U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
§ 101. Incorporators; how corporation formed; purposes
(a) Any person, partnership, association or corporation, singly or jointly with others, and
without regard to such person's or entity's residence, domicile or state of incorporation, may
incorporate or organize a corporation under this chapter by filing with the Division of
Corporations in the Department of State a certificate of incorporation which shall be executed,
acknowledged and filed in accordance with § 103 of this title.
(b) A corporation may be incorporated or organized under this chapter to conduct or
promote any lawful business or purposes, except as may otherwise be provided by the
Constitution or other law of this State.
(c) Corporations for constructing, maintaining and operating public utilities, whether in
or outside of this State, may be organized under this chapter, but corporations for constructing,
maintaining and operating public utilities within this State shall be subject to, in addition to this
chapter, the special provisions and requirements of Title 26 applicable to such corporations. (8
Del. C. 1953, § 101; 56 Del. Laws, c. 50; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 587, § 1; 71
Del. Laws, c. 339, § 1.)
§ 102. Contents of certificate of incorporation
(a) The certificate of incorporation shall set forth:
(1) The name of the corporation, which (i) shall contain 1 of the words "association,"
"company," "corporation," "club," "foundation," "fund," "incorporated," "institute," "society,"
"union," "syndicate," or "limited," (or abbreviations thereof, with or without punctuation), or
words (or abbreviations thereof, with or without punctuation) of like import of foreign countries
or jurisdictions (provided they are written in roman characters or letters); provided, however, that
the Division of Corporations in the Department of State may waive such requirement (unless it
determines that such name is, or might otherwise appear to be, that of a natural person) if such
corporation executes, acknowledges and files with the Secretary of State in accordance with §
103 of this title a certificate stating that its total assets, as defined in subsection (i) of § 503 of
this title, are not less than $ 10,000,000, (ii) shall be such as to distinguish it upon the records in
the office of the Division of Corporations in the Department of State from the names on such
records of other corporations, partnerships, limited partnerships, limited liability companies or
statutory trusts organized, reserved or registered as a foreign corporation, partnership, limited
partnership, limited liability company or statutory trust under the laws of this State, except with
the written consent of such other foreign corporation or domestic or foreign partnership, limited
partnership, limited liability company or statutory trust executed, acknowledged and filed with
the Secretary of State in accordance with § 103 of this title and (iii) shall not contain the word
"bank," or any variation thereof, except for the name of a bank reporting to and under the
supervision of the State Bank Commissioner of this State or a subsidiary of a bank or savings
association (as those terms are defined in the Federal Deposit Insurance Act, as amended, at 12
U.S.C. § 1813), or a corporation regulated under the Bank Holding Company Act of 1956, as
amended, 12 U.S.C. § 1841 et seq., or the Home Owners' Loan Act, as amended, 12 U.S.C. §
1461 et seq.; provided, however, that this section shall not be construed to prevent the use of the
word "bank," or any variation thereof, in a context clearly not purporting to refer to a banking
business or otherwise likely to mislead the public about the nature of the business of the
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
corporation or to lead to a pattern and practice of abuse that might cause harm to the interests of
the public or the State as determined by the Division of Corporations in the Department of State;
(2) The address (which shall include the street, number, city and county) of the
corporation's registered office in this State, and the name of its registered agent at such address;
(3) The nature of the business or purposes to be conducted or promoted. It shall be
sufficient to state, either alone or with other businesses or purposes, that the purpose of the
corporation is to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware, and by such statement all lawful acts and
activities shall be within the purposes of the corporation, except for express limitations, if any;
(4) If the corporation is to be authorized to issue only 1 class of stock, the total number of
shares of stock which the corporation shall have authority to issue and the par value of each of
such shares, or a statement that all such shares are to be without par value. If the corporation is to
be authorized to issue more than 1 class of stock, the certificate of incorporation shall set forth
the total number of shares of all classes of stock which the corporation shall have authority to
issue and the number of shares of each class and shall specify each class the shares of which are
to be without par value and each class the shares of which are to have par value and the par value
of the shares of each such class. The certificate of incorporation shall also set forth a statement of
the designations and the powers, preferences and rights, and the qualifications, limitations or
restrictions thereof, which are permitted by § 151 of this title in respect of any class or classes of
stock or any series of any class of stock of the corporation and the fixing of which by the
certificate of incorporation is desired, and an express grant of such authority as it may then be
desired to grant to the board of directors to fix by resolution or resolutions any thereof that may
be desired but which shall not be fixed by the certificate of incorporation. The foregoing
provisions of this paragraph shall not apply to corporations which are not to have authority to
issue capital stock. In the case of such corporations, the fact that they are not to have authority to
issue capital stock shall be stated in the certificate of incorporation. The conditions of
membership of such corporations shall likewise be stated in the certificate of incorporation or the
certificate may provide that the conditions of membership shall be stated in the bylaws;
(5) The name and mailing address of the incorporator or incorporators;
(6) If the powers of the incorporator or incorporators are to terminate upon the filing of
the certificate of incorporation, the names and mailing addresses of the persons who are to serve
as directors until the first annual meeting of stockholders or until their successors are elected and
qualify.
(b) In addition to the matters required to be set forth in the certificate of incorporation by
subsection (a) of this section, the certificate of incorporation may also contain any or all of the
following matters:
(1) Any provision for the management of the business and for the conduct of the affairs
of the corporation, and any provision creating, defining, limiting and regulating the powers of the
corporation, the directors, and the stockholders, or any class of the stockholders, or the members
of a nonstock corporation; if such provisions are not contrary to the laws of this State. Any
provision which is required or permitted by any section of this chapter to be stated in the bylaws
may instead be stated in the certificate of incorporation;
(2) The following provisions, in haec verba, viz:
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
"Whenever a compromise or arrangement is proposed between this corporation and its creditors
or any class of them and/or between this corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this corporation or of any creditor or stockholder thereof or on the application
of any receiver or receivers appointed for this corporation under § 291 of Title 8 of the Delaware
Code or on the application of trustees in dissolution or of any receiver or receivers appointed for
this corporation under § 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a majority in number
representing three fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made, be binding on all
the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation";
(3) Such provisions as may be desired granting to the holders of the stock of the
corporation, or the holders of any class or series of a class thereof, the preemptive right to
subscribe to any or all additional issues of stock of the corporation of any or all classes or series
thereof, or to any securities of the corporation convertible into such stock. No stockholder shall
have any preemptive right to subscribe to an additional issue of stock or to any security
convertible into such stock unless, and except to the extent that, such right is expressly granted to
such stockholder in the certificate of incorporation. All such rights in existence on July 3, 1967,
shall remain in existence unaffected by this paragraph unless and until changed or terminated by
appropriate action which expressly provides for the change or termination;
(4) Provisions requiring for any corporate action, the vote of a larger portion of the stock
or of any class or series thereof, or of any other securities having voting power, or a larger
number of the directors, than is required by this chapter;
(5) A provision limiting the duration of the corporation's existence to a specified date;
otherwise, the corporation shall have perpetual existence;
(6) A provision imposing personal liability for the debts of the corporation on its
stockholders or members to a specified extent and upon specified conditions; otherwise, the
stockholders or members of a corporation shall not be personally liable for the payment of the
corporation's debts except as they may be liable by reason of their own conduct or acts;
(7) A provision eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the liability of a director: (i) For any
breach of the director's duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under § 174 of this title; or (iv) for any transaction from which the director derived an
improper personal benefit. No such provision shall eliminate or limit the liability of a director for
any act or omission occurring prior to the date when such provision becomes effective. All
references in this paragraph to a director shall also be deemed to refer (x) to a member of the
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
governing body of a corporation which is not authorized to issue capital stock, and (y) to such
other person or persons, if any, who, pursuant to a provision of the certificate of incorporation in
accordance with § 141(a) of this title, exercise or perform any of the powers or duties otherwise
conferred or imposed upon the board of directors by this title.
(c) It shall not be necessary to set forth in the certificate of incorporation any of the
powers conferred on corporations by this chapter.
(d) Except for provisions included pursuant to subdivisions (a)(1), (a)(2), (a)(5), (a)(6),
(b)(2), (b)(5), (b)(7) of this section, and provisions included pursuant to subdivision (a)(4) of this
section specifying the classes, number of shares, and par value of shares the corporation is
authorized to issue, any provision of the certificate of incorporation may be made dependent
upon facts ascertainable outside such instrument, provided that the manner in which such facts
shall operate upon the provision is clearly and explicitly set forth therein. The term "facts," as
used in this subsection, includes, but is not limited to, the occurrence of any event, including a
determination or action by any person or body, including the corporation. (8 Del. C. 1953, § 102;
56 Del. Laws, c. 50; 57 Del. Laws, c. 148, § 1; 65 Del. Laws, c. 127, § 1; 65 Del. Laws, c. 289, §
§ 1, 2; 66 Del. Laws, c. 136, § 1; 66 Del. Laws, c. 352, § 1; 67 Del. Laws, c. 376, § 1; 69 Del.
