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SPONSOR: |
Rep. M. Smith & Rep. Lynn & Sen. Henry &
Sen. Townsend |
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Reps.
Brady, J. Johnson, Keeley, Mitchell, B. Short, Smyk, Spiegelman; Sens.
Cloutier, Lavelle |
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HOUSE OF REPRESENTATIVES 148th GENERAL ASSEMBLY |
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HOUSE BILL NO. 371 |
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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 § 104, Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 104. Certificate of incorporation; definition.
The
term “certificate of incorporation,” as used in this chapter, unless the
context requires otherwise, includes not only the original certificate of
incorporation filed to create a corporation but also all other certificates,
agreements of merger or consolidation, plans of reorganization, or other
instruments, howsoever designated, which are filed pursuant to § 102, §§
133-136, § 151, §§ 241-243, § 245, §§ 251-258, §§ 263-264, § 267, § 303, §§
311-313, or any other section of this title, and which have the effect of
amending or supplementing in some respect a corporation’s original certificate
of incorporation.
Section 2. Amend § 111(a), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 111. Jurisdiction to interpret, apply, enforce or determine the validity of corporate instruments and provisions of this title.
(a) Any civil action to interpret, apply, enforce or determine the validity of the provisions of:
(2) Any instrument, document or agreement
(i) by which a corporation creates or sells, or offers to create or sell, any of its stock, or any rights or options respecting its stock, or (ii) to which
a corporation and
one or more holders
of its stock are parties, and
pursuant to which any such holder or holders sell or offer to sell any of such stock, or (iii) by which a corporation agrees to sell, lease or exchange any of its
property or assets,
and
which by its terms provides
that one or more holders
of its stock approve
of or consent to such sale, lease or exchange;
may be brought in the Court of Chancery, except to the extent that a statute confers exclusive jurisdiction on a court, agency or tribunal other than the Court of Chancery.
Section 3. Amend § 141(b), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 141. Board of directors; powers; number, qualifications, terms and quorum; committees; classes of directors; nonstock corporations; reliance upon books; action without meeting; removal.
(b) The
board of directors of a corporation shall consist of 1 or more members, each of
whom shall be a natural person. The number of directors shall be fixed by, or
in the manner provided in, the bylaws, unless the certificate of incorporation
fixes the number of directors, in which case a change in the number of
directors shall be made only by amendment of the certificate. Directors need
not be stockholders unless so required by the certificate of incorporation or
the bylaws. The certificate of incorporation or bylaws may prescribe other
qualifications for directors. Each director shall hold office until such
director's successor is elected and qualified or until such director's earlier
resignation or removal. Any director may resign at any time upon notice given
in writing or by electronic transmission to the corporation. A resignation is
effective when the resignation is delivered unless the resignation specifies a
later effective date or an effective date determined upon the happening of an
event or events. A resignation which is conditioned upon the director failing
to receive a specified vote for reelection as a director may provide that it is
irrevocable. A majority of the total number of directors shall constitute a
quorum for the transaction of business unless the certificate of incorporation
or the bylaws require a greater number. Unless the certificate of incorporation
provides otherwise, the bylaws may provide that a number less than a majority
shall constitute a quorum which in no case shall be less than 1/3 of the total
number of directors except that when a board of 1 director is authorized
under this section, then 1 director shall constitute a quorum. The vote of
the majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors unless the certificate of
incorporation or the bylaws shall require a vote of a greater number
Section 4. Amend § 141(c), Title 8 of the Delaware Code,
by making insertions as shown by underline and deletions as shown by strike
through as follows:
§ 141. Board of directors; powers; number, qualifications, terms and quorum; committees; classes of directors; nonstock corporations; reliance upon books; action without meeting; removal.
(c)(3) Unless otherwise provided in the certificate
of incorporation, the bylaws or the resolution of the board of directors
designating the committee, a committee may create 1 or more subcommittees, each
subcommittee to consist of 1 or more members of the committee, and delegate to
a subcommittee any or all of the powers and authority of the committee. Except
for references to committees and members of committees in subsection (c) of
this section, every reference in this chapter to a committee of the board of
directors or a member of a committee shall be deemed to include a reference to
a subcommittee or member of a subcommittee.
(4)
A majority of the directors then serving on a committee of the board of
directors or on a subcommittee of a committee shall constitute a quorum for the
transaction of business by the committee or subcommittee, unless the
certificate of incorporation, the bylaws, a resolution of the board of
directors or a resolution of a committee that created the subcommittee requires
a greater or lesser number, provided that in no case shall a quorum be less
than 1/3 of the directors then serving on the committee or subcommittee. The
vote of the majority of the members of a committee or subcommittee present at a
meeting at which a quorum is present shall be the act of the committee or
subcommittee, unless the certificate of incorporation, the bylaws, a resolution
of the board of directors or a resolution of a committee that created the
subcommittee requires a greater number.
Section 5. Amend §141(d), Title 8 of the Delaware Code,
by making insertions as shown by underline and deletions as shown by strike
through as follows:
§ 141. Board of directors; powers; number, qualifications, terms and quorum; committees; classes of directors; nonstock corporations; reliance upon books; action without meeting; removal.
