Sponsored by:
Senator PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Assemblywoman NANCY J. PINKIN
District 18 (Middlesex)
Assemblyman TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Allows certain materials to be included in corporation’s proxy solicitation materials.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning corporation proxy solicitation materials and supplementing chapter 5 of Title 14A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. A corporation may establish, in its bylaws, procedures or conditions under which materials with respect to shareholder-nominated individuals will be included in a corporation's proxy solicitation materials, including the form of proxy, for an upcoming election of directors. Those procedures or conditions may include, but shall not be limited to, the following:
(1) A condition requiring a minimum level of beneficial ownership of shares of the corporation's voting stock by the nominating shareholder or a minimum duration of ownership of those shares;
(2) Conditions limiting nominations of directors who have been previously nominated to the board;
(3) A provision limiting the number of shareholder-nominated directors for each shareholder meeting at which directors are to be elected;
(4) Procedures requiring the nominating shareholder to submit specified information concerning the shareholder and the shareholder's nominees, including information concerning ownership by those persons of shares of the corporation's capital stock;
(5) A provision limiting nominations to shareholders, or any affiliate of those shareholders, who have not, and whose nominee has not, within a specified time period, publicly proposed to acquire shares constituting a specified percentage of the voting power of the corporation's outstanding voting stock; and
(6) A provision requiring that the nominating shareholder undertake to indemnify the corporation in respect of any loss arising as a result of any false or misleading information or statement submitted by the nominating shareholder in connection with a nomination.
2. This act shall take effect immediately.
STATEMENT
This bill allows a corporation to establish, in its bylaws, procedures or conditions under which materials with respect to shareholder-nominated individuals will be included in a corporation's proxy solicitation materials.
As an example, the bill provides the following six procedures or conditions that a corporation may establish:
(1) A condition requiring a minimum level of beneficial ownership of shares of the corporation's voting stock by the nominating shareholder or a minimum duration of ownership of those shares;
(2) Conditions limiting nominations of directors who have been previously nominated to the board;
(3) A provision limiting the number of shareholder-nominated directors for each shareholder meeting at which directors are to be elected;
(4) Procedures requiring the nominating shareholder to submit specified information concerning the shareholder and the shareholder's nominees, including information concerning ownership by those persons of shares of the corporation's capital stock;
(5) A provision limiting nominations to shareholders who have not, and whose nominee, or any affiliate of those shareholders has not, within a specified time period, publicly proposed to acquire shares constituting a specified percentage of the voting power of the corporation's outstanding voting stock; and
(6) A provision requiring that the nominating shareholder undertake to indemnify the corporation in respect of any loss arising as a result of any false or misleading information or statement submitted by the nominating shareholder in connection with a nomination.