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SPONSOR: |
Rep. Walker & Rep. M. Smith & Sen. Henry
& Sen. Townsend |
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Reps.
Brady, J. Johnson, Mitchell, Potter, Smyk, Wilson; Sens. Blevins, McDowell,
Simpson |
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HOUSE OF REPRESENTATIVES 147th GENERAL ASSEMBLY |
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HOUSE BILL NO. 329 |
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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 § 103(a)(1), Title 8 of the Delaware
Code by making deletions as shown by strikethrough and inserting as shown by
underline as follows:
(a) Whenever an
instrument is to be filed with the Secretary of State or in accordance with
this section or chapter, such instrument shall be executed as follows:
(1) The certificate of incorporation, and any other instrument to be filed
before the election of the initial board of directors if the initial directors
were not named in the certificate of incorporation, shall be signed by the
incorporator or incorporators (or, in the case of any such other instrument,
such incorporator’s or incorporators’ successors and assigns). If any incorporator is not available by
reason of death, incapacity, unknown address, or refusal or neglect to act,
then any such other instrument may be signed, with the same effect as if such
incorporator had signed it, by any person for whom or on whose behalf such
incorporator, in executing the certificate of incorporation, was acting
directly or indirectly as employee or agent, provided that such other
instrument shall state that such incorporator is not available and the reason
therefor, that such incorporator in executing the certificate of incorporation
was acting directly or indirectly as employee or agent for or on behalf of such
person, and that such person’s signature on such instrument is otherwise authorized
and not wrongful.
Section 2. Amend § 108, Title 8 of the Delaware Code by making
deletions as shown by strikethrough and insertions as shown by underline as
follows:
§ 108 Organization meeting of
incorporations or directors named in certificate of incorporation.
(d) If any incorporator is not available to act,
then any person for whom or on whose behalf the incorporator was acting
directly or indirectly as employee or agent, may take any action that such
incorporator would have been authorized to take under this section or § 107 of
this title; provided that any instrument signed by such other person, or any
record of the proceedings of a meeting in which such person participated, shall
state that such incorporator is not available and the reason therefor, that
such incorporator was acting directly or indirectly as employee or agent for or
on behalf of such person, and that such person’s signature on such instrument
or participation in such meeting is otherwise authorized and not wrongful.
Section 3. Amend § 141(f), Title 8 of
the Delaware Code by making deletions as shown by strikethrough and additions
as shown by underline as follows:
Unless
otherwise restricted by the certificate of incorporation or bylaws, any action
required or permitted to be taken at any meeting of the board of directors or
of any committee thereof may be taken without a meeting if all members of the
board or committee, as the case may be, consent thereto in writing, or by
electronic transmission and the writing or writings or electronic transmission
or transmissions are filed with the minutes of proceedings of the board, or
committee. Such filing shall be in paper form if the minutes are maintained in
paper form and shall be in electronic form if the minutes are maintained in
electronic form. Any person (whether or not then a director) may provide,
whether through instruction to an agent or otherwise, that a consent to action
will be effective at a future time (including a time determined upon the
happening of an event), no later than 60 days after such instruction is given
or such provision is made and such consent shall be deemed to have been given
for purposes of this subsection at such effective time so long as such person
is then a director and did not revoke the consent prior to such time. Any such
consent shall be revocable prior to its becoming effective.
Section 4. Amend § 218, Title 8 of the
Delaware Code by making insertions as shown by underlining and deletions as
shown by strikethrough as follows:
(a) One stockholder or 2 or
more stockholders may by agreement in writing deposit capital stock of an
original issue with or transfer capital stock to any person or persons, or
entity or entities authorized to act as trustee, for the purpose of vesting in such
person or persons, entity or entities, who may be designated voting trustee, or
voting trustees, the right to vote thereon for any period of time determined by
such agreement, upon the terms and conditions stated in such agreement. The
agreement may contain any other lawful provisions not inconsistent with such
purpose. After the filing delivery of a copy of the agreement in
to the registered office of the corporation in this State or the
principal place of business of the corporation, which copy shall be open to
the inspection of any stockholder of the corporation or any beneficiary of the
trust under the agreement daily during business hours, certificates of stock or
uncertificated stock shall be issued to the voting trustee or trustees to
represent any stock of an original issue so deposited with such voting trustee
or trustees, and any certificates of stock or uncertificated stock so
transferred to the voting trustee or trustees shall be surrendered and
cancelled and new certificates or uncertificated stock shall be issued
therefore to the voting trustee or trustees. In the certificate so issued, if
any, it shall be stated that it is issued pursuant to such agreement, and that
fact shall also be stated in the stock ledger of the corporation. The voting
trustee or trustees may vote the stock so issued or transferred during the
period specified in the agreement. Stock standing in the name of the voting
trustee or trustees may be voted either in person or by proxy, and in voting
the stock, the voting trustee or trustees shall incur no responsibility as
stockholder, trustee or otherwise, except for their own individual malfeasance.
