TITLE 8

Corporations

CHAPTER 1. GENERAL CORPORATION LAW

Subchapter V. Stock and Dividends

§ 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 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 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 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. 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, if: (1) The entire amount of such consideration has been

received by the corporation in the form of cash, services

rendered, personal property, real property, leases of real

property or a combination thereof; or (2) not less than the

amount of the consideration determined to be capital pursuant

to § 154 of this title has been received by the corporation in

such form and the corporation has received a binding obligation

of the subscriber or purchaser to pay the balance of the

subscription or purchase price; 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.)

§ 153. Consideration for stock.

(a) Shares of stock with par value may be issued for such

consideration, having a value not less than the par value

thereof, as determined from time to time by the board of

directors, or by the stockholders if the certificate of

incorporation so provides.

(b) Shares of stock without par value may be issued for such

consideration as is determined from time to time by the board

of directors, or by the stockholders if the certificate of

incorporation so provides.

(c) Treasury shares may be disposed of by the corporation for

such consideration as may be determined from time to time by

the board of directors, or by the stockholders if the certificate of

incorporation so provides.

(d) If the certificate of incorporation reserves to the

stockholders the right to determine the consideration for the

issue of any shares, the stockholders shall, unless the certificate

requires a greater vote, do so by a vote of a majority of the

outstanding stock entitled to vote thereon. (8 Del. C. 1953, §

153; 56 Del. Laws, c. 50; 57 Del. Laws, c. 148, § 10.)

§ 154. Determination of amount of capital; capital, surplus

and net assets defined.

Any corporation may, by resolution of its board of directors,

determine that only a part of the consideration which shall be

received by the corporation for any of the shares of its capital

stock which it shall issue from time to time shall be capital; but,

in case any of the shares issued shall be shares having a par

value, the amount of the part of such consideration so

determined to be capital shall be in excess of the aggregate par

value of the shares issued for such consideration having a par

value, unless all the shares issued shall be shares having a par

value, in which case the amount of the part of such

consideration so determined to be capital need be only equal to

the aggregate par value of such shares. In each such case the

board of directors shall specify in dollars the part of such

consideration which shall be capital. If the board of directors

shall not have determined (1) at the time of issue of any shares

of the capital stock of the corporation issued for cash or (2)

within 60 days after the issue of any shares of the capital stock

of the corporation issued for property other than cash what part

of the consideration for such shares shall be capital, the capital

of the corporation in respect of such shares shall be an amount

equal to the aggregate par value of such shares having a par

value, plus the amount of the consideration for such shares

without par value. The amount of the consideration so

determined to be capital in respect of any shares without par

value shall be the stated capital of such shares. The capital of

the corporation may be increased from time to time by

resolution of the board of directors directing that a portion of

the net assets of the corporation in excess of the amount so

determined to be capital be transferred to the capital account.

The board of directors may direct that the portion of such net

assets so transferred shall be treated as capital in respect of

any shares of the corporation of any designated class or classes.

The excess, if any, at any given time, of the net assets of the

corporation over the amount so determined to be capital shall

be surplus. Net assets means the amount by which total assets

exceed total liabilities. Capital and surplus are not liabilities for

this purpose. (8 Del. C. 1953, § 154; 56 Del. Laws, c. 50; 59

Del. Laws, c. 106, § 2.)

§ 155. Fractions of shares.

A corporation may, but shall not be required to, issue

fractions of a share. If it does not issue fractions of a share, it

shall (1) arrange for the disposition of fractional interests by

those entitled thereto, (2) pay in cash the fair value of fractions

of a share as of the time when those entitled to receive such

fractions are determined or (3) issue scrip or warrants in

registered form (either represented by a certificate or

uncertificated) or in bearer form (represented by a certificate)

which shall entitle the holder to receive a full share upon the

surrender of such scrip or warrants aggregating a full share. A

certificate for a fractional share or an uncertificated fractional

share shall, but scrip or warrants shall not unless otherwise

provided therein, entitle the holder to exercise voting rights, to

receive dividends thereon and to participate in any of the assets

of the corporation in the event of liquidation. The board of

directors may cause scrip or warrants to be issued subject to

the conditions that they shall become void if not exchanged for

certificates representing the full shares or uncertificated full

shares before a specified date, or subject to the conditions that

the shares for which scrip or warrants are exchangeable may be

sold by the corporation and the proceeds thereof distributed to

the holders of scrip or warrants, or subject to any other

conditions which the board of directors may impose. (8 Del. C.

