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ENTEGRIS INC 8-K Report, Code of Ethics Amendment (May 5, 2011)

Filed May 5, 2011For Securities:ENTG

Summary

Entegris, Inc. (ENTG) filed an 8-K on May 5, 2011, reporting key actions from its Annual Meeting of Stockholders held on May 4, 2011. The most significant update for investors pertains to the amendment of the company's Code of Business Ethics. Specifically, a provision prohibiting agreements to determine distributor resale prices was removed. This change was made to comply with the Supreme Court's ruling in Leegin Creative Leather Products, Inc. v. PSKS, Inc., which addressed vertical price restraints. While this amendment aligns Entegris with current legal interpretations, investors should be aware of the potential implications for pricing strategies and competition in its distribution channels. The filing also detailed the voting results from the Annual Meeting. Shareholders re-elected all director nominees and ratified the appointment of KPMG LLP as the independent registered public accounting firm. Additionally, advisory votes on executive compensation and the frequency of such votes were conducted. The majority of shareholders favored holding the executive compensation advisory vote annually, a decision the company has adopted.

Key Highlights

  • 1Amendment to Entegris' Code of Business Ethics to remove a prohibition on agreements determining distributor resale prices, aligning with the Supreme Court's Leegin decision on vertical price restraints.
  • 2All director nominees were elected for terms expiring in 2012.
  • 3KPMG LLP was ratified as the independent registered public accounting firm for 2011.
  • 4Advisory vote on executive compensation received majority support.
  • 5Shareholders voted to hold the advisory vote on executive compensation annually.
  • 6Over 91% of outstanding shares were represented at the Annual Meeting, indicating strong shareholder participation.
  • 7The amendment to the Code of Business Ethics did not result in any waiver of its provisions.

Frequently Asked Questions

The amendment removes a clause that previously prohibited agreements to determine the prices at which distributors sell Entegris products. This change aligns the company's code with the U.S. Supreme Court's decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., which has implications for how companies can manage pricing through their distribution networks.

Shareholders re-elected all director nominees, ratified KPMG LLP as the independent auditor for 2011, and approved executive compensation on an advisory basis. Shareholders also voted for the advisory vote on executive compensation to be held annually.

The filing states the amendment was made to align with the Supreme Court's holding regarding vertical price restraints. While the prohibition on such agreements was removed from the code, the filing does not explicitly state that Entegris *will* implement such pricing strategies. It simply removes a barrier from their internal code of conduct in light of legal precedent. Investors should monitor any future announcements regarding pricing policies.

A significant majority, 122,639,237 shares representing 91.35% of the outstanding shares entitled to vote, were represented at the Annual Meeting, either in person or by proxy, indicating robust shareholder engagement.