Laws, c. 61, § 1; 70 Del. Laws, c. 79, § § 1-3; 71 Del. Laws, c. 120, § 1; 71 Del. Laws, c. 339, §
2; 72 Del. Laws, c. 123, § 1; 72 Del. Laws, c. 343, § 1; 73 Del. Laws, c. 82, § 1; 73 Del. Laws, c.
329, § 43; 74 Del. Laws, c. 326, § 1.)
§ 109. Bylaws
(a) The original or other bylaws of a corporation may be adopted, amended or repealed
by the incorporators, by the initial directors if they were named in the certificate of
incorporation, or, before a corporation has received any payment for any of its stock, by its board
of directors. After a corporation has received any payment for any of its stock, the power to
adopt, amend or repeal bylaws shall be in the stockholders entitled to vote, or, in the case of a
nonstock corporation, in its members entitled to vote; provided, however, any corporation may,
in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the
directors or, in the case of a nonstock corporation, upon its governing body by whatever name
designated. The fact that such power has been so conferred upon the directors or governing body,
as the case may be, shall not divest the stockholders or members of the power, nor limit their
power to adopt, amend or repeal bylaws.
(b) The bylaws may contain any provision, not inconsistent with law or with the
certificate of incorporation, relating to the business of the corporation, the conduct of its affairs,
and its rights or powers or the rights or powers of its stockholders, directors, officers or
employees. (8 Del. C. 1953, § 109; 56 Del. Laws, c. 50; 59 Del. Laws, c. 437, § 1.)
§ 131. Registered office in State; principal office or place of business in State
(a) Every corporation shall have and maintain in this State a registered office which may,
but need not be, the same as its place of business.
(b) Whenever the term "corporation's principal office or place of business in this State" or
"principal office or place of business of the corporation in this State," or other term of like
import, is or has been used in a corporation's certificate of incorporation, or in any other
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
document, or in any statute, it shall be deemed to mean and refer to, unless the context indicates
otherwise, the corporation's registered office required by this section; and it shall not be
necessary for any corporation to amend its certificate of incorporation or any other document to
comply with this section. (8 Del. C. 1953, § 131; 56 Del. Laws, c. 50.)
§ 132. Registered agent in State; resident agent
(a) Every corporation shall have and maintain in this State a registered agent, which agent
may be any of (i) the corporation itself, (ii) an individual resident in this State, (iii) a domestic
corporation (other than the corporation itself), a domestic limited partnership, a domestic limited
liability company or a domestic statutory trust or (iv) a foreign corporation, a foreign limited
partnership or a foreign limited liability company authorized to transact business in this State, in
each case, having a business office identical with the office of such registered agent which
generally is open during normal business hours to accept service of process and otherwise
perform the functions of a registered agent.
(b) Whenever the term "resident agent" or "resident agent in charge of a corporation's
principal office or place of business in this State," or other term of like import which refers to a
corporation's agent required by statute to be located in this State, is or has been used in a
corporation's certificate of incorporation, or in any other document, or in any statute, it shall be
deemed to mean and refer to, unless the context indicates otherwise, the corporation's registered
agent required by this section; and it shall not be necessary for any corporation to amend its
certificate of incorporation or any other document to comply with this section. (8 Del. C. 1953, §
132; 56 Del. Laws, c. 50; 71 Del. Laws, c. 120, § 2; 71 Del. Laws, c. 339, § 10; 73 Del. Laws, c.
329, § 44.)
§ 141. Board of directors; powers; number, qualifications, terms and quorum; committees;
classes of directors; nonprofit corporations; reliance upon books; action without meeting;
removal.
(a) The business and affairs of every corporation organized under this chapter shall be
managed by or under the direction of a board of directors, except as may be otherwise provided
in this chapter or in its certificate of incorporation. If any such provision is made in the certificate
of incorporation, the powers and duties conferred or imposed upon the board of directors by this
chapter shall be exercised or performed to such extent and by such person or persons as shall be
provided in the certificate of incorporation.
(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
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
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.
(c)(1) All corporations incorporated prior to July 1, 1996, shall be governed by paragraph
(1) of this subsection, provided that any such corporation may by a resolution adopted by a
majority of the whole board elect to be governed by paragraph (2) of this subsection, in which
case paragraph (1) of this subsection shall not apply to such corporation. All corporations
incorporated on or after July 1, 1996, shall be governed by paragraph (2) of this subsection. The
board of directors may, by resolution passed by a majority of the whole board, designate 1 or
more committees, each committee to consist of 1 or more of the directors of the corporation. The
board may designate 1 or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. The bylaws may
provide that in the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not the member or
members present constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors, or in the bylaws of
the corporation, shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers which may require it; but no such committee
shall have the power or authority in reference to amending the certificate of incorporation
(except that a committee may, to the extent authorized in the resolution or resolutions providing
for the issuance of shares of stock adopted by the board of directors as provided in subsection (a)
of § 151 of this title, fix the designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any other class or classes or any
other series of the same or any other class or classes of stock of the corporation or fix the number
of shares of any series of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation under § 251, § 252, § 254, § 255, § 256, §
257, § 258, § 263 or § 264 of this title, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the
bylaws of the corporation; and, unless the resolution, bylaws or certificate of incorporation
expressly so provides, no such committee shall have the power or authority to declare a dividend,
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to §
253 of this title.
(2) The board of directors may designate 1 or more committees, each committee to
consist of 1 or more of the directors of the corporation. The board may designate 1 or more
directors as alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. The bylaws may provide that in the absence or
disqualification of a member of a committee, the member or members present at any meeting and
not disqualified from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the board of directors to act at the meeting in the place
of any such absent or disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the bylaws of the corporation, shall have and may
exercise all the powers and authority of the board of directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or authority in
reference to the following matter: (i) approving or adopting, or recommending to the
stockholders, any action or matter (other than the election or removal of directors) expressly
required by this chapter to be submitted to stockholders for approval or (ii) adopting, amending
or repealing any bylaw of the corporation.
(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.
(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 next ensuing 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 and election 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. 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.
(e) A member of the board of directors, or a member of any committee designated by the
board of directors, shall, in the performance of such member's duties, be fully protected in
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
relying in good faith upon the records of the corporation and upon such information, opinions,
reports or statements presented to the corporation by any of the corporation's officers or
employees, or committees of the board of directors, or by any other person as to matters the
member reasonably believes are within such other person's professional or expert competence
and who has been selected with reasonable care by or on behalf of the corporation.
(f) 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.
(g) Unless otherwise restricted by the certificate of incorporation or bylaws, the board of
directors of any corporation organized under this chapter may hold its meetings, and have an
office or offices, outside of this State.
(h) Unless otherwise restricted by the certificate of incorporation or bylaws, the board of
directors shall have the authority to fix the compensation of directors.
(i) Unless otherwise restricted by the certificate of incorporation or bylaws, members of
the board of directors of any corporation, or any committee designated by the board, may
participate in a meeting of such board, or committee by means of conference telephone or other
communications equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this subsection shall constitute presence in
person at the meeting.
(j) The certificate of incorporation of any corporation organized under this chapter which
is not authorized to issue capital stock may provide that less than 1/3 of the members of the
governing body may constitute a quorum thereof and may otherwise provide that the business
and affairs of the corporation shall be managed in a manner different from that provided in this
section. Except as may be otherwise provided by the certificate of incorporation, this section
shall apply to such a corporation, and when so applied, all references to the board of directors, to
members thereof, and to stockholders shall be deemed to refer to the governing body of the
corporation, the members thereof and the members of the corporation, respectively.
(k) Any director or the entire board of directors may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote at an election of directors, except
as follows:
(1) Unless the certificate of incorporation otherwise provides, in the case of a corporation
whose board is classified as provided in subsection (d) of this section, shareholders may effect
such removal only for cause; or
(2) In the case of a corporation having cumulative voting, if less than the entire board is
to be removed, no director may be removed without cause if the votes cast against such director's
removal would be sufficient to elect such director if then cumulatively voted at an election of the
entire board of directors, or, if there be classes of directors, at an election of the class of directors
of which such director is a part.
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Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
Whenever the holders of any class or series are entitled to elect 1 or more directors by the
certificate of incorporation, this subsection shall apply, in respect to the removal without cause of
a director or directors so elected, to the vote of the holders of the outstanding shares of that class
or series and not to the vote of the outstanding shares as a whole. (8 Del. C. 1953, § 141; 56 Del.
Laws, c. 50; 56 Del. Laws, c. 186, § 3; 57 Del. Laws, c. 148, §§ 5, 6; 57 Del. Laws, c. 421, § 1;
59 Del. Laws, c. 437, §§ 2-5; 64 Del. Laws, c. 112, § 6; 65 Del. Laws, c. 127, § 3; 66 Del. Laws,
c. 136, §§ 2, 3; 70 Del. Laws, c. 79, § 7; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 349, § 2; 71
Del. Laws, c. 339, §§ 11-13; 72 Del. Laws, c. 343, §§ 4-6; 73 Del. Laws, c. 298, § 2; 74 Del.
