I 
111TH CONGRESS 
2D SESSION 
H. R. 4537 
To amend the Securities Exchange Act of 1934 to require the express author-
ization of a majority of shareholders of a public company for certain 
political expenditures by that company, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 27, 2010 
Mr. CAPUANO (for himself, Mr. LARSON of Connecticut, Ms. PINGREE of 
Maine, and Mr. GRAYSON) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to require 
the express authorization of a majority of shareholders 
of a public company for certain political expenditures 
by that company, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Shareholder Protection 
Act of 2010’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) Corporations make significant political con-
tributions and expenditures that directly or indi-
rectly influence the election of candidates and sup-
port or oppose political causes. Decisions to use cor-
porate funds for political contributions and expendi-
tures are usually made by corporate boards and ex-
ecutives, rather than shareholders. 
(2) Corporations, acting through their boards 
and executives, are obligated to conduct business for 
the best interests of their owners, the shareholders. 
Corporate boards and executives that use corpora-
tion funds to support and oppose political can-
didates, parties, and causes in opposition to the in-
terests of their shareholders are not acting for the 
best interests of the corporation. 
(3) Historically, shareholders have not had a 
way to know, or to influence, the political activities 
of corporations they own. Shareholders and the pub-
lic have a right to know how corporations are spend-
ing their funds to make political contributions or ex-
penditures benefitting candidates, political parties, 
and political causes. 
(4) Corporations should be accountable to their 
shareholders prior to making political contributions 
or expenditures affecting local, State or Federal gov-
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ernance and public policy. Requiring the express ap-
proval of a corporation’s shareholders prior to mak-
ing political contributions or expenditures will estab-
lish necessary accountability. 
SEC. 3. SHAREHOLDER APPROVAL OF CORPORATE POLIT-
ICAL ACTIVITY. 
The Securities Exchange Act of 1934 is amended by 
adding after section 14 the following new section: 
‘‘SEC. 14A. SHAREHOLDER APPROVAL OF CERTAIN POLIT-
ICAL EXPENDITURES. 
‘‘(a) AFFIRMATIVE AUTHORIZATION.—No issuer may 
make any expenditure for political activities in excess of 
$10,000 in any fiscal year without first obtaining the writ-
ten affirmative authorization for such expenditure by a 
majority of all shareholders. 
‘‘(b) NATURE OF DECISIONS.—A decision to make a 
contribution or expenditure for political activities in excess 
of $10,000 shall not be considered a routine matter of the 
corporation under rules and guidelines established by any 
national securities exchange or by the Commission. 
‘‘(c) FIDUCIARY DUTY; LIABILITY.—A violation of 
subsection (a) shall be considered a breach of a fiduciary 
duty of the officers and directors who authorized such an 
expenditure. The officers and directors who authorize such 
an expenditure without first obtaining such authorization 
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of shareholders shall be jointly and severally liable in any 
action brought in any court of competent jurisdiction to 
any shareholder or class of shareholders for the amount 
of such expenditure. 
‘‘(d) EXEMPTION FOR CERTAIN MEDIA.—The provi-
sions of this section shall not apply to an issuer whose 
sole business is the publication or broadcasting of news, 
commentary, literature, music, entertainment, artistic ex-
pression, scientific, historical or academic works, or other 
forms of information. The Commission shall issue such 
guidance as it determines necessary or appropriate regard-
ing the extent of the exemption provided by this sub-
section. 
‘‘(e) DEFINITIONS.—As used in this section the fol-
lowing definitions apply: 
‘‘(1) AFFIRMATIVE AUTHORIZATION.—The term 
‘affirmative authorization’ means the full, free, and 
written consent of a shareholder, obtained without 
intimidation or fear of reprisal, and shall not include 
votes made by a broker or any other representative. 
‘‘(2) ISSUE
ADVOCACY
CAMPAIGN.—The term 
‘issue advocacy campaign’ means any expenditure 
for any communication to the general public in-
tended to encourage the public to contact a State or 
Federal Government official regarding pending legis-
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lation, public policy or government rule or regula-
tion, but does not include contributions or expendi-
tures for registered lobbyists employed by the cor-
poration to lobby State or Federal Government offi-
cials directly. 
‘‘(3) MAJORITY OF ALL SHAREHOLDERS.—The 
term ‘majority of all shareholders’ means number of 
shareholders that combined own more than 50 per-
cent of all outstanding shares. Shareholders not 
casting votes shall not count toward such a majority. 
‘‘(4) EXPENDITURE
FOR
POLITICAL
ACTIVI-
TIES.— 
‘‘(A) The term ‘expenditure for political 
activities’ means— 
‘‘(i) expenditures in support of, or op-
position to, any Federal, State, or local 
candidate; 
‘‘(ii) contributions to or expenditures 
in support of any political party, com-
mittee, electioneering communication, voter 
registration campaign, ballot measure cam-
paign, or an issue advocacy campaign; and 
‘‘(iii) dues or other payments to trade 
associations or other tax exempt organiza-
tions that are, or could reasonably be an-
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ticipated to be, used for the purposes de-
scribed in subparagraphs (A) and (B). 
‘‘(B) Such term shall not include— 
‘‘(i) direct lobbying efforts through 
registered lobbyists employed or hired by 
the corporation; 
‘‘(ii) communications by a corporation 
to its stockholders and executive or admin-
istrative personnel and their families; 
‘‘(iii) nonpartisan registration and 
get-out-the-vote campaigns by a corpora-
tion aimed at its stockholders and execu-
tive or administrative personnel and their 
families; or 
‘‘(iv) the establishment, administra-
tion and solicitation of contributions to a 
separate segregated fund to be utilized for 
political purposes by a corporation.’’. 
SEC. 4. REPORTING REQUIREMENTS. 
Section 13 of the Securities Exchange Act of 1934 
(15 U.S.C. 78m) is amended by adding at the end the 
following: 
‘‘(m) REPORTING REQUIREMENTS RELATING
TO 
CERTAIN POLITICAL EXPENDITURES.— 
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‘‘(1) IN GENERAL.—Not later than 180 days 
after the date of enactment of this subsection, the 
Commission shall modify its reporting rules under 
this section to require issuers to disclose quarterly 
any expenditure for political activities (as such term 
is defined in section 14A(e)(4)) made during the 
preceding quarter. Such a report shall be filed with 
the Commission and provided to shareholders and 
shall include— 
‘‘(A) the date of the contributions or ex-
penditures; 
‘‘(B) the amount of the contributions or 
expenditures; 
‘‘(C) the name or identity of the candidate, 
political party, committee, electioneering com-
munication, voter registration campaign, ballot 
measure campaign or issue advocacy campaign; 
‘‘(D) if the expenditures were made for or 
against a candidate, including an electioneering 
communication, the office sought by the can-
didate and the political party affiliation of the 
candidate; 
‘‘(E) if the contributions or expenditures 
were made for or against a ballot measure, the 
purpose of the measure and whether the con-
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