## Facts

- Winous Co., an Ohio corporation, had a three-member board of directors, the statutory minimum.
- The corporation’s articles and by-laws divided the board into three classes of one director each, with directors serving three-year terms and only one director elected each year.
- An Ohio statute granted shareholders the right to vote cumulatively for directors and prohibited corporations from restricting or qualifying that right, while other statutory provisions authorized classified boards with staggered terms.
- Humphrys, a minority shareholder and former director, challenged the classified-board structure as an unlawful restriction on cumulative voting because only one seat was up for election each year.
- At the January 18, 1954 annual meeting, Humphrys did not give the statutory notice of an intention to vote cumulatively and was not re-elected.

## Issues

1. Whether a classified board consisting of three one-director classes, with only one director elected each year, is invalid because it restricts or qualifies shareholders’ statutory right to vote cumulatively.
2. Whether a shareholder who fails to give the statutory notice required to vote cumulatively may claim deprivation of cumulative voting rights after losing an election.

## Decision

- The Supreme Court of Ohio reversed the court of appeals and upheld the validity of the classified-board structure.
- The court held that classifying directors as permitted by statute is not, by itself, an unlawful restriction or qualification of cumulative voting rights.
- The court stated that the statute guarantees the method of cumulative voting, not minority success in electing a director.
- The court noted that Humphrys failed to provide the required notice of intent to vote cumulatively and therefore could not attribute his electoral loss to denial of cumulative voting.

## Legal Principles

- A statutory right to cumulative voting protects the ability to cast votes cumulatively, not an entitlement to minority representation on the board.
- A corporate governance structure authorized by statute (including a classified, staggered board) is not invalid solely because it makes cumulative voting less effective as a practical matter.
- Statutory provisions addressing cumulative voting and director classification must be read together so that each remains operative.
- When cumulative voting is conditioned on statutory procedures (such as notice), a shareholder’s noncompliance defeats a claim that the right was denied.

## Conclusion

The Ohio Supreme Court upheld a three-member staggered, classified board, ruling that statutory cumulative voting guarantees the voting mechanism but does not assure minority board representation, and it emphasized that a shareholder must satisfy statutory notice requirements to invoke cumulative voting.


Humphrys v. Winous Co., 165 Ohio St. 45, 133 N.E.2d 780 (Ohio 1956)