Laws, c. 84, § 2; 74 Del. Laws, c. 326, § 2; 75 Del. Laws, c. 30, § 1.)
§ 142. Officers; titles, duties, selection, term; failure to elect; vacancies
(a) Every corporation organized under this chapter shall have such officers with such
titles and duties as shall be stated in the bylaws or in a resolution of the board of directors which
is not inconsistent with the bylaws and as may be necessary to enable it to sign instruments and
stock certificates which comply with § § 103(a)(2) and 158 of this title. One of the officers shall
have the duty to record the proceedings of the meetings of the stockholders and directors in a
book to be kept for that purpose. Any number of offices may be held by the same person unless
the certificate of incorporation or bylaws otherwise provide.
(b) Officers shall be chosen in such manner and shall hold their offices for such terms as
are prescribed by the bylaws or determined by the board of directors or other governing body.
Each officer shall hold office until such officer's successor is elected and qualified or until such
officer's earlier resignation or removal. Any officer may resign at any time upon written notice to
the corporation.
(c) The corporation may secure the fidelity of any or all of its officers or agents by bond
or otherwise.
(d) A failure to elect officers shall not dissolve or otherwise affect the corporation.
(e) Any vacancy occurring in any office of the corporation by death, resignation, removal
or otherwise, shall be filled as the bylaws provide. In the absence of such provision, the vacancy
shall be filled by the board of directors or other governing body. (8 Del. C. 1953, § 142; 56 Del.
Laws, c. 50; 56 Del. Laws, c. 186, § 4; 57 Del. Laws, c. 649, § 2; 59 Del. Laws, c. 437, § 6; 71
Del. Laws, c. 339, § 14.)
§ 144. Interested directors; quorum
(a) No contract or transaction between a corporation and 1 or more of its directors or
officers, or between a corporation and any other corporation, partnership, association, or other
organization in which 1 or more of its directors or officers, are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of the board or committee which authorizes the
contract or transaction, or solely because any such director's or officer's votes are counted for
such purpose, if:
(1) The material facts as to the director's or officer's relationship or interest and as to the
contract or transaction are disclosed or are known to the board of directors or the committee, and
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
the board or committee in good faith authorizes the contract or transaction by the affirmative
votes of a majority of the disinterested directors, even though the disinterested directors be less
than a quorum; or
(2) The material facts as to the director's or officer's relationship or interest and as to the
contract or transaction are disclosed or are known to the shareholders entitled to vote thereon,
and the contract or transaction is specifically approved in good faith by vote of the shareholders;
or
(3) The contract or transaction is fair as to the corporation as of the time it is authorized,
approved or ratified, by the board of directors, a committee or the shareholders.
(b) Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the board of directors or of a committee which authorizes the contract or
transaction. (8 Del. C. 1953, § 144; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 5; 57 Del. Laws,
c. 148, § 7; 71 Del. Laws, c. 339, § § 15-17.)
§ 151. Classes and series of stock; redemption; rights
(a) Every corporation may issue 1 or more classes of stock or 1 or more series of stock
within any class thereof, any or all of which classes may be of stock with par value or stock
without par value and which classes or series may have such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the certificate of incorporation or of any amendment thereto, or in the resolution or
resolutions providing for the issue of such stock adopted by the board of directors pursuant to
authority expressly vested in it by the provisions of its certificate of incorporation. Any of the
voting powers, designations, preferences, rights and qualifications, limitations or restrictions of
any such class or series of stock may be made dependent upon facts ascertainable outside the
certificate of incorporation or of any amendment thereto, or outside the resolution or resolutions
providing for the issue of such stock adopted by the board of directors pursuant to authority
expressly vested in it by its certificate of incorporation, provided that the manner in which such
facts shall operate upon the voting powers, designations, preferences, rights and qualifications,
limitations or restrictions of such class or series of stock is clearly and expressly set forth in the
certificate of incorporation or in the resolution or resolutions providing for the issue of such
stock adopted by the board of directors. The term "facts," as used in this subsection, includes, but
is not limited to, the occurrence of any event, including a determination or action by any person
or body, including the corporation. The power to increase or decrease or otherwise adjust the
capital stock as provided in this chapter shall apply to all or any such classes of stock.
(b) Any stock of any class or series may be made subject to redemption by the
corporation at its option or at the option of the holders of such stock or upon the happening of a
specified event; provided however, that immediately following any such redemption the
corporation shall have outstanding 1 or more shares of 1 or more classes or series of stock, which
share, or shares together, shall have full voting powers. Notwithstanding the limitation stated in
the foregoing proviso:
(1) Any stock of a regulated investment company registered under the Investment
Company Act of 1940 [15 U.S.C. § 80 a-1 et seq.], as heretofore or hereafter amended, may be
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
made subject to redemption by the corporation at its option or at the option of the holders of such
stock.
(2) Any stock of a corporation which holds (directly or indirectly) a license or franchise
from a governmental agency to conduct its business or is a member of a national securities
exchange, which license, franchise or membership is conditioned upon some or all of the holders
of its stock possessing prescribed qualifications, may be made subject to redemption by the
corporation to the extent necessary to prevent the loss of such license, franchise or membership
or to reinstate it.
Any stock which may be made redeemable under this section may be redeemed for cash,
property or rights, including securities of the same or another corporation, at such time or times,
price or prices, or rate or rates, and with such adjustments, as shall be stated in the certificate of
incorporation or in the resolution or resolutions providing for the issue of such stock adopted by
the board of directors pursuant to subsection (a) of this section.
(c) The holders of preferred or special stock of any class or of any series thereof shall be
entitled to receive dividends at such rates, on such conditions and at such times as shall be stated
in the certificate of incorporation or in the resolution or resolutions providing for the issue of
such stock adopted by the board of directors as hereinabove provided, payable in preference to,
or in such relation to, the dividends payable on any other class or classes or of any other series of
stock, and cumulative or noncumulative as shall be so stated and expressed. When dividends
upon the preferred and special stocks, if any, to the extent of the preference to which such stocks
are entitled, shall have been paid or declared and set apart for payment, a dividend on the
remaining class or classes or series of stock may then be paid out of the remaining assets of the
corporation available for dividends as elsewhere in this chapter provided.
(d) The holders of the preferred or special stock of any class or of any series thereof shall
be entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the
corporation as shall be stated in the certificate of incorporation or in the resolution or resolutions
providing for the issue of such stock adopted by the board of directors as hereinabove provided.
(e) Any stock of any class or of any series thereof may be made convertible into, or
exchangeable for, at the option of either the holder or the corporation or upon the happening of a
specified event, shares of any other class or classes or any other series of the same or any other
class or classes of stock of the corporation, at such price or prices or at such rate or rates of
exchange and with such adjustments as shall be stated in the certificate of incorporation or in the
resolution or resolutions providing for the issue of such stock adopted by the board of directors
as hereinabove provided.
(f) If any corporation shall be authorized to issue more than 1 class of stock or more than
1 series of any class, the powers, designations, preferences and relative, participating, optional,
or other special rights of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such class or series of
stock, provided that, except as otherwise provided in § 202 of this title, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate which the corporation
shall issue to represent such class or series of stock, a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations, preferences and
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
relative, participating, optional, or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the information required to be set forth
or stated on certificates pursuant to this section or § 156, 202(a) or 218(a) of this title or with
respect to this section a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative participating,
optional or other special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Except as otherwise expressly
provided by law, the rights and obligations of the holders of uncertificated stock and the rights
and obligations of the holders of certificates representing stock of the same class and series shall
be identical.
(g) When any corporation desires to issue any shares of stock of any class or of any series
of any class of which the powers, designations, preferences and relative, participating, optional
or other rights, if any, or the qualifications, limitations or restrictions thereof, if any, shall not
have been set forth in the certificate of incorporation or in any amendment thereto but shall be
provided for in a resolution or resolutions adopted by the board of directors pursuant to authority
expressly vested in it by the certificate of incorporation or any amendment thereto, a certificate
of designations setting forth a copy of such resolution or resolutions and the number of shares of
stock of such class or series as to which the resolution or resolutions apply shall be executed,
acknowledged, filed and shall become effective, in accordance with § 103 of this title. Unless
otherwise provided in any such resolution or resolutions, the number of shares of stock of any
such series to which such resolution or resolutions apply may be increased (but not above the
total number of authorized shares of the class) or decreased (but not below the number of shares
thereof then outstanding) by a certificate likewise executed, acknowledged and filed setting forth
a statement that a specified increase or decrease therein had been authorized and directed by a
resolution or resolutions likewise adopted by the board of directors. In case the number of such
shares shall be decreased the number of shares so specified in the certificate shall resume the
status which they had prior to the adoption of the first resolution or resolutions. When no shares
of any such class or series are outstanding, either because none were issued or because no issued
shares of any such class or series remain outstanding, a certificate setting forth a resolution or
resolutions adopted by the board of directors that none of the authorized shares of such class or
series are outstanding, and that none will be issued subject to the certificate of designations
previously filed with respect to such class or series, may be executed, acknowledged and filed in
accordance with § 103 of this title and, when such certificate becomes effective, it shall have the
effect of eliminating from the certificate of incorporation all matters set forth in the certificate of
designations with respect to such class or series of stock. Unless otherwise provided in the
certificate of incorporation, if no shares of stock have been issued of a class or series of stock
established by a resolution of the board of directors, the voting powers, designations, preferences
and relative, participating, optional or other rights, if any, or the qualifications, limitations or
restrictions thereof, may be amended by a resolution or resolutions adopted by the board of
directors. A certificate which (1) states that no shares of the class or series have been issued, (2)
sets forth a copy of the resolution or resolutions and (3) if the designation of the class or series is
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
being changed, indicates the original designation and the new designation, shall be executed,
acknowledged and filed and shall become effective, in accordance with § 103 of this title. When
any certificate filed under this subsection becomes effective, it shall have the effect of amending
the certificate of incorporation; except that neither the filing of such certificate nor the filing of a
restated certificate of incorporation pursuant to § 245 of this title shall prohibit the board of
directors from subsequently adopting such resolutions as authorized by this subsection. (8 Del.
