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jbell on DSKJLSW7X2PROD with NOTICES

Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Notices any information to CGM or its stockholders that was untrue in any material respect or that omitted to state a material fact necessary to make the statements made, in light of the circumstances in which they were made, not misleading; or xi if the Eligible Stockholder and/or applicable Stockholder Nominee breaches or fails to comply with its obligations pursuant to the Bylaws, including, but not limited to, proposed Section 2.16 and any agreement, representation or undertaking required by proposed Section 2.16.36
Proposed Section 2.16k provides that, notwithstanding anything to the contrary contained in the Bylaws, if i a Stockholder Nominee and/or the applicable Eligible Stockholder breaches any of its agreements or representations or fails to comply with any of its obligations under proposed Section 2.16, or ii a Stockholder Nominee otherwise becomes ineligible for inclusion in CGMs proxy materials pursuant to proposed Section 2.16, or dies, becomes disabled or otherwise becomes ineligible or unavailable for election at the annual meeting, in each case as determined by the Board or the chairman of the meeting, CGM may omit or, to the extent feasible, remove the information concerning such Stockholder Nominee and the related Supporting Statement from its proxy materials and/or otherwise communicate to its stockholders that such Stockholder Nominee will not be eligible for election at the annual meeting. In addition, in such circumstances CGM will not be required to include in its proxy materials any successor or replacement nominee proposed by the applicable Eligible Stockholder or any other Eligible Stockholder and the chairman of the meeting would declare such nomination to be invalid and such nomination would be disregarded, notwithstanding that proxies in respect of such vote may have been received by CGM.37
Proposed Section 2.16l provides that any Stockholder Nominee who is included in CGMs proxy materials for a particular annual meeting of stockholders would be ineligible to be a Stockholder Nominee for the next two annual meetings if: i The Stockholder Nominee withdraws from or becomes ineligible or unavailable for election at the annual meeting; or ii the Stockholder Nominee does not receive at least 25% of the votes cast in favor of such Stockholder Nominees 36 See 37 See
id.
proposed Bylaws Section 2.16k.

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election.38 This provision would not, however, prevent any stockholder from nominating any person to the Board pursuant to Section 2.11 of the Bylaws.39
Notwithstanding the provisions of proposed Section 2.16, if the Eligible Stockholder providing notice or a qualified representative of the Eligible Stockholder 40 does not appear in person including virtually, in the case of a meeting held solely by means of remote communication at the stockholder meeting to present the nomination of such Stockholder Nominee, such proposed nomination shall not be presented by CGM and shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by CGM.41
Proposed Section 2.16 of the Bylaws provides that the Board or any other person or body authorized by the Board shall have the exclusive power and authority to interpret the provisions of proposed Section 2.16 and make all determinations deemed necessary or advisable in connection with proposed Section 2.16 as to any person, facts or circumstances. All such actions, interpretations, and determinations that are done or made by the Board or any other person or body authorized by the Board shall be final, conclusive, and binding on CGM, the stockholders and all other parties.42
Finally, proposed Section 2.16o states that the proxy access provisions outlined in proposed Section 2.16 shall be the exclusive means for stockholders to include nominees for director in CGMs proxy materials.43 The Exchanges state that stockholders may continue to propose nominees through other means, but that the Board will have final authority to determine whether to include those nominees in CGMs proxy materials.44
38 See Notices, supra note 3, at 24057, 24064, 24088, 24081, 24050, and 24130, respectively;
proposed Bylaws Section 2.16l.
39 See proposed Bylaws Section 2.16l.
40 To be considered a qualified representative of the Eligible Stockholder providing notice, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting and such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, must be provided to CGM at least 24 hours prior to the meeting. See proposed Bylaws Section 2.16m.
41 See id.
42 See proposed Bylaws Section 2.16n.
43 See proposed Bylaws Section 2.16o.
44 See Notices, supra note 3, at 24057, 24065, 24089, 24082, 24050, and 24130, respectively.

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Proposed Revisions to Other Sections of the Bylaws The Exchanges have proposed to make additional changes to Sections 2.10 and 2.11 to account for the addition of the proposed proxy access provision.
First, the Exchanges propose to add references to Section 2.11 and proposed Section 2.16 in Section 2.10 of the Bylaws to clarify the exact provisions of the Bylaws that set forth requirements relating to stockholder nominees.45
Second, the Exchanges propose to add references to proposed Section 2.16 and additional language in Section 2.11 of the Bylaws to clarify that only persons who are nominated in accordance with either Section 2.11 or proposed Section 2.16 shall be eligible for election as directors and that Section 2.11 and proposed Section 2.16 of the Bylaws are the exclusive means for a stockholder to make a director nomination.46
III. Discussion and Commission Findings The Commission finds, after careful review, that the proposed rule changes, as modified by Amendment Nos. 1, are consistent with the requirements of Section 6 of the Act 47 and the rules and regulations thereunder applicable to a national securities exchange.48 In particular, the Commission finds that the proposed rule changes, as modified by Amendment Nos. 1, are consistent with the requirements of Section 6b5
of the Act, which requires, among other things, that an exchanges rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers or dealers.49
A stockholder who wishes to nominate his or her own candidate for director may initiate a proxy contest in order to solicit proxies from fellow shareholders, but doing so requires the preparation and dissemination of 45 See id. at 24058, 24065, 24089, 24082, 24050, and 24131, respectively; proposed Bylaws Section 2.10.
46 See Notices, supra note 3, at 24058, 24065, 24089, 24082, 24050, and 24131, respectively;
proposed Bylaws Section 2.11.
47 15 U.S.C. 78fb.
48 In approving these proposed rule changes, as modified by Amendment Nos. 1, the Commission has considered the proposed rules impact on efficiency, competition, and capital formation. See 15 U.S.C. 78cf.
49 15 U.S.C. 78fb5.

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