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FedEx Corporation Agrees to Adopt a Pill-Limiting Bylaw

By Harvard Law School Program on Corporate Governance

FedEx Corporation became the fourth major company this proxy season to reach an agreement with me under which it adopted a pill-limiting bylaw. Under the new bylaw, any poison pill plan adopted by the board without prior stockholder approval shall expire no later than one year following its adoption if not ratified by a stockholder vote.

The agreement followed my submission of a shareholder proposal to amend FedEx’s bylaws. Following the agreement, the board of FedEx adopted the new bylaw and I withdrew the shareholder proposal. While the bylaw?s limitation on poison pills not approved by stockholders is consistent with Fed Ex?s preexisting policy statement on poison pills, the board?s action incorporates this limitation in the company?s legally binding bylaws.

In addition to Fed Ex, other companies that, following my shareholder proposals, agreed to amend their bylaws to incorporate pill-limiting provisions are JCPenney, Safeway, CVS Caremark, Disney, and Bristol-Myers Squibb. I hope that other public companies will follow the example set by these six companies.

I would like to express my appreciation again to Michael Barry and Ananda Chaudhuri from the law firm of Grant & Eisenhofer for their valuable legal advice and legal representation in connection with my shareholder proposals in general and the pill bylaw proposals in particular. I also wish to thank again Greg Taxin and Julie Gresham of Spotlight Capital Management for advising me on engagement with companies.

The amended bylaws of FedEx, filed yesterday with the SEC, and containing the new Section 13 of Article III, are available here.

Full post as published by The Harvard Law School Corporate Governance Blog on July 17, 2008 (boomark / email).