(d) The directors of any corporation organized
under this chapter may, by the certificate of incorporation or by an initial
bylaw, or by a bylaw adopted by a vote of the stockholders, be divided into 1,
2 or 3 classes; the term of office of those of the first class to expire at the
first annual meeting held after such classification becomes effective; of the
second class 1 year thereafter; of the third class 2 years thereafter; and at
each annual election held after such classification becomes effective,
directors shall be chosen for a full term, as the case may be, to succeed those
whose terms expire. The certificate of incorporation or bylaw provision
dividing the directors into classes may authorize the board of directors to
assign members of the board already in office to such classes at the time such
classification becomes effective. The certificate of incorporation may confer
upon holders of any class or series of stock the right to elect 1 or more
directors who shall serve for such term, and have such voting powers as shall
be stated in the certificate of incorporation. The terms of office and voting
powers of the directors elected separately by the holders of any class or
series of stock may be greater than or less than those of any other director or
class of directors. In addition, the certificate of incorporation may confer
upon 1 or more directors, whether or not elected separately by the holders of
any class or series of stock, voting powers greater than or less than those of
other directors. 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. If the certificate of
incorporation provides that 1 or more directors shall have more or less than 1
vote per director on any matter, every reference in this chapter to a majority
or other proportion of the directors shall refer to a majority or other
proportion of the votes of the directors.
Section 6. Amend § 158, Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 158. Stock certificates; uncertificated shares.
The
shares of a corporation shall be represented by certificates, provided that the
board of directors of the corporation may provide by resolution or resolutions
that some or all of any or all classes or series of its stock shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation. Every holder of stock represented by certificates shall be
entitled to have a certificate signed by, or in the name of,
the corporation by the chairperson or
vice-chairperson of the board of directors, or the president or vice-president,
and by the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of such any two authorized officers of the corporation
representing the number of shares registered in certificate form. Any or all
the signatures on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person were such officer, transfer
agent or registrar at the date of issue. A corporation shall not have power to
issue a certificate in bearer form.
Section 7. Amend § 251(h), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 251. Merger or consolidation of domestic corporations.
(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
that has a class or series of stock that is 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 expressly:
a. Permits
or requires such merger to be effected under this subsection; and
b. Provides that such merger 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 exchangean 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:be
conditioned on the tender of a minimum
number or percentage of shares of the stock of such constituent corporation, or of any class or series thereof, and such offer may exclude
any excluded stock and provided
further that the corporation may consummate separate offers for separate classes or
series of the stock of such constituent corporation;
a. Such constituent corporation;
b. The
corporation making such offer;
c. Any person that owns, directly or
indirectly, all of the outstanding stock of the corporation making such offer; or
d. Any direct or indirect wholly-owned subsidiary of any of the foregoing;
(3) Following Immediately following the consummation of 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 together with the stock otherwise owned by the consummating corporation or its affiliates and any rollover stock, equals at least such percentage of the shares of stock of such constituent corporation, 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;
(4) The corporation consummating the offer referred
to in paragraph (h)(2) of this section merges with or into such constituent
corporation pursuant to such agreement; and
(5) Each outstanding share (other
than shares of excluded stock) of each class or series of stock of the such
constituent corporation that
is the subject of and is 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 irrevocably accepted for purchase
or exchange in such offer.
(6) As used in this section only, the term:
a. “Affiliate” means, in respect of the corporation making the offer referred to in
paragraph (h)(2) of this section,
any person that (i)
owns, directly or indirectly, all of the outstanding stock of such corporation or (ii)
is a direct or indirect wholly-owned subsidiary of such
corporation or of any person referred to in clause (i) of this definition;
b. “Consummates” (and
with
correlative meaning, “consummation”
and “consummating”) means irrevocably accepts
for
purchase or exchange
stock tendered pursuant to a tender or exchangean offer;
b c. “Depository” means an agent, including a depository, appointed
to facilitate consummation of the offer referred to in paragraph
(h)(2) of this section;
d. “Excluded Stock” means (i) stock of such constituent corporation that is
owned at the commencement of the offer referred
to in paragraph (h)(2) of this
section by such constituent
corporation, the corporation making the offer referred to in paragraph (h)(2) of this section,
any person that owns, directly or indirectly, all of
the outstanding stock of the corporation making such offer, or any direct
or indirect wholly-owned subsidiary of any of the foregoing and (ii) rollover stock;
c e. “Person”
means any individual, corporation, partnership,
limited liability company,
unincorporated association or other entity; and
d f. “Received” (solely for purposes
of paragraph (h)(3) of this section) means
(a) with respect to
certificated shares, 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. accompanied
by an
executed letter of transmittal, (b) with
respect to uncertificated shares held of record by a clearing corporation as nominee,
transfer into the depository’s account by means of an
agent’s message, and (c) with
respect to uncertificated shares held of record by a person other than a clearing
corporation as nominee, physical receipt of an executed letter of
transmittal by the depository; provided, however,
that shares shall cease to be “received” (i) with respect to certificated
shares, if the certificate representing such shares was
canceled prior to consummation of the offer referred to in paragraph (h)(2) of this
section, or (ii) with respect to uncertificated shares, to the extent such uncertificated shares have been reduced
or eliminated due to any sale of such
shares prior to consummation of the offer referred to in paragraph (h)(2) of this
section; and
g. “Rollover
stock” means any shares of stock
of such constituent corporation
that are the subject of a written
agreement requiring such shares to be transferred, contributed or delivered to the consummating corporation or any of
its affiliates in exchange for stock or other equity interests
in such consummating corporation or an affiliate thereof; provided, however, that such shares of stock shall cease to be
rollover stock for purposes of paragraph (h)(3) of this section if, immediately prior to the time the merger becomes effective
under this chapter, such shares have not been transferred, contributed or delivered to the consummating corporation or any of
its affiliates pursuant to such written agreement.
