Opinion ID: 2441952
Heading Depth: 1
Heading Rank: 4

Heading: The May 2008 Axcelis Shareholder Meeting

Text: On May 1, 2008, Axcelis held its annual shareholders' meeting. Axcelis had a classified board and the three directors standing for reelectionMessrs. Hardis, Fletcher and Thompsonwere unopposed. Axcelis follows the plurality voting provisions of Delaware statutory law, under which a director may be elected without receiving a majority of the votes cast. [3] Importantly, however, the Axcelis Board also had adopted a plurality plus governance policy, which provides that: At any shareholder meeting at which Directors are subject to an uncontested election, any nominee for Director who receives a greater number of votes withheld from his or her election than votes for such election shall submit to the Board a letter of resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance Committee shall recommend to the Board the action to be taken with respect to such offer of resignation. The Board shall act promptly with respect to each such letter of resignation and shall promptly notify the Director concerned of its decision. [4] All three directors seeking reelection at the 2008 annual meeting received less than a majority of the votes cast, which triggered the plurality plus governance policy. Therefore, in accordance with that policy, the three directors tendered letters of resignation. The Board, however, decided not to accept the resignations, and in a May 23, 2008 press release, explained why: [T]the board considered a number of factors relevant to the best interests of Axcelis. The Board noted that the three directors are experienced and knowledgeable about [the Company], and that if their resignations were accepted, the Board would be left with only four remaining directors. One or more of the three directors serves on each of the key committees of the Company and Mr. Hardis serves as a lead director. The Board believed that losing this experience and knowledge would harm the Company. The Board also noted that retention of these directors is particularly important if Axcelis is able to move forward on discussions with SHI following finalization of an appropriate non-disclosure agreement. The Board also expressed its intention to be responsive to the shareholder concerns that gave rise to the withhold votes. The Board is seeking to engage in confidential discussions with SHI and, prior to next year's Annual Meeting, the Board will consider recommending in favor of a declassification proposal at that meeting.