Baxter Charter Amendment Valid Under New Voting Standard

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By Michael Greene

June 23 — Baxter International Inc. validly declassified its board by using a one-share, one-vote standard to count votes on a charter amendment, the Delaware Chancery Court ruled June 22 ( In Re Baxter Int'l Inc., Del. Ch., No. 11609, 6/22/16 ).

Chancellor Andre G. Bouchard in a brief order granted the company relief under Section 205 of the Delaware General Corporation Law, which allows the chancery court to validate corporate acts which are otherwise void or voidable.

Baxter had previously counted stockholder votes on a per-capita basis. However, the company claimed that the voting clause in its charter was nearly identical to a provision that the Delaware Supreme Court found provided for a per-share voting structure: Salamone v. Gorman, 2014 BL 344899 (Del., No. 343 2014, 12/9/14 ).

In May, 77 percent of Baxter's outstanding shares were voted in favor of an amendment that removed the requirement that the company's directors be divided into three classes. The amendment would have failed under the per-capita voting standard because only 6.92 percent of record holders voted in favor of it.

Baxter's counsel—attorneys from Skadden, Arps, Slate, Meagher & Flom LLP—didn't respond to a request for comment.

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The court's order is available at

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