MORE ON AVOIDING SITTING DUCK SYNDROME: HOW TO PREPARE FOR and Respond to Rule 14A-8 Shareholder Proposals

WEBCAST PRESENTATION MORE ON AVOIDING SITTING DUCK SYNDROME: HOW TO PREPARE FOR and Respond to Rule 14A-8 Shareholder Proposals Tuesday, February 14, 2012 SPEAKERS: Keith E. Gottfried Francis H. Byrd Partner Senior Vice President Blank Rome LLP Laurel Hill Advisory Group, LLC

WEBCAST PRESENTATION • SPEAKER • Keith E. Gottfried, Partner • Blank Rome LLP • The Watergate • 600 New Hampshire Avenue, NW • Washington, DC 20037 • 202.772.5887 • Gottfried@BlankRome.com • Keith E. Gottfried, Partner, Blank Rome LLP, concentrates his practice primarily on mergers and acquisitions, corporate governance, shareholder activism, SEC reporting requirements, NYSE and Nasdaq compliance and general corporate matters. Keith has significant experience advising clients, including public companies and their boards of directors, in connection with proxy contests, consent solicitations and other activist campaigns. He also advises clients in connection with assessing their vulnerability to unsolicited takeover bids and activist shareholders and in the implementation of shareholder rights plans, charter and by-law amendments and other defensive strategies. Keith is well known in the areas of shareholder activism and corporate governance and has written, and/or been quoted in, numerous articles discussing the challenges presented by shareholder activism and what steps companies and their boards of directors should take to prepare themselves. He is also a frequent panelist or presenter at conferences, webinars and seminars focused on shareholder activism and/or corporate governance.

WEBCAST PRESENTATION SPEAKER Francis H. Byrd, Senior Vice President Laurel Hill Advisory Group, LLC 110 Wall Street, 27th Floor New York NY 10005 917.338.3191 fbyrd@laurelhill.com Francis H. Byrd, Senior Vice President, Laurel Hill Advisory Group, LLC, leads Laurel Hill’s Corporate Governance/ Risk Advisory Practice and provides strategic advice on corporate governance risk and shareholder engagement to boards of directors and senior executive management of corporate issuers. Prior to joining Laurel Hill, Francis served in a number of roles focusing on governance risks facing public companies. Francis is a frequent speaker on corporate governance issues, having appeared on Money for Breakfast, Fox Business, and has been quoted by Reuters, Agenda magazine, and ISS Governance Weekly. Francis is also a contributor to the Harvard Law School Forum on Corporate Governance and Financial Regulation, the NACD/Directorship magazine blog and Directors & Boards magazine. Francis has also writes extensively on corporate governance issues serving as editor and chief commentator for Laurel Hill’s BYRDWatch e-newsletter. Francis has also been selected by NACD Directorship as one of thirty “People to Watch” in corporate governance in 2011 – “a list of movers and shakers who merit serious attention as potential boardroom influentials.”

MORE ON AVOIDING SITTING DUCK SYNDROME: How To Prepare For and Respond to Rule 14A-8 Shareholder Proposals Webcast Presentation Tuesday, February 14, 2012

Disclaimer This presentation is intended to provide a general introductory overview of the issues discussed and is not intended to provide a complete analysis of such issues. This presentation is for educational and informational purposes only and is not intended, and should not be construed as, legal advice. Readers should not act upon the information contained in it without professional counsel. Nor is this presentation intended to establish an attorney-client relationship. This presentation may be considered attorney advertising in some jurisdictions. The hiring of an attorney is an important decision that should not be based solely upon advertisements.

What is Rule 14a-8? • Addresses when a company must include a shareholder’s proxy 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. • In order to have the shareholder proposal included on a company’s proxy card, and included along with a supporting statement in the company’s proxy statement, the shareholder must satisfy certain eligibility requirements and follow certain procedures. • Under certain specified circumstances, the company is permitted to exclude the proposal, but only after submitting its reasons to the SEC and requesting a no-action letter.