In any case where 2 or more persons or entities are designated as voting
trustees, and the right and method of voting any stock standing in their names
at any meeting of the corporation are not fixed by the agreement appointing the
trustees, the right to vote the stock and the manner of voting it at the
meeting shall be determined by a majority of the trustees, or if they be equally
divided as to the right and manner of voting the stock in any particular case,
the vote of the stock in such case shall be divided equally among the trustees.
(b) Any amendment to a voting trust agreement shall be made by a
written agreement, a copy of which shall be filed in delivered to
the registered office of the corporation in this State or principal place of
business of the corporation.
Section 5. Amend § 228(c), Title 8 of
the Delaware Code by making insertions as shown by underline as follows:
(c) Every written consent shall bear
the date of signature of each stockholder or member who signs the consent, and
no written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the earliest dated consent delivered in the
manner required by this section to the corporation, written consents signed by
a sufficient number of holders or members to take action are delivered to the
corporation by delivery to its registered office in this State, its principal
place of business or an officer or agent of the corporation having custody of
the book in which proceedings of meetings of stockholders or members are
recorded. Delivery made to a
corporation’s registered office shall be by hand or by certified or registered
mail, return receipt requested. Any
person executing a consent may provide, whether through instruction to an agent
or otherwise, that such a consent will be effective at a future time (including
a time determined upon the happening of an event), no later than 60 days after
such instruction is given or such provision is made, and, for the purposes of
this section, if evidence of such instruction or provision is provided to the
corporation, such later effective time shall serve as the date of signature. Unless otherwise provided, any such consent
shall be revocable prior to its becoming effective.
Section 6. Amend § 242, Title 8 of the
Delaware Code by making insertions as shown by underline and deletions as shown
by strikethrough as follows:
§ 242. Amendment of certificate of incorporation after receipt of payment for stock; nonstock corporations.
(a) After a corporation has received
payment for any of its capital stock, or after a nonstock corporation has
members, it may amend its certificate of incorporation, from time to time, in
any and as many respects as may be desired, so long as its certificate of
incorporation as amended would contain only such provisions as it would be
lawful and proper to insert in an original certificate of incorporation filed
at the time of the filing of the amendment; and, if a change in stock or the
rights of stockholders, or an exchange, reclassification, subdivision,
combination or cancellation of stock or rights of stockholders is to be made,
such provisions as may be necessary to effect such change, exchange,
reclassification, subdivision, combination or cancellation. In particular, and
without limitation upon such general power of amendment, a corporation may
amend its certificate of incorporation, from time to time, so as:
(1) To change
its corporate name; or
(2) To change,
substitute, enlarge or diminish the nature of its business or its corporate
powers and purposes; or
(3) To increase
or decrease its authorized capital stock or to reclassify the same, by changing
the number, par value, designations, preferences, or relative, participating,
optional, 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 subdividing or combining the outstanding shares of any class or
series of a class of shares into a greater or lesser number of outstanding
shares; or
(4) To cancel
or otherwise affect the right of the holders of the shares of any class to
receive dividends which have accrued but have not been declared; or
(5) To create
new classes of stock having rights and preferences either prior and superior or
subordinate and inferior to the stock of any class then authorized, whether
issued or unissued; or
(6) To change
the period of its duration.; or
(7) To
delete (i) such provisions of the original
certificate of incorporation which named the incorporator or incorporators, the
initial board of directors and the original subscribers for shares, and (ii) such provisions contained in any
amendment to the certificate of incorporation as were necessary to effect a
change, exchange, reclassification, subdivision, combination or cancellation of
stock, if such change, exchange, reclassification, subdivision, combination or
cancellation has become effective.
Any or all such changes or alterations
may be effected by 1 certificate of amendment.
(b) Every amendment authorized by
subsection (a) of this section shall be made and effected in the following
manner:
(1) If the
corporation has capital stock, its board of directors shall adopt a resolution
setting forth the amendment proposed, declaring its advisability, and either
calling a special meeting of the stockholders entitled to vote in respect
thereof for the consideration of such amendment or directing that the amendment
proposed be considered at the next annual meeting of the stockholders;
provided, however, that unless otherwise expressly required by the certificate
of incorporation, no meeting or vote of stockholders shall be required to adopt
an amendment that effects only changes described in paragraph (1) or (7) of
subsection (a). Such special or
annual meeting shall be called and held upon notice in accordance with § 222 of
this title. The notice shall set forth such amendment in full or a brief
summary of the changes to be effected thereby unless
such notice constitutes a notice of internet availability of proxy materials
under the rules promulgated under the Securities Exchange Act of 1934. At
the meeting a vote of the stockholders entitled to vote thereon shall be taken
for and against the any proposed amendment. If that requires adoption by stockholders. If no
vote of stockholders is required to effect such amendment, or if a majority
of the outstanding stock entitled to vote thereon, and a majority of the outstanding
stock of each class entitled to vote thereon as a class has been voted in favor
of the amendment, a certificate setting forth the amendment and certifying that
such amendment has been duly adopted in accordance with this section shall be
executed, acknowledged and filed and shall become effective in accordance with
§ 103 of this title.
