TheCorporateCounsel.net

I blogged last fall about a reason to be cautious when amending advance notice bylaws in response to the SEC’s newly effective universal proxy card rules: hedge fund activists aren’t going to take these amendments lying down. Now, as we continue to await the views of proxy advisors and institutions on this topic, well-known shareholder proponent Jim McRitchie is proactively encouraging “guardrails.” Jim recently announced that he has filed shareholder proposals with 29 companies on the topic of “fair elections.”

The proposals request that the companies adopt a bylaw amendment that would require shareholder approval for advance notice bylaws that go beyond the “norms” that existed before the SEC’s new universal proxy card rules went into effect. Specifically, for advance notice bylaw amendments that:

1. Require the nomination of candidates more than 90 days before the annual meeting,

2. Impose new disclosure requirements for director nominees, including disclosures related to past and future plans, or

3. Require nominating shareholders to disclose limited partners or business associates, except to the extent such investors own more than 5% of the Company’s shares.

When it comes to the case that I mentioned at the outset of this blog, the Delaware Chancery Court ruled against the company in late December. If you’re going down the “amendment” path, John recently shared a few tips on DealLawyers.com. This Proxy Season Blog from last week gives even more guidance on meeting conduct in the event of a contested election.

– Liz Dunshee