137) The court's insistence on the inclusion of a fiduciary out is based on the board's "continuing fiduciary responsibilities to the minority stockholders.
By analogy, if the Delaware Supreme Court found it necessary to include a fiduciary out in instances in which the board and the majority voting shareholders obtained a lock-up, it makes sense that the court would seek to ensure equal protection of minority shareholders in the event that a candidate's election was not in the best interests of the company.
146) The inclusion of a fiduciary-out clause has the potential to make a shareholder-proposed bylaw useless if a board has discretion in exercising its fiduciary out.
noting that the Bylaw, as presently drafted, is impermissible because it fails to include a clause reserving directors' right to exercise fiduciary duties); see also McDonnell, supra note 107, at 664 (noting that the lack of a fiduciary out is damning to a shareholder-proposed bylaw after CA, Inc.
See Posting by Lisa Fairfax to The Conglomerate, supra note 118 (noting the "possibility that [the inclusion of a fiduciary out] would enable directors to challenge the payment of expenses for every successful candidate, thereby defeating shareholders' purpose in adopting the bylaw"); see also McDonnell, supra note 107, at 668 (concluding that if fiduciary outs are required in all proposed bylaws, the result "leaves boards with a degree of discretion that may go against the very point of these bylaws, which seek to limit board discretion in areas in which the shareholders do not trust the board").
at *5-6 (containing Office Depot's argument that the proposal "does not clearly and unambiguously provide a fiduciary out as required by the Delaware Supreme Court").
requiring a fiduciary out in every merger agreement, (3) and for the
contained a no-shop clause with a standard fiduciary out and benign
changed recommendation" fiduciary out, which the merger
NCS board was required to negotiate a fiduciary out clause to protect
effective fiduciary out clause to exercise its continuing fiduciary