Delaware General Corporation Law – Subchapter VIII

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§ 241. | § 242. | § 243. | § 244. | § 245.

Corporations

CHAPTER 1. GENERAL CORPORATION LAW

Subchapter VIII. Amendment of Certificate of Incorporation; Changes in Capital and Capital Stock

§ 241. Amendment of certificate of incorporation before receipt of payment for stock.

(a) Before a corporation has received any
payment for any of its stock, it may amend its certificate of
incorporation at any time or times, 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
filing the amendment.

(b) The amendment of a certificate of
incorporation authorized by this section shall be adopted by a majority
of the incorporators, if directors were not named in the original
certificate of incorporation or have not yet been elected, or, if
directors were named in the original certificate of incorporation or
have been elected and have qualified, by a majority of the directors. A
certificate setting forth the amendment and certifying that the
corporation has not received any payment for any of its stock and that
the amendment has been duly adopted in accordance with this section
shall be executed, acknowledged and filed in accordance with § 103 of
this title. Upon such filing, the corporation’s certificate of
incorporation shall be deemed to be amended accordingly as of the date
on which the original certificate of incorporation became effective,
except as to those persons who are substantially and adversely affected
by the amendment and as to those persons the amendment shall be
effective from the filing date. (8 Del. C. 1953, § 241; 56 Del. Laws,
c. 50; 64 Del. Laws, c. 112, § 23; 70 Del. Laws, c. 587, § 13.)

§ 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 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. Laws, c. 376, §
10; 70 Del. Laws, c. 349, §§ 5-7; 70 Del. Laws, c. 587, § 14, 15; 72
Del. Laws, c. 123, § 5.)

§ 243. Retirement of stock.

(a) A corporation, by resolution of its
board of directors, may retire any shares of its capital stock that are
issued but are not outstanding.

(b) Whenever any shares of the capital
stock of a corporation are retired, they shall resume the status of
authorized and unissued shares of the class or series to which they
belong unless the certificate of incorporation otherwise provides. If
the certificate of incorporation prohibits the reissuance of such
shares, or prohibits the reissuance of such shares as a part of a
specific series only, a certificate stating that reissuance of the
shares (as part of the class or series) is prohibited identifying the
shares and reciting their retirement shall be executed, acknowledged
and filed and shall become effective in accordance with § 103 of this
title. When such certificate becomes effective, it shall have the
effect of amending the certificate of incorporation so as to reduce
accordingly the number of authorized shares of the class or series to
which such shares belong or, if such retired shares constitute all of
the authorized shares of the class or series to which they belong, of
eliminating from the certificate of incorporation all reference to such
class or series of stock.

(c) If the capital of the corporation
will be reduced by or in connection with the retirement of shares, the
reduction of capital shall be effected pursuant to § 244 of this title.
(8 Del. C. 1953, § 243; 56 Del. Laws, c. 50; 57 Del. Laws, c. 149; 57
Del. Laws, c. 421, § 7; 59 Del. Laws, c. 106, § 8; 66 Del. Laws, c.
136, §§ 15, 16.)

§ 244. Reduction of capital.

(a) A corporation, by resolution of its board of directors, may reduce its capital in any of the following ways:

(1) By reducing or eliminating the capital represented by shares of capital stock which have been retired;

(2) By applying to an otherwise
authorized purchase or redemption of outstanding shares of its capital
stock some or all of the capital represented by the shares being
purchased or redeemed, or any capital that has not been allocated to
any particular class of its capital stock;

(3) By applying to an otherwise
authorized conversion or exchange of outstanding shares of its capital
stock some or all of the capital represented by the shares being
converted or exchanged, or some or all of any capital that has not been
allocated to any particular class of its capital stock, or both, to the
extent that such capital in the aggregate exceeds the total aggregate
par value or the stated capital of any previously unissued shares
issuable upon such conversion or exchange; or

(4) By transferring to surplus (i) some
or all of the capital not represented by any particular class of its
capital stock; (ii) some or all of the capital represented by issued
shares of its par value capital stock, which capital is in excess of
the aggregate par value of such shares; or (iii) some of the capital
represented by issued shares of its capital stock without par value.

