"Delaware Court of Chancery Addresses Advance Notice Bylaws"

April 24, 2008 | Skadden, Arps, Slate, Meagher & Flom LLP | Robert B. Pincus, Robert S. Saunders, Edward P. Welch, Nicole A. DiSalvo

Last month, in JANA Master Fund, Ltd. v. CNET Networks, Inc., the Court used contract interpretation principles to interpret an advance notice bylaw “in the manner most favorable to the free exercise of traditional electoral rights.” JANA, an investment fund, sought to gain a majority of the seats on the CNET board by replacing two current directors and by expanding the size of the board from eight to 13. In a controversial decision, the Court interpreted CNET’s advance notice bylaw in favor of JANA, holding that the bylaw “unambiguously applies only to proposals and nominations a shareholder wishes to have included in the corporate proxy materials” pursuant to SEC Rule 14a-8.

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