-boards-are-elected/

http://comptroller.nyc.gov/wp-content/uploads/2016/01/PR16-01-005.pdf

http://comptroller.nyc.gov/newsroom/comptroller-stringer-nyc-funds-boardroom-accountability-enters-next-phase-as-campaign-achieves-critical-mass/

http://comptroller.nyc.gov/services/financial-matters/boardroom-accountability-project/focus-companies/

http://www.blackrock.com/corporate/en-us/literature/fact-sheet/blk-responsible-investment-guidelines-us.pdf

https://www.calpers.ca.gov/page/newsroom/calpers-news/2015/highlights-proxy-voting

https://www.calpers.ca.gov/docs/board-agendas/201602/invest/item10a-04.pdf

https://www.calpers.ca.gov/docs/board-agendas/201603/invest/item05a-02.pdf

http://resources.calstrs.com/publicdocs/Page/CommonPage.aspx?PageName=DocumentDownload&Id=9a68869e-c67f-4b37-9616-1ff915b53427

https://www.ssga.com/investment-topics/environmental-social-governance/2016/Proxy-Voting-and-Engagement-Guidelines-US-20160301.pdf

https://www3.troweprice.com/usis/content/trowecorp/en/about/investment-philosophy/esg-investment-policy/_jcr_content/band-wrapper/paragraph_pdfs/right-pdf-01/pdffile

https://about.vanguard.com/vanguard-proxy-voting/voting-guidelines/index.html

https://www.fidelity.com/about-fidelity/fidelity-by-numbers/fmr/proxy-guidelines#Guidelines-geode

https://am.jpmorgan.com/blob-gim/1383284529384/83456/2016_Global%20Procedures%20and%20Guidelines_FINAL.pdf

http://www.cii.org/files/policies/09_30_16_corp_gov_policies.pdf

http://www.cii.org/files/publications/misc/08_05_15_Best%20Practices%20-%20Proxy%20Access.pdf?utm_source=08-05-15+Proxy+Access+Pub+-+Member+Blast&utm_campaign=08-05-15+Proxy+Access+Pub+-+Member+Blast&utm_medium=email

http://www.wsj.com/articles/investor-group-challenges-access-to-companies-boards-1438740001

http://media.broadridge.com/documents/Broadridge-ProxyPulse-3rd-Edition-2016.pdf

https://www.issgovernance.com/file/products/2017-us-summary-voting-guidelines.pdf

http://www.issgovernance.com/file/publications/2016-iss-policy-survey.pdf


http://www.sidley.com/~/media/uploads/201509282016PolicySurveyResultsFINAL.pdf

Sidley Austin LLP

35 ISS, U.S. Proxy Voting Policies and Procedures (Excluding Compensation-Related) – Frequently Asked Questions (last updated Mar. 14, 2016) at 19 and 28, available here. 36 ISS, Beyond the Basics: An In-Depth Review of the Secondary Features of Proxy Access Bylaws, Alexandra Higgins and Peter Kimball (August 2016). 37 ISS Releases “QualityScore” Updates and Opens Data Verification Period, Sidley Update (Nov. 2, 2016), available here. 38 Glass Lewis, 2017 Proxy Season Proxy Paper Guidelines: United States at 21 and 22, available here, and Glass Lewis, 2017 Proxy Season Proxy Paper Guidelines: Shareholder Initiatives at 3 and 6, available here. 39 A company recently sought no-action relief from the SEC Staff to exclude a fix-it proxy access proposal from John Chevedden under Rule 14a-8(i)(3) claiming that the proposal is “vague, indefinite and misleading and contains materially false and misleading statements.” The SEC Staff denied no-action relief stating the following: “We are unable to concur in your view that AES may exclude the proposal under rule 14a-8(i)(3). We are unable to conclude that the proposal is so inherently vague or indefinite that neither the shareholders voting on the proposal, nor the company in implementing the proposal, would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires. We are also unable to conclude that you have demonstrated objectively that the proposal is materially false or misleading.” The AES Corporation, SEC Response Letter (Dec. 20, 2016), available here. 40 Whole Foods Market, Inc., SEC Response Letter (Dec. 1, 2014), available here. 41 No-Action Relief Regarding Conflicting Proposals to Be Unavailable During 2015 Proxy Season, Sidley Update (Jan. 21, 2015), available here. 42 Statement from Chair White Directing Staff to Review Commission Rule for Excluding Conflicting Proxy Proposals (Jan. 16, 2015), available here, and Letter from the SEC’s Division of Corporation Finance to James McRitchie (Jan. 16, 2015), available here. Prior to its annual meeting (which it postponed to September 2015), effective June 26, 2015, Whole Foods’ Board of Directors approved bylaw amendments giving an eligible shareholder, or group of up to 20 shareholders, owning 3% or more of the company’s stock for at least 3 years the right to nominate and include in the company’s proxy materials directors constituting up to 20% of the board seats (but not less than one director). McRitchie withdrew his proposal, even though he had sought a 25% cap on the number of board seats and no limit on the number of participants comprising a nominating group. 43 Building Meaningful Communication and Engagement with Shareholders, Speech by SEC Chair Mary Jo White to the Society of Corporate Secretaries and Governance Professionals (Jun. 25, 2015), available here. 44 SEC Staff Legal Bulletin No. 14H (CF), Shareholder Proposals (Oct. 22, 2015), available here. 45 SEC Issues New Guidance on Excludability of Shareholder Proposals, Sidley Update (Oct. 23, 2015), available here. 46 General Electric Company, SEC Response Letter (Mar. 3, 2015), available here. 47 SEC Grants No-Action Relief for “Substantially Implemented” Shareholder Proxy Access Proposals – With Some Exceptions, Sidley Update (Feb. 19, 2016), available here. 48 “Substantial Implementation” Will Backfire, blog post by James McRitchie (Mar. 21, 2016), available here. 49 Remarks by Michael Garland, Assistant Comptroller for Corporate Governance and Responsible Investment, New York City Office of the Comptroller, at a meeting of the SEC Investor Advisory Committee (Jul. 16, 2015). 50 Management made no recommendation at NRG Energy, Inc. and Nasdaq, Inc. and recommended that shareholders vote in favor of the shareholder proposals at Marlin Business Services Corp., PTC Therapeutics, Inc. and Urban Outfitters, Inc. 51 In 2014, 18 shareholder proxy access proposals were voted on and averaged support of approximately 34% of votes cast. 5 proposals passed, each of which included a 3% for 3 years ownership requirement. The 8 proposals that deviated from that formulation received average support of only 9% of votes cast. 52 Society for Corporate Governance Corporate Practices Committee, Features of Proxy Access Bylaws (Oct. 10, 2016). 53 CFA Institute Report on Proxy Access at Appendix D, citing a study by Jun Yang, Zengxiang Wang and Yunbi An, An Empirical Analysis of Canadian Shareholder Proposals (Jul. 20, 2009), available here. 54 CFA Institute Report on Proxy Access at 17-21.

http://www.issgovernance.com/file/policy/us-policies-and-procedures-faq-14-march-2016.pdf

http://www.sidley.com/~/media/update-pdfs/2016/11/iss-qualityscore-updates-sidley-update.pdf

http://www.glasslewis.com/wp-content/uploads/2016/11/2017_Guideline_US.pdf

http://www.glasslewis.com/wp-content/uploads/2016/11/2017_GUIDELINES_Shareholder_Initiatives.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddenaes122016-14a8.pdf

http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2014/jamesmcritchie120114.pdf



http://www.sec.gov/news/statement/statement-on-conflicting-proxy-proposals.html#.VLmTFXvQPn9

http://www.sec.gov/news/statement/statement-on-conflicting-proxy-proposals.html#.VLmTFXvQPn9

http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2015/jamesmcritchiecheveddenrecon011615-14a8.pdf

http://www.sec.gov/news/speech/building-meaningful-communication-and-engagement-with-shareholde.html

http://www.sec.gov/interps/legal/cfslb14h.htm

http://www.sidley.com/en/news/10-23-2015-corporate-governance-update

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2015/kevinmaharrecon030315-14a8.pdf


http://www.corpgov.net/2016/03/substantial-implementation-will-backfire/

http://dx.doi.org/10.2139/ssrn.1510248


A - 1

Company

Key Parameters Other Ownership Requirements

Prohibition on Third-

Party Comp-

ensation Arrange-

ments

Nomination Deadline (Annual Meeting)

Proxy Access Unavailable if Advance

Notice Nomination

Creeping Control Limitations

Restrictions on Renom-

inating Proxy Access

Nominees Based on % Support and

Other Freeze-Outs

Circumstances of Adoption

% Owner-

ship Thres-hold

(3 years)

Limit on

Proxy Access Nom-inees (Max. % of

Board)

Group Size Limit

Loaned Shares

Count as “Owned”

Must State Intention

as to Ownership

Beyond Mtg. Date

(1 Year Unless Noted)

Days Prior to Ann’y of

Proxy Date / Filing / Release

Days Prior to Annual

Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice

Nominees For That Election

TOTALS (out of 342 companies)

3%: 339

(99%)

5%: 3

(1%)

> of 2 or 20%:

228 (67%)

20%: 68

(20%)

> of 2 or 25%: 23 (7%)

25%: 23 (7%)

<20: 7 (2%)

20: 311 (91%)

>20 and None:

24 (7%)

Yes: 322

(94%)

No: 20

(6%)

Yes: 115

(34%)

No: 227

(66%)

Yes: 49

(14%)

No: 293

(86%)

Overall: 285

(83%)

Of the 285:

120-150: 259

(91%)

Other: 26 (9%)

Overall: 57 (17%)

Of the 57:

90-120:

22 (39%)

120-150: 24 (42%)

Other:

11 (19%)

274/342

(80%)

79/342

(23%)

Yes: 282 (82%)

No:

60 (18%)

Yes: 236 (69%)

No:

106 (31%)

Varied

SEC Vacated Exchange Act Rule 14a-11 (for reference)

3% 25% None

Yes, must be

recalled to count as owned

Yes, required

statement of intent

to continue

ownership after

election

No, neither disclosure

nor prohibition

of comp. arrgmts.

was included in

14a-11

120-150

Nominating SH

nominates any nominee

None None N/A


A - 2

Company



Party Comp-

ensation Arrange-

ments


Proxy Access Unavailable if

Advance Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date




Days Prior to Ann-ual Mtg.

