O'Melveny & Myers Client Alaska Air Group Receives Groundbreaking Shareholder Proposal No-Action Letter

January 1, 0001


On March 5, 2009, the SEC’s Division of Corporation Finance agreed that Alaska Air Group could exclude three shareholder proposals from its proxy materials in reliance on Rule 14a-8(c) under the Securities Exchange Act of 1934, which permits each shareholder to submit only one proposal to a company for each meeting of shareholders. The Division’s position in its no-action letter to Alaska Air Group was in response to a first-of-its-kind argument under Rule 14a-8(c) and comes after the Division denied a number of no-action requests during the current proxy season based on similar facts.

Similar to the Alaska Air Group request, the nine denied no-action requests related to the purported submission of individual proposals by two or more company shareholders. In each situation, another person acted as “agent” for these nominal proponents who had each executed a proxy that granted broad authority to the “agent” to act on the shareholder’s behalf. In seeking to exclude the proposals, the denied no-action requests took the position that the nominal proponents were, in fact, alter egos of the “agent” and, therefore, the “agent” should be deemed the true proponent. Alaska Air Group’s no-action request, instead, looked at the nature of the proxy authority granted to the “agent” and made the argument that the nature of that proxy authority caused the “agent” to be the “beneficial owner” of the nominal proponents’ securities. As the beneficial owner of the nominal proponents’ securities, the “agent” had, therefore, submitted more than one proposal to the company. The Division agreed with Alaska Air Group’s Rule 14a-8(c) analysis and concurred that it could exclude all three of the proposals submitted by the “agent” for the nominal proponents.

O’Melveny & Myers partners Marty Dunn and Andor Terner, along with counsels Shelly Heyduk and Rebekah Toton, advised Alaska Air Group with regard to the no-action request.

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