Overview
|
 Shareholder
proposals that seek to place limits on board adoption or extension of poison
pills without shareholder vote or approval by unanimous or independent
board members
Proposed
limits include
- Shareholder ratification
- Unanimous or super-majority board approval
- Independent directors' approval
- Limits on plan term
- Redeem outstanding plan
|
Background
|
Lucian
Bebchuk submitted
proposal to CA, Inc. in 2006
- Lucian Bebchuk sought declaratory judgment
that proposed bylaw is valid under Delaware law
- Court concluded issue in case not yet ripe
for consideration and denied request for declaratory relief
-
Memorandum Opinion and Order 6.22.06
CA, Inc.
submitted proposal to stockholder vote at 2006 annual meeting
CA, Inc.
board subsequently adopted Stockholder Protection Rights Agreement, subject to
stockholder ratification at 2007 annual meeting
Commentary
|
Poison Pill Proposals
 2007
|
 Boeing 3.23.07
- Subject any future poison pill to shareholder
vote
- Same proposal in Home Depot proxy statement
- Proponent: John Chevedden
Not approved
Chevron 3.19.07
- Unanimous board vote for approval of any pill not
ratified by shareholders
- Proponent: Lucian Bebchuk
Not approved
El Paso
3.28.07
- Defines "policy-abandoning decision" as board
decision (not ratified by stockholders) to deviate from existing policy on
adoption or extension of stockholder rights plan
- Prevents such decisions that are not
ratified by stockholders for which there is opposition on the board (affirmative
vote of less than 80% of board members)
- Allows any such decisions that are ratified by
stockholders
- Also calls for stockholder ratification of
director compensation in event of "policy-abandoning decision"
- Proponent:
Lucian Bebchuk
Not approved
Halliburton
4.02.07
- Defines "policy-abandoning decision" as board
decision (not ratified by stockholders) to deviate from existing policy on
stockholder rights plans
- Prevents such decisions that are not
ratified by stockholders for which there is any opposition on board
(affirmative vote of less than 100% of board members)
- Allows any such decisions that are ratified by
stockholders
- Any amendment or repeal of proposed bylaw not
ratified by stockholders would require affirmative vote of all board
members
- Proponent: Lucian Bebchuk
Not approved
Hewlett-Packard
1.23.07
- Subject any future poison pill to shareholder
vote
- Proponent: Nick Rossi
- Included in proxy statement even though company
received no action position below
- No action letter excludable
- May be omitted from the company's proxy materials
under rule 14a-8(i)(10).
Approved
MeadWestvaco 3.26.07
SEC_CODE_REF_0090001192884
- Redeem company's poison pill
- Proponent: William Steiner
Approved
Time Warner
4.09.07
- Bylaw subjects director compensation to
stockholder ratification in event board elects to maintain without stockholder
ratification a poison pill that has a term in excess of one year
- Proponent: Lucian Bebchuk
Not approved
Verizon
3.19.07
- Subject any future poison pill to shareholder
vote
- Proponent: Chris Rossi
Not approved
Walt Disney
1.12.07
- Proposal called for affirmative vote of 75% of
board members to adopt or amend poison pill
- One-year limit on pills not ratified by
shareholders
- Proponent:
Lucian Bebchuk
- Developments after meeting
June 2007
- Walt Disney board adopted
bylaw amendment
that requires affirmative vote of majority of board members (including majority
of independent members) to adopt poison pill
- One-year limit on term unless 1> ratified by
stockholders or 2> extended by board in accordance with voting requirements
specified in bylaws
-
Amended and Restated Bylaws filed as exhibit
to
Form 8-K
Not approved (two-thirds required for approval)
|
Poison Pill Proposals 2008
|
Proxy Disclosures
CVS Caremark
- Reached agreement with Lucian Bebchuk
on adoption of bylaw provisions that limits adoption of poison pills
- Any extension of poison pill that is not ratified
by shareholders must be approved by 75% or more of board members
- Otherwise pill will expire one year after
adoption or last extension
Safeway
- Reached agreement with
Lucian Bebchuk
on adoption of bylaw provisions that limits adoption of poison pills
- Any extension of poison pill that is not ratified
by shareholders must be approved by 75% or more of board members
- Otherwise pill will expire one year after
adoption or last extension
J.C.
Penney
- Reached agreement with
Lucian Bebchuk
on adoption of bylaw provisions that limits adoption of poison pills
- Any extension of poison pill that is not ratified
by shareholders must be approved by 75% or more of board members
- Otherwise pill will expire one year after
adoption or last extension
No-Action Letters
No-Action
Letters Proposal excludable
- John Chevedden
- Proponent requests bylaw or charter amendment to
require shareholder vote on any poison pill
- May be excluded from the company's proxy materials
under rule 14a-8(i)(10)
|
Related Topics
|
