International Brotherhood of Teamsters General Fund v. Fleming Cos.
975 P.2d 907 (Okla. 1999)

  • The Federal Courts were deciding a case about how corporations were governed under Oklahoma law. They asked the Oklahoma Supreme Court to answer a question about Oklahoma law:
    • “Does Oklahoma law restrict the authority to create and implement shareholder rights plans exclusively to the board of directors, or may shareholders propose resolutions requiring that shareholder rights plans be submitted to the shareholders for vote at the succeeding annual meeting?”
      • So basically, can shareholders vote to create or reject a rights plan?
  • The Oklahoma Supreme Court found that shareholders may propose resolutions requiring that shareholder rights plans be voted on by shareholders.
    • The Oklahoma Supreme Court noted that the role of shareholders in how a corporation is governed is generally indirect. Otherwise the corporation would not be able to be run efficiently.
    • The Court found that the shareholders have an absolutely right to amend the bylaws.
      • So while the directors have the right (in the absence of bylaws) to create a rights plan, those rights can be restricted by the shareholders by amending the bylaws.
  • Btw, a rights plan is a ‘poison pill’ which is a defensive measure to stop hostile takeovers. The shares are issued with rights attached that if there is a ‘tender offer’ then the shareholder gets the right to buy lots more share of stock at a very reduced price. Those rights aren’t granted to someone who owns more than 10% or so of the stock.
    • That way someone who is trying to take over the company by buying up all the stock won’t be able to get the stock because all the small-time owners can buy it up cheap.