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)(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. Amend § 262(c), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 262. Appraisal rights.
(c)
Any corporation may provide in its certificate of incorporation that appraisal
rights under this section shall be available for the shares of any class or
series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures provisions of this section, including
those set forth in subsections (d), and (e), and (g) of
this section, shall apply as nearly as is practicable.
Section 9. Amend § 262(d), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 262. Appraisal rights.
(d) Appraisal rights shall be perfected as follows:
(2) If the
merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or §
267 of this title, then either a constituent corporation before the effective
date of the merger or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders of any class or
series of stock of such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section and, if 1 of the constituent corporations is a nonstock corporation, a
copy of § 114 of this title. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing of
such notice or, in the case of a merger approved pursuant to § 251(h) of this
title, within the later of the consummation of the tender or exchange offer
contemplated by § 251(h) of this title and 20 days after the date of mailing of
such notice, demand in writing from the surviving or resulting corporation the
appraisal of such holder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and that
the stockholder intends thereby to demand the appraisal of such holder's
shares. If such notice did not notify stockholders of the effective date of the
merger or consolidation, either (i) each such constituent corporation shall
send a second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the effective
date of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or within 10
days after such effective date; provided, however, that if such second notice
is sent more than 20 days following the sending of the first notice or, in the
case of a merger approved pursuant to § 251(h) of this title, later than the
later of the consummation of the tender or exchange offer contemplated
by § 251(h) of this title and 20 days following the sending of the first notice,
such second notice need only be sent to each stockholder who is entitled to
appraisal rights and who has demanded appraisal of such holder's shares in
accordance with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is required to give
either notice that such notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be not
more than 10 days prior to the date the notice is given, provided, that if the
notice is given on or after the effective date of the merger or consolidation,
the record date shall be such effective date. If no record date is fixed and
the notice is given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the notice is
given.
Section 10. Amend § 262(g), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 262. Appraisal rights.
(g) At
the hearing on such petition, the Court shall determine the stockholders who
have complied with this section and who have become entitled to appraisal
rights. The Court may require the stockholders who have demanded an appraisal
for their shares and who hold stock represented by certificates to submit their
certificates of stock to the Register in Chancery for notation thereon of the
pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such
stockholder. If immediately before the merger or consolidation the shares of
the class or series of stock of the constituent corporation as to which
appraisal rights are available were listed on a national securities exchange,
the Court shall dismiss the proceedings as to all holders of such shares who
are otherwise entitled to appraisal rights unless (1) the total number of
shares entitled to appraisal exceeds 1% of the outstanding shares of the class
or series eligible for appraisal, (2) the value of the consideration provided
in the merger or consolidation for such total number of shares exceeds $1
million, or (3) the merger was approved pursuant to § 253 or § 267 of this
title.
Section 11. Amend § 262(h), Title 8 of the Delaware Code, by making insertions as shown by underline and deletions as shown by strike through as follows:
§ 262. Appraisal rights.
(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, and except as provided in this subsection, 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. At any time before the entry of judgment in the
proceedings, the surviving corporation may pay to each stockholder entitled to
appraisal an amount in cash, in which case interest shall accrue thereafter as
provided herein only upon the sum of (1) the difference, if any, between the
amount so paid and the fair value of the shares as determined by the Court, and
(2) interest theretofore accrued, unless paid at that time. 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 12. Amend § 311, Title 8 of the Delaware Code, by
making insertions as shown by underline and deletions as shown by strike
through as follows:
§
311. Revocation of voluntary dissolution; restoration of expired certificate of incorporation.
(a)
At any time prior to the expiration of 3 years following the dissolution of a
corporation pursuant to § 275 of this title, or, or such longer period as the Court of Chancery
may have directed pursuant to § 278 of this title, or at any time prior to
the expiration of 3 years following the expiration of the
time limited for the corporation’s existence as provided in its certificate of
incorporation or such longer period as the Court of Chancery may have
directed pursuant to § 278 of this title, a corporation may revoke the
dissolution theretofore effected by it or restore its
certificate of incorporation after it has expired by its own limitation in
the following manner:
(1) For purposes of this section, the
term “stockholders” shall mean the stockholders of record on the date the
dissolution became effective or the date of expiration by
limitation.
(2) The board of directors shall
adopt a resolution recommending that the dissolution be revoked in the case of a dissolution or that the certificate of
incorporation be restored in the case of an expiration by limitation and
directing that the question of the revocation or
restoration be submitted to a vote at a special meeting of
stockholders.
(3) Notice of the special meeting of
stockholders shall be given in accordance with § 222 of this title to each of
the stockholders.
