Company: LIDRW
Filing Date: 2025-04-07
Form Type: DEFC14A
Source: 0001140361-25-012590
Chunk: 52

Company: AEye, Inc.
Filing Date: 2025-04-07
Form: DEFC14A
Chunk 52
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holders, and consider alternate proposals and strategies. Recent research concludes that a classified board structure increases stockholder value, that declassification decreases stockholder value, and that earlier studies suggesting otherwise are based on older statistical techniques that fail to account for “clustered standard errors” by using “cluster-robust standard errors” techniques. Thus, “[a]dopting a staggered board (‘staggering up’) is associated with a statistically and economically significant increase in firm value, while decisions to destagger a board (‘staggering down’) are associated with a corresponding reduction in firm value.” Cremers & Sepe, The Shareholder Value of Empowered Boards, 68 STAN. L.REV. 67, 6 (2016). The results of earlier studies “suggesting that firms with a staggered board have firm values that are 2.4% lower than the average … becomes statistically insignificant (a t-statistic of -1.17) when we use robust standard errors clustered at the firm level - a standard technique in today’s empirical studies, but less frequent a decade ago.” Id. at 38. Other recent studies confirm these results. Ge, Tanlu & Zhang, What Are the Consequences of Board Destaggering?, AAA 2014 Management Accounting Section (MAS) Meeting Paper, 24 (2016) (“firm value decreases after the destaggering decision”); Cremers, Litov & Sepe, Staggered Boards and Firm Value, Revisited, Journal of Financial Economics, 2 (2017) (“We find no evidence that staggered boards have a strong or persistently negative association with firm value”). The Board believes that a classified board structure is consistent with good corporate governance, which the Board believes depends primarily upon active and independent directors who are knowledgeable about critical aspects of the Company’s operations and skillful in serving as competent and alert overseers of the Company’s management. The current directors of the Board are experienced, qualified, and knowledgeable about the Company and committed to protecting the long-term interests of all of the Company’s stockholders. It is important to note that passage of the stockholder proposal will not automatically eliminate the classified Board structure. Further action would be required to amend the Company's Second Amended and Restated Certificate of Incorporation to effect this change. It would require the Board to consider proposing such an amendment, consistent with its fiduciary duties, only if it believes such an amendment to be in the best interests of the Company and