Ann’y

Blanket Exclusion

Depends on #

of Advanc

e Notice

Nominees For That

Election * Denotes companies that adopted proxy access pursuant to a shareholder-approved bylaw. + Denotes one of the 110 companies on the New York City Pension Funds’ Boardroom Accountability Project Company Focus List.

1. 3D Systems Corporation (12/28/2016)

3%

20% (≥2)

20

Yes if recallable

(5 BDs)

Yes

No

120-150

Any SH nominates

any nominee

• Successful proxy access nominees count vs. cap (2 years)

25% (2 years)

Adopted after receiving shareholder

proposal

2. 3M Company+ (11/10/15) 3% 20%

(≥2) 20 Yes if recalled No No 90 – 120 Reduces

board cap

• Successful proxy access nominees count vs. cap (2 years after board nom.)

• Nominees pursuant to agreement count vs. cap (2 years after board nom.) but not <1

None Adopted and

shareholder proposal was withdrawn

3. Abbott Laboratories (12/11/15)

3% 20% (≥1) 20

Yes – silent on

recall No No 90 – 120 Reduces

board cap



• Successful nominating shareholder may not nominate (2 years)

• 25% (2 years)

• Nom’g SH may not nominate if nominee received <25% support (1 year)

Other/Unknown


A - 3

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


4. AbbVie Inc.+ (2/18/16) 3% 25% 20

Yes if recallable

(5 BDs) and

recalled by date of nom. notice

Yes No 120 – 150

Any SH nominates

any nominee


• Nominees pursuant to agreement count vs. cap (3 years)

25% (2 years)

Adopted and shareholder proposal

was withdrawn

5. Accenture plc* (Ireland) (2/3/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee



• Proxy access unavailable if successful advance notice nominee remains in office (3 years)

• 25% (2 years)

• Nom’g SH may not nominate if nominee received <10% support (2 years)

Other/Unknown; management

proposal passed in 2016

6. Acuity Brands,

Inc. (9/30/16)

3% 20% (≥2) 20

Yes if recallable

and agrees to promptly

recall upon notice

No No 120 – 150 Reduces

board cap

• If board is classified, number of proxy access nominees may not >50% of directors to be elected


• Director nominees pursuant to agreement count vs. cap

None Other/Unknown


A - 4

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


7. Adient plc

(10/31/16)

3% 20% (≥2) 20

Yes if revocable

at any time

No No 90 – 120 Reduces board cap



10% (2 years)

Adopted in connection with spin-

off from parent company where

shareholder proposal passed in 2016

8. Adobe Systems Incorporated (8/31/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by date of

nom. notice

No No 120 – 150

Any SH nominates

any nominee

• Successful proxy access

nominees count vs. cap (2 years)

None Other/Unknown

9. AdvanSix Inc. (10/1/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


off from parent company that had

adopted

10. The AES Corporation+ (11/25/15)

3% 20% 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee


• Nominees pursuant to agreement count vs. cap

25% (2 years)

Adopted after shareholder proposal passed in 2015 and competing proposal

failed; 2016 shareholder proposal

was withdrawn


A - 5

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


11. Aflac Incorporated (11/10/15)

3% 20% 20

Yes if recallable

(3 BDs) and

agrees to recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years) Other/Unknown

12. Alaska Air Group, Inc. (12/9/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)


was excluded

13. Alcoa

Corporation (10/31/16)

3% 20% (≥2) 20

Yes if revocable

at any time

No No 120 – 150

Any SH nominates

any nominee



None Adopted in

connection with spin-off

14. Alexion Pharmaceuticals, Inc.+ (1/8/16)

3% 20% (≥2) 20

Yes if revocable

at any time




None Adopted and



A - 6

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


15. Allegheny Technologies Incorporated (8/4/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee




16. Alliance Data Systems Corporation+ (1/26/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and has recalled

as of date of nom. notice or agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee

None 20% (2 years)

Adopted after majority-supported

shareholder proposal in 2015; 2016


17. Allison

Transmission Holdings, Inc. (3/11/16)

3% 25% (≥2) 20 Yes if

recallable No No 120 – 150

Any SH nominates

any nominee




18. The Allstate Corporation (11/19/15)

3% 20% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee




19. Altria Group, Inc.

(10/28/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown


A - 7

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


20. Amazon.com, Inc. (2/24/16) 3% 20% 20

Yes if recallable

(5 BDs) and

recalled within 5 BDs of notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

21. Ameren Corporation+ (12/11/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

22. American Airlines Group Inc.+ (3/9/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

23. American Electric Power Company, Inc.+ (10/20/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None


shareholder proposal in 2015


A - 8

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


24. American

Express Company (9/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee




25. American International Group, Inc. (11/16/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by date of

nom. notice

Yes No 120 – 150

Any SH nominates

any nominee



None Other/Unknown

26. American Tower Corporation+ (2/12/16)

3% 25% 20

Yes if recallable

(5 BDs) and agrees

to promptly

recall upon notice

Yes

No, OK if disclosed but

must not accept comp.

increase if elected

120 – 150

Any SH nominates

any nominee



20% (2 years)


was withdrawn

27. Amerisource-Bergen Corporation (11/12/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee

None 25% (2 years)

Adopted prior to vote on shareholder proposal (and

proposal failed)

28. Amgen Inc.+

(2/15/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by record

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee

None 20% (2 years)


was withdrawn


A - 9

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


date

29. Amphenol


3% 20% (≥2) 20 Yes if


Any SH nominates

any nominee




30. Anadarko Petroleum Corporation+ (9/15/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)



31. Anthem, Inc.

(2/19/16)

3% 20% (≥2) 20 Yes if

recallable No No 90 – 150 • Successful proxy access


None Adopted and

shareholder proposal was excluded

32. Apache

Corporation+ (2/3/16)

3% 25% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee


nominees count vs. cap (2 years after board nom.)

25% (2 years)



33. Apartment Investment and Management Company+ (1/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

Yes No 120 – 150

Any SH nominates

any nominee



10% (2 years)





A - 10

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


recall upon notice

34. Apple Inc. (12/21/15 and amended as of 12/13/16)

3% 20% 20 Yes if

recallable (5 BDs)


board cap None None

Adopted after shareholder proposal failed at 2015 annual

meeting; another shareholder proposal failed at 2016 annual meeting; amended in response to 2017 fix-

it proposal

35. Applied Materials, Inc. (12/8/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



20% (2 years)


proposal failed); 2017 fix-it proposal

excluded

36. Arch Coal, Inc.+ (2/26/15) 5% 20% 20 No Yes No 120 –

150

Any SH nominates such proxy

access nominee

None 25% (2 years)


proposal failed) (Delisted in 10/16)

37. Archer-Daniels-Midland Company (11/5/15)

3% 20% 20 No Yes No 120 – 150

Any SH nominates

any nominee





A - 11

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


38. Ashford Hospitality Prime, Inc. (8/3/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by date of

nom. notice

Yes No 90 – 120

Any SH nominates

any nominee




39. AT&T Inc. (12/18/15) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and will recall by meeting

date

No No 120 – 150

Any SH nominates

any nominee




40. Atlas Air Holdings, Inc. (12/12/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Nom-inating SH nominates

any nominee

None 25% (2 years) Other/Unknown

41. Automatic Data Processing Inc. (8/2/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee





A - 12

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


42. AutoNation, Inc. (12/12/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)

SEC no-action request to exclude

shareholder proposal is pending

43. AvalonBay Communities, Inc.+ (11/12/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee



None Adopted after

majority-supported shareholder proposal

44. Avista Corporation (8/17/16)

3% 20% 20 Yes if

recallable (5 BDs)

No No 150

Any SH nominates

any nominee




45. Avon Products, Inc.+ (3/1/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150


any nominee

None 20% (2 years)


shareholder proposal in 2015; 2016 proposal

was withdrawn 46. Bank of America


3% 20% 20 Yes if

recallable (3 days)

Yes No 120 – 150 Reduces

board cap


20% (2 years)


was withdrawn


A - 13

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


47. The Bank of New York Mellon Corporation (10/13/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by

meeting date

No No 120 – 150

Any SH nominates

any nominee



None Other/Unknown

48. Barnes Group

Inc. (7/28/16)

3% 20% 20 Yes if

recallable (3 BDs)

Yes No 120 – 150

Any SH nominates

any nominee


49. Baxter

International Inc. (12/18/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

a proxy access

nominee



25% (3 years)


was excluded

50. BB&T


3% 25% (≥2) 20

Yes if recallable

(5 BDs) Yes No 120 –

150 None None Other/Unknown

51. Becton,

Dickinson and Company (9/27/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee





A - 14

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


52. Bemis Company, Inc. (10/7/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee




53. Berry Plastics Group, Inc. (12/6/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalls promptly

upon notice

Yes No 120 – 150

Any SH

nominates any

nominee

• While board is classified, number of proxy access nominees may not >1/2 of directors to be elected



25% (2 years)


was excluded

54. Big Lots, Inc.+*

(4/14/15)

3% 25% None No No

Yes (candidacy

fees and fees for service

prohibited)

120 – 150 None 25%

(2 years)