(4) At the meeting a vote of the
stockholders shall be taken on a resolution to revoke the dissolution in the case of a dissolution or to restore the certificate
of incorporation in the case of an expiration by limitation. If a
majority of the stock of the corporation which was outstanding and entitled to
vote upon a dissolution at the time of its dissolution,
in the case of a revocation of dissolution, or which was outstanding and
entitled to vote upon an amendment to the certificate of incorporation to
change the period of the corporation’s duration at the time of its expiration
by limitation, in the case of a restoration, shall be voted for the
resolution, a certificate of revocation of dissolution or
a certificate of restoration shall be executed, and
acknowledged and filed in accordance
with § 103 of this title, which shall be specifically
designated as a certificate of revocation of dissolution or a certificate of
restoration in its heading and shall state:
a. The name of the corporation;
b. The address (which shall be stated
in accordance with § 131(c) of this title) of the corporation's registered
office in this State, and the name of its registered agent at such address;
c. The names and respective addresses
of its officers;
d. The names and respective addresses
of its directors;
e. That a majority of the stock of
the corporation which was outstanding and entitled to vote upon a dissolution
at the time of its dissolution have voted in favor of a resolution to revoke
the dissolution, in the case of a revocation of
dissolution, or that a majority of the stock of the corporation which was
outstanding and entitled to vote upon an amendment to the certificate of
incorporation to change the period of the corporation’s duration at the time of
its expiration by limitation, in the case of a restoration, have voted in favor
of a resolution to restore the certificate of incorporation; or, if it
be the fact, that, in lieu of a meeting and vote of stockholders, the
stockholders have given their written consent to the revocation or restoration in accordance with § 228 of this
title.; and
(b)
Upon the effective time of the filing in the
office of the Secretary of State of the certificate of revocation of
dissolution, the Secretary of State, upon being
satisfied that the requirements of this section have been complied with, shall
issue a certificate that the dissolution has been revoked. Upon the issuance of
such certificate by the Secretary of the State or the certificate of
restoration, the revocation of the dissolution or
the restoration of the corporation shall become effective and the
corporation may again carry on its business.
(c)
Upon the issuance of the certificate by the Secretary of
State to which effectiveness of the revocation of the dissolution or the
restoration of the corporation as provided in 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 or was expired by limitation 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.
(d)
If after the dissolution became effective or after the
expiration by limitation any other corporation organized under the laws
of this State shall have adopted the same name as the corporation, or shall
have adopted a name so nearly similar thereto as not to distinguish it from the
corporation, or any foreign corporation shall have qualified to do business in
this State under the same name as the corporation or under a name so nearly
similar thereto as not to distinguish it from the corporation, then, in such
case, the corporation shall not be reinstated under the same name which it bore
when its dissolution became effective or it expired by
limitation, but shall adopt and be reinstated or
restored under some other name, and in such case the certificate to be
filed under this section shall set forth the name borne by the corporation at
the time its dissolution became effective or it expired
by limitation and the new name under which the corporation is to be
reinstated or restored.
(e)
Nothing in this section shall be construed to affect the jurisdiction or power
of the Court of Chancery under § 279 or § 280 of this title.
(f)
At any time prior to the expiration of 3 years following the dissolution of a
nonstock corporation pursuant to § 276 of this title,
or, or such longer period as the Court of Chancery may have directed
pursuant to § 278 of this title, or at any time prior to the expiration
of 3 years following the expiration of the time limited
for a nonstock corporation’s existence as provided in its certificate of incorporation
or such longer period as the Court of Chancery may have directed
pursuant to § 278 of this title, a nonstock corporation may revoke the
dissolution theretofore effected by it or restore its
certificate of incorporation after it has expired by limitation in a
manner analogous to that by which the dissolution was authorized or, in the case of a
restoration, in the manner in which an amendment to the certificate of
incorporation to change the period of the corporation’s duration would have
been authorized at the time of its expiration by limitation including
(i) if applicable, a vote of the members entitled to vote, if any, on the
dissolution or the amendment and (ii) the filing
of a certificate of revocation of dissolution or a
certificate of restoration containing information comparable to that
required by paragraph (a)(4) of this section. Notwithstanding the foregoing,
only subsections (b), (d), and (e) of this section shall apply to nonstock
corporations.
(g)
Any corporation that revokes its dissolution or restores its certificate of
incorporation pursuant to this section shall file all annual franchise tax
reports that the corporation would have had to file if it had not dissolved or
expired and shall pay all franchise taxes that the corporation would have had
to pay if it had not dissolved or expired.
No payment made pursuant to this subsection shall reduce the amount of
franchise tax due under Chapter 5 of this title for the year in which such
revocation or restoration is effected.
Section 13. Amend § 312, Title 8 of the Delaware Code, by
making insertions as shown by underline and deletions as shown by strike
through as follows:
§
312. Renewal,
revival, extension and restoration Revival of certificate of
incorporation.
(a)
As used in this section, the term “certificate of incorporation” includes the
charter of a corporation organized under any special act or any law of this
State.
