Delaware General Assembly

CHAPTER 91

AN ACT to Amend Chapter 65 of the Revised Code of Delaware Relating to Corporations.

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met, (Two-thirds of all the members elected to each branch thereof concurring therein):

Section 1. That Section 5b of the said Chapter 65 of the Revised Code of Delaware, being Section 1919 B thereof, be amended by striking out said Section and inserting in lieu thereof the following:

1919 B, Sec. 5b. Definition of Term "Certificate of Incorporation" :--The term "Certificate of Incorporation" as used in this Chapter, unless the context shall otherwise require, shall include all certificates filed pursuant to Sections 6, 13, 25, 26, 27 or 28 of this Chapter and any agreement of consolidation or merger filed pursuant to Section 59 of this Chapter.

Section 2. That Section 17 of the said Chapter 65 of the Revised Code of Delaware, being Section 1931 thereof, be amended by striking out said Section and inserting in lieu thereof the following:

1931, Sec. 17. Power of Stockholders to Vote in Person or by Proxy ; Limitation of Power; Closing of Transfer Books or Fixing Date for Determination of Stockholders of Record for Certain Purposes ; Cumulative Voting; Quorum :--Unless otherwise provided in the Certificate of Incorporation, each stockholder, shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock held by such stockholder, but no proxy shall be voted on after three years from its date, unless said proxy provides for a longer period, and except where the transfer books of the corporation shall have been closed or a date shall have been fixed as a record date for the determination of its stockholders entitled to vote, as hereinafter provided, no share of stock shall be voted on at any election for directors which shall have been transferred on the books of the corporation within twenty days next preceding such election of directors.

The Board of Directors shall have power to close the stock transfer books of the corporation for a period not exceeding fifty days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect or for a period of not exceeding fifty days in connection with obtaining the consent of stockholders for any purpose ; provided, however, that in lieu of closing the stock transfer books as aforesaid, the by-laws may fix or authorize the Board of Directors to fix in advance a date, not exceeding fifty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid.

The Certificate of Incorporation of any corporation may provide that at all elections of directors of such corporation, each stockholder shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as he may see fit, which right when exercised, shall be termed cumulative voting.

The provisions of this Section shall not apply, however, to corporations not for profit, for which it is desired to have no capital stock. Unless otherwise provided in the Certificate of Incorporation of a corporation which is to have no capital stock, or in an amendment thereto, each member of such corporation shall at every meeting of members be entitled to one vote in person or by proxy, but no proxy shall be voted on after three years from its date, unless said proxy provides for a longer period.

Subject to the provisions of this Chapter in respect of the vote that shall be required for a specified action, the Certificate of Incorporation or by-laws of any corporation may specify the number of shares and/or the amount of other securities having voting power the holders of which (or in the case of a corporation with no capital stock, the number of the members thereof having voting power who) shall be present or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business.

Section 3. That Section 26 of the said Chapter 65 of the Revised Code of Delaware, being Section 1940 thereof, be amended by striking out said Section and inserting in lieu thereof the following:

1940, Sec. 26. CERTIFICATE OF INCORPORATION; HOW AMENDED; WHEN CORPORATION HAS CAPITAL STOCK; WHEN CORPORATION HAS NO CAPITAL STOCK :Any corporation of this State existing prior to the tenth day of March, 1899, whether created by Special Act, or general law, or any corporation created under the provisions of this Chapter, may, from time to time, when and as desired, amend its Certificate of Incorporation by addition to its corporate powers and purposes, or diminution thereof, or both ; or by substitution of other powers and purposes, in whole or in part, for those prescribed by its Certificate of Incorporation ; or by increasing or decreasing its authorized capital stock or reclassifying the same, by changing the number, par value, designations, preferences, or relative, participating, option, or other special rights of the shares, or the qualifications, limitations or restrictions of such rights, or by changing shares with par value into shares without par value, or shares without par value into shares with par value either with or without increasing or decreasing the number of shares; or by changing its corporate title; or by making any other change or alteration in its Certificate of Incorporation that may be desired, and any or all such changes or alterations may be affected by one certificate of amendment; provided that every Certificate of Incorporation as so amended, changed or altered, shall contain only such provisions as it would be lawful and proper to insert in an original Certificate of Incorporation made at the time of making such amendment.

