TITLE 8

Corporations

CHAPTER 1. GENERAL CORPORATION LAW

Subchapter IV. Directors and Officers

§ 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 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, 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 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 annual meeting next ensuing; 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, directors shall be chosen for a full

term, as the case may be, to succeed those whose terms

expire. 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 in the

manner so provided in the certificate of incorporation may be

greater than or less than those of any other director or class of

directors. If the certificate of incorporation provides that

directors elected by the holders of a class or series of stock 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

directors shall refer to a majority or other proportion of the

votes of such 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

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.

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.)

§ 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.)

§ 143. Loans to employees and officers; guaranty of

obligations of employees and officers.

Any corporation may lend money to, or guarantee any

obligation of, or otherwise assist any officer or other employee

of the corporation or of its subsidiary, including any officer or

employee who is a director of the corporation or its subsidiary,

whenever, in the judgment of the directors, such loan, guaranty

or assistance may reasonably be expected to benefit the

corporation. The loan, guaranty or other assistance may be with

or without interest, and may be unsecured, or secured in such

manner as the board of directors shall approve, including,

without limitation, a pledge of shares of stock of the

corporation. Nothing in this section contained shall be deemed

to deny, limit or restrict the powers of guaranty or warranty of

any corporation at common law or under any statute. (8 Del. C.

1953, § 143; 56 Del. Laws, c. 50.)

§ 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 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.)

§ 145. Indemnification of officers, directors, employees and

agents; insurance.

(a) A corporation shall have power to indemnify any person

who was or is a party or is threatened to be made a party to

any threatened, pending or completed action, suit or

proceeding, whether civil, criminal, administrative or

investigative (other than an action by or in the right of the

corporation) by reason of the fact that the person is or was a

director, officer, employee or agent of the corporation, or is or

was serving at the request of the corporation as a director,

officer, employee or agent of another corporation, partnership,

joint venture, trust or other enterprise, against expenses

(including attorneys' fees), judgments, fines and amounts paid

in settlement actually and reasonably incurred by the person in

connection with such action, suit or proceeding if the person

acted in good faith and in a manner the person reasonably

believed to be in or not opposed to the best interests of the

corporation, and, with respect to any criminal action or

proceeding, had no reasonable cause to believe the person's

conduct was unlawful. The termination of any action, suit or

proceeding by judgment, order, settlement, conviction, or upon

a plea of nolo contendere or its equivalent, shall not, of itself,

create a presumption that the person did not act in good faith

and in a manner which the person reasonably believed to be in

or not opposed to the best interests of the corporation, and,

with respect to any criminal action or proceeding, had

reasonable cause to believe that the person's conduct was

unlawful.

(b) A corporation shall have power to indemnify any person

who was or is a party or is threatened to be made a party to

any threatened, pending or completed action or suit by or in the

right of the corporation to procure a judgment in its favor by

reason of the fact that the person is or was a director, officer,

employee or agent of the corporation, or is or was serving at

the request of the corporation as a director, officer, employee or

agent of another corporation, partnership, joint venture, trust or

other enterprise against expenses (including attorneys' fees)

actually and reasonably incurred by the person in connection

with the defense or settlement of such action or suit if the

person acted in good faith and in a manner the person

reasonably believed to be in or not opposed to the best interests

of the corporation and except that no indemnification shall be

made in respect of any claim, issue or matter as to which such

person shall have been adjudged to be liable to the corporation

unless and only to the extent that the Court of Chancery or the

court in which such action or suit was brought shall determine

upon application that, despite the adjudication of liability but in

view of all the circumstances of the case, such person is fairly

and reasonably entitled to indemnity for such expenses which

the Court of Chancery or such other court shall deem proper.

(c) To the extent that a present or former director or officer

of a corporation has been successful on the merits or otherwise

in defense of any action, suit or proceeding referred to in

subsections (a) and (b) of this section, or in defense of any

claim, issue or matter therein, such person shall be indemnified

against expenses (including attorneys' fees) actually and

reasonably incurred by such person in connection therewith.

(d) Any indemnification under subsections (a) and (b) of this

section (unless ordered by a court) shall be made by the

corporation only as authorized in the specific case upon a

determination that indemnification of the present or former

director, officer, employee or agent is proper in the

circumstances because the person has met the applicable

standard of conduct set forth in subsections (a) and (b) of this

section. Such determination shall be made, with respect to a

person who is a director or officer at the time of such

determination, (1) by a majority vote of the directors who are

not parties to such action, suit or proceeding, even though less

than a quorum, or (2) by a committee of such directors

designated by majority vote of such directors, even though less

than a quorum, or (3) if there are no such directors, or if such

directors so direct, by independent legal counsel in a written

opinion, or (4) by the stockholders.

