Islandia-based CA to include poison pill provision in its proxy

Long Island Business News, Jun 27, 2006 by Jeremy Harrell

Reversing course, CA Inc. said Tuesday that it will include in its proxy a Harvard professor's proposal allowing shareholders to amend company bylaws.

The Islandia-based software company had previously fought corporate governance expert Lucian Bebchuk's attempt to include a bylaw amendment on CA's proxy - due in July, a month before the company's annual meeting. The proposal, part of a growing trend of greater shareholder involvement, directly challenged corporate policy of leaving bylaw decisions in the hands of directors.

The proposal dealt with CA's poison-pill policy, designed to thwart takeovers by making them prohibitively expensive.

Two months ago, CA rejected Bebchuk's proposal, saying the proposal was a matter for directors. Bebchuk sued, claiming that CA's blocking maneuver violated Delaware law.

Last week, a Delaware judge said the case wasn't ripe because a court needed to rule on something that had passed shareholder muster.

So Thursday, CA said it would give shareholders the opportunity to vote on Bebchuk's proposal.

The Delaware Court has ruled that it should not decide the legality of the bylaw until our stockholders have first voted on it, said CA spokeswoman Jennifer Hallahan in a statement. We currently intend to include the proposal in our proxy.

Bebchuk submitted the poison-pill proposal - along with similar proxy proposals to other public companies - to give shareholders greater control in what are traditionally affairs for the boardroom.