Recent Amendments to Delaware General Corporation Law Address Shareholder Proxy Access and Director Indemnification
April 2009
Colin J. Diamond, Oliver C. Brahmst, John M. Donovan, Gary Kashar, John M. Reiss
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The State of Delaware amended its General Corporation Law on April 10, 2009, in response to recent corporate governance developments and court cases. The amendments permit Delaware companies to adopt bylaws allowing shareholders to include their own director nominees in the company's proxy statement and to obtain reimbursement for soliciting proxies for director elections. The amendments are permissive, not mandatory, and come at a time when the SEC has said that it will shortly make its own proposals for shareholder access to company proxy statements. The amendments also reduce the ability of companies to eliminate retroactively indemnification and expense advancement for directors and officers by amending their certificate or bylaws after a triggering event has occurred. The amendments become effective on August 1, 2009.
We also discuss the recent Delaware decision in Kistefos AS v.Trico Marine Services, Inc. et al that may provide shareholders with the ability to solicit proxies for, and present at a shareholder meeting, proposals that a company claims conflict with law or its governing document notwithstanding the company's objections.
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