|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 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 .
NFG’s Proxy Access Bylaw
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.