Ca, Inc. v. Afscme Employees Pension Plan

953 A.2d 227 (Del. en banc 2008)


CA (P) is a Delaware corporation with a twelve-person board, all of whom sit for reelection each year. The annual meeting of stockholders is scheduled to be held on September 9, 2008. P intends to file its definitive proxy materials with the SEC on or about July 24, 2008, in connection with that meeting. AFSCME (D), a CA stockholder, is associated with the American Federation of State, County, and Municipal Employees. D submitted a proposed stockholder bylaw for inclusion in the proxy materials for its 2008 annual meeting. The Bylaw dealt with reimbursement of proxy expenses. Under the current bylaws, the decision whether to reimburse election expenses is presently vested in the discretion of P's board of directors. P notified the SEC's Division of Corporation Finance (the 'Division') of its intention to exclude the proposed Bylaw from its 2008 proxy materials. P requested a 'no-action letter.' D opposed this position with its own letter to the SEC. To obtain guidance, the SEC, at the Division's request, certified two questions of Delaware law to this Court. 1. Is the D Proposal a proper subject for action by shareholders as a matter of Delaware law? 2. Would the D Proposal, if adopted, cause P to violate any Delaware law to which it is subject?