(b)
Any corporation may, at any time before the expiration of the time limited
for its existence and any corporation whose certificate of incorporation
has become forfeited or void pursuant to this title and any corporation
whose certificate of incorporation has expired by reason of failure to renew it
or whose certificate of incorporation has been renewedrevived,
but, through failure to comply strictly with the provisions of this chapter,
the validity of whose renewal revival has
been brought into question, may at any time procure an
extension, restoration, renewal or a revival of its certificate
of incorporation, together with all the rights, franchises, privileges and
immunities and subject to all of its duties, debts and liabilities which had
been secured or imposed by its original certificate of incorporation and all
amendments thereto, by complying with the requirements of this section. Notwithstanding the foregoing, this section
shall not be applicable to a corporation whose certificate of incorporation has
been revoked or forfeited pursuant to § 284 of this title.
(c)
The extension, restoration, renewal or revival
of the certificate of incorporation may be procured as authorized by the
board of directors or members of the governing body of the
corporation in accordance with § 312(h) and by executing, acknowledging
and filing a certificate of revival in
accordance with § 103 of this title.
(d)
The certificate required by subsection (c) of this section shall state:
(1) The name date
of filing of the corporation, which shall be the
existing corporation’s original certificate of incorporation; the name
under which the corporation was originally incorporated; the name of the
corporation or at the name it bore when time
its certificate of incorporation expired, except
as provided in became forfeited or void pursuant to this title; and the new name under which the corporation is to be revived to the extent required by subsection (f) of
this section, and the date of filing of its original certificate of incorporation with the
Secretary of State;
(2) The address (which shall be
stated in accordance with § 131(c) of this title) of the corporation's
registered office in this State and the name of its registered agent at such
address;
(4) (3) That the corporation desiring to be renewed or revived and so renewing
or reviving its certificate of incorporation was organized under the
laws of this State;
(5) (4) The date when the certificate of
incorporation would expire, if such is the case, or such
other facts as may show that the certificate of incorporation has become became
forfeited or void pursuant to this title, or that the validity of any renewal
revival has been brought into question; and
(6) (5) That the certificate for renewal or of revival is filed by
authority of those who were directors
or members of the governing body of the corporation at
the time its certificate of incorporation expired or who were elected the board of directors or members of the governing
body of the corporation as provided in subsection (h)in
accordance with §312(h) of this section.
(e)
Upon the filing of the certificate in accordance with § 103 of this title the
corporation shall be renewed and revived with
the same force and effect as if its certificate of incorporation had not been
forfeited or void pursuant to this title, or had not
expired by limitation. Such reinstatement revival
shall validate all contracts, acts, matters and things made, done and
performed within the scope of its certificate of incorporation by the
corporation, its directors or members of its governing
body, officers and , agents and stockholders or members during the time when
its certificate of incorporation was forfeited or void pursuant to this title, or after its expiration by limitation, with the
same force and effect and to all intents and purposes as if the certificate of
incorporation had at all times remained in full force and effect. All real and
personal property, rights and credits, which belonged to the corporation at the
time its certificate of incorporation became forfeited or void pursuant to this
title, or expired by limitation and which were not disposed of prior
to the time of its revival or renewal shall be vested in
the corporation, after its revival and renewal,
as fully and amply as they were held by the corporation at and before the time
its certificate of incorporation became forfeited or void pursuant to this
title, or expired by limitation, and and all real and personal property, rights and
credits acquired by the corporation after its renewal
and certificate of incorporation became forfeited or void pursuant to
this title shall be vested in the corporation, after its revival, as if its
certificate of incorporation had at all times remained in full force and
effect, and the corporation after its revival shall be as exclusively
liable for all contracts, acts, matters and things made, done or performed in
its name and on its behalf by its directors or members
of its governing body, officers and , agents
and stockholders or members prior to its reinstatementrevival, as if its certificate
of incorporation had at all times remained in full force and effect.
(f)
If, since the certificate of incorporation became forfeited or void pursuant to
this title, or expired by limitation, any other
corporation organized under the laws of this State shall have adopted the same
name as the corporation sought to be renewed or revived
or shall have adopted a name so nearly similar thereto as not to distinguish it
from the corporation to be renewed or revived or
any foreign corporation qualified in accordance with § 371 of this title shall
have adopted the same name as the corporation sought to be renewed
or revived or shall have adopted a name so nearly similar thereto as
not to distinguish it from the corporation to be renewed
or revived, then in such case the corporation to be renewed
or revived shall not be renewed revived under
the same name which it bore when its certificate of incorporation became
forfeited or void pursuant to this title, or expired but
shall adopt or be renewed be revived under
some other name and in such case as set forth in the
certificate to be filed under the provisions of this
section shall set forth the name borne by the corporation at the time its
certificate of incorporation became forfeited or void pursuant to this title,
or expired and the new name under which the
corporation is to be renewed or revivedpursuant to subsection (c)
of this section.
(g)
Any corporation that renews or revives its
certificate of incorporation under this chapter shall pay to this State a sum
equal to all franchise taxes, penalties and interest thereon due at the time
its certificate of incorporation became forfeited or void pursuant to this
title, or expired by limitation or otherwise;
provided, however, that any corporation that renews or revives
its certificate of incorporation under this chapter whose certificate of
incorporation has been forfeited, or void or
expired for more than 5 years shall, in lieu of the payment of the
franchise taxes and penalties otherwise required by this subsection, pay a sum
equal to 3 times the amount of the annual franchise tax that would be due and
payable by such corporation for the year in which the renewal
or revival is effected, computed at the then current rate of taxation.
