JANA Master Fund, Ltd. v. CNET Networks, Inc.

JANA Master Fund, Ltd. (JANA) (plaintiff) owned common stock of CNET Networks, Inc. (CNET) (defendant). JANA wanted to replace two CNET directors, increase the board’s size, and nominate new directors. JANA advised CNET in writing that it intended to solicit proxies from CNET’s shareholders and to request the stockholder list for the purpose of communicating with shareholders and soliciting proxies. CNET refused to provide the stockholder list, maintaining that JANA’s proposed proxy solicitation did not comply with company bylaws. A CNET bylaw provided that any shareholder who owned at least $1,000 of CNET stock for at least one year “may seek” to transact other business at an annual meeting if CNET’s secretary received written notice by certified mail at least 120 days before CNET’s proxy materials were to be sent to shareholders, and the notice complied with federal securities laws governing CNET’s obligation to include the proposal in its proxy statement. If CNET’s annual meeting were to be held as scheduled, JANA would have held CNET shares for eight months. JANA sought a declaration that the bylaw was inapplicable to JANA or that CNET’s interpretation was invalid. JANA argued that the bylaw applied only to proposals a shareholder wanted CNET to include in management’s proxy materials pursuant to Securities and Exchange Commission (SEC) Rule 14a-8. CNET contended that nothing in the bylaw limited its applicability to proposals under Rule 14a-8.