OKLAHOMA CITY -- Fleming Cos. here said last week it will appeal a court ruling that grants shareholders the right to take a binding vote on the distributor's anti-takeover share-rights plan.
tion of future plans without shareholder approval.
The lawsuit that led to last week's ruling was filed in September by the International Brotherhood of Teamsters -- whose pension fund owns 113,000 Fleming shares -- after Fleming turned down the union's request to include the proposal at its 1997 annual meeting. Concerns with the company's stock price had prompted the union to submit a proposal to Fleming in 1995 that asked the board to voluntarily revoke the existing share-rights provision. Although shareholders ultimately voted, by a 2-to-1 margin, in favor of that proposal at the 1996 meeting, Fleming's board decided to retain the existing plan, saying the company's stock was artificially low because of concern with ongoing litigation. Share-rights plans, or "poison pills," typically make unwanted takeovers prohibitively expensive. A Fleming spokesman said his company's plan does not make the company takeover-proof but encourages prospective acquirers to work with the board rather than attempt a hostile takeover.
Many shareholder groups oppose poison pills on the grounds that they depress stock prices by deterring hostile bids and that they protect executives instead of shareholder interests.