(2) The holders
of the outstanding shares of a class shall be entitled to vote as a class upon
a proposed amendment, whether or not entitled to vote thereon by the
certificate of incorporation, if the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or decrease the
par value of the shares of such class, or alter or change the powers,
preferences, or special rights of the shares of such class so as to affect them
adversely. If any proposed amendment would alter or change the powers,
preferences, or special rights of 1 or more series of any class so as to affect
them adversely, but shall not so affect the entire class, then only the shares
of the series so affected by the amendment shall be considered a separate class
for the purposes of this paragraph. The number of authorized shares of any such
class or classes of stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the stock of the corporation entitled to vote
irrespective of this subsection, if so provided in the original certificate of
incorporation, in any amendment thereto which created such class or classes of
stock or which was adopted prior to the issuance of any shares of 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.
(3) If the
corporation is a nonstock corporation, then the governing body thereof shall
adopt a resolution setting forth the amendment proposed and declaring its
advisability. If a majority of all the members of the governing body shall vote
in favor of such amendment, a certificate thereof shall be executed,
acknowledged and filed and shall become effective in accordance with § 103 of
this title. The certificate of incorporation of any nonstock corporation may
contain a provision requiring any amendment thereto to be approved by a
specified number or percentage of the members or of any specified class of
members of such corporation in which event such proposed amendment shall be
submitted to the members or to any specified class of members of such
corporation in the same manner, so far as applicable, as is provided in this
section for an amendment to the certificate of incorporation of a stock
corporation; and in the event of the adoption thereof by such members, a
certificate evidencing such amendment shall be executed, acknowledged and filed
and shall become effective in accordance with § 103 of this title.
(4) Whenever
the certificate of incorporation shall require for action by the board of
directors of a corporation other than a nonstock corporation or by the
governing body of a nonstock corporation, by the holders of any class or series
of shares or by the members, or by the holders of any other securities having
voting power the vote of a greater number or proportion than is required by any
section of this title, the provision of the certificate of incorporation
requiring such greater vote shall not be altered, amended or repealed except by
such greater vote.
(c) The resolution authorizing a
proposed amendment to the certificate of incorporation may provide that at any
time prior to the effectiveness of 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 7. Amend § 251(h), Title 8 of
the Delaware Code by making insertions as shown by underline and deletions as
shown by strikethrough as follows:
(h)
Notwithstanding the requirements of subsection (c) of this section, unless
expressly required by its certificate of incorporation, no vote of stockholders
of a constituent corporation whose shares are listed on a national securities
exchange or held of record by more than 2,000 holders immediately prior to the
execution of the agreement of merger by such constituent corporation shall be
necessary to authorize a merger if:
(1)
The agreement of merger, which must be entered into on or
after August 1, 2013, expressly (i) permits or requires such merger to
be effected under this subsection and (ii) provides that such merger shall be governed by this subsection and shall be
effected as soon as practicable following the consummation of the offer
referred to in paragraph (h)(2) of this section if such merger is effected under this subsection;
(2)
A corporation consummates a tender or exchange offer for any and all of the outstanding
stock of such constituent corporation on the terms provided in such agreement
of merger that, absent this subsection, would be entitled to vote on the
adoption or rejection of the agreement of merger; provided,
however, that such offer may exclude stock of such constituent corporation that
is owned at the commencement of such offer by: (i) such constituent
corporation; (ii) the corporation making such offer; (iii) any person that
owns, directly or indirectly, all of the outstanding stock of the corporation
making such offer; or (iv) any direct or indirect wholly-owned subsidiary of
any of the foregoing;
(3)
Following the consummation of such offer,the offer referred to in paragraph (h)(2) of this section, the stock irrevocably
accepted for purchase or exchange pursuant to such offer and received by the
depository prior to expiration of such offer, plus the stock otherwise owned by
the consummating corporation owns equals at
least such percentage of the stock, and of each class or series thereof, of
such constituent corporation that, absent this subsection, would be required to
adopt the agreement of merger by this chapter and by the certificate of
incorporation of such constituent corporation;
(5(4) The corporation consummating the offer described
referred to in paragraph (h)(2) of this section merges with or
into such constituent corporation pursuant to such agreement; and
(65) The Each outstanding
shares share of each class or series of stock of
the constituent corporation not to be canceled in the
merger are that is the subject of and not irrevocably accepted for
purchase or exchange in the offer referred to in paragraph (h)(2) of this
section is to be converted in such merger into, or into the right to
receive, the same amount and kind of cash, property, rights or securities to be paid for shares of such class or series of
stock of such constituent corporation upon consummation of the offer referred to in paragraph (h)(2)
of this section. irrevocably
accepted for purchase or exchange in such offer.