Who Are the Most Frequent Proponents of Rule 14a-8 Shareholder Proposals? • Individual / Retail Shareholders (e.g., Chevedden Family, Kenneth Steiner, William Steiner, Gerald R. Armstrong, Evelyn Davis) • Labor Unions (e.g., AFSCME, AFL-CIO, United Brotherhood of Carpenters and Joiners of America) • Public Pension and Retirement Funds (e.g., New York City Retirement Systems, New York State Common Retirement Fund) • Investment Advisers • Faith-based investors • Hedge funds • Other activist investors • Source: FactSet Research Systems / SharkRepellent.net

Who Are the Typical Recipients of Rule 14a-8 Shareholder Proposals? • Large cap issuers (including those with no obvious performance, corporate governance, or share price issues). • Companies where “special interest” shareholders are looking for force company into shareholder engagement. • Companies with a history of corporate governance issues. • Companies with operating performance issues. • Companies with share price performance issues. • Companies that have failed to take appropriate action to address Board-level issues.

Types of Rule 14a-8 Shareholder Proposals • Governance Shareholder Proposals – Takeover Defenses: • Right to call a special meeting • Repeal of classified Board • Right to act by written consent • Repeal of supermajority requirements • Reincorporation • Redeem of vote on poison pills • Source: Institutional Shareholder Services Inc.

Types of Rule 14a-8 Shareholder Proposals • Governance Shareholder Proposals – Board Issues: • Require majority vote to elect directors • Separation of chairman and CEO roles; independent chairman • Cumulative voting • Executive succession planning • Source: Institutional Shareholder Services Inc.

Types of Rule 14a-8 Shareholder Proposals • Governance Shareholder Proposals – Executive Compensation: • Award of performance-based stock awards • Shareholder approval for future “golden parachute” arrangements • Retention period for stock awards • Adopt anti-gross-ups policy • Vote on executive death benefits • No CEO’s on compensation committee • Clawbacks • Source: Institutional Shareholder Services Inc.

Types of Rule 14a-8 Shareholder Proposals • Social Responsibility Shareholder Proposals: • Take action on climate change • Report on sustainability • Review / report on political spending / lobbying • Adopt sexual orientation anti-bias policy • Board diversity • Source: Institutional Shareholder Services Inc.

Popular Shareholder Proposals in 2011 • Most popular corporate governance shareholder proposals in the 2011 proxy season related to the following (Source – ISS data as of September 2011): • Majority voting: (83 submitted, 40 have come / will come to a vote, 37 withdrawn, 6 omitted). • Repeal of a classified Board: (62 proposals submitted, 41 have come / will come to a vote, 13 withdrawn, 8 omitted). • Authorization or enhancement of the right of shareholders to call a special meeting of shareholders: (51 submitted, 32 have come / will come to a vote, 7 withdrawn, 12 omitted). • Authorization of shareholder action by written consent: (40 submitted, 32 have come / will come to a vote, 1 withdrawn, 5 omitted).

Corporate Governance Shareholder Proposals Submitted in 2011 • Source: Institutional Shareholder Services Inc. • Page 14

Corporate Governance Shareholder Proposals Submitted in 2011 • Proposals Submitted: • (Stratified by Have Come / Will Come to a Vote, Omitted, Withdrawn) • Source: Institutional Shareholder Services Inc. • Page 17

Proposals Submitted for 2012 Proxy Season – Some Highlights • Proxy Access Proposals – 18 proxy access proposals submitted as of February 1, 2012. • Western Union to offer a management bylaw proposal to implement its own version of proxy access. • Hewlett-Packard Co. has agreed to put a proxy access bylaw proposal on its ballot in 2013. • Auditor Term Limits – Carpenter’s fund submitted proposals to 50 large cap companies, including Deere & Co, Walt Disney, and Hewlett-Packard, requesting that they establish a policy to periodically rotate their auditors. • Disclosure of Lobbying Expenses – AFCSME, Walden Asset Management, and other activist investors have filed 40 shareholder proposals to disclose their direct and indirect lobbying expenses.

