Levitt Corp. v. Office Depot, Inc., C.A. No. 3622-VCN (Del. Ch. April 14, 2008)
Plaintiff sought a declaration that it was permitted to nominate two candidates for election to the defendant’s board of directors at the upcoming annual meeting. Defendant had disseminated a notice for its annual stockholder’s meeting which listed the election of twelve members to the board of directors under “items of business” to be taken up at the meeting. Shortly after the company’s notice was sent, plaintiff filed its own preliminary proxy statement soliciting proxies in favor of its two nominees to the board. Defendant contended that plaintiff’s failure to give advance notice of its nominees violated one of its bylaws which provided that in order for business to be conducted at an annual meeting, such business had to be “properly brought before the meeting.” The bylaw also provided that in order to be “properly brought,” such business must be (among other alternatives) “specified in the notice of the meeting (or any supplement thereto) given by or at the direction of the Board of Directors.” Since plaintiff had not provided timely notice of its nominees or otherwise “properly brought” its nomination of directors in accordance with the bylaw, defendant contended that plaintiff was not permitted to nominate directors at the annual meeting. Agreeing with defendant, the Court first held that the term “business” in the bylaw at issue unambiguously included the nomination of directors, thus requiring compliance with the bylaw in connection with nomination of directors. Significantly, the Court refused to consider the fact that prior versions of defendant’s bylaws contained an advance notice provision that specifically dealt with director nominations and that defendant had removed that provision from its bylaws. However, the Court then held that because the company’s notice stated that one of the items of business was to “elect twelve (12) members of the Board of Directors,” and because, as a general matter, nomination of directors is included in the business of electing directors, the bylaw was satisfied by the company’s notice and plaintiff was permitted to nominate two directors at the upcoming annual meeting.