C. 1953, § 151; 56 Del. Laws, c. 50; 57 Del. Laws, c. 148, § § 8, 9; 57 Del. Laws, c. 421, § § 3,
4; 59 Del. Laws, c. 106, § 1; 64 Del. Laws, c. 112, § § 8-10; 65 Del. Laws, c. 127, § 4; 66 Del.
Laws, c. 136, § 4; 67 Del. Laws, c. 376, § 4; 69 Del. Laws, c. 264, § 1; 70 Del. Laws, c. 587, §
12; 71 Del. Laws, c. 339, § 18.)
§ 152. Issuance of stock; lawful consideration; fully paid stock
The consideration, as determined pursuant to subsections (a) and (b) of § 153 of this title, for
subscriptions to, or the purchase of, the capital stock to be issued by a corporation shall be paid
in such form and in such manner as the board of directors shall determine. The board of directors
may authorize capital stock to be issued for consideration consisting of cash, any tangible or
intangible property or any benefit to the corporation, or any combination thereof. In the absence
of actual fraud in the transaction, the judgment of the directors as to the value of such
consideration shall be conclusive. The capital stock so issued shall be deemed to be fully paid
and nonassessable stock upon receipt by the corporation of such consideration; provided,
however, nothing contained herein shall prevent the board of directors from issuing partly paid
shares under § 156 of this title. (8 Del. C. 1953, § 152; 56 Del. Laws, c. 50; 59 Del. Laws, c. 437,
§ 8; 74 Del. Laws, c. 326, § 3.)
§ 170. Dividends; payment; wasting asset corporations
(a) The directors of every corporation, subject to any restrictions contained in its
certificate of incorporation, may declare and pay dividends upon the shares of its capital stock, or
to its members if the corporation is a nonstock corporation, either (1) out of its surplus, as
defined in and computed in accordance with § § 154 and 244 of this title, or (2) in case there
shall be no such surplus, out of its net profits for the fiscal year in which the dividend is declared
and/or the preceding fiscal year. If the capital of the corporation, computed in accordance with §
§ 154 and 244 of this title, shall have been diminished by depreciation in the value of its
property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a preference upon the
distribution of assets, the directors of such corporation shall not declare and pay out of such net
profits any dividends upon any shares of any classes of its capital stock until the deficiency in the
amount of capital represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets shall have been repaired. Nothing in this subsection
shall invalidate or otherwise affect a note, debenture or other obligation of the corporation paid
by it as a dividend on shares of its stock, or any payment made thereon, if at the time such note,
debenture or obligation was delivered by the corporation, the corporation had either surplus or
net profits as provided in clause (1) or (2) of this subsection from which the dividend could
lawfully have been paid.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(b) Subject to any restrictions contained in its certificate of incorporation, the directors of
any corporation engaged in the exploitation of wasting assets (including but not limited to a
corporation engaged in the exploitation of natural resources or other wasting assets, including
patents, or engaged primarily in the liquidation of specific assets) may determine the net profits
derived from the exploitation of such wasting assets or the net proceeds derived from such
liquidation without taking into consideration the depletion of such assets resulting from lapse of
time, consumption, liquidation or exploitation of such assets. (8 Del. C. 1953, § 170; 56 Del.
Laws, c. 50; 56 Del. Laws, c. 186, § 9; 59 Del. Laws, c. 106, § 5; 64 Del. Laws, c. 112, § 17; 67
Del. Laws, c. 376, § 5; 69 Del. Laws, c. 61, § 3; 72 Del. Laws, c. 123, § 3.)
§ 211. Meetings of stockholders
(a) (1) Meetings of stockholders may be held at such place, either within or without this
State as may be designated by or in the manner provided in the certificate of incorporation or
bylaws, or if not so designated, as determined by the board of directors. If, pursuant to this
paragraph or the certificate of incorporation or the bylaws of the corporation, the board of
directors is authorized to determine the place of a meeting of stockholders, the board of directors
may, in its sole discretion, determine that the meeting shall not be held at any place, but may
instead be held solely by means of remote communication as authorized by paragraph (a)(2) of
this section.
(2) If authorized by the board of directors in its sole discretion, and subject to such
guidelines and procedures as the board of directors may adopt, stockholders and proxyholders
not physically present at a meeting of stockholders may, by means of remote communication:
a. Participate in a meeting of stockholders; and
b. Be deemed present in person and vote at a meeting of stockholders, whether such meeting is to
be held at a designated place or solely by means of remote communication, provided that (i) the
corporation shall implement reasonable measures to verify that each person deemed present and
permitted to vote at the meeting by means of remote communication is a stockholder or
proxyholder, (ii) the corporation shall implement reasonable measures to provide such
stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote
on matters submitted to the stockholders, including an opportunity to read or hear the
proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any
stockholder or proxyholder votes or takes other action at the meeting by means of remote
communication, a record of such vote or other action shall be maintained by the corporation.
(b) Unless directors are elected by written consent in lieu of an annual meeting as
permitted by this subsection, an annual meeting of stockholders shall be held for the election of
directors on a date and at a time designated by or in the manner provided in the bylaws.
Stockholders may, unless the certificate of incorporation otherwise provides, act by written
consent to elect directors; provided, however, that, if such consent is less than unanimous, such
action by written consent may be in lieu of holding an annual meeting only if all of the
directorships to which directors could be elected at an annual meeting held at the effective time
of such action are vacant and are filled by such action. Any other proper business may be
transacted at the annual meeting.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(c) A failure to hold the annual meeting at the designated time or to elect a sufficient
number of directors to conduct the business of the corporation shall not affect otherwise valid
corporate acts or work a forfeiture or dissolution of the corporation except as may be otherwise
specifically provided in this chapter. If the annual meeting for election of directors is not held on
the date designated therefor or action by written consent to elect directors in lieu of an annual
meeting has not been taken, the directors shall cause the meeting to be held as soon as is
convenient. If there be a failure to hold the annual meeting or to take action by written consent to
elect directors in lieu of an annual meeting for a period of 30 days after the date designated for
the annual meeting, or if no date has been designated, for a period of 13 months after the latest to
occur of the organization of the corporation, its last annual meeting or the last action by written
consent to elect directors in lieu of an annual meeting, the Court of Chancery may summarily
order a meeting to be held upon the application of any stockholder or director. The shares of
stock represented at such meeting, either in person or by proxy, and entitled to vote thereat, shall
constitute a quorum for the purpose of such meeting, notwithstanding any provision of the
certificate of incorporation or bylaws to the contrary. The Court of Chancery may issue such
orders as may be appropriate, including, without limitation, orders designating the time and place
of such meeting, the record date for determination of stockholders entitled to vote, and the form
of notice of such meeting.
(d) Special meetings of the stockholders may be called by the board of directors or by
such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
(e) All elections of directors shall be by written ballot unless otherwise provided in the
certificate of incorporation; if authorized by the board of directors, such requirement of a written
ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such
electronic transmission must either set forth or be submitted with information from which it can
be determined that the electronic transmission was authorized by the stockholder or proxy
holder. (8 Del. C. 1953, § 211; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 12; 63 Del. Laws, c.
25, § 4; 71 Del. Laws, c. 120, § § 12, 13; 72 Del. Laws, c. 343, § § 7, 8.)
§ 212. Voting rights of stockholders; proxies; limitations
(a) Unless otherwise provided in the certificate of incorporation and subject to § 213 of
this title, each stockholder shall be entitled to 1 vote for each share of capital stock held by such
stockholder. If the certificate of incorporation provides for more or less than 1 vote for any share,
on any matter, every reference in this chapter to a majority or other proportion of stock, voting
stock or shares shall refer to such majority or other proportion of the votes of such stock, voting
stock or shares.
(b) Each stockholder entitled to vote at a meeting of stockholders or to express consent or
dissent to corporate action in writing without a meeting may authorize another person or persons
to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after 3 years
from its date, unless the proxy provides for a longer period.