(e) Expenses (including attorneys' fees) incurred by an officer

or director in defending any civil, criminal, administrative or

investigative action, suit or proceeding may be paid by the

corporation in advance of the final disposition of such action,

suit or proceeding upon receipt of an undertaking by or on

behalf of such director or officer to repay such amount if it shall

ultimately be determined that such person is not entitled to be

indemnified by the corporation as authorized in this section.

Such expenses (including attorneys' fees) incurred by former

directors and officers or other employees and agents may be so

paid upon such terms and conditions, if any, as the corporation

deems appropriate.

(f) The indemnification and advancement of expenses

provided by, or granted pursuant to, the other subsections of

this section shall not be deemed exclusive of any other rights to

which those seeking indemnification or advancement of

expenses may be entitled under any bylaw, agreement, vote of

stockholders or disinterested directors or otherwise, both as to

action in such person's official capacity and as to action in

another capacity while holding such office.

(g) A corporation shall have power to purchase and maintain

insurance on behalf of any person who is or was a director,

officer, employee or agent of the corporation, or is or was

serving at the request of the corporation as a director, officer,

employee or agent of another corporation, partnership, joint

venture, trust or other enterprise against any liability asserted

against such person and incurred by such person in any such

capacity, or arising out of such person's status as such, whether

or not the corporation would have the power to indemnify such

person against such liability under this section.

(h) For purposes of this section, references to "the

corporation" shall include, in addition to the resulting

corporation, any constituent corporation (including any

constituent of a constituent) absorbed in a consolidation or

merger which, if its separate existence had continued, would

have had power and authority to indemnify its directors,

officers, and employees or agents, so that any person who is or

was a director, officer, employee or agent of such constituent

corporation, or is or was serving at the request of such

constituent corporation as a director, officer, employee or agent

of another corporation, partnership, joint venture, trust or other

enterprise, shall stand in the same position under this section

with respect to the resulting or surviving corporation as such

person would have with respect to such constituent corporation

if its separate existence had continued.

(i) For purposes of this section, references to "other

enterprises" shall include employee benefit plans; references to

"fines" shall include any excise taxes assessed on a person with

respect to any employee benefit plan; and references to

"serving at the request of the corporation" shall include any

service as a director, officer, employee or agent of the

corporation which imposes duties on, or involves services by,

such director, officer, employee or agent with respect to an

employee benefit plan, its participants or beneficiaries; and a

person who acted in good faith and in a manner such person

reasonably believed to be in the interest of the participants and

beneficiaries of an employee benefit plan shall be deemed to

have acted in a manner "not opposed to the best interests of

the corporation" as referred to in this section.

(j) The indemnification and advancement of expenses

provided by, or granted pursuant to, this section shall, unless

otherwise provided when authorized or ratified, continue as to a

person who has ceased to be a director, officer, employee or

agent and shall inure to the benefit of the heirs, executors and

administrators of such a person.

(k) The Court of Chancery is hereby vested with exclusive

jurisdiction to hear and determine all actions for advancement

of expenses or indemnification brought under this section or

under any bylaw, agreement, vote of stockholders or

disinterested directors, or otherwise. The Court of Chancery

may summarily determine a corporation's obligation to advance

expenses (including attorneys' fees). (8 Del. C. 1953, § 145; 56

Del. Laws, c. 50; 56 Del. Laws, c. 186, § 6; 57 Del. Laws, c.

421, § 2; 59 Del. Laws, c. 437, § 7; 63 Del. Laws, c. 25, § 1; 64

Del. Laws, c. 112, § 7; 65 Del. Laws, c. 289, §§ 3-6; 67 Del.

Laws, c. 376, § 3; 69 Del. Laws, c. 261, §§ 1, 2; 70 Del. Laws,

c. 186, § 1; 71 Del. Laws, c. 120, §§ 3-11.)

§ 146. Submission of matters for stockholder vote.

A corporation may agree to submit a matter to a vote of its

stockholders whether or not the board of directors determines

at any time subsequent to approving such matter that such

matter is no longer advisable and recommends that the

stockholders reject or vote against the matter. (74 Del. Laws, c.

84, § 3.)

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