Eligibility Requirements – General • Proponent must have continuously held at least $2,000 in market value, or 1% of the company’s securities entitled to be voted on at the meeting for at least one year by the date the proponent submits the proposal (Rule 14a-8(b)(1)). • Proponent must have continuously held the securities through the date of the meeting. • Proponent must be a registered holder of the company’s securities, which means that the proponent’s name appears in the company’s records as a shareholder (Rule 14a-8(b)(2)). • If proponent is not a registered holder, then, at the time that the proponent submits its proposal, the proponent must prove its eligibility (Rule 14a-8(b)(2)(i)).

Eligibility Requirements – Demonstrating Proof of Ownership • Demonstrating proof of ownership: • Submit to the company a written statement from the “record” holder of the securities (usually a broker or bank) verifying that, at the time, the proponent submitted its proposal, the proponent continuously held the securities for at least one year (Rule 14a-8(b)(2)(i)). • SEC Staff Legal Bulletin 14F (October 18, 2011) – SEC now takes the view that only DTC participants should be viewed as “record” holders of securities that are deposited at DTC. Accordingly, the broker or bank submitting the written statement must be a DTC participant. • Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTC’s participant list, which is currently available on the Internet at http://www.dtcc.com/downloads/membership/directories/dtc/alpha.pdf

Eligibility Requirements – Demonstrating Proof of Ownership • Demonstrating proof of ownership (cont’d): • SLB 14F reverses the SEC’s position in its no-action letter response to Hain Celestial (Oct. 1, 2008), which had required companies to accept proof of ownership letters from brokers in cases where, unlike the positions of registered owners and brokers and banks that are DTC participants, the company is unable to verify the positions against its own or its transfer agent’s records or against DTC’s securities position listing. • In Hain Celestial, the company had sought to exclude a proposal submitted by Kenneth Steiner pursuant to Rules 14a-8(b) and 14a-8(f) but the SEC declined to grant no-action relief.

Eligibility Requirements – Demonstrating Proof of Ownership • Demonstrating proof of ownership (cont’d): • A beneficial holder of securities can also prove ownership if it has filed a Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5, reflecting ownership of the shares as of or before the date on which the one-year eligibility period begins. If any one of these forms has been filed with the SEC, the proponent may demonstrate its eligibility by submitting to the company (Rule 14a-8(b)(2(ii)): • a copy of the schedule and/or form, and any subsequent amendments reporting a change in ownership level; • a written statement that the proponent continuously held the required number of shares for the one-year period as of the date of the statement; and • a written statement from the proponent that the proponent intends to continue ownership of the shares through the date of the meeting (Rule 14a-8(b)(2)(ii)(C)).

Eligibility Requirements – Deadlines for Submitting a Proposal • Calculating the deadline – For a shareholder proposal being submitted for a regularly scheduled annual meeting, the proposal must be received at the company’s principal executive offices not less than 120 calendar days before the date of the company’s proxy statement released to shareholders in connection with the previous year’s annual meeting (Rule 14a-8(e)). • Check last year’s proxy statement – For annual meetings, the deadline should be listed in the company’s proxy statement for the prior year. • Effect of shifting the date of the annual meeting – If the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last year’s meeting, the deadline should be included in one of the company’s quarterly reports on Form 10-Q.

Eligibility Requirements – Other Requirements • Number of Proposals that Can Be Submitted – each shareholder may not submit more than one proposal to a company for a particular shareholders’ meeting (Rule 14a-8(c)). • Length of Proposal – The proposal, including any supporting statement, may not exceed 500 words (Rule 14a-8(d)). • Presentation of Proposal at Meeting– Either the proponent or its representative, who is qualified under state law to present the proposal on the proponent’s behalf, must attend the meeting to present the proposal. • If proponent or its qualified representative fails to appear and present the proposal without good cause, the company will be permitted to exclude all of the proponent’s proposals for any meetings held in the following two calendar years (Rule 14a-8(h)(3)).