No payment made pursuant to this subsection shall reduce the amount of
franchise tax due under Chapter 5 of this title for the year in which the renewal or revival is effected.
(h) If a sufficient number of the last acting officers of any
corporation desiring to renew or revive its
certificate of incorporation are not available
by reason of death, unknown address or refusal or neglect to act, the directors
of the corporation or those remaining on the board, even if only 1, may elect
successors to such officers.For purposes
of this section and § 502(a) of this title, the board of directors or governing
body of the corporation shall be comprised of the persons, who, but for the
certificate of incorporation having become forfeited or void pursuant to this
title, would be the duly elected or appointed directors or members of the
governing body of the corporation. The
requirement for authorization by the board of directors under subsection (c) of
this section shall be satisfied if a majority of the directors or members of
the governing body then in office, even though less than a quorum, or the sole
director or member of the governing body then in office, authorizes the revival
of the certificate of incorporation of the corporation and the filing of the
certificate required by subsection (c) of this section. In any case where there shall be no directors
of the corporation available for the purposes aforesaid, the stockholders may
elect a full board of directors, as provided by the bylaws of the corporation,
and the board shall then elect such officers as are
provided by law, by so elected may then authorize the revival of the
certificate of incorporation or by the bylaws to carry
on the business and affairs of the corporation
and the filing of the certificate required by subsection (c) of this section.
A special meeting of the stockholders for the purposes
purpose of electing directors may be called by any officer, director or stockholder upon notice given in
accordance with § 222 of this title. For purposes of
this section, the bylaws shall be the bylaws of the corporation that, but for
the certificate of incorporation having become forfeited or void pursuant to
this title, would be the duly adopted bylaws of the corporation.
(i)
After a renewal or revival of the certificate of
incorporation of the corporation shall have been effected, the provisions of §
211(c) of this title shall govern and the period of time during
which the certificate of incorporation of the corporation was forfeited
or void pursuant to this title,
or after its expiration by limitation, shall be included within the
calculation of the 30-day and 13-month periods to which
§ 211(c) of this title refers. A special meeting of stockholders held in
accordance with subsection (h) of this section shall be deemed an annual
meeting of stockholders for purposes of § 211(c) of this title.
(j)
Except as otherwise provided in § 313 of this title, whenever it shall be
desired to renew or revive the certificate of
incorporation of any nonstock corporation, the governing body shall perform all
the acts necessary for the renewal or revival of
the charter certificate of incorporation of
the corporation which are performed by the board of directors in the case of a
corporation having capital stock, and the members of any nonstock corporation
who are entitled to vote for the election of members of its governing body and
any other members entitled to vote for dissolution under the certificate of
incorporation or the bylaws of such corporation, shall perform all the acts
necessary for the renewal or revival of the
certificate of incorporation of the corporation which are performed by the
stockholders in the case of a corporation having capital stock. Except as otherwise provided in § 313 of this
title, in all other respects, the procedure for the renewal
or revival of the certificate of incorporation of a
nonstock corporation shall conform, as nearly as may be applicable, to
the procedure prescribed in this section for the renewal
or revival of the certificate of incorporation of a corporation having
capital stock; provided, however, that subsection (i) of this section shall not
apply to nonstock corporations.
Section
14. Amend § 313, Title 8 of the Delaware
Code, by making insertions as shown by underline and deletions as shown by
strike through as follows:
§
313. Renewal Revival of
certificate of incorporation or charter of exempt corporations.
(a) Every exempt corporation whose certificate
of incorporation or charter has become inoperative and void, by operation of §
510 of this title for failure to file annual franchise tax reports required,
and for failure to pay taxes or penalties from which it would have been exempt
if the reports had been filed, shall be deemed to have filed all the reports and
be relieved of all the taxes and penalties, upon satisfactory proof submitted
to the Secretary of State of its right to be classified as an exempt
corporation pursuant to § 501(b) of this title, and upon filing with the
Secretary of State a certificate of renewal and revival in manner and
form as required by § 312 of this title.
(b) Upon the filing by the corporation of the
proof of classification as required by subsection (a) of this section, the
filing of the certificate of renewal and revival and payment of the
required filing fees, the Secretary of State shall issue a certificate that the
corporation’s certificate of incorporation or charter has been renewed and revived
as of the date of the certificate and the corporation shall be renewed and revived
with the same force and effect as provided in § 312(e) of this title for other
corporations.
(c) As used in this section, the term “exempt corporation” shall have the meaning given to it in § 501(b) of this title. Nothing contained in this section relieves any exempt corporation from filing the annual report required by § 502 of this title.
Section
15. Amend § 314, Title 8 of the Delaware
Code, by making insertions as shown by underline and deletions as shown by
strike through as follows:
§
314. Status of corporation.
Any
corporation desiring to renew, extend and continue its corporate existence,
shall, upon complying with applicable constitutional provisions of this
State, continue for the time stated as provided in its
certificate of renewal, effecting the foregoing as a corporation
and shall, in addition to the rights, privileges and immunities conferred by
its charter, possess and enjoy all the benefits of this chapter, which are
applicable to the nature of its business, and shall be subject to the restrictions
and liabilities by this chapter imposed on such corporations.
