Allison Transmission Holdings Inc. announced that its board of directors is implementing a number of corporate governance enhancements.

Effective immediately, Allison has appointed two new independent directors:

• Stan Askren, chairman, president and CEO of HNI Corp., and
• Richard Lavin, former president and CEO of Commercial Vehicle Group Inc. and former group president, Caterpillar Inc.

In addition, the company announced that James Star, president and CEO of Longview Asset Management LLC, one of the company’s nominees, will be standing for election at the 2016 Annual Meeting. The company also is seeking stockholder approval to declassify the board, so that the entire board will be annually elected beginning at the 2017 Annual Meeting. The company will be adopting a majority voting standard for the election of directors in uncontested elections; and will be making proxy access available to Allison stockholders beginning at the 2017 Annual Meeting.

Lawrence Dewey, chairman of the board of directors and CEO of Allison Transmission, said, “We are pleased to announce three new independent directors, each of whom brings valuable experience and skills that enhance our already strong board. Stan and Rich have significant international operating and executive leadership experience, including Rich’s vast expertise in Asian markets, while James, upon election, will represent the second significant stockholder to serve on our board and broaden the board’s financial expertise. We look forward to benefitting from their contributions as we continue to execute on our strategic priorities and drive value for all Allison stockholders.”

Gregory Spivy, partner at ValueAct Capital and a member of the board of directors, added, “As a significant Allison stockholder and a board member, I stand fully behind the board’s decision to add three new independent directors and implement the corporate governance enhancements announced today. These are important steps that underscore the board’s alignment with stockholders and serve the best interests of the company and all Allison stockholders.”

Enhancing Board Independence and Range of Expertise

With the appointments of Askren and Lavin, the Allison board will be expanded to include 11 directors, 10 of whom are independent, and six of whom, including Star, will have joined the board in the past two years. Askren and Lavin bring deep and relevant industry experience to the board, including CEO-level leadership backgrounds at large public companies and public company board experience. Star adds significant financial expertise and the perspective of a second large stockholder to the Allison board.

Star will be nominated on the company’s slate for election at the 2016 Annual Meeting to succeed Gregory Ledford, who previously announced his decision to retire from the Allison Board when his current term expires at the 2016 Annual Meeting. Askren will serve as a Class II director with a term expiring at the 2017 Annual Meeting. Lavin will serve as a Class III director with a term initially scheduled to expire at the 2018 Annual Meeting, although Lavin’s term will expire at the 2017 Annual Meeting if the company’s board declassification proposal is approved by Allison stockholders.

Corporate Governance Enhancements  

Allison’s Board approved the following corporate governance enhancements:

• Board Declassification. The Allison Board approved, and will seek stockholder approval at the 2016 Annual Meeting to adopt, a charter amendment to declassify its board of directors, such that all directors will be elected annually commencing with the 2017 Annual Meeting. If stockholders approve the charter amendment to declassify the Board at the 2016 Annual Meeting, the newly appointed directors and all incumbent directors will stand for election at the 2017 Annual Meeting.

• Adoption of Majority Voting Standard. The Allison Board amended the company’s bylaws to adopt a majority voting standard for uncontested director elections. This majority voting standard requires directors to be elected by the affirmative vote of a majority of the votes cast. Any incumbent director who does not receive at least a majority of the votes cast will be required to tender his or her resignation to the board of directors. The majority voting standard for director elections will be effective for the 2016 Annual Meeting, unless the election of directors is contested at the meeting.

• Implementation of Proxy Access. The Allison Board amended the company’s bylaws to provide proxy access for Allison stockholders, which allows Allison stockholders to include their own nominees in the company’s proxy materials, along with candidates nominated by Allison’s board of directors. Allison’s bylaw amendment specifies a 3 percent/three-year holding requirement for eligibility. Under the amendment, stockholders that meet the eligibility threshold and comply with certain procedural and disclosure requirements may include in Allison’s proxy materials stockholder-nominated director candidates to comprise up to 25 percent of the available board seats. Proxy access will be available to Allison stockholders beginning at the 2017 Annual Meeting.

Dewey added, “The Allison Board continuously reviews our governance practices and board composition to ensure that we are aligned with the interests of all stockholders. Over the past several months, we have focused on ways that Allison could strengthen both of these areas and we took into account the perspective of our stockholders. We worked to thoughtfully implement these changes and are confident that the steps announced today best serve stockholder interests.

The company also announced that its 2016 Annual Meeting will be held on May 12.