Verso Corporation (NYSE: VRS) today issued the following statement in response to a September 4, 2018, report issued by Institutional Shareholder Services (ISS) relating to the election of directors at Verso’s 2018 Annual Meeting of Stockholders.
We believe that ISS reached the wrong conclusion in failing to recommend that stockholders vote in favor of four of five of Verso’s highly qualified and experienced director nominees. ISS’s recommendation ignores Verso’s transformative success and significant stockholder value creation following emergence from Chapter 11 on July 15, 2016, as well as the roles that each of Messrs. Alan Carr, Eugene Davis, Steven Scheiwe and Jay Shuster have played in those efforts. Rather, ISS’s “withhold” recommendation for these nominees is premised solely on Verso not having removed the supermajority vote requirements contained in our organizational documents and lack of gender diversity on the board.
We note that the supermajority vote provisions contained in Verso’s organizational documents were approved and adopted as a part of Verso’s reorganization only two years ago, and do not believe that such provisions adversely impair stockholder rights. In addition, ISS only recently adopted its policy, effective in 2017, which was after Verso’s supermajority vote provisions were adopted, to treat such supermajority vote provisions as a governance failure resulting in “withhold” recommendations for members of corporate governance and nominating committees. As such, ISS’s recommendation is contrary to the legitimate governance choices of Verso’s stockholders made in 2016 when these provisions were approved for inclusion in Verso’s organizational documents. However, Verso is not averse to the adoption of majority provisions if our stockholders wish such provisions to be included in our organizational documents. Accordingly, after Verso’s 2018 annual meeting of stockholders, the board of directors will consider submitting to our stockholders, at our annual meeting to be held in 2019, a proposal to remove the supermajority vote provisions or impose a sunset requirement on such provisions.
Further, we note that prior to the 2019 annual meeting of stockholders, the Corporate Governance and Nominating Committee of the board of directors expects to seek to identify additional potential director nominees from a candidate pool that includes women and individuals from minority groups.
We believe that all of Verso’s board nominees merit a “For” vote from Verso stockholders.
In addition to the foregoing, Verso notes that ISS maintains in its report that Mr. Davis sits on the boards of the following public companies: Bluestem Group Inc. and Titan Energy LLC. Bluestem Group Inc. is a privately held company that does not have common stock registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Titan Energy LLC filed a form 15 on June 6, 2018 to terminate registration under the Exchange Act.