55. Biogen Inc. (3/27/15)

3% 25% (≥1) 20 No Yes

Yes (fees for service

prohibited)

120 – 150


access nominee

Unavail-able if

≥50% of directors

up for election


25% (2 years)


was withdrawn


A - 15

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


56. BlackRock, Inc.* (5/25/16 and amended as of 7/20/16)

3% 25% 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)



57. The Boeing Company+ (12/14/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by record

date


board cap



25% (2 years)


was withdrawn

58. BorgWarner, Inc. (2/10/16 and amended as of 7/26/16)

3% 20% (≥2) 25

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



None


proposal passed)

59. Boston Properties, Inc. (2/24/15)

3% 25% 5 No No Yes (fees for

service prohibited)

120

Any SH nominates

any nominee


nominees count vs. cap (indefinitely)

25% (2 years)


proposal failed)


A - 16

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


60. Boyd Gaming


3% 20% 20

Yes if recallable

(3 BDs) and


Yes Yes (fees for

service prohibited)

60

Any SH nominates

any nominee

None 33% (2 years)


meeting

61. Brandywine Realty Trust (5/24/16)

3% 25% (≥2) 25

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee


62. The Brink’s Company (3/19/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120

Any SH nominates

any nominee



25% (2 years)


proposal failed)

63. Bristol-Myers Squibb Company (2/12/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150 Reduces board cap



64. Broadridge Financial Solutions, Inc. (7/2/15)

3% 25% 20 Yes if

recallable (3 BDs)

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee

Unavail-able if

≥30% of directors

up for election


25% (2 years)


was withdrawn


A - 17

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


65. Brocade Communications Systems, Inc. (1/26/16)

3% 20% (≥2) 30

Yes if recallable

(5 BDs) and

recalled by record

date

No No 45 – 75

Any SH nominates

any nominee

None None Adopted and


66. Brunswick Corporation (5/4/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee

• While board is classified, number of proxy access nominees may not >50% of directors to be elected


• Directors in office or nominees pursuant to agreement count vs. cap


67. Cabot Oil & Gas Corporation+ (3/11/15 and amended as of 7/27/16)

3% 20% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)

Adopted prior to vote on 2015 shareholder

proposal (and proposal failed); fix-it

proposal failed at 2016 annual meeting

but later made certain amendments


A - 18

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


68. Capital One Financial Corporation (10/5/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs)

Yes (through term of

director’s service)

No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

69. Cardinal Health, Inc. (6/30/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH

nominates any

nominee



None Adopted and


70. CarMax, Inc. (12/8/15) 3% 20% 20

Yes if recalled by date of nom. notice


board cap



None Other/Unknown

71. Caterpillar Inc.+ (12/9/15) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)


was withdrawn

72. CBL & Associates Properties, Inc. (2/11/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) and

recalled within 5 BDs of

Yes No 120 – 150


None Adopted after

majority-supported proposal in 2015


A - 19

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


notice

73. Celanese Corporation (2/8/16)

3%

20% (≥2)

(≤1/3 at 2017

and 2018

annual mtgs.)

20

Yes if recallable

(5 BDs) and



board cap




74. Celgene Corporation (12/8/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



None



75. Cerner Corporation+ (2/25/16)

3% 20% 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Unavail-able if

≥50% of directors then in office


15% (2 years)


was withdrawn


A - 20

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


76. CF Industries Holdings, Inc.+ (2/4/15 and amended as of 10/14/15)

3% 25% 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal passed)

77. Chemed Corporation (2/19/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee

None 25% (2 years)


was excluded

78. Cheniere Energy, Inc.+ (12/9/15 and amended as of 9/15/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



None



79. Chevron Corporation+ (9/30/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


No

Yes (candidacy fees OK but

fees for service

prohibited)

120 – 150

Any SH nominates

any nominee

None 25% (2 years)



80. Chico’s FAS, Inc. (11/17/16) 3% 20%

(≥1) 20

Yes if recallable

(5 BDs) and



board cap


• Nominees pursuant to agreement count vs. cap (2 years after board nom.)



A - 21

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


notice

81. The Children’s Place, Inc. (2/12/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee




82. Chipotle

Mexican Grill, Inc.+ (10/4/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee


• Nominees pursuant to agreement count vs. cap but not <1

None

Adopted after shareholder proposal passed in 2016 and

competing management

proposal failed; competing proposals both failed in 2015

83. Cimarex Energy Co.+ (11/11/15) 3% 25% 20

Yes if recallable

(5 BDs) and





• Successful advance notice nominees count vs. cap (2 years)

20% (2 years)



84. Cisco Systems, Inc. (7/28/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



None


shareholder proposal in 2015; adopted and

2016 shareholder proposal was

excluded


A - 22

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


85. CIT Group Inc. (3/15/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee




86. Citigroup Inc. (10/22/15) 3% 20%

(≥2) 20 Yes if

recallable (3 BDs)


board cap


None


shareholder proposal in 2015; SEC no-action request to

exclude 2017 fix-it proposal is pending

87. The Clorox Company (8/28/15 and amended as of 9/13/16)

3% 20% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



20% (2 years)


was withdrawn

88. Cloud Peak Energy Inc.+ (10/20/15 and amended as of 5/2/16)

3% 25% None

Yes if recallable

(3 BDs) and

recalled by date of

nom. notice

No No 120 – 150


access nominee

None None

Adopted after shareholder proposal passed in 2015 and competing proposal

failed

89. CMS Energy Corporation+ (2/4/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee



25% (2 years)


was withdrawn


A - 23

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


90. The Coca-Cola Company (9/2/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee

None 25% (2 years)


meeting; 2016 shareholder proposal

was withdrawn 91. Cognizant

Technology Solutions Corporation (1/28/16)

3% 25% (≥2) None

Yes if recallable

(5 BDs) No No 120 –

150 • Nominees pursuant to agreement count vs. cap

None Adopted and


92. Colgate-Palmolive Company+ (1/14/16)

3% 20% (≥2) 20

Yes if recallable





10% (2 years)


was withdrawn

93. Community Health Systems, Inc. (12/7/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None



94. ConocoPhillips+ (10/9/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



None




A - 24

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


95. CONSOL Energy

Inc.+ (9/20/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



25% (2 years)



96. Corning

Incorporated (12/7/15)

3% 20% (≥2) 20

Yes if revocable

at any time


board cap




97. Corrections

Corporation of America (1/8/16)

3% 25% (≥2) 20

Yes if recallable

(3 BDs) No No 60 – 90


any nominee or any SH nominates

a proxy access

nominee

None 20% (1 year) Other/Unknown

98. Costco

Wholesale Corporation (9/26/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee



25% (3 years)




A - 25

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


99. Crown Holdings, Inc. (1/29/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee




100. C.R. Bard, Inc. (12/22/2016)

3%

20% (≥2)

20

Yes if

recallable (5 BDs)


recall upon notice

No

No

120-150

Any SH nominates

any nominee



25% (2 years)

Other/Unknown

101. CSX Corporation (10/7/15) 3% 20%

(≥2) 20 Yes if

recallable (3 BDs)

No No 120

Any SH nominates

any nominee




102. CVS Health Corporation (1/21/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled promptly

upon notice

Yes No 120 – 150



• Successful advance notice



A - 26

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


nominees count vs. cap (2 years) but not <1

103. Dana Holding Corporation (1/26/16)

3% 25% 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)

104. Danaher Corporation (12/6/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



None Adopted and


105. DaVita Inc.* (6/20/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH

nominates any

nominee

None None

Adopted after management

proposal passed in 2016; shareholder

proposal had failed in 2015

106. DCT Industrial Trust Inc. (5/4/16)


candidacy and service

120 – 150

Any SH nominates

any nominee

• Successful proxy access or

advance notice nominees being nominated for re-



A - 27

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


prohibited) election by the board count vs. cap

107. Deere & Company (8/31/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)



108. Delta Air Lines,

Inc. (10/28/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown

109. Devon Energy Corporation+ (1/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and



board cap


None





A - 28

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


110. Discover Financial Services (12/15/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No


prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)

Other/Unknown; SEC no-action request to

exclude 2017 proposal seeking

proxy access with a group size limit of 40

is pending

111. Dominion Resources, Inc.+ (12/17/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No Yes (fees for

service prohibited)

120 – 150


access nominee



25% (2 years)


was withdrawn

112. Domtar Corporation (2/23/16)

3% 20% 20

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee




113. Dover Corporation (2/11/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)


A - 29

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


114. The Dow Chemical Company (12/15/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None



115. DTE Energy

Company+ (9/17/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 – 150

Any SH nominates

any nominee



None



116. Duke Energy Corporation+ (1/4/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


shareholder proposal in 2015; 2016 proposal

was withdrawn

117. The Dun & Bradstreet Corporation (12/3/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

118. Eastman Chemical Company (2/18/16)

3% 20% (≥1) 20

Yes if recallable

(3 BDs) and



board cap None 25% (2 years)


was excluded


A - 30

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


119. eBay Inc.+ (3/15/16) 3% 20%

(≥2) 20 Yes if

recallable (5 days)

No No 90 – 120

Any SH nominates

any nominee



None




120. Ecolab Inc. (12/3/15) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)

121. Edison International (12/10/15)

3% 20% (≥2) 20

Yes if recallable


180

Any SH nominates

any nominee



None


proposal failed)

122. Edwards Lifesciences Corporation (2/25/16)

3% 20% (≥2) 30

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee




123. Electronic Arts Inc.+ (5/13/16) 3% 20%

(≥2) 20 Yes if recallable No No 120 – 150 Any SH

nominates • Successful proxy access nominees count vs. cap (2

25% (2 years)



