Exhibit 10.6


 


Proposal 2. Approval of Amendments to the Company’s
Certificate of Incorporation


to Eliminate the Classified Board Structure


 


The board of directors has
adopted, and recommends that the company’s stockholders approve, amendments to Article EIGHTH
of the company’s Amended and Restated Certificate of Incorporation (the “Certificate
of Incorporation”) to:


 


·                  eliminate the classified board structure on a
phase-out basis beginning in 2011; and


 


·                  provide that once the board ceases to be
classified, directors may, consistent with Delaware law, be removed with or
without cause.


 


A copy of Article EIGHTH
of the Certificate of Incorporation that shows the changes that would be
implemented upon stockholder approval of this proposal 2 is attached as Appendix A
to this proxy statement. An explanation of the proposed amendments is included
below.


 


Background


 


A nonbinding stockholder
proposal to declassify the board of directors was included in the proxy
statement for our 2009 annual meeting and received favorable votes from 73% of
outstanding shares of the company’s common stock (94.9% of the shares voted at
our 2009 annual meeting). The Corporate Governance and Nominating Committee of
the company’s board of directors, which is comprised 


 


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entirely of independent directors, regularly
considers and evaluates a broad range of corporate governance issues affecting
the company. While the board of directors believes that the classified board of
directors structure has promoted continuity and stability and encouraged a
long-term perspective on the part of directors, it recognizes the sentiment of
the company’s stockholders and a number of institutional investor groups in
favor of the annual election of directors. In light of this, the company’s
board of directors, at the recommendation of the Corporate Governance and
Nominating Committee, has determined that it will ask stockholders to approve
amendments to the Certificate of Incorporation that would eliminate the company’s
current classified board structure and make certain related changes.


 


Current
Classification of the Company’s Board of Directors


 


The Certificate of
Incorporation currently provides that the board of directors is divided into
three classes, with each class containing as nearly equal a number of directors
as is possible. At each annual meeting, only one class of directors is
considered by the stockholders for election to a term of three years to succeed
those directors whose terms expire at the meeting. Consistent with Delaware
corporate law, the Certificate of Incorporation currently provides that
directors may be removed only for cause.


 


Summary of
Proposed Amendments


 


Declassification
of the Board of Directors


 


If this proposal is approved
by stockholders, Article EIGHTH of the Certificate of Incorporation would
be amended to eliminate the classification of the board of directors and to
provide that the size of the board will be fixed, as is currently contemplated
by the company’s By-laws, by board resolution. If approved, declassification
will be phased-in over a three-year period, beginning at the 2011 annual
meeting, as follows:


 


·                  Class II
directors whose terms will end in 2011 will serve out their current terms in
full and they or their successors will stand for election at the 2011 annual
meeting, and subsequent annual meetings, for one-year terms;


 


·                  Class III
directors whose terms will end in 2012 will serve out their current terms in
full and they or their successors will stand for election at the 2012 annual
meeting, and subsequent annual meetings, for one-year terms; and


 


·                  Class I
directors whose terms will end in 2013 will serve out their terms in full and
they or their successors will stand for election at the 2013 annual meeting and
subsequent annual meetings, for one-year terms.


 


This proposal will not
affect the election of Class I directors at this 2010 annual meeting.
Beginning with the 2013 annual meeting, if this proposal is approved, all
directors will stand for election at each annual meeting of stockholders for
one-year terms.


 


Removal of
Directors Without Cause


 


Delaware corporate law
provides that members of a board that is classified may be removed only for
cause. If this proposal is approved by stockholders, Article EIGHTH of the
Certificate of Incorporation would be amended to provide that, once the board
has become declassified in 2013, directors may be removed with or without
cause. At present, because the board is classified, the Certificate of
Incorporation provides that directors are removable only for cause.


 


 


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