Rule 14a-8 Shareholder Proposals – Key Deadlines

How to Prepare for the Submission of Rule 14a-8 Proposals? • Review shareholder profile – determine whether a company has any shareholders that would be likely to submit a Rule 14a-8 shareholder proposal. • Review proposals submitted by your shareholders at other companies – review any shareholder proposals that have been submitted by your shareholders at other companies and assess whether you are at risk for receiving a similar proposal. • Engage in an active dialogue with your shareholders – ensure that you understand the concerns and issues of your shareholders and that they do not need to resort to a shareholder proposal to force a dialogue with the company. • Proactively address proxy advisory firm issues – improve “standing” with the proxy advisory firms like ISS and Glass Lewis. • Consider pre-emptive action – consider whether to adopt a proposal similar to that which you believe is likely to be proposed.

What To Do If Your Company Receives a Rule 14a-8 Shareholder Proposal? • Determine whether proposal meets procedural / eligibility requirements (ownership threshold, ownership duration, verification of ownership from record holder that is a DTC participant, submission by deadline). • Determine whether there is a substantive basis for seeking to exclude the proposal from the company’s proxy statement. • Engage with proponent and seek withdrawal of proposal. • Determine whether to seek a no-action letter to exclude the proposal. • Review SEC’s website to see if other companies are seeking no-action letters on similar proposals • Consult with your peer companies to see if any of them have received a similar proposal.

What To Do If Your Company Receives a Rule 14a-8 Shareholder Proposal? • Determine whether to oppose the proposal if it will not be excluded. • Determine whether to pre-empt the proposal with a similar management proposal but with more favorable terms (e.g., higher threshold to call a special meeting). • Engage a proxy solicitor to assist with evaluating the chances of the proposal being successful if brought to a vote and in developing a strategy to defeat the proposal. • Review shareholder profile and assess how your shareholders have voted on similar proposals in the past; also assess how your shareholders would vote on an alternative proposal proposed by management. • Review corporate governance profile. • Assess standing with proxy advisory firms and how proxy advisory firms will react to the proposal and any alternative proposal that management may propose.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • The company may seek to exclude a Rule 14a-8 shareholder proposal on either procedural or substantive grounds. • Burden is on the company to demonstrate that it is entitled to exclude the proposal (Rule 14a-8(g)). • If the company intends to exclude a proposal from its proxy materials, it must file its reasons with the SEC in the form of a no-action letter request no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the SEC (Rule 14a-8(j)).

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • No-Action Letter Process: • If the company intends to exclude a proposal from its proxy materials, it must file its reasons with the SEC no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the SEC. The company must simultaneously provide the proponent with a copy of its submission. • The company must include in the no-action letter request: • the proposal; • an explanation of why the company believes that it may exclude the proposal which should refer to the most recent applicable authority, such as prior SEC no-action letters issued under the rule; and • a supporting opinion of counsel when such reasons are based on matters of state or foreign law. • Pursuant to SLB No. 14D (Nov 7, 2008), the letter and related correspondence from the proponent should be submitted to the SEC via email to shareholderproposals@sec.gov.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Procedural / Eligibility Grounds: • Failure to meet ownership threshold. • Failure to meet continuous ownership requirements. • Failure to provide proof of ownership from registered holder who is a DTC participant (BUT ONLY IF THE COMPANY INFORMS THE PROPONENT OF WHAT WOULD CONSTITUTE APPROPRIATE DOCUMENTATION UNDER RULE 14a-8(b) IN THE COMPANY’S REQUEST FOR ADDITIONAL INFORMATION FROM THE PROPONENT). • Failure to present prior shareholder proposal. • Failure to meet the company’s Rule 14a-8 deadline for the receipt of a shareholder proposal. • Failure to correct a properly notified procedural or eligibility deficiency. • Failure, within the past two calendar years, to comply with previous promise to hold the required number of securities through the date of the shareholders’ meeting (check ownership as of date of the annual meeting).