(b) Notwithstanding the other provisions
of this section, no reduction of capital shall be made or effected
unless the assets of the corporation remaining after such reduction
shall be sufficient to pay any debts of the corporation for which
payment has not been otherwise provided. No reduction of capital shall
release any liability of any stockholder whose shares have not been
fully paid.

(c) [Repealed.] (8 Del. C. 1953, § 244; 56 Del. Laws, c. 50; 59 Del. Laws, c. 106, § 9; 64 Del. Laws, c. 112, §§ 25, 26.)

§ 245. Restated certificate of incorporation.

(a) A corporation may, whenever desired,
integrate into a single instrument all of the provisions of its
certificate of incorporation which are then in effect and operative as
a result of there having theretofore been filed with the Secretary of
State 1 or more certificates or other instruments pursuant to any of
the sections referred to in § 104 of this title, and it may at the same
time also further amend its certificate of incorporation by adopting a
restated certificate of incorporation.

(b) If the restated certificate of
incorporation merely restates and integrates but does not further amend
the certificate of incorporation, as theretofore amended or
supplemented by any instrument that was filed pursuant to any of the
sections mentioned in § 104 of this title, it may be adopted by the
board of directors without a vote of the stockholders, or it may be
proposed by the directors and submitted by them to the stockholders for
adoption, in which case the procedure and vote required by § 242 of
this title for amendment of the certificate of incorporation shall be
applicable. If the restated certificate of incorporation restates and
integrates and also further amends in any respect the certificate of
incorporation, as theretofore amended or supplemented, it shall be
proposed by the directors and adopted by the stockholders in the manner
and by the vote prescribed by § 242 of this title or, if the
corporation has not received any payment for any of its stock, in the
manner and by the vote prescribed by § 241 of this title.

(c) A restated certificate of
incorporation shall be specifically designated as such in its heading.
It shall state, either in its heading or in an introductory paragraph,
the corporation’s present name, and, if it has been changed, the name
under which it was originally incorporated, and the date of filing of
its original certificate of incorporation with the Secretary of State.
A restated certificate shall also state that it was duly adopted in
accordance with this section. If it was adopted by the board of
directors without a vote of the stockholders (unless it was adopted
pursuant to § 241 of this title), it shall state that it only restates
and integrates and does not further amend the provisions of the
corporation’s certificate of incorporation as theretofore amended or
supplemented, and that there is no discrepancy between those provisions
and the provisions of the restated certificate. A restated certificate
of incorporation may omit (a) such provisions of the original
certificate of incorporation which named the incorporator or
incorporators, the initial board of directors and the original
subscribers for shares, and (b) such provisions contained in any
amendment to the certificate of incorporation as were necessary to
effect a change, exchange, reclassification, subdivision, combination
or cancellation of stock, if such change, exchange, reclassification,
subdivision, combination or cancellation has become effective. Any such
omissions shall not be deemed a further amendment.

(d) A restated certificate of
incorporation shall be executed, acknowledged and filed in accordance
with § 103 of this title. Upon its filing with the Secretary of State,
the original certificate of incorporation, as theretofore amended or
supplemented, shall be superseded; thenceforth, the restated
certificate of incorporation, including any further amendments or
changes made thereby, shall be the certificate of incorporation of the
corporation, but the original date of incorporation shall remain
unchanged.

(e) Any amendment or change effected in
connection with the restatement and integration of the certificate of
incorporation shall be subject to any other provision of this chapter,
not inconsistent with this section, which would apply if a separate
certificate of amendment were filed to effect such amendment or change.
(8 Del. C. 1953, § 245; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, §
15; 59 Del. Laws, c. 437, § 11; 64 Del. Laws, c. 112, §§ 27-29; 70 Del.
Laws, c. 587, § 16; 73 Del. Laws, c. 82, § 13.)

ァ 246. [Reserved.]

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