(c) Without limiting the manner in which a stockholder may authorize another person or
persons to act for such stockholder as proxy pursuant to subsection (b) of this section, the
following shall constitute a valid means by which a stockholder may grant such authority:
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(1) A stockholder may execute a writing authorizing another person or persons to act for
such stockholder as proxy. Execution may be accomplished by the stockholder or such
stockholder's authorized officer, director, employee or agent signing such writing or causing
such person's signature to be affixed to such writing by any reasonable means including, but not
limited to, by facsimile signature.
(2) A stockholder may authorize another person or persons to act for such stockholder as
proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means
of electronic transmission to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly authorized by the person
who will be the holder of the proxy to receive such transmission, provided that any such
telegram, cablegram or other means of electronic transmission must either set forth or be
submitted with information from which it can be determined that the telegram, cablegram or
other electronic transmission was authorized by the stockholder. If it is determined that such
telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are
no inspectors, such other persons making that determination shall specify the information upon
which they relied.
(d) Any copy, facsimile telecommunication or other reliable reproduction of the writing
or transmission created pursuant to subsection (c) of this section may be substituted or used in
lieu of the original writing or transmission for any and all purposes for which the original writing
or transmission could be used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or transmission.
(e) A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A
proxy may be made irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. (8 Del. C. 1953, § 212; 56
Del. Laws, c. 50; 57 Del. Laws, c. 148, § 12; 67 Del. Laws, c. 376, § 6; 71 Del. Laws, c. 339, § §
28-31; 73 Del. Laws, c. 298, § 7.)
§ 216. Quorum and required vote for stock corporations
Subject to this chapter in respect of the vote that shall be required for a specified action, the
certificate of incorporation or bylaws of any corporation authorized to issue stock may specify
the number of shares and/or the amount of other securities having voting power the holders of
which shall be present or represented by proxy at any meeting in order to constitute a quorum
for, and the votes that shall be necessary for, the transaction of any business, but in no event shall
a quorum consist of less than one-third of the shares entitled to vote at the meeting, except that,
where a separate vote by a class or series or classes or series is required, a quorum shall consist
of no less than one-third of the shares of such class or series or classes or series. In the absence
of such specification in the certificate of incorporation or bylaws of the corporation:
(1) A majority of the shares entitled to vote, present in person or represented by proxy,
shall constitute a quorum at a meeting of stockholders;
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(2) In all matters other than the election of directors, the affirmative vote of the majority
of shares present in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders;
(3) Directors shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of directors; and
(4) Where a separate vote by a class or series or classes or series is required, a majority of
the outstanding shares of such class or series or classes or series, present in person or represented
by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter
and the affirmative vote of the majority of shares of such class or series or classes or series
present in person or represented by proxy at the meeting shall be the act of such class or series or
classes or series.
A bylaw amendment adopted by stockholders which specifies the votes that shall be necessary
for the election of directors shall not be further amended or repealed by the board of directors. (8
Del. C. 1953, § 216; 56 Del. Laws, c. 50; 63 Del. Laws, c. 25, § 7; 64 Del. Laws, c. 112, § 21; 66
Del. Laws, c. 136, §§ 10, 11; 71 Del. Laws, c. 339, §§ 34, 35; 75 Del. Laws, c. 306, § 5.)
2006 Revisor's Note. -- Section 8 of 75 Del. Laws, c. 306, provides that this section shall
become effective on August 1, 2006.
§ 219. List of stockholders entitled to vote; penalty for refusal to produce; stock ledger
(a) The officer who has charge of the stock ledger of a corporation shall prepare and
make, at least 10 days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder. Nothing
contained in this section shall require the corporation to include electronic mail addresses or
other electronic contact information on such list. Such list shall be open to the examination of
any stockholder for any purpose germane to the meeting for a period of at least 10 days prior to
the meeting: (i) on a reasonably accessible electronic network, provided that the information
required to gain access to such list is provided with the notice of the meeting, or (ii) during
ordinary business hours, at the principal place of business of the corporation. In the event that the
corporation determines to make the list available on an electronic network, the corporation may
take reasonable steps to ensure that such information is available only to stockholders of the
corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the
time and place of the meeting during the whole time thereof and may be inspected by any
stockholder who is present. If the meeting is to be held solely by means of remote
communication, then the list shall also be open to the examination of any stockholder during the
whole time of the meeting on a reasonably accessible electronic network, and the information
required to access such list shall be provided with the notice of the meeting.
(b) Upon the wilful neglect or refusal of the directors to produce such a list at any
meeting for the election of directors held at a place, or to open such a list to examination on a
reasonably accessible electronic network during any meeting for the election of directors held
solely by means of remote communication, they shall be ineligible for election to any office at
such meeting.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(c) The stock ledger shall be the only evidence as to who are the stockholders entitled by
this section to examine the list required by this section or to vote in person or by proxy at any
meeting of stockholders. (8 Del. C. 1953, § 219; 56 Del. Laws, c. 50; 72 Del. Laws, c. 343, § § 9,
10; 74 Del. Laws, c. 84, § 4.)
§ 220. Inspection of books and records
(a) As used in this section:
(1) "List of stockholders" includes lists of members in a nonstock corporation.
(2) "Stockholder" means a holder of record of stock in a stock corporation, or a person
who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee
on behalf of such person, and also a member of a nonstock corporation as reflected on the
records of the nonstock corporation.
(3) "Subsidiary" means any entity directly or indirectly owned, in whole or in part, by the
corporation of which the stockholder is a stockholder and over the affairs of which the
corporation directly or indirectly exercises control, and includes, without limitation,
corporations, partnerships, limited partnerships, limited liability partnerships, limited liability
companies, statutory trusts and/or joint ventures.
(4) "Under oath" includes statements the declarant affirms to be true under penalty of
perjury under the laws of the United States or any state.
(b) Any stockholder, in person or by attorney or other agent, shall, upon written demand
under oath stating the purpose thereof, have the right during the usual hours for business to
inspect for any proper purpose, and to make copies and extracts from:
(1) The corporation's stock ledger, a list of its stockholders, and its other books and
records; and
(2) A subsidiary's books and records, to the extent that:
a. The corporation has actual possession and control of such records of such subsidiary;
or
b. The corporation could obtain such records through the exercise of control over such
subsidiary, provided that as of the date of the making of the demand:
1. The stockholder inspection of such books and records of the subsidiary would not
constitute a breach of an agreement between the corporation or the subsidiary and a person or
persons not affiliated with the corporation; and
2. The subsidiary would not have the right under the law applicable to it to deny the
corporation access to such books and records upon demand by the corporation.
In every instance where the stockholder is other than a record holder of stock in a stock
corporation or a member of a nonstock corporation, the demand under oath shall state the
person's status as a stockholder, be accompanied by documentary evidence of beneficial
ownership of the stock, and state that such documentary evidence is a true and correct copy of
what it purports to be. A proper purpose shall mean a purpose reasonably related to such person's
interest as a stockholder. In every instance where an attorney or other agent shall be the person
who seeks the right to inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing which authorizes the attorney or other agent to so act on behalf of
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
the stockholder. The demand under oath shall be directed to the corporation at its registered
office in this State or at its principal place of business.
(c) If the corporation, or an officer or agent thereof, refuses to permit an inspection
sought by a stockholder or attorney or other agent acting for the stockholder pursuant to
subsection (b) of this section or does not reply to the demand within 5 business days after the
demand has been made, the stockholder may apply to the Court of Chancery for an order to
compel such inspection. The Court of Chancery is hereby vested with exclusive jurisdiction to
determine whether or not the person seeking inspection is entitled to the inspection sought. The
Court may summarily order the corporation to permit the stockholder to inspect the corporation's
stock ledger, an existing list of stockholders, and its other books and records, and to make copies
or extracts therefrom; or the Court may order the corporation to furnish to the stockholder a list
of its stockholders as of a specific date on condition that the stockholder first pay to the
corporation the reasonable cost of obtaining and furnishing such list and on such other conditions
as the Court deems appropriate. Where the stockholder seeks to inspect the corporation's books
and records, other than its stock ledger or list of stockholders, such stockholder shall first
establish that:
(1) Such stockholder is a stockholder;
(2) Such stockholder has complied with this section respecting the form and manner of
making demand for inspection of such documents; and
(3) The inspection such stockholder seeks is for a proper purpose.
Where the stockholder seeks to inspect the corporation's stock ledger or list of stockholders and
establishes that such stockholder is a stockholder and has complied with this section respecting
the form and manner of making demand for inspection of such documents, the burden of proof
shall be upon the corporation to establish that the inspection such stockholder seeks is for an
improper purpose. The Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other or further relief as the Court may deem just and
proper. The Court may order books, documents and records, pertinent extracts therefrom, or duly
authenticated copies thereof, to be brought within this State and kept in this State upon such
terms and conditions as the order may prescribe.
(d) Any director (including a member of the governing body of a nonstock corporation)
shall have the right to examine the corporation's stock ledger, a list of its stockholders and its
other books and records for a purpose reasonably related to the director's position as a director.
