This article was first published on Activist Insight Online on April 30, 2020. For more information about the module, click here.
Driver Management has urged First United to give more details regarding a 2010 vote on a proposal to declassify the board, saying it may have identified potential voting irregularities that are further proof of directors’ entrenchment.
Driver claimed that First United had unlawfully denied brokers the right to vote on the proposal to declassify its board in 2010. Driver said the current interdiction was enacted after that annual meeting.
At the time, more than 60% of the votes cast were in favor of the resolution but it nevertheless failed to pass under the lender’s supermajority approval requirement. Driver criticized the board for not advancing the proposal in the coming years, given the large support at the 2010 meeting, saying this calls into question the board’s stated commitment to good corporate governance.
The board’s refusal to hold another vote on the matter may have “irreparably harmed” the company’s shareholders, Driver said in a letter to First United lead director John McCullough dated April 21.
In addition, Driver also claimed it had found an “oddity” in the vote tallies from that meeting. The lender expressed the votes to the nearest ten-thousandth of a share, a ‘split’ that had no apparent legal basis, the letter penned by Driver Managing Member Abbott Cooper argued.
To shed light on these matters and prepare the upcoming contested board elections, Driver urged the bank to provide a number of documents related to the 2010 meeting, including a report from the inspector of elections and a record of how directors voted at the time.
First United and Driver Management are engaged in a proxy battle, with the activist aiming to win three board seats at the June 11 annual meeting.
Shares in First United traded up 2.3% at market open on Thursday.