Summary
American Water Works Company, Inc. (AWK) filed a Form 8-K on January 5, 2010, to announce a significant change in its corporate governance. The company's Board of Directors approved amendments to its bylaws that will alter the voting standard for director elections from a plurality to a majority of the votes cast, effective for the annual meeting of stockholders in 2011. This change applies only to uncontested director elections.
Key Highlights
- 1Effective January 4, 2010, American Water Works Company, Inc. (AWK) amended its bylaws regarding director elections.
- 2The voting standard for electing directors in uncontested elections will change from a plurality to a majority of votes cast, starting with the 2011 annual meeting.
- 3A majority of votes cast means more shares voted 'for' a director than 'against' them.
- 4If an election is contested (determined 14 days before proxy statement filing), the plurality standard will still apply.
- 5Incumbent directors must submit contingent resignations that become effective if they fail to receive sufficient votes for re-election, commencing with the 2011 meeting.
- 6The Board of Directors will have 90 days after election results are certified to decide whether to accept such a resignation and disclose its decision and reasoning.
Frequently Asked Questions
The company's Board of Directors approved amendments to its bylaws to change the voting standard for director elections. In uncontested elections, directors will now need to receive a majority of the votes cast to be elected, rather than just a plurality. This change is effective starting with the 2011 annual meeting of stockholders.
The new majority vote standard for uncontested director elections will take effect with the company's annual meeting of stockholders in 2011.
If an election is determined to be contested (based on a date 14 days prior to the company filing its proxy statement), the traditional plurality vote standard will still apply for the election of directors.
Commencing with the 2011 annual meeting, incumbent directors must submit a contingent resignation. This resignation becomes effective if the director fails to receive the required number of votes for election. The Board of Directors will then review and decide whether to accept the resignation within 90 days of the election results being certified, and will publicly disclose their decision and the rationale.