Mellanox to Hold Extraordinary General Meeting of Shareholders
Shareholders to Vote on Proposals Designed to Enhance Shareholder Choice in Contested Elections
Establish Plurality Voting in the Event of Contested Elections:
- Mellanox's articles of association currently include a majority voting provision for the election of directors.
In line with governance best practices for
U.S.-listed companies, Mellanoxintends to seek shareholder approval to amend its current articles of association to provide for a plurality voting standard in a contested election.
A plurality voting standard in a contested election of directors will
ensure that if the number of director nominees proposed by the
Mellanox Board of Directors (the "Board") and shareholders of
Mellanoxexceeds the total number of directors to be elected, those director nominees receiving the largest number of votes would be elected to the Board. A plurality voting standard maximizes the ability of shareholders to elect the directors they want.
If the current majority voting standard is not amended and continues
to apply in the event of a contested election of directors, it is
possible that, due to abstentions and against votes, no directors
would be elected to the Board, or that less than the full Board would
be elected and remaining vacancies on the Board would then be filled
by the elected directors, rather than
The amendment proposed by the Mellanox Board providing for a plurality
voting standard in a contested election of directors would align the
Company's voting practices with the guidelines of institutional
shareholders and proxy advisory firms, such as
Institutional Shareholder Servicesand Glass Lewis.
The proposed amendment will not affect the existing majority voting
standard for the election of directors of
Mellanoxin an uncontested election of directors.
Require the Use of Universal Proxy Cards:
The adoption of universal proxy cards in a contested election of
directors will provide for all nominees put forth by either the Board
or any shareholder of
Mellanoxto be listed together on the universal proxy cards, enabling shareholders to elect any combination of director nominees they choose without attending the shareholder meeting in person.
Absent this proposed amendment,
Mellanoxshareholders would receive two versions of a proxy card - one version listing director nominees proposed by the Board and another version listing director nominees proposed by a shareholder. Applicable laws and proxy voting mechanics do not allow shareholders to use both proxy cards to vote, and each card would contain director nominees only from either the Board or the nominating shareholder. As a result, a shareholder would not be able to vote for a combination of any director nominees from each nominating party.
In order to permit
Mellanoxshareholders to vote to elect any combination of director nominees put forth by the Board and any shareholder of Mellanox, Mellanoxintends to seek shareholder approval of an amendment to its current articles of association requiring the use of universal proxy cards in a contested election, and requiring that director nominees consent to be included on each universal proxy card.
Universal proxy cards have been advocated for by institutional
investors, including by the
Council of Institutional Investors, as a way to ensure a fairer, less cumbersome voting process. In addition, SEC Commissioner Kara M. Steinshared her views about universal proxy cards in a recent speech: "…we should continue to be ready to help fortify the corporation-shareholder relationship as we move forward. For example, we should adopt final rules regarding the use of universal proxy cards. These rules should recognize that few shareholders can dedicate the time and resources necessary to attend a company's meeting in person and that, in the modern marketplace, most voting is done by proxy. The Commission's rules need to change to reflect our current reality, empowering companies and shareholders alike."1
In order to allow existing shareholder director nominees for the 2018
AGM to be included on universal proxy cards,
Mellanoxhas committed to permit those nominees to consent to being named on the universal proxy cards for a period of 10 days following shareholder approval of the use of universal proxy cards at the EGM.
"Mellanox is committed to best-in-class governance practices and
shareholders deserve the right to choose the director candidates who
they believe will best guide Mellanox's strategy and success over the
long term," said
The Company noted that holding the EGM will allow
Advance Notice Deadlines for Shareholder Proposals
The Company currently anticipates holding the 2018 AGM on
In addition, shareholders holding at least 1% of the voting power in the Company have the right pursuant to Section 19(b) of the Company's articles of association to request that the Board include an item in the agenda of a general meeting of the shareholders. The Board may include such item in the agenda of a general meeting of the shareholders only if the request has been delivered to the Secretary of the Company not later than 60 days and not more than 120 days prior to the applicable general meeting of the shareholders and otherwise in accordance with the requirements of Section 19(b) of the Company's articles of association and the Israeli Companies Law, 1999 (the "Companies Law").
Shareholders holding at least 1% of the voting power in the Company also
have the right to request that the Board include an item in the agenda
of a general meeting of the shareholders pursuant to Section 66(b) of
the Companies Law. The Company shall not consider shareholder proposals
pursuant to Section 66(b) of the Companies Law for inclusion in the
agenda of the EGM if received later than
Shareholders may submit proposals by sending their proposals to the
Secretary of the Company at
Important Additional Information and Where You Can Find It
The Company and certain of its directors and executive officers may be
deemed to be participants in a solicitation of proxies in connection
with the matters to be considered at the EGM and the 2018 AGM.
Information regarding the names of the Company's directors and executive
officers and their respective interests in the Company by security
holdings or otherwise is set forth in the Company's preliminary proxy
statement filed with the
The Company intends to furnish its definitive proxy statements and white
proxy cards for the EGM and the 2018 AGM to each shareholder entitled to
delivery of a proxy, and intends to file such definitive proxy
statements and white proxy cards with the
This press release does not constitute a convening notice for the EGM or the 2018 AGM under Israeli law, and separate notices convening the EGM and the 2018 AGM and setting the date, place and record date of the EGM and the 2018 AGM will be made separately in due course.
1 Permission to use quotation neither sought nor obtained
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