The first C&DI provides that it is permissible to submit as a single proposal a proposed charter amendment that would, as a result of negotiations, both reduce the dividend rate on a particular series of preferred stock in exchange for an extension of the maturity date. In this case, the SEC Staff would view the matters as being “inextricably intertwined” because each of the proposed changes relates to a basic financial term of the same series of stock and was the sole consideration for the other change. However, two arguably separate matters would not be inextricably intertwined merely because the matters were negotiated as part of a transaction or because the matters represent terms of a contract that a party considers essential to the overall bargain.
The second C&DI provides that it is permissible to submit as a single proposal a proposed amended and restated charter that would amend the charter in a way that is material for purposes of Rule 14a‑4(a)(3) (e.g., declassification of the board) and in ways that are not material (e.g., changing the par value of the common stock or eliminating provisions relating to a series of preferred stock that is no longer outstanding and is not subject to further issuance). However, two proposed amendments to a charter that are both material for purposes of Rule 14a-4(a)(3) could not be combined in the same proposal. Further, even if an amendment is not material because it does not substantively affect shareholder rights, if management knows or has reason to believe that a particular amendment is one on which shareholders could reasonably be expected to wish to express a view separate from their views on the other amendments that are part of the restatement, the amendment should be unbundled. The C&DI notes that the analysis under Rule 14a-4(a)(3) is not governed by whether or not the proposed amendments could be presented to shareholders as a single restatement proposal for state law purposes.
The third C&DI provides that it is permissible to submit multiple, material changes to an equity incentive plan as a single proposal, even if the rules of a national securities exchange would require shareholder approval of each of the changes if presented on a standalone basis. This is an exception to the position the SEC Staff generally takes with respect to the bundling of multiple, material matters into a single proposal.