This excerpt taken from the CMLS DEF 14A filed Oct 17, 2008.
2. Amendment of the Certificate of Incorporation to Provide for the Annual Election of
All Members of the Board of Directors
Our Board of Directors is seeking your approval to amend our Amended and Restated Certificate of Incorporation, referred to as our certificate of incorporation, to provide for the annual election of all members of the Board of Directors. Our certificate of incorporation currently provides that our Board is divided into three classes, with the terms of office of the respective classes ending in successive years.
At our 2007 annual meeting of stockholders, our stockholders approved a stockholder proposal requesting that the Board consider eliminating the three classes of directors and replacing the classified board structure with annual elections of all directors. In connection with that proposal being presented to our stockholders for their consideration at the 2007 annual meeting, our Board stated that if the stockholders approved that proposal, then the Board would consider recommending that stockholders approve, at our 2008 annual meeting, an amendment to our certificate of incorporation to eliminate the classified board structure. Accordingly, after consideration of the various arguments for and against a classified board structure, the Board determined to propose eliminating such a structure.
Approval of the proposed amendment would eliminate the classes of directors and the current practice of three-year terms for directors. If our stockholders approve the proposed amendment, directors who have been elected to three-year terms prior to the effectiveness of the amendment (including directors elected at the 2008 annual meeting) will complete those terms. Beginning with the 2009 annual meeting, at that meeting and at the 2010 annual meeting directors whose previous terms expire will be subject to election for a one-year term expiring at the next annual meeting. Thus, beginning with the 2011 annual meeting, the entire Board will be elected annually.
The proposed amendment would delete in their entirety the first four sentences of Article XIII of our current certificate of incorporation, and insert the following in their place:
At the 2009 annual meeting of stockholders, the Directors whose terms expire at that meeting (or such directors successors) shall be elected to hold office for a one-year term expiring at the 2010 annual meeting of stockholders. At the 2010 annual meeting of stockholders, the directors whose terms expire at that meeting (or such directors successors) shall be elected to hold office for a one-year term expiring at the 2011 annual meeting of stockholders. At the 2011 annual meeting of stockholders, and each annual meeting of stockholders thereafter, all directors shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders. Directors may be re-elected any number of times. Each Director shall hold office until the election and qualification of his or her successor.
Our Board has considered the merits of the classified board structure, taking into account a variety of perspectives. The Board recognizes that a classified structure may offer several advantages, such as promoting continuity and stability, encouraging directors to take a long-term point-of-view, and reducing a companys vulnerability to coercive takeover tactics. The Board also recognizes, however, that a classified structure may appear to reduce directors accountability to shareholders, since such a structure does not enable stockholders to express a view on each directors performance by means of an annual vote.
If the proposed amendment is adopted, it would become effective upon filing of the amendment with the Secretary of State of the State of Delaware, which we currently anticipate would occur as soon as practicable following the annual meeting.
Your Board recommends a vote FOR the amendment to our certificate of incorporation to provide for the annual election of all members of the Board of Directors.