Section 16. Sections 1, 3 through 6, and 12 through 15
shall be effective on August 1, 2016.
Section 17. Section 2 shall be effective only with
respect to instruments, documents and agreements entered into on or after August 1,
2016. Section 7 shall be effective only
with respect to merger agreements entered into on or after August 1, 2016.
Section 18. Sections 8 through 11 shall be effective only with respect to transactions consummated pursuant to agreements entered into on or after August 1, 2016 (or, in the case of mergers pursuant to Section 253, resolutions of the board of directors adopted on or after August 1, 2016 or, in the case of mergers pursuant to Section 267, authorizations provided on or after August 1, 2016 in accordance with an entity's (as defined in Section 267) governing documents (as defined in Section 267) and the laws of the jurisdiction under which such entity is formed or organized), and appraisal proceedings arising out of such transactions
SYNOPSIS
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This bill’s changes to the corporations law are recommended by the Delaware State Bar Association. Section 1. Section 104 is amended in connection with the amendments to Sections 311, 312 and 313. Section 2. The amendment to Section 111(a)(2) permits the Court of Chancery to exercise non-exclusive subject matter jurisdiction over civil actions involving certain instruments, documents, or agreements, including (i) those to which a Delaware corporation is a party and pursuant to which one or more holders of the corporation’s stock sell or offer to sell any of such stock, and (ii) those by which a Delaware corporation agrees, subject to specified conditions, to sell, lease or exchange any of its property or assets. The amendment does not affect the concurrent subject matter jurisdiction of the Superior Court over civil actions at law involving such matters. Section 3. Section 141(b) is being amended to eliminate surplus language that addresses the minimum quorum requirement for a one-person board of directors. Section 4. Section 141(c) is being amended to specify default quorum and voting requirements for committees of a board of directors and subcommittees of committees of a board. Section 141(c)(3) is being amended to clarify that references in the General Corporation Law to board committees (and committee members) will be deemed to include references to subcommittees (and subcommittee members). Section 5. Section 141(d) is being amended to eliminate the express reference to subcommittees of committees of a board. The eliminated reference is unnecessary given the amendments to Section 141(c)(3). Section 6. The amendment to Section 158 provides that any two officers of the corporation who are authorized to do so may execute stock certificates on behalf of the corporation. The amendment is not intended to change the existing law that the signatures on a stock certificate may be the signatures of the same person, so long as each signature is made in a separate officer capacity of such person. Section 7. Section 7 amends Section 251(h) in several respects. It clarifies that Section 251(h) is applicable to a constituent corporation that has a class or series of stock that is 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, even if not all classes or series of stock of such constituent corporation are so listed or held. Relatedly, Section 7 clarifies that the offer contemplated by paragraph (2) (the “Offer”) may be effected through separate offers for separate classes or series of stock. The amendments to Section 251(h) also clarify that the Offer may be conditioned on the tender of a minimum number or percentage of the shares of the stock of the constituent corporation, or of any class or series thereof. Section 7 permits, for purposes of determining whether the requirement in paragraph (3) (the “Statutory Minimum Tender Condition”) is satisfied, the inclusion of shares of stock of the constituent corporation held by any person that owns, directly or indirectly, all of the outstanding stock of the corporation making the Offer (the “Offeror”), or that is a direct or indirect wholly-owned subsidiary of such person or persons or of the Offeror (such owners and such subsidiaries, collectively, the “Offeror Affiliates”). Section 251(h), as amended, similarly permits shares of stock of the constituent corporation that are the subject of a written agreement requiring such shares to be transferred, contributed or delivered to the Offeror or any Offeror Affiliate in exchange for stock or other equity interests in the Offeror or any Offeror Affiliate to be counted for purposes of determining satisfaction of the Statutory Minimum Tender Condition, so long as such shares are in fact so transferred, contributed or delivered prior to the effective time of the merger (such shares in fact so transferred, contributed or delivered, “Rollover Stock”). Further, Section 7 provides that Rollover Stock and shares of the constituent corporation held by such constituent corporation in treasury, by any direct or indirect wholly-owned subsidiary of such constituent corporation, or by the Offer or Offeror Affiliates are excluded from the requirement that they be converted in the merger into, or into the right to receive, the same consideration paid in the Offer. Finally, Section 7 clarifies the methods by which shares of stock of the constituent corporation may be “received” for purposes of the Statutory Minimum Tender Condition. With respect to certificated shares, such shares will be “received” upon physical receipt of a stock certificate accompanied by an executed letter of transmittal so long as the certificate representing such shares was not cancelled prior to consummation of the Offer. With respect to uncertificated shares held of record by a clearing corporation as nominee, such shares will be “received” by transfer into the depository’s account by means of an agent’s message. With respect uncertificated shares not so held, such shares will be “received” by physical receipt of an executed letter of transmittal by the depository. Regardless of how uncertificated shares are held, they will cease to be “received” to the extent such uncertificated shares have been reduced or eliminated due to any sale of such shares prior to the consummation of the Offer. For purposes of the foregoing, an “agent’s message” is a message transmitted by the clearing corporation acting as nominee, received by the depository, and forming part of the book-entry confirmation, which states that such clearing corporation has received an express acknowledgment from a stockholder that such stockholder has received the Offer and agrees to be bound by the terms of the Offer, and that the Offeror may