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Procedural Grounds – the company may seek to exclude a Rule 14a-8 shareholder proposal on procedural or eligibility grounds as long as the company notifies the proponent of the problem and the proponent fails to adequately correct it (Rule 14a-8(f)). • The company has 14 calendar days from receipt of the proposal to notify the proponent in writing of any procedural or eligibility deficiencies. • Proponent’s response must be postmarked or transmitted electronically no later than 14 calendar days from the date the proponent received the company’s notification. • The company need not provide the proponent with notice of the deficiency if it cannot be remedied (e.g., failure to submit the proposal by the applicable deadline). • If the company intends to exclude the proposal on procedural or eligibility grounds, it will still have to submit a no-action letter to the SEC.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(1) – Improper Under State Law: Proposal not a proper subject for action by shareholders under the laws of the jurisdiction of the company’s organization. • Rule 14a-8(j)(2)(iii) requires the company to provide a supporting opinion of counsel when basing its reasons for omitting a proposal on a matter of state or foreign law. • “Precatory” vs. binding proposals: • SEC is much more tolerant of “precatory” proposals that ask a Board to “take necessary steps” but don’t require the Board to take any action.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(2)– Violation of Law: Proposal would cause the company to violate any state, federal, or foreign law to which it is subject. • Rule 14a-8(j)(2)(iii) requires the company to provide a supporting opinion of counsel when basing its reasons for omitting a proposal on a matter of state or foreign law.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(3) – Violation of Proxy Rules: Proposal or supporting statement is contrary to any of the SEC’s proxy rules, including Rule 14a-9, which prohibits materially false or misleading statements. • e.g., proposal is “vague and indefinite" because it is impossible for the board of directors or the shareholders to reasonably understand the scope or effect of the action they are being asked to take. • e.g., failure to define a number of critical phrases, inclusion of ambiguous terms or otherwise provide guidance on what is necessary to implement the proposal; terms subject to multiple interpretations. • Shareholders cannot make an informed decision on the merits of the proposal without knowing what they are voting on. • Can the shareholders voting on the proposal and the Board in implementing the proposal, if adopted, interpret the proposal differently, such that any action taken by the Board in implementing the proposal might be significantly different than that actions envisioned by the shareholders?

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(4) – Personal Grievance; Special Interest: Proposal relates to redress of a personal claim or grievance against company or other person, or is designed to result in a benefit to the shareholder, or to further a personal interest, which is not shared by the other shareholders at large. • What are the motives of the proponent? • e.g., “disgruntled” former employees