Whenever issued shares having par value are changed into the same or a greater or less number of shares without par value, whether of the same or of a different class or classes of stock, the aggregate amount of the capital of the corporation represented by such shares without par value shall be the same as the aggregate amount of capital represented by the shares so changed ; and whenever issued shares without par value are changed into other shares without par value to a greater or less number, whether of the same or of a different class or classes, the amount of capital represented by the new shares in the aggregate shall be the same as the aggregate amount of capital represented by the shares so changed. The certificate of amendment of any Certificate of Incorporation effecting any change in the issued shares of the corporation shall set forth that the capital of the corporation will not be reduced under or by reason of said amendment.1. If the corporation has a capital stock, its Board of Directors shall adopt a resolution setting forth the amendment proposed, declaring its advisability, and calling a meeting of the stockholders entitled to vote in respect thereof, for the consideration of such amendment. Said meeting shall be called and held upon such notice as the certificate of incorporation or by-laws of the corporation shall provide, or, in the absence of such provision, upon notice thereof to each stockholder so entitled to vote, either delivered to such stockholder or mailed to him, at his postoffice address, if known, at least ten days before the date fixed for said meeting, said notice to set forth such amendment in full or a brief summary of the changes to be effected thereby, as the Directors shall deem advisable. At said meeting a vote of the stockholders so entitled to vote, by ballot, in person or by proxy, shall be taken for and against the proposed amendment, which vote shall be conducted by two Judges appointed for the purpose, either by the directors or by the said meeting. Said judges shall decide upon the qualifications of voters, and accept their votes, and when the vote is completed, count and ascertain the number of shares voted respectively for and against the amendment, and shall declare whether the persons or bodies corporate holding the majority of the voting stock of said corporation (or of each class of stock entitled to vote thereon, when such vote is to be taken by classes, as herein provided) have voted for or against the proposed amendment ; and shall make out a certificate accordingly, stating the number of shares of stock, issued and outstanding and entitled to vote thereon, and the number of shares voted for and the number of shares voted against the amendment respectively, and shall subscribe and deliver said certificate to the Secretary of the corporation. If it shall appear by said certificate of the Judges that the persons or bodies corporate holding the majority of the stock of said corporation entitled to vote (or of each class of stock when such vote is to be taken by classes, as hereinafter provided) have voted in favor of the amendment, a certificate setting forth the amendment and certifying that such amendment has been duly adopted in accordance with the provisions of this Section shall be made under the seal of the corporation and signed by its President or a Vice President, and its Secretary or an Assistant Secretary and the President or such Vice-President shall acknowledge the said certificate before an officer authorized by the laws of Delaware to take acknowledgments of deeds ; and the said certificate, so executed and acknowledged shall be filed in the office of the Secretary of State, and a copy thereof, certified by said Secretary of State, shall be recorded in the office of the Recorder of the County in which the original Certificate of Incorporation is recorded ; or if the corporation shall have been created by special public act of the Legislature, then said certificate shall be recorded in the office of the Recorder of any County where the business of the said corporation may be conducted. And upon so filing and recording the same, the Certificate of Incorporation of said corporation shall be deemed to be amended accordingly ; provided, however, that if any such proposed amendment would alter or change the preferences, special rights or powers given to any one or more classes of stock, by the Certificate of Incorporation, so as to affect such class or classes of stock adversely, or would increase or decrease the amount of the authorized stock of such class or classes of stock, or would increase or decrease the par value thereof, then the holders of the stock of each class of stock so affected by the amendment shall be entitled to vote as a class upon such amendment, whether by the terms of the Certificate of Incorporation such class be entitled to vote or not ; and the affirmative vote of a majority in interest of each such class of stock so affected by the amendment shall be necessary to the adoption thereof, in addition to the affirmative vote of a majority of every other class of stock entitled to vote thereon ; and provided, further, that the amount of the authorized stock of any such class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote, if so provided in the original Certificate of Incorporation or in any amendment thereto which created such class or classes of stock or in any amendment thereto which was authorized by a resolution or resolutions adopted by the affirmative vote of the holders of a majority of such class or classes of stock.

2. If the corporation has no capital stock, then the Board of Directors, managers, trustees, or the governing body thereof shall pass a resolution declaring that every such addition, change or alteration is advisable, and if at the next meeting, held not earlier than fifteen days and not later than thirty days from the meeting at which such resolution shall have been passed, two-thirds of the whole number of the said Board of Directors, managers, trustees, or the governing body, shall vote in favor of such amendment, addition, change or alteration, a certificate thereof shall be signed by the President and Secretary under the corporate seal, acknowledged by said President before any officer authorized by the laws of this State to take acknowledgment of deeds, to be the act and deed and certificate of such corporation, and such certificate acknowledged as aforesaid, together with the assent of two-thirds of the whole number of the members of the said Board of Directors, managers, trustees, or governing body in writing, shall be filed in the office of the Secretary of State, and a copy thereof duly certified by the Secretary of State shall be recorded in the office of the Recorder of the County in which the original Certificate of Incorporation is recorded ; or, if the corporation shall have been created by a special public Act of the Legislature, then said certificate shall be recorded, as above provided, in the county where said corporation has its principal place of business ; and upon so filing and recording the same, the Certificate of Incorporation shall be deemed to be amended accordingly.

