Opinion ID: 2442278
Heading Depth: 1
Heading Rank: 11

Heading: The Annual Meeting Term Alternative and the Defined Term Alternative in Practice

Text: Although practice and understanding do not control the issue before us, we agree with Airgas that [p]ractice and understanding in the real world are relevant. Here, we find the industry practice and understanding of similar charter language to be persuasive. Of the eighty-nine Fortune 500 Delaware corporations that have staggered boards, fifty-eight corporations use the Annual Meeting Term Alternative. More important, forty-six of those fifty-eight Delaware corporations, or 79%, expressly represent in their proxy statements that their staggered-board directors serve three year terms. Indeed, Air Products itself uses the Annual Meeting Term Alternative in its charter, [21] and represents in its proxy statement that: Our Board is divided into three classes for purposes of election, with three-year terms of office ending in successive years. [22] Also noteworthy is the practice and understanding of corporations that have de-staggered their boards. Ninety-nine of the Fortune 500 Delaware corporations have de-staggered their boards over the last decade. Of those ninety-nine corporations, sixty-four used the Annual Meeting Term Alternative, and an overwhelming majoritysixty-two, or 97%represented in their proxy statements that their directors served three year terms. We cannot ignore this widespread corporate practice and understanding it represents. It supports a construction that the Annual Meeting Term Alternative is intended to provide that each class of directors serves three year terms. Air Products has offered no evidence to the contrary.