Summary
ONEOK Inc. (OKE) has filed an 8-K report on June 23, 2011, disclosing a significant change impacting its corporate governance structure. New legislation passed by the Oklahoma legislature mandates that all large, publicly traded companies incorporated in Oklahoma, including ONEOK, must implement a classified (staggered) board of directors. This legislative change overrides ONEOK's existing charter, which previously required annual election of all directors. The company has notified its shareholders via a letter about this development. The new law automatically classifies ONEOK's current directors into three classes with staggered terms. While companies can opt out of this requirement after January 1, 2015, through a majority shareholder vote, the immediate effect is a change in the board's election cycle. This development is a key piece of information for investors concerned with corporate governance and potential shifts in board oversight and accountability.
Key Highlights
- 1Oklahoma legislation now requires large, publicly traded companies incorporated in the state to have a classified board of directors.
- 2ONEOK Inc., being incorporated in Oklahoma, is directly affected by this new law.
- 3The legislation overrides ONEOK's existing charter, which previously called for annual election of all directors.
- 4Directors have been automatically classified into three groups with staggered terms as per the new statute.
- 5Companies have the option to opt out of this requirement after January 1, 2015, via a majority shareholder vote.
- 6A letter to shareholders detailing this change has been mailed and is included as an exhibit.