Florida Amendments Facilitate Majority Voting and Full E-Proxy
June 29, 2009
Florida Governor Charlie Crist has signed into law amendments to the Florida Business Corporation Act (FBCA) that facilitate majority voting and will allow Florida public companies to take full advantage of the SEC’s electronic proxy rule, or e-proxy.
Majority Voting
Revised Section 607.0728(1) permits the board of directors or shareholders of a company that is listed on a national securities exchange to adopt a bylaw that fixes a greater voting requirement for the election of directors than the current plurality voting requirement. Previously, the FBCA provided that a voting requirement change could be made only by an amendment to the articles of incorporation, which requires shareholder approval. Now, a corporation that wishes to adopt a majority voting standard can do so without having to incur the time and expense of soliciting shareholder approval of the amendment. Any such bylaw adopted by shareholders cannot be amended or repealed by the board of directors.
To address the situation of “holdover” directors who remain in office, even though they did not receive majority approval, Section 607.0807 was also amended to provide that director resignations may be made effective upon the happening of a future event (such as the failure to receive a majority vote) and may be irrevocable. As a result, bylaws or majority voting policies can require that directors tender irrevocable, contingent resignations which will only become effective if they do not receive majority approval upon their reelection. Further, Section 607.0809 was amended to provide that if a vacancy occurs at a later date, it may be filled before the vacancy happens, but the director may not take office until the vacancy actually takes place.
E-Proxy
Revised Section 607.1620 permits Florida companies with securities registered under the Exchange Act to satisfy their obligation to furnish annual financial statements to shareholders by complying with the SEC’s electronic proxy rule. The e-proxy rule, which is found in Rule 14a-16, permits companies to deliver their proxy statement and annual report to shareholders via posting on the company’s Internet website.
Historically, Florida corporations were required to mail their annual financial statements to shareholders within 120 days after the close of each fiscal year. As a result, Florida public companies could not achieve the full benefits of the e-proxy rule because they still had to mail their annual financial statements. With the adoption of these amendments, Florida public companies now are able to achieve the full cost-saving benefits of the SEC’s e-proxy rule.
http://laws.flrules.org/files/Ch_2009-205.pdf
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