Summary
Phillips 66 (PSX) filed an 8-K on February 9, 2017, to announce the adoption of Amended and Restated By-laws, effective immediately on February 8, 2017. The most significant change for investors is the incorporation of a "proxy access" by-law. This new provision allows eligible long-term stockholders, or groups of stockholders, to nominate directors to be included in the company's proxy materials for annual meetings. The proxy access by-law sets specific ownership thresholds (at least 3% of outstanding stock) and holding periods (three years) for nominating stockholders. It also caps the number of director nominees at the greater of two or 20% of the board size. While this provides shareholders with greater ability to influence board composition, it is subject to various eligibility, procedural, and disclosure requirements detailed in the by-laws, including advance notice provisions.
Key Highlights
- 1Phillips 66 adopted Amended and Restated By-laws effective February 8, 2017.
- 2A key amendment introduces a "proxy access" provision, allowing certain shareholders to nominate directors.
- 3To utilize proxy access, a stockholder or group of up to 20 stockholders must have continuously owned at least 3% of the company's capital stock for three years.
- 4The proxy access by-law permits the nomination of director candidates not exceeding the greater of two or 20% of the board size.
- 5Specific eligibility, procedural, and disclosure requirements must be met by nominating stockholders and their nominees.
- 6Notice for proxy access nominations must be provided between 90 and 120 days before the anniversary of the prior year's annual meeting.
- 7The filing also includes conforming and clarifying revisions to the by-laws.