1953, § 155; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 7; 57

Del. Laws, c. 148, § 11; 64 Del. Laws, c. 112, § 11.)

§ 156. Partly paid shares.

Any corporation may issue the whole or any part of its shares

as partly paid and subject to call for the remainder of the

consideration to be paid therefor. Upon the face or back of each

stock certificate issued to represent any such partly paid shares,

or upon the books and records of the corporation in the case of

uncertificated partly paid shares, the total amount of the

consideration to be paid therefor and the amount paid thereon

shall be stated. Upon the declaration of any dividend on fully

paid shares, the corporation shall declare a dividend upon partly

paid shares of the same class, but only upon the basis of the

percentage of the consideration actually paid thereon. (8 Del. C.

1953, § 156; 56 Del. Laws, c. 50; 64 Del. Laws, c. 112, § 12.)

§ 157. Rights and options respecting stock.

(a) Subject to any provisions in the certificate of

incorporation, every corporation may create and issue, whether

or not in connection with the issue and sale of any shares of

stock or other securities of the corporation, rights or options

entitling the holders thereof to purchase from the corporation

any shares of its capital stock of any class or classes, such

rights or options to be evidenced by or in such instrument or

instruments as shall be approved by the board of directors.

(b) The terms upon which, including the time or times which

may be limited or unlimited in duration, at or within which, and

the price or prices (including a formula by which such price or

prices may be determined) at which any such shares may be

purchased from the corporation upon the exercise of any such

right or option, shall be such as shall be stated in the certificate

of incorporation, or in a resolution adopted by the board of

directors providing for the creation and issue of such rights or

options, and, in every case, shall be set forth or incorporated by

reference in the instrument or instruments evidencing such

rights or options. In the absence of actual fraud in the

transaction, the judgment of the directors as to the

consideration for the issuance of such rights or options and the

sufficiency thereof shall be conclusive.

(c) The board of directors may, by a resolution adopted by

the board, authorize 1 or more officers of the corporation to do

1 or both of the following: (i) designate officers and employees

of the corporation or of any of its subsidiaries to be recipients of

such rights or options created by the corporation, and (ii)

determine the number of such rights or options to be received

by such officers and employees; provided, however, that the

resolution so authorizing such officer or officers shall specify the

total number of rights or options such officer or officers may so

award. The board of directors may not authorize an officer to

designate himself or herself as a recipient of any such rights or

options.

(d) In case the shares of stock of the corporation to be issued

upon the exercise of such rights or options shall be shares

having a par value, the price or prices so to be received therefor

shall not be less than the par value thereof. In case the shares

of stock so to be issued shall be shares of stock without par

value, the consideration therefor shall be determined in the

manner provided in § 153 of this title. (8 Del. C. 1953, § 157;

56 Del. Laws, c. 50; 73 Del. Laws, c. 82, §§ 4-7.)

§ 158. Stock certificates; uncertificated shares.

The shares of a corporation shall be represented by

certificates, provided that the board of directors of the

corporation may provide by resolution or resolutions that some

or all of any or all classes or series of its stock shall be

uncertificated shares. Any such resolution shall not apply to

shares represented by a certificate until such certificate is

surrendered to the corporation. Notwithstanding the adoption of

such a resolution by the board of directors, every holder of

stock represented by certificates and upon request every holder

of uncertificated shares shall be entitled to have a certificate

signed by, or in the name of the corporation by the chairperson

or vice-chairperson of the board of directors, or the president or

vice-president, and by the treasurer or an assistant treasurer,

or the secretary or an assistant secretary of such corporation

representing the number of shares registered in certificate form.

Any or all the signatures on the certificate may be a facsimile.

In case any officer, transfer agent or registrar who has signed

or whose facsimile signature has been placed upon a certificate

shall have ceased to be such officer, transfer agent or registrar

before such certificate is issued, it may be issued by the

corporation with the same effect as if such person were such

officer, transfer agent or registrar at the date of issue. A

corporation shall not have power to issue a certificate in bearer

form. (8 Del. C. 1953, § 158; 56 Del. Laws, c. 50; 56 Del. Laws,

c. 186, § 8; 58 Del. Laws, c. 235, § 2; 64 Del. Laws, c. 112, §

13; 71 Del. Laws, c. 339, § 19; 73 Del. Laws, c. 298, § 3.)

§ 159. Shares of stock; personal property, transfer and

taxation.

