What is 'proxy access' and why is it important for L3Harris shareholders?

Proxy access is a by-law provision that allows eligible shareholders to nominate director candidates and have those nominees included in the company's official proxy materials used for shareholder votes. This gives shareholders a greater say in who sits on the Board of Directors and is generally seen as a positive development for corporate governance and shareholder rights.

What are the ownership requirements to use the new proxy access provision?

To nominate directors through proxy access, a shareholder or a group of up to 20 shareholders must have continuously owned at least 3% of L3Harris's outstanding common stock for a minimum of three consecutive years.

How many directors can be nominated through proxy access?

The company's by-laws limit the number of proxy access nominees to the greater of two directors or 20% of the total number of directors on the Board (rounded down to the nearest whole number).

Are there any deadlines or procedures shareholders must follow to nominate directors using proxy access?

Yes, shareholders must adhere to specific procedural requirements. For instance, the nomination notice must be submitted between 150 and 120 calendar days before the anniversary of the previous year's proxy material release date. Both the nominating shareholders and the nominees must provide certain information, representations, and agreements to the company.

LHX 8-K: Corporate Changes

Summary

L3 Technologies, Inc. /DE/ (LHX) filed an 8-K on May 30, 2018, to announce amendments to its By-Laws, effective immediately. The most significant change is the implementation of "proxy access," allowing eligible shareholders to nominate director candidates for inclusion in the company's proxy materials. This move signifies a step towards increased shareholder engagement in corporate governance. Under the new provisions, a single shareholder or a group of up to 20 shareholders who have continuously owned at least 3% of the company's common stock for a minimum of three years can nominate directors. The number of proxy access nominees is capped at the greater of two directors or 20% of the Board. Several eligibility and procedural requirements, including specific notice periods and information submissions, must be met. These amendments aim to enhance shareholder rights and participation in the board selection process.

Key Highlights

1L3Harris Technologies (LHX) amended its By-Laws effective May 30, 2018.
2Key amendment is the adoption of "proxy access" provisions.
3Allows eligible shareholders to nominate director candidates for board inclusion.
4Eligibility requires continuous ownership of 3% of common stock for at least three years.
5A group of up to 20 shareholders can aggregate holdings to meet the 3% threshold.
6The maximum number of proxy access nominees is the greater of two or 20% of the Board.
7Specific notice periods and information submission requirements are outlined for nominations.

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Bylaw Amendment (May 30, 2018)

Summary

Key Highlights

Frequently Asked Questions