The Resignation Guideline sets a demanding director resignation governance guideline to reflect shareholder voting sentiment in
director elections. Missouri corporate law states that a director shall hold office for the term for which he or she is elected or until his or her successor shall
have been elected and qualified. An incumbent director who fails to receive the required vote for election may continue to serve as a holdover director.
The proposed Resignation Guideline sets a demanding director resignation review process, requiring directors to articulate a compelling reason or reasons
when they reject a tendered resignation and allow an unelected director to continue to serve. Importantly, the Resignation Guideline further holds that if a
holdover director again fails to be re-elected at the next annual meeting of shareholders, a new tendered resignation will be effective ninety days following the
election vote certification. While the Resignation Guideline provides the Board latitude to reject the initial resignation of an incumbent director who fails to
receive majority vote support, it honors the shareholder vote as the final word on a holdover director’s second election defeat.
Shareholder director election voting rights under Missouri corporate law are foundational rights in the governance of corporations. The majority vote director
election standard adopted by the Company gives shareholders voting rights that have legal effect. It is important that corporate director resignation policies,
guidelines, and bylaws not undermine shareholder voting rights. The proposed Resignation Guideline establishes shareholder voting in director elections as a
more consequential governance right, striking a proper balance between board discretion and shareholder voting rights.