Shareholder Franchise

Section 1 of 3

Federal Rule 14a-8(b) and the Texas § 21.373 proposal-submission election.

Long-form source as of June 9, 2026

Federal Rule 14a-8(b) sets eligibility thresholds for including a shareholder proposal in a company's proxy materials: $2,000 held three years, $15,000 held two years, or $25,000 held one year, with no aggregation to satisfy the ownership threshold. Texas Business Organizations Code § 21.373, enacted by S.B. 1057, applies only to a “nationally listed corporation” that affirmatively elects the provision in its governing documents. For covered shareholder proposals other than director nominations and procedural meeting resolutions, an electing corporation may impose a separate state-law submission threshold requiring a shareholder or group to hold at least $1 million in market value or 3% of the corporation's voting shares for at least six months before the meeting and through the meeting, and to solicit holders representing at least 67% of the voting power entitled to vote on the proposal.

Federal Rule 14a-8 tiered baselines vs. Texas TBOC § 21.373 proposal-submission electionFederal Rule 14a-8(b) sets three ownership tiers: $2,000 held three years, $15,000 held two years, or $25,000 held one year, with no aggregation to satisfy the ownership threshold. A nationally listed corporation that affirmatively elects TBOC § 21.373 may, for covered shareholder proposals, require $1 million in market value or 3% of voting shares, held at least six months before the meeting and through the meeting by a shareholder or group, and solicitation of holders representing at least 67% of voting power entitled to vote on the proposal. The figure compares dollar-value thresholds only; holding-period and solicitation differences are noted separately.OWNERSHIP THRESHOLD · SQ-ROOT-SCALED FOR LEGIBILITY$2,00036-month (3-year) holding periodRule 14a-8(b) tier 1Federal baseline; no aggregation$15,00024-month (2-year) holding periodRule 14a-8(b) tier 2Federal baseline; no aggregation$25,00012-month (1-year) holding periodRule 14a-8(b) tier 3Federal baseline; no aggregation$1M MARKET VALUE OR 3% OF VOTING SHARESat least 6-month hold, through meeting+ solicit at least 67% of voting power; group submissions permittedTBOC § 21.373 (Texas)Opt-in; nationally-listed Texas issuers

How to read. Bars use a square-root scale so the federal dollar tiers ($2K / $15K / $25K) remain visible next to the Texas $1M market-value prong. The chart compares dollar-value thresholds only; it does not visualize the alternative Texas 3% voting-shares prong. The dashed blue line marks the lowest federal dollar tier ($2,000 / three years); the dashed red line marks the Texas $1M market-value prong. The Texas $1M prong applies only after an affirmative TBOC § 21.373 election and is accompanied by additional requirements: group submissions are permitted, at-least-six-month-through-meeting ownership is required, and holders representing at least 67% of voting power must be solicited. Texas § 21.373(f) excludes director nominations and procedural resolutions ancillary to the conduct of the meeting from the § 21.373(e) requirements.

Sources. 17 C.F.R. § 240.14a-8(b)(1)(i)(A)–(C), (b)(1)(vi) (2026) (setting $2,000/three-year, $15,000/two-year, and $25,000/one-year ownership tiers and prohibiting aggregation to satisfy the ownership requirement); Tex. Bus. Orgs. Code Ann. § 21.373(e)(1) (West 2025); S.B. 1057, 89th Leg., R.S., § 1 (Tex. 2025) (enrolled). Rule 14a-8 governs federal proxy-material inclusion; Texas § 21.373 governs a state-law proposal-submission threshold for electing nationally listed corporations. Nevada: a Texas-style shareholder-proposal submission threshold has not been identified in NRS chapter 78; for SEC-reporting Nevada corporations, Rule 14a-8 remains the federal proxy-inclusion baseline (negative-search note; will be revalidated on schedule).

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