CHAPTER 376
FORMERLY
SENATE BILL NO. 467
AN ACT TO AMEND TITLE 8, DELAWARE CODE, RELATING TO THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each House thereof concurring therein):
Section 1. Amend §102(a)(4), Title 8, Delaware Code by deleting the words "which are not organized for profit and from the fourth sentence of such subsection,
Section 2. Amend §104, Title 8, Delaware Code by deleting therefrom the reference to "§241-245" and inserting in lieu thereof the reference "§241-243, 245".
Section 3. Amend §145(e), Title 8, Delaware Code by deleting from the first sentence thereof the phrase "a civil or criminal" and inserting in lieu thereof the phrase "any tiv11, criminal, administrative or investigative", and by inserting the parenthetical phrase "(Including attorneys' fees)" after the word "expenses" and before the word "incurred" in the first and second sentences thereof.
Section 4. Amend §151(b), Title 8, Delaware Code by deleting that subsection and inserting in lieu thereof the following:
"(b) The stock of any class or series may be made subject to redemption by the corporation at its option or at the option of the holders' of such stock or upon the happening of a specified event; provided, however, that at the time of such redemption the corporation shall have outstanding shares of at least one class or series of stock with full voting powers which shall not be subject to redemption. Notwithstanding the limitation stated in the foregoing proviso:
(1) Any stock of a regulated investment company registered under the Investment Company Act of 1940, as heretofore or hereafter amended, may be made subject to redemption by the corporation at its option or at the option of the holders of such stock.
(2) Any stock of a corporation which holds (directly or indirectly) a license or franchise from a governmental agency to conduct its business or is a member of a national securities exchange, which license, franchise or membership is conditioned upon some or all of the holders of its stock possessing prescribed qualifications, may be made subject to redemption by the corporation to the extent necessary to prevent the loss of such license, franchise or membership or to reinstate it.
Any stock which may be made redeemable under this section may be redeemed for cash, property or rights, including securities of the same or another corporation, at such time or times, price or prices, or rate or rates, and with such adjustments, as shall be stated in the certificate of incorporation or in the resolution or resolutions providing for the issue of such stock adopted by the board of directors pursuant to subsection (a) of this section."
Section 5. Amend §170(a), Title 8, Delaware Code by inserting the phrase ", or to its members if the corporation is a nonstock corporation organized for profit," in the first sentence thereof after the words "capital stock" and before the word "either".
Section 6. Amend §212, Title 8, Delaware Code by designating subsection "c" thereof as subsection "e" and by adding new subsections (c) and (d) thereto as follows:
"(c) Without limiting the manner in which a stockholder may authorize another person or persons to act for him as proxy pursuant to subsection (b) of this section, the following shall constitute a valid means by which a stockholder may grant such authority:
(1) A stockholder may execute a writing authorizing another person or persons to act for him as proxy. Execution may be accomplished by the stockholder or his authorized officer, director, employee or agent signing such writing or causing his or her Signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature.
(2) A stockholder may authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information upon which they relied.
(d) Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to subsection (c) of this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission."
Section 7. Amend §228(b), Title 8, Delaware Code by deleting from the first sentence thereof the word "stockholders" and inserting in lieu thereof the word "members'.
Section 8. Amend §228(c), Title 8, Delaware Code by inserting the words "or members" in the first sentence thereof between the word "stockholders" and the word "are".
Section 9. Add a new §231 to Title 8, Delaware Code as follows:
"§231 Voting Procedures and Inspectors of Elections.
(a) The corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report
thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more Inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.
(b) The inspectors shall (i) ascertain the number of shares outstanding and the voting power of each, (ii) determine the shares represented at a- meeting and the validity of proxies and ballots, (i11) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares represented at- the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
(c) The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.
(d) In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with §212(c)(2), ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to subsection (b)(v) of this section shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable.
(e) Unless otherwise provided in the certificate of incorporation or bylaws, this section shall not apply to a corporation that does not have a class of voting stock that is (i) listed on a national securities exchange, (11) authorized for quotation on an interdealer quotation system of a registered national securities association, or (iii) held of- record by more than 2,000 stockholders."
Section 10. Amend §242, Title 8, Delaware Code to add a new subsection (c) thereto as follows:
"(c) The resolution authorizing a proposed amendment to the certificate of incorporation may provide that at any time prior to the filing of the amendment with the Secretary of State, notwithstanding authorization of the proposed amendment by the stockholders of the corporation or by the members of a nonstock corporation, the board of directors or governing body may abandon such proposed amendment without further action by the stockholders or members."