The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a
director is entitled to the inspection sought. The Court may summarily order the corporation to
permit the director to inspect any and all books and records, the stock ledger and the list of
stockholder's and to make copies or extracts therefrom. The burden of proof shall be upon the
corporation to establish that the inspection such director seeks is for an improper purpose. The
Court may, in its discretion, prescribe any limitations or conditions with reference to the
inspection, or award such other and further relief as the Court may deem just and proper. (8 Del.
C. 1953, § 220; 56 Del. Laws, c. 50; 63 Del. Laws, c. 25, § 9; 70 Del. Laws, c. 79, § § 11, 12; 70
Del. Laws, c. 186, § 1; 71 Del. Laws, c. 339, § 39; 74 Del. Laws, c. 84, § § 5-8.)
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
§ 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, 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.
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. 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, as the directors shall deem advisable. At the
meeting a vote of the stockholders entitled to vote thereon shall be taken for and against the
proposed amendment. 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
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
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 has no capital stock, 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 such corporation without capital stock
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 without capital stock 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, by the holders of any class or series of shares 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. (8 Del. C. 1953, § 242; 56 Del. Laws, c. 50; 57 Del. Laws, c. 148, § §
18-21; 59 Del. Laws, c. 106, § 7; 63 Del. Laws, c. 25, § 12; 64 Del. Laws, c. 112, § 24; 67 Del.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
Laws, c. 376, § 10; 70 Del. Laws, c. 349, § § 5-7; 70 Del. Laws, c. 587, § 14, 15; 72 Del. Laws,
c. 123, § 5.)
§ 251. Merger or consolidation of domestic corporations and limited liability company
(a) Any 2 or more corporations existing under the laws of this State may merge into a
single corporation, which may be any 1 of the constituent corporations or may consolidate into a
new corporation formed by the consolidation, pursuant to an agreement of merger or
consolidation, as the case may be, complying and approved in accordance with this section.
(b) The board of directors of each corporation which desires to merge or consolidate shall
adopt a resolution approving an agreement of merger or consolidation and declaring its
advisability. The agreement shall state: (1) The terms and conditions of the merger or
consolidation; (2) the mode of carrying the same into effect; (3) in the case of a merger, such
amendments or changes in the certificate of incorporation of the surviving corporation as are
desired to be effected by the merger, or, if no such amendments or changes are desired, a
statement that the certificate of incorporation of the surviving corporation shall be its certificate
of incorporation; (4) in the case of a consolidation, that the certificate of incorporation of the
resulting corporation shall be as is set forth in an attachment to the agreement; (5) the manner, if
any, of converting the shares of each of the constituent corporations into shares or other
securities of the corporation surviving or resulting from the merger or consolidation, or of
cancelling some or all of such shares, and, if any shares of any of the constituent corporations are
not to remain outstanding, to be converted solely into shares or other securities of the surviving
or resulting corporation or to be cancelled, the cash, property, rights or securities of any other
corporation or entity which the holders of such shares are to receive in exchange for, or upon
conversion of such shares and the surrender of any certificates evidencing them, which cash,
property, rights or securities of any other corporation or entity may be in addition to or in lieu of
shares or other securities of the surviving or resulting corporation; and (6) such other details or
provisions as are deemed desirable, including, without limiting the generality of the foregoing, a
provision for the payment of cash in lieu of the issuance or recognition of fractional shares,
interests or rights, or for any other arrangement with respect thereto, consistent with § 155 of this
title. The agreement so adopted shall be executed and acknowledged in accordance with § 103 of
this title. Any of the terms of the agreement of merger or consolidation may be made dependent
upon facts ascertainable outside of such agreement, provided that the manner in which such facts
shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement
of merger or consolidation. The term "facts," as used in the preceding sentence, includes, but is
not limited to, the occurrence of any event, including a determination or action by any person or
body, including the corporation.
(c) The agreement required by subsection (b) of this section shall be submitted to the
stockholders of each constituent corporation at an annual or special meeting for the purpose of
acting on the agreement. Due notice of the time, place and purpose of the meeting shall be
mailed to each holder of stock, whether voting or nonvoting, of the corporation at the
stockholder's address as it appears on the records of the corporation, at least 20 days prior to the
date of the meeting. The notice shall contain a copy of the agreement or a brief summary thereof,
as the directors shall deem advisable. At the meeting, the agreement shall be considered and a
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
vote taken for its adoption or rejection. If a majority of the outstanding stock of the corporation
entitled to vote thereon shall be voted for the adoption of the agreement, that fact shall be
certified on the agreement by the secretary or assistant secretary of the corporation. If the
agreement shall be so adopted and certified by each constituent corporation, it shall then be filed
and shall become effective, in accordance with § 103 of this title. In lieu of filing the agreement
of merger or consolidation required by this section, the surviving or resulting corporation may
file a certificate of merger or consolidation, executed in accordance with § 103 of this title,
which states:
(1) The name and state of incorporation of each of the constituent corporations;
(2) That an agreement of merger or consolidation has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance with this
section;
(3) The name of the surviving or resulting corporation;
(4) In the case of a merger, such amendments or changes in the certificate of
incorporation of the surviving corporation as are desired to be effected by the merger, or, if no
such amendments or changes are desired, a statement that the certificate of incorporation of the
surviving corporation shall be its certificate of incorporation;
(5) In the case of a consolidation, that the certificate of incorporation of the resulting
corporation shall be as set forth in an attachment to the certificate;
(6) That the executed agreement of consolidation or merger is on file at an office of the
surviving corporation, stating the address thereof; and
(7) That a copy of the agreement of consolidation or merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any constituent
corporation.
(d) Any agreement of merger or consolidation may contain a provision that at any time
prior to the time that the agreement (or a certificate in lieu thereof) filed with the Secretary of
State becomes effective in accordance with § 103 of this title, the agreement may be terminated
by the board of directors of any constituent corporation notwithstanding approval of the
agreement by the stockholders of all or any of the constituent corporations; in the event the
agreement of merger or consolidation is terminated after the filing of the agreement (or a
certificate in lieu thereof) with the Secretary of State but before the agreement (or a certificate in
lieu thereof) has become effective, a certificate of termination or merger or consolidation shall be
filed in accordance with § 103 of this title. Any agreement of merger or consolidation may
contain a provision that the boards of directors of the constituent corporations may amend the
agreement at any time prior to the time that the agreement (or a certificate in lieu thereof) filed
with the Secretary of State becomes effective in accordance with § 103 of this title, provided that
an amendment made subsequent to the adoption of the agreement by the stockholders of any
constituent corporation shall not (1) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or any of the shares
of any class or series thereof of such constituent corporation, (2) alter or change any term of the
certificate of incorporation of the surviving corporation to be effected by the merger or
consolidation, or (3) alter or change any of the terms and conditions of the agreement if such
alteration or change would adversely affect the holders of any class or series thereof of such
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
constituent corporation; in the event the agreement of merger or consolidation is amended after
the filing thereof with the Secretary of State but before the agreement has become effective, a
certificate of amendment of merger or consolidation shall be filed in accordance with § 103 of
this title.
(e) In the case of a merger, the certificate of incorporation of the surviving corporation
shall automatically be amended to the extent, if any, that changes in the certificate of
incorporation are set forth in the agreement of merger.
(f) Notwithstanding the requirements of subsection (c) of this section, unless required by
its certificate of incorporation, no vote of stockholders of a constituent corporation surviving a
merger shall be necessary to authorize a merger if (1) the agreement of merger does not amend in
any respect the certificate of incorporation of such constituent corporation, (2) each share of
stock of such constituent corporation outstanding immediately prior to the effective date of the
merger is to be an identical outstanding or treasury share of the surviving corporation after the
effective date of the merger, and (3) either no shares of common stock of the surviving
corporation and no shares, securities or obligations convertible into such stock are to be issued or
delivered under the plan of merger, or the authorized unissued shares or the treasury shares of
common stock of the surviving corporation to be issued or delivered under the plan of merger
plus those initially issuable upon conversion of any other shares, securities or obligations to be
issued or delivered under such plan do not exceed 20% of the shares of common stock of such
constituent corporation outstanding immediately prior to the effective date of the merger. No
vote of stockholders of a constituent corporation shall be necessary to authorize a merger or
consolidation if no shares of the stock of such corporation shall have been issued prior to the
adoption by the board of directors of the resolution approving the agreement of merger or
consolidation. If an agreement of merger is adopted by the constituent corporation surviving the
merger, by action of its board of directors and without any vote of its stockholders pursuant to
this subsection, the secretary or assistant secretary of that corporation shall certify on the
agreement that the agreement has been adopted pursuant to this subsection and, (1) if it has been
adopted pursuant to the first sentence of this subsection, that the conditions specified in that
sentence have been satisfied, or (2) if it has been adopted pursuant to the second sentence of this
subsection, that no shares of stock of such corporation were issued prior to the adoption by the
board of directors of the resolution approving the agreement of merger or consolidation. 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.
