-- Lexmark International changes By-Laws --

View Lexmark’s Amendment
View Lexmark’s Press Release

Comptroller William C. Thompson, Jr., on behalf of New York City Pension Funds, has filed shareholder proposals at seven companies urging that their Boards of Directors adopt a majority vote standard for the election of directors in uncontested elections.

The Board of Directors of one company, Lexmark International, already responded by amending its By-Laws to provide for directors to be elected by majority vote in uncontested elections.

“The New York City Pension Funds remain steadfast in their long-held commitment to the advancement of needed corporate governance reforms,” Thompson said. “We are pleased to join with other leading institutional investors in advancing this very important reform for a majority vote standard in uncontested director elections.”

Thompson added: “The majority vote standard is a fundamental principle of good corporate governance and the protection of shareholder rights. It is urgently needed to replace the undemocratic, plurality voting system, under which a director can be elected with one vote in an uncontested election, despite the disapproval of the majority of the shareholders.”

The proposals were filed on behalf of the New York City Employees’ Retirement System (NYCERS), New York City Teachers Retirement System (NYCTRS), New York City Police Pension Fund, New York City Fire Department Pension Fund, and New York City Board of Education Retirement System (BERS).

Besides Lexmark of Lexington, KY, the proposals were submitted to Cooper Tire & Rubber of Findlay, OH, Keane, Inc. of Boston, MA, and Superior Industries International of Van Nuys, CA.

A proposal also was resubmitted to Teradyne, Inc. of Boston, MA, where it was co-sponsored by the United Brotherhood of Carpenters and garnered 41.2% of the shares voted during the previous proxy season.

Collectively, the Funds hold more than 1.5 million shares in the five companies valued at more than $42 million.

The proposal was submitted to Lear Corporation of Southfield, MI, on behalf of the Police Pension Fund, the Fire Department Pension Fund, TRS and BERS. The four hold 99,269 shares of Lear Corporation common stock valued at more than $2.8 million.

In addition, a proposal was submitted to Rigel Pharmaceuticals of South San Francisco, CA, on behalf of TRS, which holds 58,096 shares of Rigel Pharmaceutical common stock valued at $690,761.

The proposals specifically request that a corporation’s Board of Director’s “initiate the appropriate process to amend the Company’s governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders, with a plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats.”

Lexmark International communicated to the Comptroller’s Office that its Board of Directors amended its By-Laws to adopt a majority vote standard for the election of directors, which provides “that to be elected, in an uncontested election, a director nominee must receive a majority of the votes cast such that the number of shares voted ‘for’ the nominee must exceed 50% of the votes cast with respect to that director. In contested elections where the number of nominees exceeds the number of the directors to be elected, the vote standard will continue to be a plurality of voted cast.”

As a result, the Funds have withdrawn their proposal.
“I am pleased that Lexmark International has recognized the importance of the majority vote standard for the election of directors,” Thompson said. “The Funds are hopeful that other companies will adopt the same standard.”
The trustees for the Pension Funds are:

NYCERS: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), Adolfo Carrion (Bronx), and James Molinaro (Staten Island); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Carroll (Carl) Haynes, President, International Brotherhood of Teamsters, Local 237.

TRS: New York City Finance Commissioner Martha E. Stark (Chair); Deputy Chancellor Kathleen Grimm, New York City Department of Education; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Finance Commissioner Martha E. Stark; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; Peter Gorman, President and Captains’ Rep., Nicholas J. Visconti, Chiefs’ Rep., and Stephen J. Carbone, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

Police Pension Fund: Mayor Michael Bloomberg; New York City Finance Commissioner Martha E. Stark; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

BERS: mayoral appointees Schools Chancellor Joel Klein, Alan Aviles, Philip Berry, David Chang, Tino Hernandez, Augusta Souza Kappner, Richard Menschel and Marita Regan; Borough President appointees Martine G. Guerrier (Brooklyn), Vivian Farmery (Manhattan), Michael Flowers (Queens), and Joan Correale (Staten Island); and employee members Thomas J. Malanga of the International Union of Operating Engineers, Local 891, and Milagros Rodriguez of District Council 37, Local 372.

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