Item 8.01. Other Events In addition to the amendment of the Registrant’s Amended and Restated By-Laws, the Registrant also approved an amendment to its Corporate Governance Guidelines that requires any incumbent director who is not elected to the Board of Directors in a non-contested election to promptly tender his or her resignation. The text of the Corporate Governance Guidelines amendment states: Under Article III, Section 1 of the By-laws, in an uncontested election, each director shall be elected by a majority vote. In that connection, the Board of Directors will not nominate for director any director candidate who is an incumbent director unless and until such director candidate has submitted in writing his or her irrevocable resignation as a director, which resignation would be effective upon the director’s failure to receive the required majority vote in any uncontested election and the Board of Director’s acceptance of such resignation. If a resignation agreement is not executed by an incumbent director prior to the election of directors, it is the policy of the Board that if such director fails to receive the required majority vote in an uncontested election, he or she shall, promptly after certification of such vote, tender his or her resignation to the Chairman of the Board which resignation would be effective upon its acceptance by the Board of Directors. If an incumbent director is not elected by a majority of the votes cast (unless, pursuant to Article III, Section 1 of the By-laws, the director election standard is a plurality of the votes cast), the incumbent director shall promptly tender his or her resignation to the Board of Directors. A recommendation on whether to accept such resignation shall be made by the Nominating and Corporate Governance Committee, or, if a majority of such committee did not receive the required majority vote, a majority of the Board of Directors shall appoint a special committee of Independent Directors (as defined below) for such purpose of making a recommendation to the Board of Directors (the “Special Nominating Committee”). If fewer than three Independent Directors received the required majority vote, the Board of Directors shall act on the resignation offers. The applicable committee, if any, shall make a recommendation to the Board of Directors on whether to accept or reject the director’s resignation, or whether other action should be taken. The Board of Directors shall act on any such resignation offer and publicly disclose its decision within 90 days from the date of the certification of the election results. Notwithstanding the foregoing, if acceptance by the Board of Directors of all the offers of resignation then pending would result in the Corporation having fewer than a majority of the directors who were in office before the election, the Board of Directors may determine to extend such 90-day period by an additional 90 days upon the conclusion that such an extension is in the best interests of the Corporation. The term “Independent Director” for these resignation and recusal policies shall mean a director who complies with the “independent director” requirements under the rules of NYSE, under law or under any rule or regulation of any other regulatory body or self regulatory body applicable to the Corporation. If any director’s resignation offer is not accepted by the Board of Directors, such director shall continue to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualified, subject, however, to the director’s earlier death, disability, resignation, retirement, disqualification or removal from office. If a director’s offer of resignation is accepted by the Board, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, acting on the recommendation of the Nominating and Corporate Governance Committee, or Special Nominating Committee, as may be applicable, may fill the resulting vacancy pursuant to the By-laws or may decrease the size of the Board pursuant to the By-laws. The Board of Directors expects an incumbent director that fails to receive the required majority vote in any uncontested election to exercise voluntary recusal from participation, except in limited circumstances, in any consideration by the Nominating and Corporate Governance Committee (or such other committee as may be designated pursuant to the policy set forth above) and by the Board of Directors with respect to whether to accept or reject such director’s resignation or whether other action should be taken; provided that if the number of Independent Directors who were successful incumbents is fewer than three, all directors may participate in the decisions of the Board of Directors pursuant to these resignation and recusal policies. The Registrant’s Corporate Governance Guidelines are available on its public website at www.lehman.com. |