A - 31

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


(5 BDs) and


any nominee

years) • Directors in office or

nominees pursuant to agreement count vs. cap



124. Ellie Mae, Inc.

(11/16/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) Yes No 90 – 120

Any SH nominates

any nominee



25% (2 years)



125. EMCOR Group, Inc. (12/14/16) 3% 25%

(≥2) 25 Yes if

recallable (5 BDs)

No No 120 – 150


access nominee

None None



126. EOG Resources Inc.+ (9/22/15)

3% 20% 20 Yes if

recallable (3 BDs)



10% (2 years)



127. EQT Corporation+ (10/14/15)

3% 20% (≥2) 20

Yes if recallable

at any time


board cap



None




A - 32

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


128. Equinix, Inc. (3/28/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

129. Equity Residential+ (10/1/15)

3% 20% 20

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee



None



130. Ethan Allen Interiors Inc.* (11/16/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and


No No 120 – 150


access nominee

Unavail-able if

≥50% of directors

up for election

None 25% (2 years)



131. Exelon Corporation*+ (4/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agree to recall by record date

Yes No 120 – 150

Any SH nominates

any nominee

• Successful nominating

shareholder may not nominate (2 years)

25% (2 years)


proposal passed in 2015 and competing shareholder proposal

failed; 2016 shareholder proposal was withdrawn; 2016

management proposal passed


A - 33

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


132. Expeditors International of Washington, Inc.*+ (5/3/16)

3% 20% 20 Yes if

recallable (5 days)

No No 120 – 150

Any SH nominates

any nominee



None


proposal passed in 2015 and competing shareholder proposal

failed; 2016 management

proposal also passed; SEC granted no-action

request to exclude 2017 fix-it proposal

133. Express Scripts Holding Company+ (3/9/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

promptly recalled

upon notice

Yes No 120 – 150

Reduces board cap but not <1



20% (2 years)


was withdrawn

134. Exxon Mobil

Corporation+ (10/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

promptly recalled

upon notice

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)



135. FedEx Corporation (3/7/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –


• Successful proxy access nominees count vs. cap (1 year)

None


shareholder proposal in 2015; 2016 fix-it proposal excluded


A - 34

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


136. FelCor Lodging

Trust Incorporated (10/27/16)

3% 20% 10 No Yes No 120 – 150

Any SH nominates

any nominee


137. Ferro


3% 20% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee


• Successful advance notice nominees and nominees pursuant to agreement count vs. cap but not <1

None



138. Fidelity National Financial, Inc.+ (2/3/16)

3% 20% (≥2) 25

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120


any nominee



None




139. FirstMerit

Corporation* (4/15/15)

3% 20% 20 No Yes No 90

Any SH nominates

a proxy access

nominee

• Successful nominating shareholder may not nominate if >20% of board consists of candidates previously submitted by it or its affiliates

25% (2 years)


was withdrawn


A - 35

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


140. Fiserv, Inc.

(2/19/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled upon of notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)

141. FleetCor

Technologies, Inc.+ (10/20/16)

3% 25% (≥2) 25

Yes if recallable

and agrees to

promptly recall upon

notice


board cap



None



142. FLIR Systems,

Inc. (10/20/16)

3% 25% (≥1) 20

Yes if recallable

(5 BDs) and


Yes (no timeframe specified)

No 120 – 150 Reduces

board cap

• Successful proxy access nominees count vs. cap (if mid-term and not up for election)

None



143. Flowserve Corporation (12/14/15 and amended as of 8/11/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) Yes


prohibited)

120 – 150

Any SH nominates

a proxy access

nominee

Unavail-able if

≥50% of directors

up for election

None 25% (2 years)


proposal failed)

144. Fluor


3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded


A - 36

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


145. FMC


3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –





146. Freeport McMoRan Inc.*+ (6/8/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



15% (2 years)

Adopted after management proposal passed in

2016; 2016 shareholder proposal

was withdrawn; shareholder proposal

passed in 2015

147. General Dynamics Corporation (12/2/15)

3% 20% 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)

Adopted and shareholder proposal was excluded; SEC no-

action request to exclude 2017 fix-it proposal is pending

148. General Electric Company (2/6/15)

3% 20% 20 Yes if

recallable (3 BDs)

Yes No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)


was excluded


A - 37

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


149. General Mills, Inc. (3/8/16) 3% 20%

(≥2) 20 Yes if

recallable (3 BDs)

Yes No 120 – 150

Any SH nominates

any nominee



None Other/Unknown

150. General Motors Company (3/4/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by time

the nom. notice is submitte

d

Yes No 120 – 180


any nominee



25% (2 years)


was excluded

151. Gilead Sciences, Inc. (12/23/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to recall

within 5 BDs of notice

No No 120 – 150

Any SH nominates

any nominee




152. The Goldman Sachs Group, Inc. (10/23/15)

3% 20% (≥2) 15

Yes if recallable

and agrees to recall by meeting

Yes No 120 – 150

Any SH nominates

any nominee



20% (2 years)


meeting; SEC no-action request to

exclude 2017 fix-it


A - 38

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


date proposal is pending

153. Green Dot


3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown

154. H&R Block, Inc. (7/14/15) 3% 20% 20

Yes if recallable

(3 BDs) No No 90 – 120

Any SH nominates

any nominee

Reduces board cap None 25%

(1 year)

Adopted and 2015 shareholder proposal was withdrawn; fix-it


155. Halliburton Company (9/14/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and gives notice to

recall within 3 BDs of notice

Yes No 90 – 120

Any SH nominates

any nominee




156. The Hartford Financial Services Group, Inc. (7/21/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No


prohibited)

120 – 150

Any SH nominates

any nominee



None Other/Unknown


A - 39

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


157. Hasbro, Inc.+ (10/1/15 and amended as of 12/10/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 90 – 120


any nominee

None 25% (2 years)



158. HCP, Inc.+ (2/8/15 and amended as of 1/28/16)

3% 20% (≥2) 25

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



10% (2 years)


proposal passed); 2016 shareholder

proposal was withdrawn

159. Hess Corporation+ (11/4/15)

3% 20% (≥2) 20 Yes if

recallable No No 90 Reduces board cap


None



160. Hewlett Packard Enterprise Company (10/31/15)

3% 20% 20 No No No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)



adopted

161. The Home Depot, Inc.+ (3/3/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee


• Directors in office and nominees pursuant to agreement count vs. cap

None Adopted and



A - 40

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


162. Honeywell International Inc.+ (12/11/15 and amended as of 2/12/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

163. Host Hotels & Resorts, Inc. (11/21/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee




164. Huntington Ingalls Industries, Inc. (1/28/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



None Adopted and


165. Illinois Tool Works Inc. (12/11/15)

3% 25% (≥2) 20 Yes if

revocable No No 90 – 120 Reduces board cap



None Adopted and



A - 41

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


166. Ingersoll-Rand plc* (6/2/16) 3% 20%

(≥2) 20 Yes if

recallable (3 BDs)

No No 120 – 150

Any SH nominates

any nominee




• 25% (2 years) (also applies to advance notice nominees)

• Nom’g SH may not nominate if nominee received <10% support (2 years)



167. Ingredion Incorporated (12/9/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee




168. Intel Corporation+ (1/21/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled within 5 BDs of date of nom. notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn


A - 42

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


169. Intercontinental Exchange, Inc.+ (5/6/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by record

date

No No 120 – 150

Any SH nominates

any nominee

• Successful proxy access nominees count vs. cap (1 year)


20% (2 years)


was withdrawn

170. International Flavors & Fragrances Inc. (12/15/15)

3% 20% 20

Yes if recallable

(5 BDs) and

recalled upon notice

No No 90 – 120

Any SH nominates

any nominee




171. International Paper Company (2/9/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee



25% (2 years)


was excluded

172. The Interpublic

Group of Companies, Inc. (10/24/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None



173. Intuit Inc. (5/5/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 105 – 135

Any SH nominates

any nominee





A - 43

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


174. Intuitive Surgical, Inc. (12/12/16)

3% 25% (≥2) 20

Yes if recallable

(3 BDs) and

agrees to promptly

recall upon notice

Yes No 90 – 120

Any SH nominates

any nominee

• Successful proxy access nominees (including nominees pursuant to agreement) count vs. cap (2 years)


175. iRobot Corporation (3/7/16)

3% 25% (≥2) None

Yes if recallable

(5 BDs) and

recalled by date of

nom. notice

No No 90 – 120

Any SH nominates

any nominee



176. ITT Corporation (2/19/16) 3% 20%

(≥2) 20

Yes if recallable

(3 BDs) and

recalled within 3 BDs of date of nom. notice

Yes No 120 – 150


any nominee

Reduces board cap


None Adopted and



A - 44

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


177. J.C. Penney Company, Inc. (7/20/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee




178. Johnson & Johnson+ (1/26/16)

3%

20% (≥2 if board size <10)

20 Yes if

recallable (5 BDs)

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



20% (2 years)


was withdrawn

179. JPMorgan Chase & Co. (1/19/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

recalled by record date and meeting

date

Yes No 120 – 150

Any SH nominates

any nominee




180. Juniper Networks, Inc. (11/16/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee





A - 45

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


181. Kansas City Southern (2/26/16)

3% 20% (≥2) 20

Yes if recallable (5 days)


board cap



None


proposal failed)

182. Kate Spade & Company* (5/19/16)

3% 20% (≥2) 20

Yes if recallable

and recalled

upon notice


board cap

• Successful advance notice nominees count vs. cap


None

Adopted after 2016 management

proposal passed and competing

shareholder proposal failed

183. Kellogg Company (2/19/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –





184. Kimberly-Clark Corporation (12/14/15)

3% 20% (≥2) 20

Yes if recallable

and recalled

by notice deadline




None Adopted and


185. Kindred Healthcare, Inc. (10/29/15)

3% 20% (≥2)

