California Corporation Fails To Persuade SEC That Cumulative Voting Proposal Can Be Excluded Under Rule 14a-8

Although Rule 14a-8 is a federal rule, its application often turns on state corporate law. In most cases, the state law in question is the Delaware General Corporation Law because companies subject to the SEC’s proxy rules are most commonly incorporated in the Blue Hen State. Thus, I’ve decided to devote today’s post and a few upcoming posts to some recently filed Rule 14a-8 requests involving questions of California law.

Last month, Oak Valley Bancorp unsuccessfully sought to exclude a shareholder proposal submitted by Robert P. Laukat requesting the Board to take the necessary steps to provide cumulative voting in the election of directors. The company argued that it could exclude Mr. Laukat’s proposal under Rule 14a-8(i)(2) because adoption of the proposal would cause the company to violate state law.

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