Delaware Courts Provide Another Narrow Reading of an Advanced Notice Bylaw Provision

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On April 14, 2008, in Levitt Corp. v. Office Depot, Inc., 2008 WL 1724244, the Delaware Chancery Court issued another opinion narrowly construing a bylaw requiring advance stockholder notice of an intent to submit a proposal at an annual stockholders’ meeting. In the Levitt case, the Office Depot bylaws restricted “business” that could be brought before an annual meeting to business specified in

the management’s notice of meeting, or otherwise brought before the meeting by or at the direction at the board of directors or by a stockholder of record who complied with the advance notice bylaws provision. That advance notice provision required that a notice be received by the corporation not less than 120 calendar days before the date the corporation’s proxy statement was released to

stockholders in connection with the prior year’s annual meeting. Levitt Corporation, a stockholder of Office Depot, sought to submit its own two nominees for directors at the annual meeting without giving the advance notice required by the Office Depot bylaws. Although the Office Depot advance notice bylaw did not expressly deal with nomination of directors, the court concluded that because management’s notice of meeting indicated that election of 12 directors would be considered at the annual meeting, that was sufficient to include nomination of directors as an item of “business” to be considered at the meeting, and relieved Levitt Corp. of the need to submit its own advance notice of its proposal to nominate two persons for two of the 12 director positions to be filled at the annual meeting.

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