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(5) – Relevance: Proposal relates to operations which account for less than 5 percent of the company's total assets at the end of its most recent fiscal year, and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year, and is not otherwise significantly related to the company's business. • SEC has generally interpreted the phrase “otherwise significantly related to the company’s business” to require proposals that raise significant policy issues to be included in proxy materials despite the fact that they implicate less than 5% of a company’s assets. • Proposals that raise a significant policy issue are deemed to be significantly related to a company’s business despite the fact that they may account for a very small amount of the company’s operations because if they are a matter of significant social attention they may stir up a level of sentiment in shareholders that is not proportionate to the level of the company’s involvement. Thus, shareholders would want the opportunity to vote on the matter.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(6) – Absence of Power / Authority: If the company would lack the power or authority to implement the proposal. • e.g., where a proposal would require intervening actions by third parties that are not subject to the company's control. • e.g., proposals that require a third party to cooperate. • A company may even exclude a shareholder proposal requiring a third party's cooperation if it exerts some, but only limited, influence over the third party.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(7) – Management Functions: Proposal deals with a matter relating to the company's ordinary business operations. • The ordinary business exclusion – confines the resolution of ordinary business problems to management and the board of directors. • Exchange Act Release No. 40018 (May 21, 1998): the ordinary business exclusion rests on two central considerations: • the subject matter of the proposal – "certain tasks are so fundamental to management's ability to run a company on a day-to-day basis that they could not, as a practical matter, be subject to direct shareholder oversight.” • the degree the proposal attempts to "micro-manage" the company by "probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.” • e.g. – compliance with applicable laws and regulations; selection of auditors; sale of a non-core business or asset; risk management; reports to shareholders on ordinary business matters.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(8) – Director Elections (as amended effective Sept. 20, 2011):If the proposal: • would disqualify a nominee who is standing for election; • would remove a director from office before the expiration of such director’s term; • questions the competence, business judgment, or character of one or more nominees or directors; • seeks to include a specific individual in the company’s proxy materials for election to the board of directors; or • otherwise could affect the outcome of the upcoming election of directors.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(8) – Director Elections (as amended effective Sept. 20, 2011): • Election exclusion under Rule 14a-8(i)(8) has been substantially narrowed. • Companies can no longer rely on Rule 14a-8(i)(8) to exclude a proposal seeking to establish a procedure in a company’s governing documents for the inclusion of one or more shareholder nominees for director in the company’s proxy materials (e.g., “proxy access proposals”). • The proposal can still be excluded if it seeks to include a specific individual in the company’s proxy materials for election to the Board.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(9) – Conflicts with Company’s Proposal: Proposal directly conflicts with one of the company’s own proposals to be submitted to shareholders at the same meeting (no-action letter must specify the points of conflict with company’s proposal). • Need to avoid presenting shareholders with alternative and conflicting decisions as well as inconsistent and ambiguous results. • e.g., where the shareholder sponsored proposal contains a threshold that differs from a company-sponsored proposal. • e.g., shareholder proposal to amend the bylaws to give holders of at least 10% of the voting shares the power to call a special meeting of shareholders submitted for meeting where management proposes to allow shareholders holding at least 25% of the voting shares the power to call a special meeting. • See, e.g., eBay, Inc. (January 13, 2012).

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(10) – Substantially Implemented: Proposal has already been substantially implemented by the company. • Proposal need not be fully effected. • Do the company’s policies & practices compare favorably with those requested by the proposal. • Does not require the exact same means of implementation. • Are the essential objectives of the proposal addressed? • Do the company’s actions satisfactorily address the concerns underlying the proposal? • Mootness exclusion relating to compliance with regulatory and disclosure requirements required by a third party such as the SEC, national stock exchanges, and the FASB.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(11) – Duplication: Proposal substantially duplicates another proposal previously submitted to the company by another proponent that will be included in the company's proxy materials for the same meeting.

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(12) – Resubmissions: if the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the company’s proxy statement within the preceding 5 years, a company may exclude it from the proxy materials for any meeting held within 3 years of the last time it was included if the proposal received: (i) less than 3% of the vote if proposed once within the preceding 5 years; (ii) less than 6% of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 years; or (iii) less than 10% of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 years. • See, e.g., The Coca-Cola Company (January 17, 2012); General Electric Company (January 19, 2012).

Seeking the Exclusion of a Rule 14a-8 Shareholder Proposal • Excluding on Substantive Grounds: • Rule 14a-8(i)(13) – Dividends: Proposal relates to specific amounts of cash or stock dividends. • e.g. – a proposal requesting that the shareholders approve a liquidation or sale of the company and a distribution of at least $X per share in dividends. • See, e.g., Bassett Furniture Industries, Incorporated (January 23, 2012).

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MORE ON AVOIDING SITTING DUCK SYNDROME: HOW TO PREPARE FOR and Respond to Rule 14A-8 Shareholder Proposals