Document:

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 

 

56

 

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.

 

 

57Exhibit 10.7

 

APPENDIX A

 

Proposed Amendments to the Company’s Certificate of
Incorporation*

 

EIGHTH: The business and
affairs of the Corporation shall be managed by or under the direction of a
Board of Directors consisting of not fewer than seven nor more than seventeen
directors (exclusive of directors referred to in the following paragraph
last paragraph of this Article EIGHTH), the exact number to be
determined from time to time by resolution adopted by the affirmative
vote of a majority of such directors then in office. The

 

a.             From the effective date of this
Certificate of Amendment until the election of directors at the 2011 annual
meeting of stockholders, pursuant to Section 141(d) of the General
Corporation Law of the State of Delaware, the directors shall be divided
into three classes, designated Class I, Class II and Class III.
Each class shall consist, as nearly as may be possible, of one-third of the
total number of directors determined by the Board of Directors pursuant to this
paragraph. AtArticle EIGHTH, with the directors in Class I
having a term expiring at the annual meeting of stockholders held in 2013, the
directors in Class II having a term expiring at the annual meeting of
stockholders held in 2011 and the directors in Class III having a term
expiring at the annual meeting of stockholders held in 2012.

 

b.             Commencing with the first
election of directors following adoption of this Amended and Restated
Certificate of Incorporation, Class I directors shall be elected for a
one-year term, Class II directors for a two-year term and Class III
directors for a three-year term. Atelection of directors at the annual
meeting of stockholders held in 2011, pursuant to Section 141(d) of
the General Corporation Law of the State of Delaware, the directors shall be
divided into two classes of directors, designated Class I and Class III,
with the directors in Class I having a term that expires at the annual
meeting of stockholders held in 2013 and the directors in Class III having
a term that expires at the annual meeting of stockholders held in 2012. The
successors of the directors who, immediately prior to the annual meeting of
stockholders held in 2011, were members of Class II (and whose terms
expire at the annual meeting of stockholders held in 2011) shall be elected to Class III;
the Class III directors who, immediately prior to the annual meeting of
stockholders held in 2011, were members of Class III and whose terms were
scheduled to expire at the annual meeting of stockholders held in 2012 shall be
assigned by the Board of Directors to Class III; and the directors who,
immediately prior to the annual meeting of stockholders held in 2011, were
members of Class I and whose terms were scheduled to expire at the annual
meeting of stockholders held in 2013 shall be assigned by the Board of
Directors to Class I for a term expiring at the annual meeting of
stockholders held in 2013.

 

c.             Commencing with the election of
directors at the annual meeting of stockholders held in 2012, pursuant to Section 141(d) of
the General Corporation Law of the State of Delaware, the directors shall be
divided into one class of directors, designated Class I, with the
directors in Class I having a term that expires at the annual meeting of
stockholders held in 2013. The successors of the directors who, immediately
prior to the annual meeting of stockholders held in 2013, were members of Class III
(and whose terms expire at the annual meeting of stockholders held in 2013)
shall be elected to Class I for a term that expires at the annual meeting
of stockholders held in 2013, and the directors who, immediately prior to the
annual meeting of stockholders held in 2013, were members of Class I and
whose terms were scheduled to expire at the annual meeting of stockholders held
in 2013 shall be assigned by the Board of Directors to Class I for a term
expiring at the annual meeting of stockholders held in 2013.

 

d.             From and after the election of
directors at the annual meeting of stockholders held in 2013, the directors
shall cease to be classified as provided in Section 141(d) of the
General Corporation Law of the State of Delaware, and the directors elected at
the annual meeting of stockholders held in 2013 (and each annual meeting of
stockholders  beginning in 1998, successors
to the directors in the class whose term expires at that annual meeting shall
be elected for a three-year term held thereafter) shall be elected for a
term expiring at the next annual meeting of stockholders.

 

A-1

 

Each director shall serve
for the term for which he or she was elected or appointed and until his or her
successor shall be elected and shall qualify.

 

Any vacancy in the Board of
Directors that results from an increase in the number of directors may be filled
by a majority of the directors then in office, provided that a quorum is
present, and any other vacancy may be filled by a majority of the directors
then in office, even if less than a quorum, or by a sole remaining director. If the number
of directors is changed, any increase or decrease shall be apportioned among
the classes so as to maintain the number of directors in each class as nearly
equal as possible, and any additional director of any class elected
to fill a vacancy resulting from an increase in such class shall hold office
for the remaining term of that class, but in no case will ashall hold
office until the next annual meeting of stockholders and until such director’s
successor shall be elected and shall qualify. Any director elected to fill a vacancy
not resulting from an increase in the number of directors shall hold office
until the next annual meeting of stockholders and until such director’s
successor shall be elected and shall qualify. No decrease in the number of
directors shall shorten the term of any incumbent director. A
director shall hold office until the annual meeting for the year in which his
or her term expires and until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.

 

Subject to the rights of the
holders of any one or more classes or series of Preferred Stock issued by the
Corporation, any director, or the entire Board of Directors, may be removed
from office at any time, but only for cause and only by the affirmative
vote of the holders of not less than a majority of the voting power of all of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for purposes of this
sentence as a single class. Any vacancy in the Board of Directors that
results from an increase in the number of directors may be filled by a majority
of the directors then in office, provided that a quorum is present, and any
other vacancy may be filled by a majority of the directors then in office, even
if less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy not resulting from an increase in the number of directors shall
hold office for the remaining term of his or her predecessor.

 

Notwithstanding the
foregoing, whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect directors at an annual or special
meeting of stockholders, the number of such directors and the election, term of
office, filling of vacancies and other features of such directorships shall be
governed by the provisions of Article FOURTH of this Certificate of
Incorporation and any resolution or resolutions adopted by the Board of
Directors pursuant thereto, and such directors shall not be divided into
classes unless expressly so provided therein.

 

*                                         Underline
indicates new or moved language. Strikethrough indicates language to be
deleted.

 

A-2

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