SPONSOR: |
Rep.
Valihura & Rep. M Marshall & Sen. Adams & Sen. DeLuca; |
|
Reps. Hudson, Lavelle,
Stone, Wagner, Johnson, Mitchell; Sens. McDowell, Amick, Simpson |
HOUSE OF REPRESENTATIVES 144th GENERAL ASSEMBLY |
HOUSE BILL NO. 160 |
AN ACT TO AMEND TITLE 8 OF THE |
BE IT ENACTED BY THE GENERAL ASSEMBLY OF
THE STATE OF
Section 1. Amend § 141(d), Title 8, Delaware Code, by
inserting before the last sentence thereof, the following sentence: "Any such provision conferring greater
or lesser voting power shall apply to voting in any committee or subcommittee,
unless otherwise provided in the certificate of incorporation or bylaws.".
Section 2. Amend § 203(b)(4), Title 8, Delaware Code, by
deleting the words "authorized for quotation on The NASDAQ Stock Market;
or (iii)" and adding the word "or" in lieu thereof.
Section 3. Amend § 216(4), Title 8, Delaware Code, by inserting after the words "with respect to that vote on that matter and" the following: ", in all matters other than the election of directors,".
Section 4. Amend § 251(c), Title 8, Delaware Code, by inserting before the period in the fifth sentence thereof the following: ", provided that such certification on the agreement shall not be required if a certificate of merger or consolidation is filed in lieu of filing the agreement".
Section 5. Amend § 251(c)(2), Title 8, Delaware Code, by deleting "certified," therefrom. Section 6. Amend § 251(f), Title 8, Delaware Code, by inserting before the period in the third sentence thereof the following: ", provided that such certification on the agreement shall not be required if a certificate of merger or consolidation is filed in lieu of filing the agreement".
Section 7. Amend § 251(g), Title 8, Delaware Code, by inserting before the period in the third sentence of the second paragraph thereof the following: ", provided that such certification on the agreement shall not be required if a certificate of merger or consolidation is filed in lieu of filing the agreement".
Section 8. Amend § 255(c), Title 8, Delaware Code, by inserting before the period in the fifth sentence thereof the following: ", provided that such certification on the agreement shall not be required if a certificate of merger or consolidation is filed in lieu of filing the agreement".
Section 9. Amend § 255(d), Title 8, Delaware Code, by inserting after the words "members of a corporation" in the third sentence thereof the following: ", provided that such certification on the agreement shall not be required if a certificate of merger or consolidation is filed in lieu of filing the agreement,".
Section 10. Amend§ 258(b), Title 8, Delaware Code, by inserting after the words "adopted, approved," in the last sentence thereof the following: "certified,".
Section 11. Amend § 262(b)(1), Title 8, Delaware Code, by deleting the words "or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.".
Section 12. Amend § 262(b)(2)(b), Title 8, Delaware Code, by deleting the words "or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.".
Section 13. Amend § 262(e), Title 8, Delaware Code, by deleting the text thereof in its entirety and inserting in lieu thereof, the following:
"(e) Within 120 days after the effective date of
the merger or consolidation, the surviving or resulting corporation or any
stockholder who has complied with subsections (a) and (d) hereof and who is
otherwise entitled to appraisal rights, may commence an appraisal proceeding by
filing a petition in the Court of Chancery demanding a determination of the
value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the
effective date of the merger or consolidation, any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholder's demand for appraisal and to
accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be
mailed to the stockholder within 10 days after such stockholder's written
request for such a statement is received by the surviving or resulting
corporation or within 10 days after expiration of the period for delivery of
demands for appraisal under subsection (d) hereof, whichever is later. Notwithstanding subsection (a) of this
section, a person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such person may, in such
person's own name, file a petition or request from the corporation the
statement described in this subsection.".
Section 14. Amend § 262(h), Title 8, Delaware Code, by
deleting the text thereof in its entirety and inserting in lieu thereof, the
following:
"(h) After the Court determines the stockholders
entitled to an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including any rules
specifically governing appraisal proceedings.
Through such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation, together with interest, if any, to
be paid upon the amount determined to be the fair value. In determining such fair value, the Court
shall take into account all relevant factors.