The shares of stock in every corporation shall be deemed

personal property and transferable as provided in Article 8 of

subtitle I of Title 6. No stock or bonds issued by any corporation

organized under this chapter shall be taxed by this State when

the same shall be owned by non-residents of this State, or by

foreign corporations. Whenever any transfer of shares shall be

made for collateral security, and not absolutely, it shall be so

expressed in the entry of transfer if, when the certificates are

presented to the corporation for transfer or uncertificated

shares are requested to be transferred, both the transferor and

transferee request the corporation to do so. (8 Del. C. 1953, §

159; 56 Del. Laws, c. 50; 64 Del. Laws, c. 112, § 14.)

§ 160. Corporation's powers respecting ownership, voting,

etc., of its own stock; rights of stock called for redemption.

(a) Every corporation may purchase, redeem, receive, take or

otherwise acquire, own and hold, sell, lend, exchange, transfer

or otherwise dispose of, pledge, use and otherwise deal in and

with its own shares; provided, however, that no corporation

shall:

(1) Purchase or redeem its own shares of capital stock

for cash or other property when the capital of the corporation is

impaired or when such purchase or redemption would cause any

impairment of the capital of the corporation, except that a

corporation may purchase or redeem out of capital any of its

own shares which are entitled upon any distribution of its

assets, whether by dividend or in liquidation, to a preference

over another class or series of its stock, or, if no shares entitled

to such a preference are outstanding, any of its own shares, if

such shares will be retired upon their acquisition and the capital

of the corporation reduced in accordance with §§ 243 and 244

of this title. Nothing in this subsection shall invalidate or

otherwise affect a note, debenture or other obligation of a

corporation given by it as consideration for its acquisition by

purchase, redemption or exchange of its shares of stock if at the

time such note, debenture or obligation was delivered by the

corporation its capital was not then impaired or did not thereby

become impaired;

(2) Purchase, for more than the price at which they may

then be redeemed, any of its shares which are redeemable at

the option of the corporation; or

(3) Redeem any of its shares unless their redemption is

authorized by subsection (b) of § 151 of this title and then only

in accordance with such section and the certificate of

incorporation.

(b) Nothing in this section limits or affects a corporation's

right to resell any of its shares theretofore purchased or

redeemed out of surplus and which have not been retired, for

such consideration as shall be fixed by the board of directors.

(c) Shares of its own capital stock belonging to the

corporation or to another corporation, if a majority of the shares

entitled to vote in the election of directors of such other

corporation is held, directly or indirectly, by the corporation,

shall neither be entitled to vote nor be counted for quorum

purposes. Nothing in this section shall be construed as limiting

the right of any corporation to vote stock, including but not

limited to its own stock, held by it in a fiduciary capacity.

(d) Shares which have been called for redemption shall not be

deemed to be outstanding shares for the purpose of voting or

determining the total number of shares entitled to vote on any

matter on and after the date on which written notice of

redemption has been sent to holders thereof and a sum

sufficient to redeem such shares has been irrevocably deposited

or set aside to pay the redemption price to the holders of the

shares upon surrender of certificates therefor. (8 Del. C. 1953,

§ 160; 56 Del. Laws, c. 50; 57 Del. Laws, c. 649, § 1; 59 Del.

Laws, c. 106, § 3; 59 Del. Laws, c. 437, § 9; 70 Del. Laws, c.

349, § 3.)

§ 161. Issuance of additional stock; when and by whom.

The directors may, at any time and from time to time, if all of

the shares of capital stock which the corporation is authorized

by its certificate of incorporation to issue have not been issued,

subscribed for, or otherwise committed to be issued, issue or

take subscriptions for additional shares of its capital stock up to

the amount authorized in its certificate of incorporation. (8 Del.

C. 1953, § 161; 56 Del. Laws, c. 50.)

§ 162. Liability of stockholder or subscriber for stock not

paid in full.

(a) When the whole of the consideration payable for shares of

a corporation has not been paid in, and the assets shall be

insufficient to satisfy the claims of its creditors, each holder of

or subscriber for such shares shall be bound to pay on each

share held or subscribed for by such holder or subscriber the

sum necessary to complete the amount of the unpaid balance of

the consideration for which such shares were issued or are to be

issued by the corporation.

(b) The amounts which shall be payable as provided in

subsection (a) of this section may be recovered as provided in §

325 of this title, after a writ of execution against the corporation

has been returned unsatisfied as provided in said § 325.

(c) Any person becoming an assignee or transferee of shares

or of a subscription for shares in good faith and without

knowledge or notice that the full consideration therefor has not

been paid shall not be personally liable for any unpaid portion of

such consideration, but the transferor shall remain liable

therefor.

