Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Director
Altria’s Board of Directors (the “Board”) has retirement guidelines that require a director who will have attained the age of 75 as of the date of the next annual meeting of Altria’s shareholders to tender his or her written resignation to the Board at least six months prior to that annual meeting. The resignation is subject to acceptance by the Board and effective at the time specified by the Board. In accordance with the retirement guidelines, W. Leo Kiely III (age 75), a director of Altria since 2011, submitted his written resignation to the Board, and, on October 26, 2022, the Board, based on the recommendation of the Board’s Nominating, Corporate Governance and Social Responsibility Committee, accepted Mr. Kiely’s resignation effective upon completion of his current term. Mr. Kiely will serve through his current term, but will not stand for re-election to the Board at Altria’s 2023 Annual Meeting of Shareholders, which is anticipated to be held on May 18, 2023.
Election of Director
On October 26, 2022, the Board increased the size of the Board from 12 to 13 and elected Jacinto Hernandez to the Board, in each case, effective November 1, 2022. The Board also elected Mr. Hernandez to the Board’s Finance and Innovation Committees, effective November 1, 2022.
The Board affirmatively determined that Mr. Hernandez qualifies as an independent director under the New York Stock Exchange listing standards and Altria’s standards for director independence.
Mr. Hernandez will be compensated for his service on the Board pursuant to Altria’s existing compensation program for non-employee directors, which is described under “Director Compensation” in Altria’s proxy statement for its 2022 Annual Meeting of Shareholders (filed with the Securities and Exchange Commission on April 7, 2022) and is incorporated by reference in this Item 5.02.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On October 26, 2022, the Board, as part of a periodic review of Altria’s governance documents, approved changes to Altria’s Amended and Restated By-Laws, effective as of October 26, 2022 (as amended and restated, the “By-Laws”). The amendments, among other things:
•expand the scope of disclosures required by a shareholder seeking to bring a director nomination or other business before a meeting of shareholders (“proposing shareholder”) to include:
•any rights to dividends on Altria shares owned beneficially by the shareholder and any affiliates or associates or other parties with whom the shareholder is acting in concert (each, an “associated person”) that are separated or separable from the underlying Altria shares;
•any proportionate interest in Altria shares or any derivative instruments held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the shareholder or any associated person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager, managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of a limited liability company or similar entity; and
•any performance-related fees (other than an asset-based fee) that the shareholder or any associated person is entitled to based on the increase or decrease in the value of Altria shares or derivative instruments;
•expand the scope of disclosures required by a proposing shareholder seeking to bring a director nomination (“shareholder nominee”) to include:
•the name, age, business address and, if known, residence address of each shareholder nominee for whom the shareholder is proposing or intends to solicit proxies and of each shareholder nominee who would be presented for election at the annual meeting in the event of a need to change the shareholders’ original slate; and
•a representation as to whether the shareholder or any associated person intends to solicit proxies in support of director nominees other than individuals nominated by the Board (“board nominees”) in compliance with the requirements of Rule 14a-19(b) under the Exchange Act;
•clarify that, in addition to complying with the advance notice provisions in the By-Laws, each proposing shareholder and any associated person must also comply with all applicable requirements of Altria’s Articles of Incorporation, the By-Laws and state and federal law, including the Exchange Act, with respect to any such proposal or the solicitation of proxies with respect thereto;
•provide that any shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white;
•provide that (a) no shareholder or associated person may solicit proxies in support of any nominees other than board nominees unless such shareholder and associated person complies with Rule 14a-19 under the Exchange Act in connection with the solicitation of such proxies, including the provision to Altria of notices required thereunder in a timely manner, and (b) if such shareholder or associated person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (ii) subsequently fails to comply with any of the requirements of Rule 14a-19 under the Exchange Act, then Altria will disregard any proxies or votes solicited for such shareholder’s nominees;
•provide that, if any shareholder or associated person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such shareholder or associated person must deliver to Altria, upon its request, reasonable evidence that such shareholder or associated person has met the requirements of Rule 14a-19 under the Exchange Act no later than five business days prior to the applicable meeting;
•require shareholder nominees and board nominees to provide any additional information necessary to permit the Board to determine the nominee’s independence;
•provide that if Altria increases the number of directors to be elected to the Board and does not make a public announcement naming all of the nominees for director or specifying the size of the increased Board at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice required by the By-Laws will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to Altria’s secretary not later than the close of business on the tenth day following the day on which the public announcement naming all nominees or specifying the size of the increased Board is first made by Altria; and
•make various other updates, including clarifying, ministerial and conforming changes.
The foregoing description of amendments to the By-Laws does not purport to be complete and is qualified in its entirety by reference to the full text of the By-Laws, a copy of which is attached as Exhibit 3.1 and is incorporated by reference in this Item 5.03.