The SEC has elaborated on its Rule 14a-8(i)(3) analysis in its recent responses to registrant request for no-action letters.
Shareholder proposals often reference definitions found in NYSE and NASDAQ listing standards when requesting, for example, that the company elect an "independent" chair, as that term is defined in the applicable listing standard. The staff historically has permitted the exclusion of such proposals from company proxy statement materials on the basis of Rule 14a-8(i)(3), concurring with the issuer's view that such proposals are vague and indefinite because "neither shareholders nor the company would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires." See e.g., Cardinal Health, Inc. (avail. July 6, 2012); Wellpoint, Inc. (SEIU Master Trust) (avail Feb. 24, 2012, recon. denied Mar. 27, 2012).
In its recent responses, the staff has made clear that it views the definition of independence as a "central aspect of the proposal" and that in "evaluating whether a proposal may be excluded on this basis, the [staff] consider[s] only the information contained in the proposal and supporting statement and determine[s] whether, based on that information, shareholders and the company can determine what actions the proposal seeks." Additionally, the staff is of the view that if a proposal does not include the referenced listing standard definition, it believes shareholders would not be able to determine with any reasonable certainty exactly what actions or measures the proposal requires. See, e.g., the following no-action letter: Chevron Corp. (avail. Mar. 15, 2013) (concurring in exclusion of a proposal containing reference to independent director definition in NYSE listing standards); KeyCorp (avail. Mar. 15, 2013); Comcast Corp. (avail. Mar. 15, 2013) (concurring in exclusion of a proposal containing reference to independent director definition in NASDAQ Stock Market rules); and Bank of America Corp. (avail. Mar. 12, 2013) (concurring in the exclusion of a proposal citing "extraordinary transaction" definition as found "under applicable law or stock exchange listing standard.").
The staff's no-action letters under Rule 14a-8 may be found at: http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8.shtml