City of Westland Police & Fire Retirement System v. Axcelis Technologies, Inc.

Facts

Axcelis is a Delaware corporation specializing in the manufacture of ion implantation and semiconductor equipment. In 2008, Sumitomo Heavy Industries, Ltd. (SHI) a Japanese company that had been engaged since 1983 with Axcelis as equal partners in a joint venture called SEN made an unsolicited bid to acquire Axcelis for $6. In June Axcelis and SHI entered into a confidentiality agreement to facilitate discussions concerning a possible acquisition of Axcelis. Axcelis held its annual shareholders’ meeting to fill three of seven seats on its classified board. Axcelis follows the plurality voting provisions, under which a director may be elected without receiving a majority of the votes cast. However, the Axcelis board also had adopted a “plurality plus” governance policy. All three directors seeking reelection at the 2008 annual meeting received less than a majority of the votes cast, which triggered the plurality plus governance policy. Thus, the three directors tendered letters of resignation. The board, however, decided not to accept the resignations. In December 2008, Westland sent a demand letter to Axcelis requesting books and records of Axcelis. Axcelis refused.