## Facts

- Fleming Companies, Inc., an Oklahoma public corporation, adopted a shareholder rights plan (a “poison pill”) as an anti-takeover measure.
- International Brotherhood of Teamsters General Fund, a Fleming shareholder, prepared a proxy proposal to amend the bylaws to require majority shareholder approval of any shareholder rights plan.
- Fleming refused to include the proposal in its 1997 proxy materials, asserting that rights plans were not a proper subject for shareholder action under Oklahoma law and were within the board’s exclusive authority.
- The shareholder sued in the U.S. District Court for the Western District of Oklahoma seeking inclusion of the proposal in the proxy materials.
- The district court ruled for the shareholder; Fleming appealed to the Tenth Circuit.
- The Tenth Circuit certified to the Oklahoma Supreme Court a state-law question about whether only the board may create and implement rights plans or whether shareholders may propose measures requiring a shareholder vote on such plans.

## Issues

1. Whether Oklahoma corporate law vests exclusive authority in the board of directors to create and implement shareholder rights plans.
2. Whether shareholders may propose resolutions or bylaws requiring that shareholder rights plans be submitted to a shareholder vote at the next annual meeting, absent a contrary charter provision.

## Decision

- The Oklahoma Supreme Court answered the certified question: (A) no exclusive board authority exists under Oklahoma law for shareholder rights plans; (B) shareholders may propose resolutions and bylaws requiring shareholder approval of such plans, assuming the certificate of incorporation does not provide otherwise.
- The court found no Oklahoma statute or precedent granting boards exclusive authority over rights plans or barring shareholder proposals addressing them.
- The court rejected equating statutory references to the “corporation” with exclusive “board” power, treating “corporation” as including shareholder governance rights within the statutory and charter framework.
- After the state-court answer, the Tenth Circuit affirmed the district court’s judgment and remanded for determination of reasonable appellate attorney’s fees.

## Legal Principles

- Under Oklahoma law, boards of directors do not have exclusive statutory authority to create and implement shareholder rights plans.
- Shareholders may use bylaws and related governance mechanisms to restrict board implementation of shareholder rights plans, including requiring submission of such plans to a shareholder vote, unless the certificate of incorporation provides otherwise.
- Statutory allocation of corporate powers to the “corporation” does not, without clearer direction, eliminate shareholder governance authority exercised through proper corporate procedures.

## Conclusion

The case establishes that Oklahoma corporate law permits shareholders, through valid governance channels, to propose and adopt bylaws that condition or restrict a board’s use of poison pills, and it rejects the claim that boards possess exclusive authority over rights plans absent an express charter or statutory grant.


Int'l Bhd. of Teamsters Gen. Fund v. Fleming Cos., 975 P.2d 907 (Okla. 1999)