20 (25 if mkt. cap >

$2.5B)

Yes if recallable

and recalled

upon notice


board cap


None Adopted and



A - 46

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


186. Knight Transportation, Inc.* (5/12/16)

3% 20% (≥2) 20 Yes if



25% (2 years)

Adopted after 2016 management

proposal passed and competing

shareholder proposal failed

187. Kohl’s Corporation (11/11/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)



188. L Brands, Inc.

(11/3/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)



189. L-3 Communications Holdings, Inc. (10/18/16 and amended as of 12/7/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

voted at the

meeting

No No 120 – 150

Any SH nominates

any nominee


• Directors in office or nominees pursuant to agreement count vs. cap (2 years)


• Nominating shareholder may not nominate if a



A - 47

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


nominee failed to receive 10% support (2 years)

190. Leidos Holdings, Inc. (4/12/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

191. Level 3 Communications, Inc.+ (11/12/15)

3% 20% (≥1) 20 No No No 120 –

150


access nominee



25% (2 years)


meeting

192. Lockheed Martin Corporation (9/22/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –



None Adopted and


193. Lowe’s Companies, Inc. (3/18/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by sub-

mission of nom. notice

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)


A - 48

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


194. The Macerich Company+ (4/21/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No

60 – 90

Any SH nominates

any nominee



25% (2 years)


was withdrawn

195. Macy’s, Inc. (2/26/16 and amended as of 9/29/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No


prohibited)

120 – 150

Any SH nominates

any nominee




196. Marathon Oil Corporation (4/9/15 and amended as of 9/1/15)

3% 25% 20 No Yes Yes (fees for

service prohibited)

90 – 120


access nominee

Unavail-able if

≥50% of directors

up for election


25% (2 years)


proposal passed)

197. Marathon Petroleum Corporation (2/24/16)

3% 20% (≥2) 20

Yes if recallable

at any time


board cap




None


proposal failed)


A - 49

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


198. Marlin Business

Services Corp. (10/20/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



25% (2 years)



199. Marvell

Technology Group Ltd.* (11/8/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 90 – 120

Any SH nominates

any nominee



20% (2 years)


proposal passed in 2016; shareholder

proposal withdrawn when management proposal was added

to the ballot

200. Mastercard

Incorporated (9/29/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown

201. McDonald’s Corporation (10/26/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 90 – 120 Reduces

board cap



None




A - 50

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


202. McKesson Corporation* (7/29/15)

3% 20% 20 Yes if

recallable (3 BDs)

No No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)


was withdrawn

203. Mead Johnson Nutrition Company (12/13/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150


any nominee

Reduces board cap



204. Merck & Co., Inc. (7/22/15)

3% 20% 20 Yes if

recallable (3 BDs)

Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee




205. MetLife, Inc. (12/8/15) 3% 20%

(≥2) 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee





206. Mettler-Toledo

International Inc. (11/3/16)

3% 20% (≥2) 20


No No 120 – 150

Any SH nominates

any nominee




207. MGC Diagnostics Corporation (2/2/16)

3% 20% None No No No 120 – 150


any nominee

None None Other/Unknown


A - 51

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


208. MGM Resorts International (1/13/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120 –

150

Any SH nominates

any nominee


(2 years) Other/Unknown

209. Microsoft Corporation (8/7/15 and amended as of 9/20/16)

3% 20% (≥2) 20

Yes if recallable

(5BDs) No No 120 –

150

Any SH nominates

any nominee



15% (2 years)

Adopted and 2015 shareholder proposal was withdrawn; fix-it


210. Mondelēz

International, Inc. (10/1/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120

Any SH nominates

any nominee




211. Monsanto Company (6/5/15 and amended as of 1/11/16)

3% 20% 20

Yes if revocable

at any time

No No 120 – 150


access nominee

Unavail-able if

≥50% of directors

up for election

None None



212. Monster Worldwide, Inc. (3/16/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) and


No No 45 – 75

Any SH nominates

any nominee





A - 52

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


notice

213. Morgan Stanley (10/29/15) 3% 20%

(≥2) 20

Yes if recallable

(3 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150


any nominee

Reduces board cap



214. The Mosaic Company (3/3/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee




215. Murphy Oil Corporation+ (2/3/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) Yes


prohibited)

120 – 150

Any SH nominates

any nominee



10% (2 years)


shareholder proposal in 2015; adopted and

2016 shareholder proposal was

withdrawn


A - 53

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


216. Nasdaq, Inc.

(11/21/16)

3% 25% (≥2) None

Yes if recallable

(3 BDs) and


Yes No 120 – 150 None 25%

(2 years)



217. National Fuel Gas Company (3/10/16)

3% 20% 20

Yes if recallable

and recalled by date of nom. notice

No Yes (fees for

service prohibited)

120 – 150 Reduces board cap



None Other/Unknown

218. NCR Corporation

(10/11/16)

3% 25% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)



219. NETGEAR, Inc. (4/19/16) 3% 20%

(≥2) 50 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



None Adopted and



A - 54

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


220. New York

Community Bancorp, Inc.+ (3/17/15 and amended as of 12/20/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)

Adopted prior to vote on 2015 shareholder

proposal (and proposal failed); fix-it

proposal passed at 2016 annual meeting

and made certain amendments

221. Newell Brands Inc. (f/k/a Newell Rubbermaid Inc.) (2/11/16)

3% 20% (≥1) 20

Yes if recallable

(3 BDs) No No 90 – 120 Reduces

board cap


25% (2 years)


was excluded

222. Newfield

Exploration Company (11/11/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee




223. Newmont

Mining Corporation (2/12/16)

3% 20% (≥2) 20

Yes if recallable (5 days)


board cap



None Other/Unknown


A - 55

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


224. NextEra Energy,

Inc. (10/14/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee

None None


shareholder proposal in 2016; SEC no-action request to

exclude 2017 fix-it proposal is pending

225. NiSource Inc.+

(1/29/16)

3% 20% (≥2) 20

Yes (if recallable

and recalled)

No No 120 – 150

Any SH nominates

any nominee


None Adopted and


226. Noble Energy, Inc.+ (10/20/15 and amended as of 7/27/16)

3% 25% (≥1) 25 No Yes


prohibited)

120 – 150

Any SH nominates

any nominee

None 15% (2 years)


meeting; fix-it proposal failed at

2016 annual meeting but later made

certain amendments


A - 56

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


227. Norfolk Southern Corporation (7/29/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120



228. Northrop Grumman Corporation (12/4/15 and amended as of 2/17/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



None Adopted and


229. NRG Energy, Inc.+ (12/1/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150


and unavail-able if

≥50% of directors

up for election

• Successful proxy access count vs. cap (2 years)

25% (2 years)



230. NVIDIA Corporation (11/29/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by date of nom.

No Yes (fees for

service prohibited)

90 – 120

Any SH nominates

any nominee



None

Adopted after shareholder proposal failed at 2015 annual meeting; amended

and 2016 shareholder proposal was

excluded


A - 57

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


notice

231. NVR, Inc.+ (11/6/15 and amended as of 3/17/16)

3% 20% 20 Yes if

recallable (5 BDs)

Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee

None 25% (2 years)


meeting; amended and 2016 fix-it proposal

excluded based on Rule 14a-8(i)(10)

232. Occidental Petroleum Corporation+ (10/8/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee

• Successful proxy access or advance notice nominees count vs. cap (3 years)


25% (2 years)



233. Omnicom Group

Inc. (3/14/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



None Adopted and



A - 58

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


234. Oracle Corporation (6/15/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee

None None




235. O’Reilly Automotive, Inc.+ (11/22/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



20% (2 years)



236. Oshkosh

Corporation (11/13/15 and amended as of 9/13/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



None


proposal failed); 2017 fix-it proposal

excluded based on Rule 14a-8(i)(10)

237. PayPal Holdings,

Inc. (7/17/15)

3% 20% 15 No No No 90 – 120 Reduces board cap

• Successful proxy access nominees count vs. cap (2 years) but not <1


10% (2 years)

Majority-approved shareholder proposal

at prior parent company annual

meeting


A - 59

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


238. Peabody Energy Corporation+ (12/10/15)

3% 20% (≥2) 20

Yes if revocable

at any time




10% (2 years)


was withdrawn

239. Pebblebrook Hotel Trust (11/10/16 with 1/4/17 effective date)

3% 20% 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee




240. PepsiCo, Inc.+ (1/11/16) 3% 20%

(≥2)

20 (each owning ≥0.1%)

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



None Adopted and


241. PerkinElmer, Inc. (7/27/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee





A - 60

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


242. Pfizer Inc.+

(12/14/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

243. PG&E Corporation (2/17/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



244. Philip Morris International Inc. (9/16/15)

3% 20% 15 Yes if

recallable (3 BDs)

Yes No 120 – 150

Any SH nominates

any nominee




245. Pioneer Natural

Resources Company+ (11/19/15 and amended as of 5/19/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee


advance notice nominees count vs. cap (2 years)

25% (2 years)


meeting

246. The PNC Financial Services Group, Inc. (8/11/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown


A - 61

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


247. PPG Industries, Inc. (12/10/15) 3% 20%

(≥2) 20

Yes if recallable

at any time


board cap




None

Adopted and shareholder proposal was excluded; SEC no-

action request to exclude 2017 fix-it proposal is pending

248. PPL Corporation+ (12/18/15) 3% 20%

(≥2) 25 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee

None None




249. Praxair, Inc.+ (1/26/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee



None Adopted and


250. The Priceline Group Inc.+ (3/18/15 and amended as of 7/23/15 and 11/4/15)

3% 25% None Yes if

recallable (5 BDs)



prohibited) 120 – 150


any nominee or any SH nominates such proxy

access nominee

None 25% (2 years)


proposal passed)


