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Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Notices
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the direction of the Board, the name, together with the Required Information, of any person nominated for election to the Board as a director by an Eligible Stockholder defined below Stockholder Nominee. The Required Information to be included in the proxy statement is i the information provided to CGMs Secretary concerning the Stockholder Nominee and the Eligible Stockholder that is required to be disclosed in CGMs proxy statement pursuant to Section 14
of the Act and the rules and regulations promulgated thereunder and, ii if the Eligible Stockholder so elects, a Supporting Statement, which is a written statement, not to exceed 500
words, in support of its Stockholder Nominees candidacy.10 The proposal would also require that the name of any Stockholder Nominee included in CGMs proxy statement for an annual meeting of stockholders be set forth on the form of proxy and any ballot distributed by CGM in connection with such annual meeting.11 In addition to any other applicable requirements, for a nomination to be made by an Eligible Stockholder under proposed Section 2.16 of the Bylaws, the Eligible Stockholder must give timely notice to CGM thereof a Notice of Proxy Access Nomination and must expressly request in such notice to have its nominee included in CGMs proxy materials.12
An Eligible Stockholder is defined as a stockholder or group of no more 10 See proposed Bylaws Sections 2.16a and h.
See also infra note 28 and accompanying text.
11 Proposed Section 2.16a states that, for the avoidance of doubt, nothing in the proposal will limit CGMs ability to solicit against any Stockholder Nominee or include in its proxy materials CGMs own statements or other information relating to any Eligible Stockholder or Stockholder Nominee, including any information provided to CGM pursuant to proposed Section 2.16.
12 See proposed Bylaws Section 2.16b. Proposed Section 2.16b requires that a Notice of Proxy Access Nomination must be delivered not earlier than the open of business on the 150th day and not later than the close of business on the 120th day prior to the first anniversary of the date that CGM
first distributed its proxy statement to stockholders for the preceding years annual meeting of stockholders provided, however, that in the event the annual meeting is more than 30 days before or after the anniversary date of the prior years annual meeting, or if no annual meeting was held in the preceding year, to be timely, the Notice of Proxy Access Nomination must be received by CGM no earlier than 150 days before such annual meeting and no later than the later of 120 days before such annual meeting or the 10th day following the day on which public announcement as defined in Section 2.11 of the Bylaws of the date of such meeting is first made by CGM. Proposed Section 2.16b further provides that in no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period or extend any time period for the giving of a Notice of Proxy Access Nomination.

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than 20 stockholders 13 that i has Owned continuously for at least three years Minimum Holding Period at least three percent of the outstanding shares of capital stock of CGM as of the date the Notice of Proxy Access Nomination is received by CGM
Required Shares, ii continues to Own the Required Shares through the date of the annual meeting, and iii meets all other requirements of the proposed Section 2.16.14 Proposed Section 2.16e of the Bylaws sets forth when a stockholder would be deemed to Own shares of CGMs capital stock, and provides that whether outstanding shares of CGMs capital stock are Owned shall be determined by the Board.15
13 Proposed Section 2.16d states that any two or more funds that are part of the same Qualifying Fund Group will be counted as one stockholder, and defines a Qualifying Fund Group as two or more funds that are i under common management and investment control, ii under common management and funded primarily by the same employer, or iii a group of investment companies as such term is defined in Section 12d1Gii of the Investment Corporation Act of 1940, as amended.
14 See proposed Bylaws Section 2.16d. Proposed Section 2.16d further provides that whenever the Stockholder consists of a group, i each provision of proposed Section 2.16 that requires the Eligible Stockholder to provide any written statements, representations, undertakings, agreements or other instruments or to meet any other conditions will be deemed to require each stockholder including each individual fund that is a member of such group to provide such statements, representations, undertakings, agreements or other instruments and to meet such other conditions except that the members of such group may aggregate the shares that each member has Owned continuously for the Minimum Holding Period in order to meet the three percent Ownership requirement of the Required Shares definition and ii a breach of any obligation, agreement or representation under proposed Section 2.16 by any member of such group shall be deemed a breach by the Eligible Stockholder. Proposed Section 2.16d also prohibits any stockholder from being a member of more than one group of stockholders constituting an Eligible Stockholder with respect to any annual meeting.
15 Under proposed Section 2.16e of the Bylaws, a stockholder will be deemed to Own only those outstanding shares of CGMs capital stock as to which the stockholder possesses both: i The full voting and investment rights pertaining to the shares; and ii the full economic interest in including the opportunity for profit from and risk of loss on such shares; provided that the number of shares calculated in accordance with clauses i and ii shall not include any shares that are 1 sold by such stockholder or any of its affiliates in any transaction that has not been settled or closed; 2
borrowed by such stockholder or any of its affiliates for any purposes or purchased by such stockholder or any of its affiliates pursuant to an agreement to resell; or 3 subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar instrument or agreement entered into by such stockholder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of CGMs capital stock, in any such case which instrument or agreement has, or is intended to have, the purpose
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Proposed Section 2.16c of the Bylaws provides that the maximum number Permitted Number of Stockholder Nominees nominated by all Eligible Stockholders that will be included in CGMs proxy materials with respect to an annual meeting of stockholders will not exceed the greater of i two or ii 20% of the number of directors in office as of the last day on which a Notice of Proxy Access Nomination may be delivered pursuant to and in accordance with proposed Section 2.16 the Final Proxy Access Nomination Date or, if such amount is not a whole number, the closest whole number below 20%. Proposed Section 2.16c sets forth certain circumstances under which the Permitted Number would be reduced.16 Proposed Section 2.16c also sets forth procedures for determining when the Permitted Number is reached and for selecting candidates when the Permitted Number or effect of: A Reducing in any manner, to any extent or at any time in the future, such stockholders or its affiliates full right to vote or direct the voting of any such shares; and/or B
hedging, offsetting or altering to any degree any gain or loss realized or realizable from maintaining the full economic ownership of such shares by such stockholder or affiliate. Proposed Section 2.16e further provides that a stockholder shall Own shares held in the name of a nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. Under proposed Section 2.16e, a stockholders Ownership of shares shall be deemed to continue during any period in which i the stockholder has loaned such shares, provided that the stockholder has the power to recall such loaned shares on five business days notice and includes in the Notice of Proxy Access Nomination an agreement that it will 1 promptly recall such loaned shares upon being notified that any of its Stockholder Nominees will be included in CGMs proxy materials and 2 will continue to hold such shares through the date of the annual meeting or ii the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the stockholder.
16 Proposed Section 2.16c provides that in the event one or more vacancies on the Board occurs with respect to any directors for any reason after the Final Proxy Access Nomination Date but before the date of the annual meeting and the Board resolves to reduce the size of the Board in connection therewith, the Permitted Number will be calculated based on the number of directors in office as so reduced. In addition, the Permitted Number will be reduced by i the number of individuals who will be included in CGMs proxy materials as director nominees recommended by the Board pursuant to an agreement, arrangement or other understanding with a stockholder or group of stockholders other than any such agreement, arrangement or understanding entered into in connection with an acquisition of stock from CGM by such stockholder or group of stockholders and/or ii the number of directors in office as of the Final Proxy Access Nomination Date who were included in CGMs proxy materials as Stockholder Nominees for any of the two preceding annual meetings of stockholders and whose reelection at the upcoming annual meeting is being recommended by the Board.

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