Nasdaq Updates Bylaws to Keep Up with Delaware's Legal Shuffle
Published Date: 10/1/2025
Notice
Summary
Nasdaq, Inc. is updating its official rules and documents to keep up with new Delaware laws and modern business practices. These changes affect Nasdaq’s parent company and aim to make governance smoother and clearer. No big money moves or deadlines are announced yet, but the updates keep Nasdaq sharp and ready for the future.
Analyzed Economic Effects
7 provisions identified: 6 benefits, 0 costs, 1 mixed.
Officer Exculpation Added to Charter
Nasdaq proposes to amend its Certificate so that certain officers may be exculpated from monetary liability for breaches of the duty of care, similar to existing director exculpation. The Board approved the change on April 23, 2025 and stockholders approved the Certificate amendments at the June 11, 2025 Annual Meeting.
Universal-Proxy Compliance and Proxy Access Exception
Nasdaq proposes that if a Proposing Person submits notice under Rule 14a-19 (the SEC universal proxy rule) but later fails to comply with Rule 14a-19(a)(2) or (a)(3), the corporation may disregard those nominations and any related proxies or votes. The By-Laws would also require, on request, that a Proposing Person provide reasonable evidence no later than five (5) business days prior to the meeting that it met Rule 14a-19(a)(3). Separately, Nasdaq would amend Section 3.6(m) to allow nominees included pursuant to Section 14a-19 to be included in proxy materials despite Section 3.6 being the exclusive proxy-access process.
Broader Board and Committee Flexibility
Nasdaq proposes multiple By-Law changes to give the Board and its committees more flexibility: removing limits on the number of Issuer Directors (Section 4.3), opting into Section 141(c)(2) of Delaware law to permit broader committee powers (Section 4.13(a)), deleting one-year term language for committee members (Sections 4.13(d)-(g)), allowing committee quorum calculations based on members then serving (Section 4.13(j)), and removing language that declared certain Board determinations 'binding'.
Limits on Information Required from Nominees
Nasdaq proposes narrowing Section 3.1(b)(i) of its By-Laws so the company may only request information reasonably required to determine whether a proposed director nominee is qualified under the Certificate, By-Laws, applicable exchange rules, or law, and whether the nominee is independent. The change replaces broader, open-ended information requests with a qualifications-focused standard.
Remove 'Acting in Concert' Language
Nasdaq proposes removing the phrase 'acting in concert' and replacing it with 'knowingly coordinating' in advance-notice and special-meeting provisions (e.g., Section 3.1 and 3.2). The filing states this narrows the standard to reduce the potential for plaintiffs to use the 'acting in concert' language to identify litigation targets.
Clarify 'Affiliate' and 'Principal Competitor' Terms
Nasdaq proposes adding parentheticals in multiple advance-notice subsections to define 'affiliate' as shown on Nasdaq's most recent Form 10-K and to define 'principal competitor' by reference to Section 8 of the Clayton Antitrust Act of 1914. These edits appear in Sections 3.1(b)(iii)(I)-(L) and related subsections.
Cap on Number of Nominees When Board Size Rises
Nasdaq proposes amending Section 3.1(d) to limit the number of nominees a Proposing Person may submit when the number of directors to be elected at an annual meeting increases; the number of nominees proposed may not exceed the number of directors to be elected at that meeting. The change is described as a safeguard against proposing surplus nominees.
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