A - 62

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


251. The Procter & Gamble Company (4/8/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) Yes


prohibited) 120 – 150 Reduces

board cap None None

Shareholder proposal was on 2015 ballot

but was not voted on because proponent failed to appear at

the meeting

252. The Progressive Corporation (8/7/15)

3% 20% (≥1) 20

Yes if recallable

and recalled

No No 120 Reduces board cap





253. Prologis, Inc.

(9/21/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 90 – 120

Any SH nominates

any nominee




254. Proto Labs, Inc.

(11/8/16)

3% 25% (≥2) 20

Yes if recallable

(3 BDs) No No 120

Any SH nominates

any nominee



25% (2 years)




A - 63

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


255. Prudential Financial, Inc. (3/10/15)

3% 20% 20 Yes if

recallable (3 BDs)

Yes No 120 – 150

Any SH nominates

any nominee


256. Public Service Enterprise Group Incorporated (12/15/15)

3% 25% 20 Yes if

recallable (3 BDs)

No No 120 – 150


any nominee



257. Qorvo, Inc. (5/13/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee




258. QEP Resources, Inc. (12/15/16) 3% 20%

(≥2) 20

Yes if recallable

(3 BDs) and


Yes Yes (fees for

service prohibited)

90 – 120

Any SH nominates

any nominee




259. QUALCOMM

Incorporated (12/7/15 and amended as of 7/11/16)

3% 20% (≥2) 20 No No

Yes (fees for candidacy

and service prohibited)

120 – 150

Any SH nominates

any nominee

None None


proposal failed)


A - 64

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


260. Quality Care Properties, Inc. (10/31/16)

3% 20% (≥2) 25

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



10% (2 years)



adopted

261. Quest Diagnostics Incorporated (2/25/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150


any nominee

None 25% (2 years)


was excluded

262. Range Resources Corporation+ (2/29/16)

3% 20% (≥2) 20

Yes if recallable (10 BDs)


recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal in 2015

263. Raytheon Company (3/23/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and



board cap None 25% (2 years)


proposal failed)


A - 65

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


264. Regency Centers

Corporation (7/15/15 and amended as of 4/21/16)


service prohibited)

120

Any SH nominates

any nominee




265. Reliance Steel & Aluminum Co. (2/16/16)

3% 25% (≥2) 20

Yes if recallable

(3 BDs) No


prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

266. Republic Services, Inc.*+ (5/6/16)

3% 25% 20

Yes if recallable

(5 BDs) and


No

Yes (fees for action as a

director prohibited)

120 – 150


access nominee

Reduces board cap


25% (2 years)

Adopted after majority-supported proposal in 2015;

management proposal passed in

2016

267. Rite Aid Corporation (4/15/15)

3% 20% 20 No Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed) 268. Rockwell

Automation, Inc. (6/8/16)

3% 20% (≥2) 20

Yes if revocable

at any time

No No 120 – 150





A - 66

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


269. Roper

Technologies, Inc.+ (3/9/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



25% (2 years)




270. Ryder System, Inc. (2/22/16) 3% 20%

(≥2) 25 Yes if

recallable (5 days)

No No 120 – 150



None Adopted and


271. S&P Global Inc.

(f/k/a McGraw Hill Financial, Inc.) (1/27/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee



None Adopted and


272. salesforce.com, Inc.+ (3/21/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)


board cap



25% (2 years)


was withdrawn


A - 67

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


273. SBA Communications Corporation+ (7/28/15)

5% 20% (≥1) 10 No No No 120

Any SH nominates

any nominee


• While board is classified, number of proxy access nominees may not >50% of directors to be elected

25% (3 years)

Adopted after 2015 management proposal passed and competing shareholder proposal

failed; 2016 management proposal failed and competing

shareholder fix-it proposal passed

274. Science Applications International Corporation (2/2/16)

3% 25% (≥2) 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

275. Sempra Energy (12/15/15) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee




276. SL Green Realty Corp.+ (3/23/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn


A - 68

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


277. SLM Corporation* (6/25/15)

3% 25% (≥1) 20 No No No 90 – 120


access nominee

Reduces board cap


25% (2 years)


shareholder proposal

278. Sonoco Products

Company (2/10/16)

3%

20% (≥1 if class-ified or 2 if not class-ified)

20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)

279. The Southern Company*+ (5/25/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee

(if # of nominees

would exceed #

of directors

to be elected)



20% (2 years)


was withdrawn; management



A - 69

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


280. Southwest Airlines Co. (11/17/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee


advance notice nominees count vs. cap (2 years)

25% (2 years)



281. Southwestern Energy Company+ (11/9/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)



282. Spectra Energy Corp. (11/4/15) 3% 20% 20

Yes if recallable

(3 BDs) and

agrees to promptly

recall upon notice

No Yes (fees for

service prohibited)

90 – 120


access nominee

Reduces board cap




A - 70

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


283. Spirit Aerosystems Holdings, Inc. (11/29/16)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No No 120


any nominee


284. Splunk Inc.+ (3/10/16) 3%

20% if board size

≥10 or 25% if ≤9 (≥1)

20 (25 if ann. Revs. >$4B)

Yes if recallable

(5 BDs) and



No 120 – 150 Reduces

board cap


None Adopted and


285. St. Jude Medical,

Inc.* (10/26/16)

3% 25% 20 Yes if

recallable (3 BDs)

No No 120 – 150

Any SH nominates

any nominee


None


proposal passed in 2016 at meeting to

approve merger with company that has

adopted proxy access

286. Staples, Inc.+ (12/1/15) 3% 20%

(≥2) 25

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 90 – 120

Any SH nominates

any nominee

None 15% (2 years)


was withdrawn


A - 71

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


287. Starbucks Corporation (9/13/16)

3% 20% 20 Yes if

recallable (5 BDs)

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)



288. State Street


3% 20% 20 Yes if

recallable (3 BDs)

No No 120 – 150



access nominee


(2 years) Other/Unknown

289. Stericycle, Inc. (2/10/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


proposal failed)

290. Superior

Industries International, Inc. (10/25/16)

3% 20% 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes No 90 – 120

Any SH nominates

any nominee



25% (2 years)




A - 72

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


291. Synchrony

Financial (10/27/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 120 – 150

Any SH nominates

any nominee



None

Other/Unknown; spun-off from

company that has adopted proxy access

292. Sysco Corporation (8/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 90 – 130

Any SH nominates

any nominee




293. T. Rowe Price Group, Inc. (12/10/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) and

recalled by record

date

No Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee




294. Target Corporation (11/11/15)

3% 20% (≥2) 20

Yes if recallable

(3 BDs) No


prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

295. TCF Financial Corporation (10/19/15)

3% 25% 20 No Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



None




A - 73

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


296. Tenneco Inc.

(10/11/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

recalled by record

date


board cap




297. Teradata Corporation (7/26/16)

3% 20% 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee




298. Tesoro


3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown

299. Texas

Instruments Incorporated (12/12/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee




None Other/Unknown


A - 74

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


300. Textron Inc.

(12/6/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150



• Successful advance notice nominees count vs. cap (2 years) but not <1


301. Time Warner Inc. (1/28/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 150 – 180

Any SH nominates

any nominee



25% (2 years)


was excluded

302. The Timken Company* (5/10/16)

3% 20% (≥2) 20


No No 120 – 150

Any SH nominates

any nominee



None



303. The Travelers

Companies, Inc. (11/3/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee




None Other/Unknown

304. U.S. Bancorp+ (1/19/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee




A - 75

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


305. UDR, Inc. (5/12/16) 3% 20% 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee




306. Union Pacific Corporation+ (11/19/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

307. United Continental Holdings, Inc. (2/18/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



25% (2 years)


was excluded

308. United Natural Foods, Inc. (10/23/15 and amended as of 9/8/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes Yes (fees for

service prohibited)

120 – 150


access nominee

Reduces board cap

and unavail-able if

≥50% of directors

up for election




25% (2 years)

Adopted and shareholder proposal was withdrawn; fix-it



A - 76

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


309. United Rentals, Inc. (9/8/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee




310. United States

Steel Corporation (11/1/16)

3% 20% None

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee




311. United Technologies Corporation (9/9/15)

3% 20% (≥1) 20

Yes if revocable

at any time


board cap



None Other/Unknown

312. United Therapeutics Corporation+ (4/29/15)

3% 20%

(25% if <10)

20

Yes if recallable

(3 BDs) and


No No 120 – 150

Any SH nominates

any nominee


25% (2 years)


was withdrawn


A - 77

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


313. UnitedHealth Group Incorporated (2/9/16)

3% 20% 20

Yes if recallable

(3 BDs) and

recalled by record

date

No Yes (fees for

service prohibited)

120 – 150



access nominee

Reduces board cap


25% (2 years)


was excluded

314. Universal Health

Realty Income Trust (9/28/16)

3% 20% 20

Yes if recallable

(5 BDs) and will recall as

of meeting

date

No No 120 – 150

Any SH nominates

any nominee



25% (2 years)



315. Unum Group+ (2/24/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


was withdrawn

316. Urban

Outfitters, Inc.+ (12/12/16)

3% 25% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee

Reduces board cap



None




A - 78

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


317. Valero Energy


3% 20% (≥2) 20

Yes if recallable

(3 BDs) Yes


prohibited) 120 – 150 Reduces

board cap None None Other/Unknown

318. Valley National Bancorp (12/6/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee

None 25% (2 years)


was excluded

319. VCA Inc.+ (10/29/15) 5% 20%

(≥1) 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee



25% (2 years)


meeting

320. VEREIT, Inc.+

(8/5/15 with 1/1/16 effective

3% 25% 20 Yes if

recallable (5 BDs)

No Yes (fees for

service prohibited)

120

Any SH nominates

any nominee



25% (2 years)


was withdrawn


A - 79

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


date)

321. Verifone Systems, Inc. (12/15/16)

3% 20% (≥2) 20

Yes if recallable


150

Any SH nominates

any nominee




322. VeriSign, Inc. (7/27/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)

No No 120 – 150

Any SH nominates

any nominee



None


meeting; company had proposed terms

of its own proxy access bylaw in 2016

proxy statement 323. Vertex

Pharmaceuticals Incorporated+ (4/26/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

No No 90

Any SH nominates

any nominee


• Nominees and directors in office pursuant to agreement count vs. cap (2 years after board nom.)

