## Facts

- National Intergroup, Inc., a Delaware corporation, had a classified (staggered) board structure adopted through 1984 amendments to its certificate of incorporation and bylaws.
- The 1984 charter amendment (Article Eighth) addressed board size and classification and required an 80% vote of outstanding shares to amend Article Eighth “or any similar provision.”
- A corresponding 1984 bylaw provision (Section 16) also addressed board size and classification and required an 80% stockholder vote to amend or repeal it “or any similar provisions.”
- Centaur Partners IV, an investment partnership, and affiliates held about 16.5% of National’s common stock.
- In 1990, Centaur sought to increase the board from nine to fifteen directors and to limit the board’s ability to later change the board size.
- Centaur attempted to implement the change by stockholder written consent and asserted that a simple majority of outstanding shares was sufficient to amend the bylaws.
- National and its directors contended that the proposed amendments were covered by the charter/bylaw supermajority language and required an 80% vote.
- The Court of Chancery entered declaratory relief for National, finding the 80% requirement unambiguous; Centaur appealed.

## Issues

1. Whether National’s certificate of incorporation and bylaws required an 80% vote of outstanding shares to amend bylaws affecting the size of the classified board.
2. Whether the phrase “or any similar provision” was ambiguous such that default majority-rule voting should control.
3. Whether a stockholder-adopted bylaw amendment is invalid if inconsistent with an unambiguous charter-imposed voting threshold.

## Decision

- The Delaware Supreme Court affirmed the judgment for National.
- Article Eighth unambiguously required an 80% supermajority to amend Article Eighth or any “similar” charter or bylaw provision addressing board structure, including board size.
- Centaur’s proposed bylaw amendments increasing the board size and restricting later board-initiated changes were “similar provisions” covered by the 80% requirement.
- Because the proposed bylaw amendments conflicted with the charter’s supermajority condition, they could not be adopted by simple majority consent and were ineffective.

## Legal Principles

- Delaware corporate governance presumes majority rule for stockholder action only absent a valid contrary provision in the certificate of incorporation or bylaws.
- Stockholders may lawfully adopt charter provisions imposing supermajority voting requirements, and clear supermajority requirements are enforced as written.
- A charter provision requiring a supermajority to amend itself “or any similar provision” can reach bylaw amendments that functionally alter the same protected subject matter (e.g., classified board composition, tenure, or size).
- Bylaws must be consistent with the certificate of incorporation; a bylaw amendment inconsistent with an unambiguous charter restriction is void and of no effect.
- When charter language is unambiguous, courts apply its plain meaning and do not override it using default voting rules.

## Conclusion

The court enforced National’s charter-based 80% voting requirement to block a stockholder-led bylaw amendment that would enlarge and entrench control over a classified board, holding that bylaws altering protected board-structure features are subject to—and cannot evade—clear charter supermajority conditions.


Centaur Partners IV v. Nat'l Intergroup, Inc., 582 A.2d 923 (Del. 1990)