Nasdaq Files Boring By-Law Tweaks to Stay Delaware Compliant
Published Date: 10/1/2025
Notice
Summary
Nasdaq MRX, LLC wants to update the official rules and documents of its parent company, Nasdaq, Inc., to match new Delaware laws and modern business practices. These changes affect how Nasdaq runs things behind the scenes but won’t cost extra or change trading. The updates are set to happen soon after approval and aim to keep Nasdaq sharp and up-to-date.
Analyzed Economic Effects
10 provisions identified: 9 benefits, 1 costs, 0 mixed.
Limits Officer Monetary Liability
The Certificate would let Nasdaq limit covered officers' monetary liability for breaches of the duty of care (similar to existing director exculpation). This change was approved by Nasdaq's Board on April 23, 2025 and by Nasdaq stockholders on June 11, 2025, and implements the authority in Delaware law (8 Del. C. Section 102(b)(7)).
Universal Proxy Compliance: Missed Steps Can Bar Nominees
Nasdaq would add a rule that if a Proposing Person uses Rule 14a-19 (the SEC universal proxy rule) but then fails to comply with specified parts of that rule, Nasdaq may disregard the proposed nominee and any received proxies or votes. The By-Laws also require, on request, that a Proposing Person deliver reasonable evidence of compliance no later than five business days before the meeting.
Narrower Info Requests for Director Nominees
Nasdaq would narrow what information it may require from a proposed director nominee. The By-Laws change limits requests to information reasonably needed to determine whether the nominee is qualified under Nasdaq's Certificate, By-Laws, exchange rules, or applicable law.
Remove 'Acting in Concert' Language
Nasdaq proposes deleting the phrase "acting in concert" from advance-notice and special-meeting provisions and replacing it with terms like "knowingly coordinating." The change is intended to stop plaintiffs from using the old phrase to find litigation targets.
Clarify 'Affiliate' and 'Competitor' Terms
The By-Laws would add parentheticals clarifying key terms: an "affiliate" is as shown on Nasdaq's most recent Form 10-K, and "principal competitor" is defined as for purposes of Section 8 of the Clayton Antitrust Act of 1914. These clarifications apply to several advance-notice requirements.
Limit on Nominees When Board Size Grows
If the number of directors to be elected at an annual meeting increases effective at that meeting, a Proposing Person may not nominate more nominees than the number of directors to be elected. The By-Laws would add this explicit limit to Section 3.1(d).
Remove 'Sole Discretion' and 'Binding' Board Language
Nasdaq would delete language saying certain Board determinations are "in its sole discretion" or "binding on the Corporation and the stockholders" across multiple By-Laws sections. The change aligns the By-Laws with practice and addresses legal challenges to finality language.
Allow Universal-Proxy Nominees Into Proxy Materials
The By-Laws would make an exception to proxy-access exclusivity so that nominees included pursuant to, and in compliance with, Section 14a-19 of the Exchange Act (the SEC universal proxy rule) may be included in the Corporation's proxy materials.
Give Committees Broader Authority Under Delaware Law
Nasdaq would opt into Section 141(c)(2) of Delaware law and remove certain By-Laws limitations on committee actions, bringing committee authority into conformity with Delaware law and giving committees greater flexibility (including as to stock-related actions).
Remove Cap on Issuer Directors
The By-Laws would delete the current limit that the Board may include at least one but not more than two Issuer Directors, thereby removing the cap on how many Issuer Directors can serve on the Board.
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