Timken Proposes to Lower Certain Director Voting Thresholds By Reverting to State Law Default, But Raises Others While Activists Push For Break Up
The Timken Company (TKR) filed a Form 8-K with a notice that it would propose to amend its articles and bylaws (referred to as its “Regulations”) to remove the supermajority voting requirements for:
- substituting for unavailable director nominees;
- changing the number of directors; and
- removing directors.
Timken stated that as a result, the articles and Regulations will contain no shareholder voting threshold other than a majority of votes cast or a majority of the shares entitled to vote, subject to the default voting standards under Ohio law.
Nifty. Let the shareholders have their say, right?
But wait, there’s more!
Timken continued to say that if the governance proposals are approved, a number of actions subject to the approval of the shareholders would require greater than a majority of votes cast or the majority of the shares entitled to vote thereon under the default voting standards in Ohio. For example, the default voting standard for the approval of a merger or consolidation or a sale of all or substantially all of the assets would require the approval of two-thirds of the shares entitled to vote thereon.
Basically, Timken is proposing to:
- remove the ability of a block of shares to veto director election mechanics, and
- ratchet up the requirement to merge or break up the company.
As this is an Opps Tracker pick [Ed. Up 9.56% in less than 1 month!!!!], we’ll continue to keep an eye on it.