Mainstreet Bancshares, Inc.
Extract: Bylaws Amended/Restated (Plain English Desc) from a 8-K on 11/16/2023
SEC Document
SEC Filing

In August 2022, Rule 14a–19 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), became effective and impacts all sides nominating and soliciting proxies for their candidates in a director election contest. Rule 14a–19, among other things, requires that a “universal proxy card” distributed by public companies and dissident shareholders in contested director elections include both sides’ director nominees, so that shareholders can “mix and match” nominees from the company’s and the dissident’s slates.

In November 2022, the Board of Directors of the Company determined to amend the Bylaws to update advance notice requirements for director nominations by establishing as a clear prerequisite to the submission of such nominations and the related solicitation of proxies under Rule 14a-19 that shareholders comply with applicable requirements of the Securities and Exchange Commission (“SEC”) and the Bylaws, as amended. The Bylaw amendments afford the Company with an opportunity to review and privately enforce the SEC requirements.

In addition to addressing Rule 14a-19, the amended Bylaws require additional disclosures in director nominee’s notices concerning the nominating shareholder, the nominating shareholder’s director nominees, and other affiliates and participants in the nominating shareholder’s solicitation of proxies.

Following the conclusion of the 2023 proxy season, the Board of Directors and management reexamined the Bylaw amendments and reaffirmed their conclusion that adoption of the amendments was appropriate and in the best interest of the Company and its shareholders. The Board also considered objections raised by Institutional Shareholder Services Inc. to two provisions in the amended Bylaws – Article I, Section 12(a)(iv)(D) and Article I, Section 12(a)(iv)(E), which are described below. The Board concluded that it is in the best interest of the Company and its shareholders to delete these provisions from the Bylaws.

On November 15, 2023, the Board of Directors of the Company approved and adopted Amended and Restated Bylaws which became effective the same day. Amendments effected in the Amended and Restated Bylaws include:

(i) removal of Article I, Section 12(a)(iv (D), which requires a nominating shareholder or beneficial owner of shares to disclose “any plans or proposals on the part of such shareholder or such beneficial owner to nominate directors at any other company with a class of equity securities registered under Section 12 of the Exchange Act within the next 12 months”;

(ii) removal of Article I, Section 12(a)(iv)(E), which requires “any proposals or nominations submitted on behalf of such shareholder or such beneficial owner to nominate directors for election at any other company with a class of equity securities registered under Section 12 of the Exchange Act within the past 36 months (whether or not such proposal or nomination was publicly disclosed)”; and