As used in this section only, the term
(i) “consummates” (and with correlative meaning, “consummation” and
“consummating”) means irrevocably accepts for purchase or exchange stock
tendered pursuant to a tender or exchange offer, (ii) “depository” means an
agent, including a depository, appointed to facilitate consummation of the offer referred to
in paragraph (h)(2) of this section,
(iii) “person” means any individual, corporation, partnership, limited
liability company, unincorporated association or other entity, and (iv)
“received” (solely for purposes of paragraph (h)(3) of this section) means
physical receipt of a stock certificate in the case of certificated shares and
transfer into the depository’s account, or an agent’s message being received by
the depository, in the case of uncertificated shares.
If an
agreement of merger is adopted without the vote of stockholders of a
corporation pursuant to this subsection, the secretary or assistant secretary
of the surviving corporation shall certify on the agreement that the agreement
has been adopted pursuant to this subsection and that the conditions specified
in this subsection (other than the condition listed in paragraph (h)(5(h)(4) of this section) have been
satisfied; provided that such certification on the agreement shall not be
required if a certificate of merger is filed in lieu of filing the agreement.
The agreement so adopted and certified shall then be filed and shall become
effective, in accordance with § 103 of this title. Such filing shall constitute
a representation by the person who executes the agreement that the facts stated
in the certificate remain true immediately prior to such filing.
Section 8. This Act shall become effective on August 1, 2014, except that Section 7 shall be effective with respect to merger agreements entered into on or after August 1, 2014.
SYNOPSIS
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Section 1 amends Section 103(a)(1) to remove any limitation on the reason for the incorporator’s unavailability. Section 2 amends Section 108 to provide a means for the incorporator’s actions required by this section to be taken in the event the incorporator is unavailable to act. Section 3 amends Section 141(f) to clarify that a person may execute a consent, and that such consent may be placed in escrow (or similar arrangement), to become effective at a later time, even if the person is not a director at the time the consent is executed, so long as the escrow period does not exceed 60 days. Section 4 amends Sections 218(a) and (b) to provide that a voting trust agreement, or any amendment thereto, may be delivered to the principal place of business of the corporation in lieu of the registered office of the corporation. Section 5 amends Section 228(c) to clarify that a person may execute a consent, and that such consent may be placed in escrow (or similar arrangement), to become effective at a later time even if the person is not a stockholder at the time the consent is executed and that the later effective time would then be treated as the date the consent was signed. In contrast to the similar amendment made to Section 141(f) (addressing consents of directors) the amendment to Section 228(c) does not expressly state the signatory need not be a stockholder when the consent is signed. The reason for this difference is that a person executing a written consent need not be a stockholder at the time of execution under current law, but only on the relevant record date. The amendment does not affect the requirement that the consent bear the actual date of signature. Section 6 amends Section 242 to authorize corporations to file certificates of amendment that either change the corporate name or delete historical provisions relating to the corporation’s incorporator, initial board of directors or initial subscribers for shares and provisions relating to previously effected changes to stock, in each case without submitting the amendment for stockholder approval. The changes also eliminate the requirement that the notice of a meeting at which an amendment is to be voted on contain a copy of the amendment itself or a brief summary thereof, but only when notice constitutes a notice of internet availability of proxy materials for Securities Exchange Act purposes. Section 7 amends Section 251(h) in several respects, including revisions to (i) eliminate Section 4, which precluded the use of Section 251(h) when a party to the merger agreement is an "interested stockholder" (as that term is defined in Section 203), (ii) clarify when a corporation consummating an offer referred to in Section 251(h) is entitled to effect a merger pursuant to such section, and (iii) clarify that shares of stock tendered into an offer referred to in Section 251(h) are not counted for purposes of Section 251(h) unless irrevocably accepted for exchange and received by the depositary prior to expiration of such offer. The amendments do not change the fiduciary duties of directors in connection with mergers effected pursuant to Section 251(h) or the level of judicial scrutiny that will apply to the decision to enter into such a merger agreement, each of which will be determined based on the common law of fiduciary duty, including the duty of loyalty. Section 8 provides that the effective date of these amendments is August 1, 2014, with a limitation that Section 7 is effective only for merger agreements entered into on or after that date. |