Division of Corporation Finance Staff Legal Bulletin Proposals of Security Holders: Ordinary Business Operations Exclusion

• the application of Rule 14a-8(i)(7) to proposals relating to risk;
• the application of Rule 14a-8(i)(7) to proposals focusing on succession planning for a company's chief executive officer ("CEO"); and
• the manner in which shareholder proponents and companies can notify the Division that they will be submitting correspondence in connection with a no-action request.

Rule 14a-8 focuses on when a company must include a shareholder's proposal in its proxy statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders. Rule 14a-8(i)(7), one of the substantive bases for exclusion in Rule 14a-8, permits a company to exclude a proposal that deals with a matter relating to the company's ordinary business operations.