Revisiting Advance Notice Bylaws in Light of Recent Delaware Decisions
By Robert R. Carlson and Jeffrey T. Hartlin
In March and April 2008, the Delaware Court of Chancery issued two decisions that place advance notice bylaws at the forefront of corporate governance matters for companies to address before the 2009 proxy season. These decisions reinforce the Court's stated goal of protecting the stockholder franchise and may give activist stockholders even greater opportunity to launch insurgent campaigns and raise a number of other proposals without providing advance notice to companies. Based on these developments and an increasing use of creative synthetic ownership structures, companies are encouraged to revisit their advance notice bylaw provisions.