Opinion ID: 2442278
Heading Depth: 1
Heading Rank: 12

Heading: Model Forms and Commentary

Text: The ABA's Public Company Organizational Documents: Model Forms and Commentary contains the following model charter provision for a staggered board that repeats the language that has been commonly understood for decades to provide for a three year term: The initial Class I Directors shall serve for a term expiring at the first annual meeting of stockholders of the corporation following the filing of this certificate of incorporation; the initial Class II Directors shall serve for a term expiring at the second annual meeting of stockholders following the filing of this certificate of incorporation; and the initial Class III Directors shall serve for a term expiring at the third annual meeting of stockholders following the filing of this certificate of incorporation. Each director in each class shall hold office until his or her successor is duly elected and qualified. Each director in each class shall hold office until his or her successor is duly elected and qualified. At each annual meeting of stockholders beginning with the first annual meeting of stockholders following the filing of this certificate of incorporation, the successors of the class of directors whose terms expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in the third year following the year of their election, with each director in each such class to hold office until his or her successor is duly elected and qualified. [23] Notably, the accompanying commentary explains: The DGCL permits the certificate of incorporation to provide that the board of directors may be divided into one, two, or three classes, with the term of office of those of the first class to expire at the annual meeting next ensuing; of the second class, one year thereafter; of the third class, two years thereafter, and at each annual election held after such classification and election, directors elected to succeed those whose terms expire shall be elected for a three-year term. DGCL Section 141(d). [24] Thus, this model form commentary confirms the understanding that the Annual Meeting Term Alternative intends to provide that each class of directors is elected for a three year term.