What is proxy access and how does it affect me as a shareholder?

Proxy access is a provision in Teradyne's updated bylaws that allows long-term, significant shareholders to nominate director candidates for inclusion in the company's official proxy materials. This means you, along with other eligible shareholders, can have a greater say in who represents you on the Board of Directors, potentially leading to more diverse perspectives and improved governance.

What are the specific requirements for shareholders to use proxy access?

To utilize proxy access, a shareholder, or a group of up to 20 shareholders acting together, must have continuously owned at least 3% of Teradyne's issued and outstanding voting shares for at least the preceding three years. These shareholders and their nominees must also meet other requirements detailed within the amended bylaws.

How has the requirement to call a special meeting changed?

The percentage of voting shares needed to call a special meeting of shareholders has been reduced. Previously, it required 66 2/3% of outstanding voting shares. Now, only a majority (more than 50%) of all issued, outstanding, and voting shares is required to call a special meeting, making it easier for shareholders to convene and address critical issues.

Are there any other changes to the bylaws?

Yes, in addition to proxy access and the special meeting threshold, the bylaws include non-substantive conforming, clarifying, and updating changes to other sections to ensure consistency and reflect current practices.

TER 8-K: Corporate Changes

Summary

Teradyne, Inc. (TER) has filed an 8-K on January 29, 2021, detailing significant amendments to its Amended and Restated Bylaws. These changes, effective immediately as of January 26, 2021, are designed to enhance shareholder rights and engagement. The most impactful revisions include the implementation of proxy access, allowing eligible shareholders to nominate directors, and a reduction in the ownership threshold required to call a special meeting of shareholders. Specifically, proxy access now permits a shareholder or a group of up to 20 shareholders, holding at least 3% of outstanding voting shares for a minimum of three years, to nominate director candidates for inclusion in the company's proxy materials. This aligns with best practices in corporate governance and can increase shareholder influence. Additionally, the threshold for calling a special meeting has been lowered from two-thirds to a majority of all outstanding voting shares, making it easier for shareholders to convene and discuss important matters outside of the annual meeting.

Key Highlights

1Teradyne's Board of Directors amended and restated the company's Bylaws effective January 26, 2021.
2Implemented proxy access, enabling eligible shareholders to nominate directors for inclusion in proxy materials.
3Proxy access requires a shareholder (or group of up to 20) to own at least 3% of voting shares continuously for three years.
4Reduced the voting share percentage required to call a special meeting from 66 2/3% to a majority of all outstanding voting shares.
5These changes aim to increase shareholder rights and facilitate greater shareholder engagement.
6The full text of the Amended and Restated Bylaws is attached as Exhibit 3.1 to the filing.

TERADYNE, INC 8-K Report, Bylaw Amendment (Jan 29, 2021)

Summary

Key Highlights

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