(g) 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
shall be necessary to authorize a merger with or into a single direct or indirect wholly-owned
subsidiary of such constituent corporation if: (1) such constituent corporation and the direct or
indirect wholly-owned subsidiary of such constituent corporation are the only constituent entities
to the merger; (2) each share or fraction of a share of the capital stock of the constituent
corporation outstanding immediately prior to the effective time of the merger is converted in the
merger into a share or equal fraction of share of capital stock of a holding company having the
same designations, rights, powers and preferences, and the qualifications, limitations and
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
restrictions thereof, as the share of stock of the constituent corporation being converted in the
merger; (3) the holding company and the constituent corporation are corporations of this State
and the direct or indirect wholly-owned subsidiary that is the other constituent entity to the
merger is a corporation or limited liability company of this State; (4) the certificate of
incorporation and by-laws of the holding company immediately following the effective time of
the merger contain provisions identical to the certificate of incorporation and by-laws of the
constituent corporation immediately prior to the effective time of the merger (other than
provisions, if any, regarding the incorporator or incorporators, the corporate name, the registered
office and agent, the initial board of directors and the initial subscribers for shares and 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); (5) as a result of the merger the constituent corporation or its successor becomes or
remains a direct or indirect wholly-owned subsidiary of the holding company; (6) the directors of
the constituent corporation become or remain the directors of the holding company upon the
effective time of the merger; (7) the organizational documents of the surviving entity
immediately following the effective time of the merger contain provisions identical to the
certificate of incorporation of the constituent corporation immediately prior to the effective time
of the merger (other than provisions, if any, regarding the incorporator or incorporators, the
corporate or entity name, the registered office and agent, the initial board of directors and the
initial subscribers for shares, references to members rather than stockholders or shareholders,
references to interests, units or the like rather than stock or shares, references to managers,
managing members or other members of the governing body rather than directors and 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); provided, however, that (i) if the organizational documents of the surviving entity do
not contain the following provisions, they shall be amended in the merger to contain provisions
requiring that (A) any act or transaction by or involving the surviving entity, other than the
election or removal of directors or managers, managing members or other members of the
governing body of the surviving entity, that requires for its adoption under this chapter or its
organizational documents the approval of the stockholders or members of the surviving entity
shall, by specific reference to this subsection, require, in addition, the approval of the
stockholders of the holding company (or any successor by merger), by the same vote as is
required by this chapter and/or by the organizational documents of the surviving entity; provided,
however, that for purposes of this clause (i)(A), any surviving entity that is not a corporation
shall include in such amendment a requirement that the approval of the stockholders of the
holding company be obtained for any act or transaction by or involving the surviving entity,
other than the election or removal of directors or managers, managing members or other
members of the governing body of the surviving entity, which would require the approval of the
stockholders of the surviving entity if the surviving entity were a corporation subject to this
chapter; (B) any amendment of the organizational documents of a surviving entity that is not a
corporation, which amendment would, if adopted by a corporation subject to this chapter, be
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
required to be included in the certificate of incorporation of such corporation, shall, by specific
reference to this subsection, require, in addition, the approval of the stockholders of the holding
company (or any successor by merger), by the same vote as is required by this chapter and/or by
the organizational documents of the surviving entity; and (C) the business and affairs of a
surviving entity that is not a corporation shall be managed by or under the direction of a board of
directors, board of managers or other governing body consisting of individuals who are subject
to the same fiduciary duties applicable to, and who are liable for breach of such duties to the
same extent as, directors of a corporation subject to this chapter; and (ii) the organizational
documents of the surviving entity may be amended in the merger (A) to reduce the number of
classes and shares of capital stock or other equity interests or units that the surviving entity is
authorized to issue and (B) to eliminate any provision authorized by subsection (d) of § 141 of
this title; and (8) the stockholders of the constituent corporation do not recognize gain or loss for
United States federal income tax purposes as determined by the board of directors of the
constituent corporation. Neither subdivision (g)(7)(i) of this section nor any provision of a
surviving entity's organizational documents required by subdivision (g)(7)(i) shall be deemed or
construed to require approval of the stockholders of the holding company to elect or remove
directors or managers, managing members or other members of the governing body of the
surviving entity. The term "organizational documents", as used in subdivision (g)(7) and in the
preceding sentence, shall, when used in reference to a corporation, mean the certificate of
incorporation of such corporation, and when used in reference to a limited liability company,
mean the limited liability company agreement of such limited liability company.
As used in this subsection only, the term "holding company" means a corporation which, from its
incorporation until consummation of a merger governed by this subsection, was at all times a
direct or indirect wholly-owned subsidiary of the constituent corporation and whose capital stock
is issued in such merger. From and after the effective time of a merger adopted by a constituent
corporation by action of its board of directors and without any vote of stockholders pursuant to
this subsection: (i) to the extent the restrictions of § 203 of this title applied to the constituent
corporation and its stockholders at the effective time of the merger, such restrictions shall apply
to the holding company and its stockholders immediately after the effective time of the merger as
though it were the constituent corporation, and all shares of stock of the holding company
acquired in the merger shall for purposes of § 203 of this title be deemed to have been acquired
at the time that the shares of stock of the constituent corporation converted in the merger were
acquired, and provided further that any stockholder who immediately prior to the effective time
of the merger was not an interested stockholder within the meaning of § 203 of this title shall not
solely by reason of the merger become an interested stockholder of the holding company, (ii) if
the corporate name of the holding company immediately following the effective time of the
merger is the same as the corporate name of the constituent corporation immediately prior to the
effective time of the merger, the shares of capital stock of the holding company into which the
shares of capital stock of the constituent corporation are converted in the merger shall be
represented by the stock certificates that previously represented shares of capital stock of the
constituent corporation capital stock of the constituent corporation and (iii) to the extent a
stockholder of the constituent corporation immediately prior to the merger had standing to
institute or maintain derivative litigation on behalf of the constituent corporation, nothing in this
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
section shall be deemed to limit or extinguish such standing. If an agreement of merger is
adopted by a constituent corporation by action of its board of directors and without any vote of
stockholders pursuant to this subsection, the secretary or assistant secretary of the constituent
corporation shall certify on the agreement that the agreement has been adopted pursuant to this
subsection and that the conditions specified in the first sentence of this subsection have been
satisfied. The agreement so adopted and certified shall then be filed and 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. (8 Del. C. 1953, § 251; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 16; 57 Del.
Laws, c. 148, § 22; 57 Del. Laws, c. 421, § § 8, 9; 58 Del. Laws, c. 235, § 5; 59 Del. Laws, c.
437, § § 12-14; 64 Del. Laws, c. 112, § § 30-33; 66 Del. Laws, c. 136, § § 17-23; 67 Del. Laws,
c. 376, § § 11, 12; 68 Del. Laws, c. 337, § 1; 69 Del. Laws, c. 235, § 5; 70 Del. Laws, c. 79, § §
13-15; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 349, § § 8, 17; 70 Del. Laws, c. 186, § 1; 70
Del. Laws, c. 587, § § 17, 18; 71 Del. Laws, c. 339, § § 43, 44; 72 Del. Laws, c. 123, § 7; 73 Del.
Laws, c. 82, § § 14-20; 74 Del. Laws, c. 84, § § 10, 11; 75 Del. Laws, c. 30, § 3.)
§ 252. Merger or consolidation of domestic and foreign corporations; service of process
upon surviving or resulting corporation
(a) Any 1 or more corporations of this State may merge or consolidate with 1 or more
other corporations of any other state or states of the United States, or of the District of Columbia
if the laws of the other state or states, or of the District permit a corporation of such jurisdiction
to merge or consolidate with a corporation of another jurisdiction. The constituent corporations
may merge into a single corporation, which may be any 1 of the constituent corporations, or they
may consolidate into a new corporation formed by the consolidation, which may be a corporation
of the state of incorporation of any 1 of the constituent corporations, pursuant to an agreement of
merger or consolidation, as the case may be, complying and approved in accordance with this
section. In addition, any 1 or more corporations existing under the laws of this State may merge
or consolidate with 1 or more corporations organized under the laws of any jurisdiction other
than 1 of the United States if the laws under which the other corporation or corporations are
organized permit a corporation of such jurisdiction to merge or consolidate with a corporation of
another jurisdiction.
(b) All the constituent corporations shall enter into an agreement of merger or
consolidation. The agreement shall state: (1) The terms and conditions of the merger or
consolidation; (2) the mode of carrying the same into effect; (3) the manner, if any, of converting
the shares of each of the constituent corporations into shares or other securities of the corporation
surviving or resulting from the merger or consolidation, or of cancelling some or all of such
shares, and, if any shares of any of the constituent corporations are not to remain outstanding, to
be converted solely into shares or other securities of the surviving or resulting corporation or to
be cancelled, the cash, property, rights or securities of any other corporation or entity which the
holders of such shares are to receive in exchange for, or upon conversion of, such shares and the
surrender of any certificates evidencing them, which cash, property, rights or securities of any
other corporation or entity may be in addition to or in lieu of the shares or other securities of the
surviving or resulting corporation; (4) such other details or provisions as are deemed desirable,
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
including, without limiting the generality of the foregoing, a provision for the payment of cash in
lieu of the issuance or recognition of fractional shares of the surviving or resulting corporation or
of any other corporation the securities of which are to be received in the merger or consolidation,
or for some other arrangement with respect thereto consistent with § 155 of this title; and (5)
such other provisions or facts as shall be required to be set forth in certificates of incorporation
by the laws of the state which are stated in the agreement to be the laws that shall govern the
surviving or resulting corporation and that can be stated in the case of a merger or consolidation.