10% (2 years)




324. Visa Inc. (10/30/15) 3% 20% 20

Yes if recallable

(3 BDs) and


Yes No 120 – 150

Any SH nominates

any nominee





A - 80

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


325. Visteon Corporation+ (6/10/16)

3% 20%

(25% if <10)

20

Yes if recallable

(5 BDs) and


No No 120 – 150


access nominee;

nom-inating SH

that nominates

proxy access

nominee may not also use advance notice

• Successful proxy access nominees count vs. cap (indefinitely)

15% (2 years)

Adopted after 2016 shareholder proposal

passed and competing

management proposal failed; 2016

management proposal passed; 2016 shareholder

proposal was withdrawn

326. Walgreens Boots

Alliance, Inc. (10/14/15)

3% 20% 20 Yes if

recallable (5 BDs)

Yes No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)

Adopted after shareholder

proposals failed at 2015 and 2014 annual

meetings

327. The Walt Disney Company (6/28/16 and amended as of 11/30/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) and


No No 120 – 150


any nominee

Reduces board cap


25% (2 years)

Adopted after shareholder proposal

failed in 2013 and was withdrawn in

2014


A - 81

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


328. WD-40 Company (7/13/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to promptly

recall upon notice

Yes Yes (fees for

service prohibited)

120 – 150

Any SH nominates

any nominee



25% (2 years)


was excluded

329. WEC Energy

Group, Inc.+ (10/20/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee

(if # of nominees

would exceed #

of directors

to be elected)


None



330. Wells Fargo &

Company+ (12/17/15)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Adopted and


331. The Wendy’s Company* (5/26/16)

3% 20%

(25% if <10)

25

Yes if recallable

(5 BDs) and

recalled by

No No 120 – 150

Any SH nominates

any nominee



None


was excluded; management



A - 82

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


meeting date

332. Westmoreland

Coal Company*+ (5/18/16)

3% 25% (≥2)

10 (25 if mkt.

cap >$1B)

Yes if recallable

(5 BDs) and


No No 90 – 120 None 25% (2 years)


proposal passed in 2016; shareholder proposal failed in

2015

333. Whirlpool


3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Other/Unknown

334. Whiting Petroleum Corporation+ (2/18/16)

3% 25% 25

Yes if recallable

(5 BDs) and



board cap


25% (2 years)


was withdrawn

335. Whole Foods Market, Inc. (6/26/15)

3% 20% (≥1) 20

Yes if recallable

(3 BDs) and

recalled by time

the nom.

Yes Yes (fees for

service prohibited)

120 – 150


access nominee

Reduces board cap

and unavail-able if

≥50% of directors




25% (2 years)


proposal failed); fix-it proposal failed at

2016 annual meeting


A - 83

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


notice is submitte

d

up for election


336. Windstream

Holdings, Inc. (11/19/15)

3% 20% (≥2) 20 Yes if

recallable No Yes (fees for

service prohibited)

120 – 150


access nominee

Unavail-able if

≥30% of directors

up for election


None Other/Unknown

337. Xcel Energy+

(2/17/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Adopted and


338. Xylem Inc.

(2/25/16)

3% 20% (≥2) 20

Yes if recallable

(5 BDs) No No 120 –

150

Any SH nominates

any nominee



None Adopted and


339. Yahoo! Inc. (3/25/16) 3% 20%

(≥2) 20

Yes if recallable

(5 BDs) and

agrees to

No No 120 – 150

Any SH nominates

any nominee

None 25% (2 years)


was withdrawn


A - 84

Company



Party Comp-

ensation Arrange-

ments



Notice Nomination





Other Freeze-Outs


% Owner-

ship Thres-hold

(3 years)

Limit on


Board)

Group Size Limit

Loaned Shares



as to Ownership

Beyond Mtg. Date





Mtg. Ann’y

Blanket Exclusion

Depends on # of

Advance Notice


promptly recall upon notice

340. Yum! Brands Inc. (9/18/15) 3% 20% 20

Yes if recallable

(3 BDs) and


Yes Yes (fees for

service prohibited)

120 – 150


access nominee

Unavail-able if

≥50% of directors

up for election

None 25% (2 years)


was withdrawn or excluded

341. Yum China

Holdings, Inc. (10/31/16)

3% 20% 20

Yes if revocable

at any time

Yes Yes (fees for

service prohibited)

120 – 150


access nominee

Unavail-able if

≥50% of directors

up for election

• Nominees and directors in office pursuant to agreement count vs. cap

25% (2 years)



adopted

342. Zoetis Inc.+ (2/19/16) 3% 20%

(≥2) 20 Yes if

recallable (5 BDs)


board cap



None Adopted and


Note: Data in Appendix A is derived from publicly-available information as of December 31, 2016. Inclusion of a company in Appendix A is not intended to suggest that Sidley Austin LLP advised such company

regarding adopting proxy access.

Appendix B – Summary of Proxy Access Bylaw Amendments Sought by Shareholder Proponents

B - 1

Company

Proxy Access Bylaw Amendments Sought by Shareholder Proponents

% Ownership Threshold

Limit on Proxy Access

Nominees (Max % of

Board)

Group Size Limit

Loaned Shares Count as “Owned”

Requirement to Hold Shares

Beyond Mtg. Date (e.g., 1 Year) or

Express Intention to Hold

Restrictions on Renominating

Unsuccessful Proxy Access Nominees

Nominee Eligibility Generally

Board Power to Amend Proxy Access Bylaws

The AES Corporation • Non-binding • Proponent: John Chevedden • No-action relief based on Rule

14a-8(b), (f) and (i)(3) denied on 12/20/161

No requested amendment

(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

No requested amendment (loaned shares count as owned if

recallable on 5 BDs’ notice)

No requested amendment (required to

express intention to hold shares beyond annual

meeting)

Remove 2-year nomination

restriction on nominees who did

not receive support of ≥25% of total

votes cast


No requested amendment (board can amend proxy

access bylaw)

Apple Inc. • Non-binding • Proponent: James McRitchie • No-action relief based on Rule

14a-8(i)(10) denied on 10/27/162

• Amended on 12/13/163 • Annual meeting date to be

fixed (last held 2/26/16)


(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

No requested amendment (loaned shares count as owned if recallable on 5 BDs’ notice and recalled within 5 BDs’ notice);

amended to delete requirement that shares be recalled


(not required to express intention

to hold shares beyond annual

meeting)



not receive support of ≥25% of shares

present and entitled to vote; amended to

delete this restriction



access bylaw)

Applied Materials, Inc. • Non-binding • Proponent: John Chevedden

on behalf of Kenneth Steiner • No-action relief based on Rule

14a-8(b) and (f) granted on 11/23/164


(3%)

From 20% (≥2 directors) to

25% (≥2 directors)

From 20 to no limit

No requested amendment (loaned shares count as owned if recallable on 5 BDs’ notice and agrees to recall upon notice)



meeting)




votes cast



access bylaw)

1 The AES Corporation, SEC Response Letter (Dec. 20, 2016), available here. 2 Apple Inc., SEC Response Letter (Oct. 27, 2016), available here. 3 Apple Inc., Form 8-K filed with the SEC on Dec. 15, 2016 announcing amendments to proxy access bylaw, available here. 4 Applied Materials, Inc., SEC Response Letter (Nov. 23, 2016), available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddenaes122016-14a8.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/jamesmcritchieapple102716-14a8.pdf


https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/kennethsteinerapplied112316-14a8.pdf


B - 2

Company




Nominees (Max % of

Board)

Group Size Limit









Cabot Oil and Gas Corporation • Binding • Proponent: New York City

Comptroller • Voted on 5/4/16 (45.5%

support (39.7% of shares outstanding))

• Amended on 7/27/165

From 5% to 3%; amended

to 3%

From 20% to 25%

From 10 to no limit;

increased to 20

No requested amendment; amended to provide that loaned

shares count as owned

No requested amendment;

amended to delete requirement to

represent express intention to hold shares beyond

annual meeting

Amend nomination restriction on

nominees who did not receive ≥25% of total votes cast, to

≥10%


Eliminate board power to amend proxy access bylaw

Citigroup Inc. • Non-binding • Proponent: John Chevedden

on behalf of Kenneth Steiner • No-action relief based on Rule

14a-8(i)(3) and (i)(10) requested on 12/16/166

• No SEC Staff response yet


(3%)


(20% (≥2 directors))

From 20 to 50



No requested amendment (not

required to express intention to hold

shares beyond annual meeting)




access bylaw)

Expeditors International of Washington, Inc. • Non-binding • Proponent: John Chevedden • No-action relief based on Rule

14a-8(h)(3) granted on 12/29/167


(3%)


(20%)

From 20 to 50


recallable on 5 days’ notice)







access bylaw)

5 Cabot Oil & Gas Corporation, Form 8-K filed with the SEC on Jul. 29, 2016 announcing amendments to proxy access bylaw, available here. 6 Citigroup Inc., Incoming Request for SEC No-Action Relief (Dec. 16, 2016), available here. 7 Expeditors International of Washington, Inc., SEC Response Letter (Dec. 29, 2016), available here.


