Case: NYCERS v. Dole Food Company:
· NYCERS owns stock in Dole. They are asking for the same thing as in the last case. For directors to form a committee to evaluate the healthcare reform proposals being made by the company.
· Essentially its making the company less profitable because the cost of healthcare is too much.
· General counsel for Dole wants a shelter, a no action letter, to exclude the proposal.
· Claims it IS related to “ordinary business operations”, “insignificant relation”, and “beyond power to effectuate”.
· Corp has burden of showing the exception applies.
· HOLDS: This is a broad social issue and one that’s continuing in society, this is not within the ordinary business. Exception fails.
· HOLDS: This proposal DOES relate to more then 5% thus its not insignificant. Exception fails.
· HOLDS: Not beyond power to effectuate. They are only asking for a study and a report which is within their power. They aren’t asking the directors to lobby or effectuate a change of law…only study. Exception Fails.
· Include the request in the proxy solicitation.