Summary
Emerson Electric Co. (EMR) filed an 8-K on August 2, 2017, detailing significant amendments to its Corporate Bylaws, effective August 1, 2017. The most notable change is the adoption of a proxy access provision, allowing a holder or group (not exceeding 20 holders) of at least 3% of outstanding common stock, held continuously for three years, to nominate director candidates for inclusion in the company's proxy materials. This provision will be effective for the 2018 annual meeting and allows for the nomination of up to two individuals or 20% of the Board, whichever is greater, subject to specified requirements. Furthermore, the company announced its intention to submit two matters for shareholder vote at the 2018 Annual Meeting. The first concerns a proposed amendment to the Articles of Incorporation granting shareholders the right to amend the Bylaws. The second is a non-binding advisory vote to ratify previously enacted Bylaw amendments that establish the U.S. District Court for the Eastern District of Missouri (or certain Missouri state courts) as the exclusive forum for specific legal actions.
Key Highlights
- 1Emerson Electric Co. adopted amendments to its Bylaws, effective August 1, 2017.
- 2A new proxy access bylaw allows large, long-term shareholders (3% stake for 3+ years) to nominate directors for inclusion in company proxy materials.
- 3Proxy access will be available starting with the 2018 annual meeting.
- 4The proxy access provision permits nominations of up to the greater of two directors or 20% of the Board.
- 5Emerson will seek shareholder approval at the 2018 meeting for an amendment granting shareholders the right to amend the Bylaws.
- 6Shareholders will also have a non-binding advisory vote to ratify prior Bylaw amendments establishing an exclusive forum for legal actions in Missouri courts.
- 7The amendments also update advance notice requirements for shareholder proposals and nominations outside of proxy access.