SPONSOR:

Sen. Adams & Rep. Wagner ;

Rep. Valihura

DELAWARE STATE SENATE

141st GENERAL ASSEMBLY

SENATE BILL NO. 361

AN ACT TO AMEND TITLE 8 OF THE DELAWARE CODE RELATING TO THE GENERAL CORPORATION LAW.

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 Section 103(c)(6), Title 8, Delaware Code, by adding the language "as a public record" after the word "maintained" at the end of the first sentence thereof.

Section 2. Amend Section 141(b), Title 8, Delaware Code, by adding the words ", each of whom shall be a natural person" after the words "1 or more members" in the first sentence thereof.

Section 3. Amend Section 158, Title 8, Delaware Code, by adding at the end thereof the following sentence: "A corporation shall not have power to issue a certificate in bearer form."

Section 4. Amend Section 203(a)(2), Title 8, Delaware Code, by replacing the words "number of shares" with the words "voting stock" and by adding the parenthetical phrase "(but not the outstanding voting stock owned by the interested stockholder)" after the word "outstanding" and before the word "those".

Section 5. Amend Section 203(c)(5), Title 8, Delaware Code, by replacing the words "paragraph (8)" with the words "paragraph (9)".

Section 6. Amend Section 203(c)(8), Title 8, Delaware Code, by adding at the end thereof the following sentence: "Every reference to a percentage of voting stock shall refer to such percentage of the votes of such voting stock."

Section 7. Amend Section 212(a), Title 8, Delaware Code, by adding the words ", voting stock or shares" after the word "stock" each time it appears in the second sentence thereof.

Section 8. Amend Section 223(c), Title 8, Delaware Code, by replacing the words "total number of the shares" with the words "voting stock".

Section 9. Amend Title 8, Delaware Code, by adding thereto a new Section 233 reading in its entirety as follows:

"233. Notice to stockholders sharing an address.

(a) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the corporation under any provision of this chapter, the certificate of incorporation or the bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the corporation.

(b) Any stockholder who fails to object in writing to the corporation, within 60 days of having been given written notice by the corporation of its intention to send the single notice permitted under subsection (a) of this section, shall be deemed to have consented to receiving such single written notice.

(c) This section shall apply to a corporation organized under this chapter that is not authorized to issue capital stock, and when so applied, all references to stockholders shall be deemed to refer to members of such a corporation.

(d) This section shall not apply to 164, 296, 311, 312 or 324 of this chapter."

Section 10. Amend Section 263(b), Title 8, Delaware Code, by adding the word "limited" directly after "not" and immediately preceding "to" in the last sentence of the subsection.

Section 11. Amend Section 311, Title 8, Delaware Code, by re-lettering paragraphs (c) and (d) to become paragraphs (d) and (e), and by adding a new paragraph (c) as follows:

"(c) Upon the issuance of the certificate by the Secretary of State to which subsection (b) of this section refers, the provisions of 211(c) of this title shall govern, and the period of time the corporation was in dissolution shall be included within the calculation of the 30- day and 13-month periods to which 211(c) of this title refers. An election of directors, however, may be held at the special meeting of stockholders to which subsection (a) of this section refers and, in that event, that meeting of stockholders shall be deemed an annual meeting of stockholders for purposes of 211(c) of this title."

Section 12. Amend Section 312(i), Title 8, Delaware Code, by deleting the words "corporation was in dissolution" and substituting in lieu thereof the words "certificate of incorporation of the corporation was forfeited pursuant to 136(b) of this title, or was inoperative or void, or after its expiration by limitation,".

Section 13. Amend Section 395(b), Title 8, Delaware Code, by adding the word "Company" immediately after the word "Holding" and immediately before the word "Act" in the last sentence of the subsection.

Section 14. Amend Section 395(c), Title 8, Delaware Code, by deleting the words "person, firm, association or persons, or" and by replacing the words "person's or entity's" with the word "corporation's".

Section 15. Amend Section 512, Title 8, Delaware Code, by deleting the present Section 512 in its entirety and substituting in lieu thereof the following:

"512. Filing and publication of proclamation. A list of those corporations whose charters were repealed by gubernatorial proclamation pursuant to 511 of this chapter shall be filed in the office of the Secretary of State. On or before October 31 of each calendar year, the Secretary of State shall publish such proclamation on the Internet or on a similar medium for a period of 1 week and shall advertise the website or other address where such proclamation can be accessed in at least 1 newspaper of general circulation in the State of Delaware."

Section 16. This Act shall become effective July 1, 2002.

SYNOPSIS

Section 1. The amendment to Section 103(c)(6) confirms that all instruments filed with the Secretary of State pursuant to Section 103 are permanently maintained as a public record.

Section 2. The amendment to Section 141(b) clarifies that directors must be natural persons.

Section 3. The amendment to Section 158 clarifies that a Delaware corporation may not issue stock certificates in bearer form.

Sections 4, 5, 6, 7 and 8. The amendments to Sections 203(a)(2), 203(c)(8), 212(a) and 223(c) clarify that references to "voting stock" or "shares" therein and elsewhere in the title, including in Sections 203, 223 and 253, are intended to adopt the voting power concept reflected in Section 212(a). The parenthetical phrase added to Section 203(a)(2) is intended to make it clear that while voting stock owned by persons who are directors and also officers and by certain employee stock plans would not be included in determining the total amount of voting stock outstanding to calculate the 85% exemption, that voting stock would be included in the determination of the amount of voting stock owned by the interested stockholder. The amendment to Section 203(c)(5) is intended to refer to the paragraph defining the term "owner". This reference should have been changed when the definition of "stock" was added in 1995.

Section 9. Certain amendments to the proxy rules promulgated under the Securities Exchange Act of 1934 permit "householding" of certain documents, such as proxy statements and information statements, sent to stockholders. These householding rules permit corporations to satisfy the requirements for sending proxy statements, information statements and certain other materials with respect to two or more stockholders sharing the same address by sending a single document to those stockholders. This amendment provides that sending non-objecting stockholders such a "householded" document that includes a notice required to be given under this chapter, the certificate of incorporation or the bylaws shall satisfy the requirement that such notice be given to each stockholder.

Section 10. The purpose of the amendment to Section 263(b) is to correct the inadvertent deletion of the word "limited" from the last sentence of Section 263(b) that resulted from the former amendment.

Section 11. The amendment to Section 311, which applies to revocation of voluntary dissolution, adds a new subsection (c) which is comparable to subsection (i) of Section 312, which applies to renewal, revival, extension and restoration of the certificate of incorporation, thereby conforming the two sections with respect to the application of Section 211 following the revocation or the renewal, revival, extension or restoration, as the case may be.

Section 12. The amendment to Section 312(i) clarifies that the measurement of the time period after which a stockholder may demand that an annual meeting be held includes the period during which the corporate charter was forfeited, inoperative, void or expired.

Sections 13 and 14. The amendments to Section 395 correct the reference to the Savings and Loan Holding Company Act in subsection (b) and limit the application of subsection (c) exclusively to corporations (and not other persons and entities).

Section 15. This amendment permits the Secretary of State to carry out its obligation to provide notice of corporations proclaimed void by giving notice through the use of electronic communication.

Section 16. Section 16 provides for an effective date of July 1, 2002.

Author: Senator Adams