Any of the terms of the agreement of merger or consolidation may be made dependent upon facts
ascertainable outside of such agreement, provided that the manner in which such facts shall
operate upon the terms of the agreement is clearly and expressly set forth in the agreement of
merger or consolidation. The term "facts," as used in the preceding sentence, includes, but is not
limited to, the occurrence of any event, including a determination or action by any person or
body, including the corporation.
(c) The agreement shall be adopted, approved, certified, executed and acknowledged by
each of the constituent corporations in accordance with the laws under which it is formed, and, in
the case of a Delaware corporation, in the same manner as is provided in § 251 of this title. The
agreement shall be filed and shall become effective for all purposes of the laws of this State
when and as provided in § 251 of this title with respect to the merger or consolidation of
corporations of this State. In lieu of filing the agreement of merger or consolidation, the
surviving or resulting corporation may file a certificate of merger or consolidation, executed in
accordance with § 103 of this title, which states:
(1) The name and state or jurisdiction of incorporation of each of the constituent
corporations;
(2) That an agreement of merger or consolidation has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance with this
subsection;
(3) The name of the surviving or resulting corporation;
(4) In the case of a merger, such amendments or changes in the certificate of
incorporation of the surviving corporation as are desired to be effected by the merger, or, if no
such amendments or changes are desired, a statement that the certificate of incorporation of the
surviving corporation shall be its certificate of incorporation;
(5) In the case of a consolidation, that the certificate of incorporation of the resulting
corporation shall be as is set forth in an attachment to the certificate;
(6) That the executed agreement of consolidation or merger is on file at an office of the
surviving corporation and the address thereof;
(7) That a copy of the agreement of consolidation or merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any constituent
corporation;
(8) If the corporation surviving or resulting from the merger or consolidation is to be a
corporation of this State, the authorized capital stock of each constituent corporation which is not
a corporation of this State; and
(9) The agreement, if any, required by subsection (d) of this section.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(d) If the corporation surviving or resulting from the merger or consolidation is to be
governed by the laws of the District of Columbia or any state or jurisdiction other than this State,
it shall agree that it may be served with process in this State in any proceeding for enforcement
of any obligation of any constituent corporation of this State, as well as for enforcement of any
obligation of the surviving or resulting corporation arising from the merger or consolidation,
including any suit or other proceeding to enforce the right of any stockholders as determined in
appraisal proceedings pursuant to § 262 of this title, and shall irrevocably appoint the Secretary
of State as its agent to accept service of process in any such suit or other proceedings and shall
specify the address to which a copy of such process shall be mailed by the Secretary of State. In
the event of such service upon the Secretary of State in accordance with this subsection, the
Secretary of State shall forthwith notify such surviving or resulting corporation thereof by letter,
certified mail, return receipt requested, directed to such surviving or resulting corporation at its
address so specified, unless such surviving or resulting corporation shall have designated in
writing to the Secretary of State a different address for such purpose, in which case it shall be
mailed to the last address so designated. Such letter shall enclose a copy of the process and any
other papers served on the Secretary of State pursuant to this subsection. It shall be the duty of
the plaintiff in the event of such service to serve process and any other papers in duplicate, to
notify the Secretary of State that service is being effected pursuant to this subsection and to pay
the Secretary of State the sum of $ 50 for the use of the State, which sum shall be taxed as part of
the costs in the proceeding, if the plaintiff shall prevail therein. The Secretary of State shall
maintain an alphabetical record of any such service setting forth the name of the plaintiff and the
defendant, the title, docket number and nature of the proceeding in which process has been
served, the fact that service has been effected pursuant to this subsection, the return date thereof,
and the day and hour service was made. The Secretary of State shall not be required to retain
such information longer than 5 years from receipt of the service of process.
(e) Subsection (d) and the second sentence of subsection (c) of § 251 of this title shall
apply to any merger or consolidation under this section; subsection (e) of § 251 of this title shall
apply to a merger under this section in which the surviving corporation is a corporation of this
State; subsection (f) of § 251 of this title shall apply to any merger under this section. (8 Del. C.
1953, § 252; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 17; 57 Del. Laws, c. 148, § 23; 59 Del.
Laws, c. 437, § § 15, 16; 64 Del. Laws, c. 112, § § 34, 35; 66 Del. Laws, c. 136, § § 24, 25; 67
Del. Laws, c. 190, § 4; 68 Del. Laws, c. 337, § 2; 69 Del. Laws, c. 61, § § 4-6; 70 Del. Laws, c.
186, § 1; 70 Del. Laws, c. 349, § § 9, 18; 70 Del. Laws, c. 587, § 19; 71 Del. Laws, c. 339, § 45;
74 Del. Laws, c. 84, § 12.)
§ 271. Sale, lease or exchange of assets; consideration; procedure
(a) Every corporation may at any meeting of its board of directors or governing body sell,
lease or exchange all or substantially all of its property and assets, including its goodwill and its
corporate franchises, upon such terms and conditions and for such consideration, which may
consist in whole or in part of money or other property, including shares of stock in, and/or other
securities of, any other corporation or corporations, as its board of directors or governing body
deems expedient and for the best interests of the corporation, when and as authorized by a
resolution adopted by the holders of a majority of the outstanding stock of the corporation
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
entitled to vote thereon or, if the corporation is a nonstock corporation, by a majority of the
members having the right to vote for the election of the members of the governing body, at a
meeting duly called upon at least 20 days' notice. The notice of the meeting shall state that such a
resolution will be considered.
(b) Notwithstanding authorization or consent to a proposed sale, lease or exchange of a
corporation's property and assets by the stockholders or members, the board of directors or
governing body may abandon such proposed sale, lease or exchange without further action by
the stockholders or members, subject to the rights, if any, of third parties under any contract
relating thereto.
(c) For purposes of this section only, the property and assets of the corporation include
the property and assets of any subsidiary of the corporation. As used in this subsection,
"subsidiary" means any entity wholly-owned and controlled, directly or indirectly, by the
corporation and includes, without limitation, corporations, partnerships, limited partnerships,
limited liability partnerships, limited liability companies, and/or statutory trusts. Notwithstanding
subsection (a) of this section, except to the extent the certificate of incorporation otherwise
provides, no resolution by stockholders or members shall be required for a sale, lease or
exchange of property and assets of the corporation to a subsidiary. (8 Del. C. 1953, § 271; 56
Del. Laws, c. 50; 57 Del. Laws, c. 148, § 30; 64 Del. Laws, c. 112, § 55; 65 Del. Laws, c. 127, §
9; 75 Del. Laws, c. 30, § 28.)
§ 275. Dissolution generally; procedure
(a) If it should be deemed advisable in the judgment of the board of directors of any
corporation that it should be dissolved, the board, after the adoption of a resolution to that effect
by a majority of the whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the resolution and of a
meeting of stockholders to take action upon the resolution.
(b) At the meeting a vote shall be taken upon the proposed dissolution. If a majority of
the outstanding stock of the corporation entitled to vote thereon shall vote for the proposed
dissolution, a certification of dissolution shall be filed with the Secretary of State pursuant to
subsection (d) of this section.
(c) Dissolution of a corporation may also be authorized without action of the directors if
all the stockholders entitled to vote thereon shall consent in writing and a certificate of
dissolution shall be filed with the Secretary of State pursuant to subsection (d) of this section.
(d) If dissolution is authorized in accordance with this section, a certificate of dissolution
shall be executed, acknowledged and filed, and shall become effective, in accordance with § 103
of this title. Such certificate of dissolution shall set forth:
(1) The name of the corporation;
(2) The date dissolution was authorized;
(3) That the dissolution has been authorized by the board of directors and stockholders of
the corporation, in accordance with subsections (a) and (b) of this section, or that the dissolution
has been authorized by all of the stockholders of the corporation entitled to vote on a dissolution,
in accordance with subsection (c) of this section; and
(4) The names and addresses of the directors and officers of the corporation.
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U.S. Corporate Law: Professor Margaret A. Bancroft
Management, Directors and Shareholders Dechert LLP
and the Division of Power New York, New York
2008
(e) The resolution authorizing a proposed dissolution may provide that notwithstanding
authorization or consent to the proposed dissolution by the stockholders, or the members of a
nonstock corporation pursuant to § 276 of this title, the board of directors or governing body may
abandon such proposed dissolution without further action by the stockholders or members.
(f) Upon a certificate of dissolution becoming effective in accordance with § 103 of this title, the
corporation shall be dissolved. (8 Del. C. 1953, § 275; 56 Del. Laws, c. 50; 57 Del. Laws, c. 148,
§ § 31, 32; 59 Del. Laws, c. 106, § 14; 66 Del. Laws, c. 136, § 34.)
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