Section 11. Amend §251(d), Title 8, Delaware Code by inserting the parenthetical phrase "(or a certificate in lieu thereof)" in the first sentence thereof between the phrase the agreement" and the phrase "with the Secretary of State".
Section 12. Amend §251(f), Title 8, Delaware Code by deleting the third sentence thereof and inserting the following in lieu thereof:
If an agreement of merger is adopted by the constituent corporation surviving the merger, by action of its board of directors and without any vote of its stockholders pursuant to this subsection, the secretary or assistant secretary of that corporation shall certify on the agreement that the agreement has been adopted pursuant to this subsection and, (i) if it has been adopted pursuant to the first sentence of this subsection, that the conditions specified in that sentence have been satisfied, or (ii) if It has been adopted pursuant to the second sentence of this subsection, that no shares of stock of such corporation were issued prior to the adoption by the board of directors of the resolution approving the agreement of merger or consolidation."
Section 13. Amend §254(b), Title 8, Delaware Code by deleting that subsection and inserting in lieu thereof the following:
"(b) Any 1 or more corporations of this State may merge or consolidate with 1 or more joint-stock associations, except a joint-stock association formed under the laws of a state which forbids such merger or consolidation. Such corporation or corporations and such 1 or more joint-stock associations may merge into a single corporation, or joint-stock association, which may be any 1 of such corporations or joint-stack associations, or they may consolidate into a new corporation or joint-stock association of this State, pursuant to an agreement of merger or consolidation, as the case may be, complying and approved in accordance with this section. The surviving or resulting entity may be organized for profit or not organized for profit and if the surviving or resulting entity is a corporation, it may be a stock corporation or a nonstock corporation."
Section 14. Amend §254(c), Title 8, Delaware Code by deleting that subsection and inserting in lieu thereof the following:
"(c) Each such corporation and joint-stock association shall enter into a written agreement of merger or consolidation. The agreement shall state: (1) the terms and conditions of the merger or consolidation; (2) the mode of carrying the same into effect; (3) the manner of converting the shares of stock of each stock corporation, the Interest of members of each nonstock corporation, and the shares, memberships or financial or beneficial interests in each of the joint-stock associations into shares or other securities of a stock corporation or membership interests of a nonstock corporation or into shares, memberships, or financial or beneficial interests of the joint-stock association surviving or resulting from such merger or consolidation, and, if any shares of any such stock corporation, any membership interests of any such nonstock corporation, or any shares, memberships or financial or beneficial interests in any such joint-stock association are not to be converted solely into shares or other securities of the stock corporation or membership interest of the nonstock corporation or into shares, memberships, or financial or beneficial interests of the joint-stock association surviving or resulting from such merger or consolidation, the cash, property, rights or securities of any other corporation or entity which the holders of shares of any such stock corporation, membership interests of any such nonstick corporation, or shares, memberships or financial or beneficial interests of any such joint-stock association are to receive in exchange for, or upon conversion of such shares, membership interest or shares, memberships or financial or beneficial interests, and the surrender of any certificates evidencing them, which cash, property, rights or securities of any other corporation or entity may be in addition to or in lieu of shares or other securities of the stock corporation or membership interests of the nonstock corporation or shares, memberships, or financial or beneficial interests of the joint-stock association surviving or resulting from such merger or consolidation; and (4) such other details or provisions as are deemed desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in lieu of the issuance of fractional shares where the surviving or resulting entity is a corporation. There shall also be set forth in the agreement such other matters or provisions as shall then be required to be set forth in certificates of incorporation or documents required to establish and maintain a joint-stock association by the laws of this State and that can be stated in the case of such merger or consolidation. Any of the terms of the agreement of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, provided that the manner in which such facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger or consolidation."
Section 15. Amend §254(d), Title 8, Delaware Code by deleting the word The which appears as the first word of the second sentence of that subsection and inserting in lieu thereof the phrase "Where the surviving or resulting entity is a corporation, the". by deleting the phrase the surviving or resulting corporation" from that portion of the third sentence thereof which appears prior to the colon and inserting in lieu thereof the phrase "where the surviving or resulting entity is a corporation It"' and by inserting at the end of such subsection the following sentence: "Where the surviving or resulting entity is a joint-stock association, the agreement shall be filed and recorded and shall be effective for all purposes when filed in accordance with the laws regulating the- creation of joint-stock associations."
