8-KCorporate Changes

SEMPRA 8-K Report, Bylaw Amendment (Dec 6, 2007)

Filed December 6, 2007For Securities:SRESREA

Summary

This 8-K filing by Sempra Energy (SRE) on December 5, 2007, details significant changes to its corporate governance related to shareholder voting. The Board of Directors has adopted amendments to the company's bylaws that will implement majority voting for directors in uncontested elections, effective immediately. This aligns with recent changes in California corporate law allowing such provisions for exchange-listed companies. In contested elections, plurality voting will continue. Additionally, the Board has approved proposed amendments to the Articles of Incorporation to eliminate supermajority voting requirements for certain shareholder actions, which will be presented to shareholders for approval at the 2008 Annual Meeting. These changes aim to streamline corporate decision-making and align voting standards with current market practices.

Key Highlights

  • 1Sempra Energy's Board of Directors amended the company's bylaws to adopt majority voting for directors in uncontested elections, effective immediately.
  • 2Majority voting means directors in uncontested elections must receive affirmative votes from a majority of shares represented and voting, constituting a majority of the quorum.
  • 3Plurality voting will continue to be used for director elections in contested elections.
  • 4The Board has also approved proposed amendments to the Articles of Incorporation to eliminate supermajority voting requirements.
  • 5These proposed amendments would replace supermajority votes with the minimum shareholder approvals required by California law (generally a majority of outstanding shares or a majority of shares in the quorum).
  • 6The proposed amendments to eliminate supermajority voting will be submitted to shareholders for approval at the 2008 Annual Meeting.
  • 7A related bylaw amendment was adopted to conform to the proposed elimination of supermajority voting regarding the fixing of the exact number of directors.

Frequently Asked Questions

The company has adopted majority voting for directors in uncontested elections. This means that for a director to be elected in an uncontested election, they must receive the affirmative vote of a majority of the shares represented and voting at a shareholders' meeting, and this vote must also constitute a majority of the quorum required for that meeting.

No, contested elections will continue to use plurality voting. This means that the director candidates receiving the highest number of affirmative votes will be elected, up to the number of director seats available.

Supermajority voting requires a higher threshold (currently two-thirds of outstanding shares for certain actions) for shareholder approval than a simple majority. Sempra Energy's Board has approved amendments to eliminate these supermajority provisions, which currently apply to adopting bylaws, fixing the exact number of directors, and amending certain articles. The goal is to align with standard corporate governance practices requiring the minimum shareholder approval mandated by California law (typically a majority vote).

The proposed amendments to eliminate supermajority voting must first be approved by shareholders at Sempra Energy's 2008 Annual Meeting of Shareholders. If approved by the required two-thirds vote of outstanding shares, the changes will become effective upon filing with the California Secretary of State.