Section 4. That Section 27 of the said Chapter 65 of the Revised Code of Delaware, being Section 1941 thereof, be amended by striking out said Section and inserting in lieu thereof the following :

1941, Sec. 27. Retirement of Preferred Stock :--Whenever any corporation organized under this Chapter shall have issued any preferred or special shares it may, subject to the provisions of its Certificate of Incorporation, (1) redeem all or any part of such shares, if subject to redemption, at such time or times, at such price or prices, and otherwise as shall be stated or expressed in the Certificate of Incorporation or (2) at any time or from time to time purchase all or any part of such shares, but in the case of shares subject to redemption, at not exceeding the price or prices at which the same may be redeemed, or (3) at any time or from time to time, by resolution of the Board of Directors, retire any such shares redeemed or purchased out of surplus. The corporation may apply to such redemption or purchase an amount out of its capital which shall not be greater than the sum of (1) that part of the consideration received for such shares which shall be capital pursuant to the provisions of Section 14 of this Chapter and that part of surplus which shall have been transferred and treated as capital in respect of such shares pursuant to the provisions of said Section and (2) any amounts by which the capital of the corporation shall have been increased by other transfers from surplus in accordance with the provisions of said Section 14, except those transfers, if any, which shall have been made in respect of other preferred or special shares. No such redemption or purchase, however, shall be made out of capital unless the assets of the corporation remaining after such redemption or purchase shall be sufficient to pay any debts of the corporation, the payment of which shall not have been otherwise provided for.

Any such shares so redeemed or purchased by the application of capital or otherwise retired pursuant to the provisions of this Section shall, upon the filing and recording of the certificate hereinafter in this Section provided for, and any shares of the corporation surrendered to it on the conversion or exchange thereof into or for other shares of the corporation pursuant to the provisions of the Certificate of Incorporation shall, after such conversion or exchange, have the status of authorized and unissued shares of the class of stock to which such shares belong ; provided, however, that if the Certificate of Incorporation prohibits the reissue of such shares, the authorized capital stock of the corporation of the class to which such shares belong shall, upon such redemption, purchase, retirement, conversion or exchange, be deemed to be, and shall, upon the filing and recording of an appropriate certificate, executed as hereinafter provided, be reduced to the extent of the aggregate par value of the shares so redeemed, purchased, retired, converted or exchanged or, if such shares are without par value, to the extent of the total number of such shares.

Whenever any capital of the corporation is applied to the redemption or the purchase of shares or any shares are retired pursuant to the provisions of this Section 27, a certificate shall be made accordingly under the seal of the corporation and the hands of its President or a Vice President and its Secretary or an Assistant Secretary and the President or such Vice President shall acknowledge said certificate before an officer authorized by the laws of Delaware to take acknowledgment of deeds ; and said certificate, so executed and acknowledged, shall be filed in the office of the Secretary of State and a copy thereof, certified by said Secretary of State, shall be recorded in the office of the Recorder of the County in which the original Certificate of Incorporation is recorded ; and thereupon the capital of the corporation shall be deemed to be and shall thereby be reduced by the amount thereof so applied to such redemption or purchase or the amount thereof represented by the shares so redeemed or purchased, whichever shall be greater, or, in the case of shares redeemed or purchased out of surplus and so retired, by the amount of capital represented by the shares so retired, without the necessity of any other proceedings under any other Section of this Chapter. If the Certificate of Incorporation prohibits the reissue of the shares so redeemed, purchased, retired or surrendered to the corporation on the conversion or exchange thereof into other shares of the corporation, the filing and recording of such certificate containing a recital of such fact shall constitute an amendment to the Certificate of Incorporation effecting a reduction in the authorized capital stock of the corporation to the extent of the aggregate par value of the shares so redeemed, purchased, retired, or surrendered on conversion or exchange, or, if such shares are without par value, to the extent of the total number of such shares. If the shares so redeemed, purchased, retired, or surrendered on conversion or exchange constitute all the outstanding shares of any particular class and the reissue thereof is so prohibited, the filing and recording of such certificate, containing a recital of such fact, shall constitute an amendment to the Certificate of Incorporation effecting a reduction in the authorized capital stock of the corporation by the elimination therefrom of all reference to said particular class of stock.

Nothing in this Section shall be construed as limiting the exercise of the rights given by Section 19 of this Chapter, or as in any way affecting the right of any corporation to resell any of its shares theretofore purchased or redeemed out of surplus for such consideration as shall be fixed from time to time by the Board of Directors.