enforce such agreement against such stockholder. Section 8. The amendment to Section 262(c) is intended to clarify that where a provision of the certificate of incorporation confers appraisal rights where those rights otherwise do not exist, an appraisal proceeding must be dismissed under the new provisions of subsection (g) of Section 262, if applicable. Section 9. The amendments to Section 262(d) conform to Section 251(h) as amended. Section 10. The amendment to Section 262(g) limits the availability of a judicial determination and award of fair value where the corporation's shares had been traded on a national securities exchange. In that circumstance appraisal rights are essentially precluded unless the dispute with regard to valuation is substantial and involves little risk that the petition for appraisal will be used to achieve a settlement because of the nuisance value of discovery and other burdens of litigation. In a short-form merger under Section 253 or Section 267, however, there is no requirement of approval by the corporation's board of directors and therefore no obligation on the part of directors to approve and recommend the merger, and appraisal may be the only remedy. Accordingly, the limitation in new subsection (g) also is not applicable to mergers accomplished pursuant to Section 253 or Section 267. Section 11. The amendment to Section 262(h) provides an option to the surviving corporation to pay to the stockholders seeking appraisal a sum of money, the amount of which is to be determined in the sole discretion of the surviving corporation, at any time before judgment is entered in the appraisal proceeding, with the result of avoiding the need to pay subsequently accruing interest on that sum. There is no requirement or inference that the amount so paid by the surviving corporation is equal to, greater than, or less than the fair value of the shares to be appraised. Where one or more stockholders' entitlement to appraisal is contested in good faith, the corporation may elect to pay such amount only to those stockholders whose entitlement to appraisal is uncontested. Section 12. Section 311 is amended to include a procedure to restore a corporation’s certificate of incorporation after it has expired by limitation. This change is consistent with Section 278 which provides that Sections 279 through 282, relating to dissolved corporations, apply to any corporation that has expired by its own limitation. Section 311 is also amended to clarify that a corporation desiring to revoke its dissolution or restore its certificate of incorporation must file all annual franchise tax reports that the corporation would have had to file if it had not dissolved or expired by limitation and pay all franchise taxes that the corporation would have had to pay if it had not dissolved or expired. Section 13. Section 312 is amended to distinguish the procedure to extend the term of a corporation’s certificate of incorporation or to restore a corporation’s certificate of incorporation if it has expired by limitation from the procedure to revive a corporation’s certificate of incorporation when it has become forfeited or void. Section 312, as amended, only applies to a corporation whose certificate of incorporation has become forfeited or void and now uses only the term “revival” to reflect this process. The terms “renewal”, “extension” and “restoration” have been eliminated. The amendment to Section 312, however, does not invalidate or otherwise change the effect of filings to “revive”, “renew”, “restore” or “extend” a corporation that were made pursuant to Section 312 prior to the effective time of the amendment to Section 312. The amendment to Section 312 also does not affect the procedure for a corporation formed by a special act of the General Assembly to renew, revive and continue its corporate existence. The procedure to extend a corporation’s duration is now solely governed by Section 242 which sets forth the manner in which a corporation’s certificate of incorporation is amended, including for the purpose of changing the period of duration of the corporation. Section 311 as amended sets forth the procedure to restore a corporation’s certificate of incorporation that has expired by limitation. The other amendments to Section 312 clarify and simplify the procedures to be followed by a Delaware corporation to revive its certificate of incorporation which became forfeited or void. The amendments clarify that the provisions of Section 312 do not apply to a corporation whose certificate of incorporation has been forfeited or revoked by the Court of Chancery pursuant to Section 284. Amended Section 312 also clarifies and streamlines the process to approve a revival of the certificate of incorporation by providing that a majority of the directors then in office, even if less than a quorum, or the sole director in office, may authorize the revival of the certificate of incorporation. Further, Section 312 identifies such directors as those who, but for the certificate of incorporation having become forfeited or void, would be the duly elected or appointed directors of the corporation. The amendments also clarify the process for elections of directors if none are in office and the effect of a revival with respect to actions taken by the corporation’s directors or members of the governing body, officers, agents and stockholders or members. Section 14. The amendments to Section 313 conform to the amendments to Section 312 which provide that a corporation files a certificate of revival when its certificate of incorporation has become void or forfeited. Section 15. Section 314 is amended in connection with the amendments to Sections 311, 312 and 313. Sections 16, 17 and 18. Section 16 provides that the effective date of Sections 1, 3 through 6 and 12 through 15 is August 1, 2016. Section 17 provides that Section 2 shall be effective only with respect to instruments, documents and agreements entered into on or after August 1, 2016, and that Section 7 shall be effective only with respect to merger agreements entered into on or after August 1, 2016. Pursuant to Section 18, Sections 8 through 11 shall be effective only with respect to transactions consummated pursuant to agreements entered into on or after August 1, 2016 (or, in the case of mergers pursuant to Section 253, resolutions of the board of directors adopted on or after August 1, 2016 or, in the case of mergers pursuant to Section 267, authorizations provided on or after August 1, 2016 in accordance with an entity's (as defined in Section 267) governing documents (as defined in Section 267) and the laws of the jurisdiction under which such entity is formed or organized), and appraisal proceedings arising out of such transactions. |