Advance Notice Bylaws in Light of Corvex/Williams: Displacing the Placeholder Nomination

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2016-09-03

Posted by Daniel E. Wolf and Sarkis Jebejian, Kirkland & Ellis LLP, on Monday, August 29, 2016
Editor's Note:

Daniel Wolf and Sarkis Jebejian are partners at Kirkland & Ellis LLP who specialize in mergers and acquisitions. The following post is based on a Kirkland publication by Mr. Wolf and Mr. Jebejian.

Advance notice bylaws are a near universal feature of the organizational documents of public companies. In their simplest form, they set a deadline, usually between 60 and 120 days before an upcoming stockholder meeting, by which a stockholder must give notice to the company of its intention to nominate director candidates and identify those nominees. Delaware courts have repeatedly upheld the validity of these provisions holding that they are “useful in permitting orderly shareholder meetings.”