Section 5. That Section 28 of the said Chapter 65 of the Revised Code of Delaware, being Section 1942 thereof, be amended by striking out said Section and inserting in lieu thereof the following:

1942, Sec. 28. Reduction of Capital:--Any corporation organized under this Chapter may reduce its capital at any time (a) by the written consent of the holders of record of the total number of shares of the corporation having voting powers at the time outstanding or (b) by resolution of its Board of Directors supplemented by a resolution adopted by the holders of record of a majority of said shares at a meeting of the stockholders called for that purpose upon at least ten days' notice given in accordance with the by-laws of the corporation to said stockholders. Any preferred or special shares which have been called for redemption and the payment of the redemption price of which has been provided for shall not be deemed to be outstanding. A certificate stating the fact of such consent or the adoption of such resolution and specifying the manner in and the extent to which the capital of the corporation is to be reduced shall be made under the seal of the corporation and the hands of its President or a Vice-President and its Secretary or an Assistant Secretary and the President or such Vice-President shall acknowledge said certificate before an officer authorized by the laws of Delaware to take acknowledgments of deeds ; and the certificate, so executed and acknowledged, shall be filed in the office of the Secretary of State and a certified copy thereof shall be recorded in the office of the Recorder of the County in which the original Certificate of Incorporation is recorded. Upon the completion of such filing and recording the capital of the corporation shall thereby be so reduced. No such reduction, however, shall be made in the capital of the corporation unless the assets of the corporation remaining after such reduction are sufficient to pay any debts, the payment of which shall not have been otherwise provided for and said certificate shall so state.

Such reduction of the capital of the corporation may be effected by retiring or reducing the outstanding shares of any class or by drawing the necessary number of the outstanding shares of any class by lot for retirement, or by the exchange by the holders of outstanding shares of any class of the shares of such class held by them for a decreased number of shares of stock of the same or of a different class of stock, or by the exchange of shares having par value for shares having no par value, or of shares without par value for shares with par value, or by reducing (in conjunction with appropriate action under Section 26 of this Chapter) the par value of the shares of any class of stock having par value, or, where the amount of capital represented by shares of stock having par value exceeds such par value, by reducing the amount of capital, represented by such shares by an amount not greater than such excess, or by reducing the amount of capital represented by shares of stock having no par value, or, in case the capital shall have been increased by the transfer thereto from surplus pursuant to the provisions of Section 14 of this Chapter and the transfer shall not have been made in respect of any designated class or classes of stock, by retransferring to surplus all or any part of the amount by which capital shall have been so increased, or by the purchase of shares for retirement, either pro rata from all holders of shares of that class of stock or by purchasing such shares from time to time in the open market or at private sale in both cases at not exceeding such price or prices as may be fixed or approved by the stockholders entitled to vote upon the reduction of capital to be effected in that manner, or by retiring shares owned by the corporation. If such reduction of capital of the corporation be effected by retiring shares, then, if the consent or resolution of stockholders above referred to shall so provide, an amount not exceeding that part of the capital of the corporation represented by such shares may be charged against or paid out of the capital of the corporation in respect of such shares.

If such reduction of capital shall have been effected by retiring or reducing the outstanding shares of any class in any of the manners above mentioned, including the retirement of shares already owned by the corporation, the shares so retired or by the acquisition of which in any manner the outstanding shares of such class shall have been reduced shall, upon the filing and recording of the certificate as provided in this Section, if the Certificate of Incorporation does not prohibit the reissue thereof, have the status of authorized and unissued shares of the class of stock to which such shares belong. If the Certificate of Incorporation prohibits the reissue of such shares, the filing and recording of such certificate, containing a recital of such fact, shall constitute an amendment to the Certificate of Incorporation effecting a reduction of the authorized capital stock of the corporation to the extent of the aggregate par value of such shares, or, if such shares are without par value, to the extent of the total number of such shares. If such shares constitute all the outstanding shares of any particular class and the reissue thereof is so prohibited, the filing and recording of such certificate, containing a recital of such fact, shall constitute an amendment to the Certificate of Incorporation effecting a reduction in the authorized capital stock of the corporation by the elimination therefrom of all reference to said particular class of stock.

When any corporation shall decrease the amount of its capital as hereinbefore provided, the above-mentioned certificate shall be published for three weeks successively at least once in each week, in a newspaper published in the county in which the principal office of the corporation is located ; the first publication to be made within fifteen days after the filing of such certificate, and in default thereof the directors of the corporation shall be jointlyand severally liable to any creditors of the corporation who shall suffer loss by reason of the non-compliance with the provisions of this section and the stockholders shall be similarly liable up to the amount of such sums as they may respectively receive of the amount so reduce ; provided that no such decrease of capital shall release the liability of any stockholder, whose shares have not been fully paid, for debts of the corporation theretofore contracted.

Section 6. That Section 133 of the said Chapter 65 of the Revised Code of Delaware, being Section 2047 thereof, be amended by striking out of the fifth line thereof the words "to be made from coal or other materials".

Approved March 29, 1933.