Bed, Bath and Beyond 2008 Annual Report Download - page 49

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BED BATH & BEYOND PROXY STATEMENT
47
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION ADOPTING MAJORITY VOTING FOR THE ELECTION
OF DIRECTORS IN NON-CONTESTED ELECTIONS (PROPOSAL 3)
The New York Business Corporation Law (“Business Corporation Law”) provides that, unless otherwise specified in a company’s
certificate of incorporation, a director is elected by a plurality of the votes cast. The Company’s Restated Certificate of
Incorporation does not specify the voting standard required in director elections, so our directors are currently elected by a plurali-
ty vote; that is, a director nominee who receives the highest number of affirmative votes cast is elected, whether or not such votes
constitute a majority including withheld votes.
The Board believes that active shareholder participation in the election of directors is important to the Company and to effective
corporate governance. In response to similar concerns, a number of public companies have recently approved charter amendments
requiring a majority vote standard for the election of directors. The Board has carefully considered the arguments for and against
amajority voting standard and concluded that it reflects the current consensus of best practices for the election of directors.
Therefore, the Board has authorized, and recommends that shareholders approve, an amendment to the Company’s Restated
Certificate of Incorporation that would specify that director nominees in a non-contested election would be elected by a majority
vote. Under this provision, each vote is specifically counted “for” or “against” the director’s election. An affirmative majority of
the total number of votes cast “for” a director nominee will be required for election. Shareholders will also be entitled to abstain
with respect to the election of a director. In accordance with the Business Corporation Law, abstentions will have no effect in
determining whether the required affirmative majority vote has been obtained. Director nominees in contested elections
would continue to be elected by plurality vote. An election is considered contested if there are more nominees for election than
positions on the Board to be filled.
Under the Business Corporation Law, shareholders must approve an amendment to the Company’s Restated Certificate of
Incorporation to change the voting standardin director elections. If the proposed amendment is approved, a new paragraph
will be added to Article SEVENTH of the Company’sRestated Certificate of Incorporation that reads as follows:
“The vote required for the election of directors by the shareholders shall be the affirmative vote of a “majority of votes cast”
(as defined herein), unless the election is contested, in which case directors shall be elected by a plurality of votes cast. An election
shall be contested if, as of the record date (or such later date as may be determined by the Board of Directors based on events
occurring after the record date, but in no event later than the date the Corporation files its definitive proxy statement with the
Securities and Exchange Commission), the number of nominees exceeds the number of directors to be elected. A “majority of
votes cast” means that the number of shares voted “for” a director exceeds the number of votes “withheld” or cast “against”
that director.Abstentions and broker non-votes shall not constitute votes cast or votes withheld.”
Toapprove this amendment to the Company’s Restated Certificate of Incorporation, a majority of the outstanding shares of the
Company must be voted “FOR” the proposed amendment. If approved, this amendment will become effective upon the filing
with the New York Department of State of a certificate of amendment of the Company’s Restated Certificate of Incorporation.
The Company would make such a filing promptly after the annual meeting.
Conditioned upon and effective after shareholder approval of this proposal and the filing of a certificate of amendment of the
Company’s Restated Certificate of Incorporation with the New York Department of State, the Board has approved an amendment
to the Company’s By-laws adopting a director resignation policy consistent with the majority vote standard, so that an incumbent
director who did not receive the requisite affirmative majority of the votes cast for his or her re-election would be required to
immediately tender his or her resignation to the Board. The Boardthen will decide, through a process managed by the
Nominating and Corporate Governance Committee and excluding the nominee in question, whether to accept the resignation.
In making its decision, the Boardmay consider any factors or information that it considers appropriate or relevant. The Board’s
explanation of its decision shall be promptly disclosed in a Current Report on Form 8-K filed with the SEC. The decision of the
Board and such disclosure shall be completed within 90 days from the date of the certification of the election results. The amend-
ments to the Company’s By-laws and Restated Certificate of Incorporation will be disclosed in a Current Report on Form 8-K filed
with the SEC.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL
OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION ADOPTING MAJORITY VOTING FOR THE
ELECTION OF DIRECTORS IN NON-CONTESTED ELECTIONS.