Section 16. Amend §254(e), Title 8, Delaware Code by deleting the word The which appears as the first word of the second sentence thereof and inserting in lieu thereof the phrase "Where the surviving or resulting entity is a corporation, the".
Section 17. Amend §254(f), Title 8, Delaware Code by deleting that subsection and inserting in lieu thereof the following:
"(f) Nothing in this section shall be deemed to authorize the merger of a charitable nonstock corporation or charitable joint-stock association into a stock corporation or joint-stock association if the charitable status of such nonstock corporation or joint-stock association would be thereby lost or impaired, but a stock corporation or joint-stock association may be merged into a charitable nonstock corporation or charitable joint-stock association which shall continue as the surviving corporation or joint-stock association."
Section 18. Amend §256, Title 8, Delaware Code by deleting from the caption and text thereof the comma and word ", nonprofit" wherever they so appear.
Section 19. Amend 5262(d)(1), Title 8, Delaware Code by deleting from the first sentence thereof the phrase "entitled to such appraisal rights" and inserting in lieu thereof the phrase who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsections (b) or (c) hereof".
Section 20. Amend §262(d)(2), Title 8, Delaware Code by inserting in the last sentence thereof the word "thereby" between the words "intends" and 'to".
Section 21. Amend §280(a)(2), Title 8, Delaware Code by deleting the period at the end of the first sentence of that subsection and inserting in lieu thereof the following: ";provided, however, that in the case of a claim filed pursuant to §295 of this title against a corporation or successor entity for which a receiver or trustee has been appointed by the Court of Chancery the time period shall be as provided in §296 of this title, and the 30-day appeal period provided for in §296 shall be applicable." and by deleting the period at the -end of the second sentence of that subsection and inserting in lieu thereof the following: "and, in the case of a notice sent by a court-appointed receiver or trustee and as to which a claim has been filed pursuant to §295, copies of §295 and §296 of this title."
Section 22. Amend 5280(b)(1), Title 8, Delaware Code by inserting the word "contractual" between the words "with" and "claims" in the first sentence thereof, and by inserting the following sentence between the first and second sentences thereof:
"Provided, however, that as used in this §280 and in §281 of this title, the term "contractual claims" shall not include any implied warranty as to any product manufactured, sold, distributed or handled by the dissolved corporation."
Section 23. Amend §280(b)(2), Title 8, Delaware Code by inserting the phrase on a contract" between the words "claimant" and "whose" in the first sentence thereof.
Section 24. Amend §280(c)(2), Title 8, Delaware Code by deleting from the first sentence thereof the phrase "which will be sufficient to provide compensation to claimants whose claims are known to the corporation or successor entity but whose identities are unknown" and inserting in lieu thereof the phrase "which will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity prior to the expiration of applicable statutes of limitation and by deleting the second sentence of such subsection and inserting the following in lieu thereof: The Court of Chancery may appoint a guardian ad ?item in respect of any such proceeding brought under this subsection."
Section 25. Amend §280, Title 8, Delaware Code to add a new subsection (f) thereto as follows:
"(f) The time periods and notice requirements of this section shall, in the case of a corporation or successor entity for which a receiver or trustee has been appointed by the Court of Chancery, be subject to variation by or in the manner provided in, the Rules of the Court of Chancery."
Section 26. Amend §281(a)(4), Title 8, Delaware Code by deleting the phrase "obligations of" from the first sentence of that subsection and inserting in lieu thereof the phrase "claims that are mature, known and uncontested or that have been finally determined to be owing by".
Section 27. Amend §281(b), Title 8, Delaware Code by inserting the word "contractual" between the words "unmatured" and "claims" in the first sentence thereof and by deleting the phrase "which are known to the dissolved corporation or such successor entity but for which the identity of the claimant is unknown" from the first sentence of that subsection and inserting the phrase "which will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity prior to the expiration of applicable statutes of limitation" in lieu thereof.
Section 28. Amend §281, Title 8, Delaware Code to add a new subsection (e) thereto as follows:
"(e) The term 'priority', as used in this section, does not refer either to the order of payments set forth in subparagraphs (1)—(4) of paragraph (a) of this section or to- the relative times at which any claims mature or are reduced to judgment."
Section 29. Amend §502(e), Title 8, Delaware Code by deleting the reference "§283" and inserting in lieu thereof the reference "§284".
Section 30. This 8111 shall become effective on July 1, 1990.
Approved July 17, 1990.