Unless the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through the date of
payment of the judgment shall be compounded quarterly and shall accrue at 5%
over the Federal Reserve discount rate (including any surcharge) as established
from time to time during the period between the effective date of the merger
and the date of payment of the judgment.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, proceed to trial upon the appraisal prior to the final
determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to subsection (f)
of this section and who has submitted such stockholder's certificates of stock
to the Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder is not
entitled to appraisal rights under this section.".
Section 15. Amend Section 262(i), Title 8, Delaware Code,
by deleting the second sentence thereof.
Section 16. Amend Section 262(k), Title 8, Delaware Code,
by adding the following immediately after the words "deems just":
"; provided, however that this
provision shall not affect the right of any stockholder who has not commenced
an appraisal proceeding or joined that proceeding as a named party to withdraw
such stockholder's demand for appraisal and to accept the terms offered upon
the merger or consolidation within 60 days after the effective date of the
merger or consolidation, as set forth in subsection (e) of this section".
Section 17. Sections 1 through 10 shall be effective on
August 1, 2007, and Sections 11 through 16 shall be effective only with respect
to transactions consummated pursuant to agreements entered into after August 1,
2007 (or, in the case of mergers pursuant to Section 253, resolutions of the
board of directors adopted after August 1, 2007), and appraisal proceedings
arising out of such transactions.
SYNOPSIS
Section 1. The amendment to § 141(d) clarifies that when a provision of the certificate of incorporation endows some directors with greater or lesser voting power than other directors, that differentiation of voting power applies both in voting by the board of directors and in voting by committees of the board and in subcommittees, unless otherwise provided in the certificate of incorporation or bylaws. Section 2. This amendment revises the specifications regarding the application of § 203, in order to accommodate ongoing changes in the structure and identification of securities trading markets, including recent changes in the configuration and status of securities trading markets administered by The NASDAQ Stock Market, Inc. Section 3. The amendment to § 216(4) clarifies that, unless otherwise provided in the certificate of incorporation or the bylaws, a plurality vote (and not a majority of the quorum) is the vote required to elect directors where one or more classes or series of stock votes as a separate class or series on the election of directors. Sections
4 through 9. The amendments to § 251
and § 255 eliminate the requirement that an agreement of merger or
consolidation include a certification by the secretary or assistant secretary
of the corporation that the agreement has been adopted by the requisite vote
of the stockholders or members, as applicable, or otherwise approved in
accordance with § 251 without a vote of the stockholders, if a certificate of
merger or consolidation is filed in lieu of filing the agreement. The certification requirement for a Section 10. The amendment to § 258(b) clarifies that the agreement of merger or consolidation must also be certified by each of the constituent foreign corporations in accordance with the laws under which each was formed. Sections 11-12. These amendments revise the specifications regarding the application of § 262 and the availability of appraisal rights, in order to accommodate ongoing changes in the structure and identification of securities trading markets, including recent changes in the configuration and status of securities trading markets administered by The National Association of Securities Dealers, Inc. Sections 13 and 16. The amendment to § 262(k) and an amendment to § 262(e) clarify the right of a stockholder who has demanded appraisal to withdraw that demand and receive the merger consideration at any time within 60 days after the effective date of the merger, even if a petition for appraisal has been filed, as long as that stockholder has not filed such a petition or otherwise joined the proceeding as a named party. Another amendment to § 262(e) enables beneficial holders of shares of stock held in street name to (i) file petitions for appraisal, and (ii) request a statement of shares with respect to which demands for appraisal have been received, in their own name rather than in the name of the stockholder of record. Sections 14 and 15. These Sections amend the approach to awarding interest in appraisal proceedings, principally by establishing a presumption that interest is to be awarded for the period from the effective date of the merger until the date of payment of judgment, compounded quarterly and accruing at the rate of 5% over the Federal Reserve discount rate, giving effect to any variation in that rate during that period. The Court of Chancery may depart from this presumptive approach for good cause, in order, for example, to avoid an inequitable result such as rewarding, or insufficiently compensating for, improper delay of the proceeding or unreasonable or bad faith assertion of valuation claims. The amendments to § 262(h) also clarify that the Court of Chancery in appraisal proceedings does not determine the fair value of shares on its own initiative, and that appraisal proceedings are adversary proceedings to be litigated in accordance with generally applicable rules of the Court of Chancery. Section 17. The amendment describes the effective time for the amendments. |