Securities Regulation and Corporate Governance

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Securities Regulation and Corporate Governance > Posts > Shareholder Nominates First Proxy Access Nominee
Shareholder Nominates First Proxy Access Nominee
In what appears to be the first use of a company’s proxy access bylaw, GAMCO Asset Management filed today a Schedule 13D/A (available here ) and a Schedule 14N (available here ) announcing that it has used the proxy access bylaw at National Fuel Gas (NFG) to nominate a director candidate for election at NFG’s 2017 Annual Meeting.  According to the 13D/A, GAMCO and its affiliates beneficially own in the aggregate approximately 7.81% of NFG’s Common Stock and yesterday delivered a letter to NFG nominating Lance A. Bakrow to the Board of Directors.  NFG described itself in its most recent Form 10-K as “a diversified energy company engaged principally in the production, gathering, transportation, distribution and marketing of natural gas.”  According to the Schedule 13D/A, Mr. Bakrow is the “co-founder and a director of Greenwich Energy Solutions, a private company that provides independent energy solutions in the northeastern United States.”


NFG’s Proxy Access Bylaw

NFG amended its Bylaws to adopt proxy access in March 2016.  The Bylaws provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding Common Stock continuously for at least three years may nominate and include in the company’s proxy materials directors constituting up to 20% of the board, provided that the shareholders(s) and the nominee(s) satisfy the bylaw requirements.   NFG’s proxy access bylaw is available here

GAMCO’s Activism at NFG

Based on past Schedule 13Ds, GAMCO and its affiliates have beneficially owned in the aggregate at least 5% of NFG’s outstanding shares since 2010 and have been advocating for several years that NFG consider a spin-off of certain of its operations.  This included GAMCO submitting for consideration at NFG’s 2015 Annual Meeting a Rule 14a-8 shareholder proposal asking that “the Board of Directors and management, act expeditiously consistent with effective tax considerations, to engage an investment banking firm to effectuate a spin-off of the Company’s utility segment, which represents the operations of National Fuel Gas Distribution Corporation, into a separate publicly traded C-corporation.”  That shareholder proposal received support from 17.8% of votes cast.

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