Advance Notice Bylaws

Summary

Advance notice bylaws

Provisions with regard to director nominations as well as other stockholder proposals
Designed to give directors adequate time to evaluate and respond to stockholder proposals

Recent decisions by Delaware chancery court have limited application of advance notice bylaw provisions

In each case, court ruled that advance notice
bylaw was not applicable to director nominations
by dissident stockholders
The rulings have generated a lot of commentary and suggested bylaw revisions

Developments

Wal-Mart Stores

Sample of Bylaw Provisions

Sample of bylaws from Dow Component companies, which have not been modified in response to recent Delaware chancery court rulings

Modified advance notice bylaws will be posted when available by public announcement or EDGAR filing
Companies may wait to amend bylaws after conclusion of appellate process for Jana Master Fund v. CNET Networks
See commentary below for suggested revisions to advance notice bylaw provisions

Home Depot

Court Cases

Delaware chancery court issued another ruling that limits application of an advance notice bylaw

Office Depot bylaws
Office Depot proxy statement
Office Depot reported to stockholders on 4.18.08 that Alan Levan and his company Woodbridge have stated that they no longer intend to nominate candidates to replace two directors

Ruling states director nominations and elections are business within the meaning of the bylaw provision

However, because election of directors was included in the notice of meeting as a matter of business to be voted on by shareholders
Dissident stockholder did not have to comply with the advance notice bylaw

Delaware chancery court held that CNET Network's advance notice bylaw applies only to Rule 14a-8 precatory proposals