https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/kennethsteinercitigroup121616-14a8-incoming.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddenexpeditors122916-14a8.pdf


B - 3

Company




Nominees (Max % of

Board)

Group Size Limit









FedEx Corporation • Non-binding • Proponent: John Chevedden

on behalf of Myra Young • No-action relief based on Rule

14a-8(b) and (f)(1) granted on 7/5/168


(3%)



From 20 to no limit









access bylaw)

General Dynamics Corporation • Non-binding • Proponent: John Chevedden • No-action relief based on Rule

14a-8(i)(10) requested on 12/23/169



(3%)


(20%)

From 20 to 50

No requested amendment (loaned shares count as owned if recallable on 5 BDs’ notice and recalled by date of nomination

notice)



meeting)




access bylaw)

The Goldman Sachs Group, Inc. • Non-binding • Proponent: John Chevedden

on behalf of James McRitchie and Myra Young

• No-action relief based on Rule 14a-8(b)(2) and f)(1) requested on 12/27/1610



(3%)



From 15 to 40

No requested amendment (loaned shares count as owned if recallable and will be recalled by

the meeting date)



meeting)




access bylaw)

8 FedEx Corporation, SEC Response Letter (Jul. 5, 2016), available here. 9 General Dynamics Corporation, Incoming Request for SEC No-Action Relief (Dec. 23, 2016), available here. 10 The Goldman Sachs Group, Inc., Incoming Request for SEC No-Action Relief (Dec. 27, 2016), available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/myrayoung070516-14a8.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddengeneral122316-14a8-incoming.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/mcritchieyoung122716-14a8-incoming.pdf


B - 4

Company




Nominees (Max % of

Board)

Group Size Limit









H&R Block, Inc. • Non-binding • Proponent: John Chevedden

on behalf of James McRitchie and Myra Young

• No-action relief based on Rule 14a-8(i)(10) denied on 7/21/1611

• Voted on 9/8/16 (30.0% support)


(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

Modify loaned shares provision (count if recallable on 3 BDs’ notice) to ensure that loaned

shares are counted if nominating SH represents it has the legal

right to recall shares for voting purposes, will vote the shares at

the annual meeting, and will hold shares through the meeting

date






not receive ≥25% of total votes cast



access bylaw)

Microsoft Corporation • Non-binding • Proponent: James McRitchie • No-action relief based on Rule

14a-8(i)(10) denied on 9/27/1612



(3%)



From 20 to no limit








not receive ≥15% of total votes cast

To the extent possible, the board should

defer decisions about the

suitability of SH nominees to a

SH vote


access bylaw)

New York Community Bancorp, Inc. • Non-binding • Proponent: New York City

Comptroller • Approved on 6/7/16 (67.1%

support) • Amended on 12/20/1613


to 3%

From 20% (≥1 director) to

25%; increased to 20% (≥2 directors)


increased to 20

Modify loaned shares provision (silent as to recall) to ensure that loaned shares count as owned if recallable; amended such that

loaned shares count as owned if recalled on 5 BDs’ notice and

recalled by the date of the nomination notice







access bylaw)

11 H&R Block, Inc., SEC Response Letter (Jul. 21, 2016), available here. 12 Microsoft Corporation, SEC Response Letter (Sep. 27, 2016), available here. 13 New York Community Bancorp, Inc., Form 8-K filed with the SEC on Dec. 23, 2016 announcing amendments to proxy access bylaw, available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/mcritchieyoung072116-14a8.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/jamesmcritchie092716-14a8.pdf



B - 5

Company




Nominees (Max % of

Board)

Group Size Limit









NextEra Energy, Inc. • Non-binding • Proponent: John Chevedden

on behalf of Myra K. Young • No-action relief based on Rule

14a-8(i)(10) requested on 12/19/1614



(3%)



From 20 to 40 or 50









access bylaw)

Noble Energy, Inc. • Binding • Proponents: Illinois State

Board of Investment and the New York City Comptroller


• Amended on 7/27/1615


to 3%

From 20% to 25%; increased

to 25% (≥1 director)


increased to 25

No requested amendment (loaned shares do not count as

owned)



meeting)

Amend nomination restriction on

nominees who did not receive ≥25% of total votes cast, to 10%; amended to

reduce 25% to 15%



access bylaw)

NVR, Inc. • Binding • Proponent: New York City

Comptroller • Reconsideration request for

no-action relief based on Rule 14a-8(i)(10) granted on 3/25/1616


to 3%


(20%)

From 20 to no limit

Modify loaned shares provision (count if recallable on 3 BDs’ notice) to increase 3 BDs to 5

BDs; amended to 5 BDs

Remove requirement to

disclose intention to hold shares for

at least 1 year beyond annual

meeting




access bylaw)

14 NextEra Energy, Inc., Incoming Request for SEC No-Action Relief (Dec. 19, 2016), available here. 15 Noble Energy, Inc., Form 8-K filed with the SEC on Jul. 29, 2016 announcing amendments to proxy access bylaw, available here. 16 NVR, Inc., SEC Response Letter (Mar. 25, 2016), available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddennextera121916-14a8-incoming.pdf


https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/comptrollercitynyrecon032516-14a8.pdf


B - 6

Company




Nominees (Max % of

Board)

Group Size Limit









Oshkosh Corporation • Non-binding • Proponent: John Chevedden • Amended on 9/13/1617 • No-action relief based on Rule

14a-8(i)(10) granted on 11/4/1618

• Annual meeting to be held on 2/2/17


to 3%



From 20 to no limit



right to recall shares for voting purposes, will vote shares at the

annual meeting, and will hold shares through the meeting date



at least 1 year beyond annual

meeting; amended to delete this requirement



not receive support of ≥25% of shares entitled to vote;

amended to delete this restriction



access bylaw)

PPG Industries, Inc. • Non-binding • Proponent: John Chevedden • No-action relief requested on

12/16/1619 • No SEC Staff response yet


(3%)



From 20 to 50


recallable)


required to express intention

to hold shares beyond annual

meeting)




access bylaw)

SBA Communications Corporation • Non-binding • Proponent: New York City

Comptroller • Approved on 5/13/16 (67.6%

support) • No subsequent amendments

From 5% to 3% From 20% (≥1 director) to 25%

From 10 to no limit

From loaned shares not counting as owned to loaned shares

counting as owned if recallable on 5 BDs’ notice







access bylaw)

17 Oshkosh Corporation, Form 8-K filed with the SEC on Sep. 16, 2016 announcing amendments to proxy access bylaw, available here. 18 Oshkosh Corporation, SEC Response Letter (Nov. 4, 2016), available here. 19 PPG Industries, Inc., Incoming Request for SEC No-Action Relief (Dec. 16, 2016), available here.


https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johnchevedden092016-14a8-incoming.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddenppg121616-14a8-incoming.pdf


B - 7

Company




Nominees (Max % of

Board)

Group Size Limit









United Natural Foods, Inc. • Non-binding • Proponent: James McRitchie

and Myra Young • Voted on 12/15/16 (35.8%

support)


(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

Modify loaned shares provision (count if recallable on 5 BDs’

notice and agrees to recall upon notice) to ensure that loaned






meeting)




present and entitled to vote



access bylaw)

Walgreens Boots Alliance, Inc. • Non-binding • Proponent: John Chevedden • No-action relief based on Rule

14a-8(c) and (i)(10) denied on 11/3/1620



(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit







at least 1 year beyond the annual

meeting







access bylaw)

The Walt Disney Company • Non-binding • Proponent: James McRitchie • No-action relief based on Rule

14a-8(c) and (i)(10) denied on 11/3/1621

• Amended on 11/30/1622 • Annual meeting date to be

fixed (last held on 3/3/16)


(3%)

From 20% to 25% (≥2

directors); amended to


From 20 to no limit

No requested amendment (loaned shares count as owned if recallable on a BDs’ notice and recalled within 5 BDs’ notice)










access bylaw)

20 Walgreens Boots Alliance, Inc., SEC Response Letter (Nov. 3, 2016), available here. 21 The Walt Disney Company, SEC Response Letter (Nov. 3, 2016), available here. 22 The Walt Disney Company, Form 8-K filed with the SEC on Dec. 2, 2016 announcing amendment to proxy access bylaw, available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/johncheveddenwalgreens110316-14a8.pdf

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/jamesmcritchiewalt110316-14a8.pdf



B - 8

Company




Nominees (Max % of

Board)

Group Size Limit









Whole Foods Market, Inc. - 2016 • Non-binding • Proponent: James McRitchie • Voted on 3/9/16 (39.8%

support)


(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

Modify loaned shares provision to ensure that loaned shares are

counted if nominating SH represents it has the legal right

to recall shares for voting purposes, will vote shares at the




meeting)




votes cast

No prohibition on comp.

arrangements (but should be disclosed); to

the extent possible, board

should defer decisions about suitability of SH nominees to a

SH vote


access bylaw)

Whole Foods Market, Inc. - 2017 • Non-binding • Proponent: James McRitchie • No-action relief based on Rule

14a-8(c) and (i)(10) denied on 11/3/1623



(3%)

From 20% to 25% (≥2

directors)

From 20 to no limit

No requested amendment (loaned shares count as owned if recallable on 3 BDs’ notice and

recalled by the time nomination is submitted)



meeting)




votes cast



access bylaw)

Note: Data in Appendix B is derived from publicly-available information as of December 31, 2016. Inclusion of a company in Appendix B is not intended to suggest that Sidley Austin LLP advised such company regarding a shareholder proposal relating to proxy access.

23 Whole Foods Market, Inc., SEC Response Letter (Nov. 3, 2016), available here.

https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/jamesmcritchiewhole110316-14a8.pdf

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