(d) No person holding shares in any corporation as collateral

security shall be personally liable as a stockholder but the

person pledging such shares shall be considered the holder

thereof and shall be so liable. No executor, administrator,

guardian, trustee or other fiduciary shall be personally liable as

a stockholder, but the estate or funds held by such executor,

administrator, guardian, trustee or other fiduciary in such

fiduciary capacity shall be liable.

(e) No liability under this section or under § 325 of this title

shall be asserted more than 6 years after the issuance of the

stock or the date of the subscription upon which the assessment

is sought.

(f) In any action by a receiver or trustee of an insolvent

corporation or by a judgment creditor to obtain an assessment

under this section, any stockholder or subscriber for stock of the

insolvent corporation may appear and contest the claim or

claims of such receiver or trustee. (8 Del. C. 1953, § 162; 56

Del. Laws, c. 50; 71 Del. Laws, c. 339, § 20.)

§ 163. Payment for stock not paid in full.

The capital stock of a corporation shall be paid for in such

amounts and at such times as the directors may require. The

directors may, from time to time, demand payment, in respect

of each share of stock not fully paid, of such sum of money as

the necessities of the business may, in the judgment of the

board of directors, require, not exceeding in the whole the

balance remaining unpaid on said stock, and such sum so

demanded shall be paid to the corporation at such times and by

such installments as the directors shall direct. The directors

shall give written notice of the time and place of such

payments, which notice shall be mailed at least 30 days before

the time for such payment, to each holder of or subscriber for

stock which is not fully paid at such holder's or subscriber's last

known post-office address. (8 Del. C. 1953, § 163; 56 Del.

Laws, c. 50; 71 Del. Laws, c. 339, § 21.)

§ 164. Failure to pay for stock; remedies.

When any stockholder fails to pay any installment or call upon

such stockholder's stock which may have been properly

demanded by the directors, at the time when such payment is

due, the directors may collect the amount of any such

installment or call or any balance thereof remaining unpaid,

from the said stockholder by an action at law, or they shall sell

at public sale such part of the shares of such delinquent

stockholder as will pay all demands then due from such

stockholder with interest and all incidental expenses, and shall

transfer the shares so sold to the purchaser, who shall be

entitled to a certificate therefor.

Notice of the time and place of such sale and of the sum due

on each share shall be given by advertisement at least 1 week

before the sale, in a newspaper of the county in this State

where such corporation's registered office is located, and such

notice shall be mailed by the corporation to such delinquent

stockholder at such stockholder's last known post-office

address, at least 20 days before such sale.

If no bidder can be had to pay the amount due on the stock,

and if the amount is not collected by an action at law, which

may be brought within the county where the corporation has its

registered office, within 1 year from the date of the bringing of

such action at law, the said stock and the amount previously

paid in by the delinquent stockholder on the stock shall be

forfeited to the corporation. (8 Del. C. 1953, § 164; 56 Del.

Laws, c. 50; 59 Del. Laws, c. 106, § 4; 71 Del. Laws, c. 339, §

22.)

§ 165. Revocability of preincorporation subscriptions.

Unless otherwise provided by the terms of the subscription, a

subscription for stock of a corporation to be formed shall be

irrevocable, except with the consent of all other subscribers or

the corporation, for a period of 6 months from its date. (8 Del.

C. 1953, § 165; 56 Del. Laws, c. 50.)

§ 166. Formalities required of stock subscriptions.

A subscription for stock of a corporation, whether made

before or after the formation of a corporation, shall not be

enforceable against a subscriber, unless in writing and signed by

the subscriber or by such subscriber's agent. (8 Del. C. 1953, §

166; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 23.)

§ 167. Lost, stolen or destroyed stock certificates; issuance

of new certificate or uncertificated shares.

A corporation may issue a new certificate of stock or

uncertificated shares in place of any certificate theretofore

issued by it, alleged to have been lost, stolen or destroyed, and

the corporation may require the owner of the lost, stolen or

destroyed certificate, or such owner's legal representative to

give the corporation a bond sufficient to indemnify it against

any claim that may be made against it on account of the alleged

loss, theft or destruction of any such certificate or the issuance

of such new certificate or uncertificated shares. (8 Del. C. 1953,

§ 167; 56 Del. Laws, c. 50; 64 Del. Laws, c. 112, § 15; 71 Del.

Laws, c. 339, § 24.)

§ 168. Judicial proceedings to compel issuance of new

certificate or uncertificated shares.

(a) If a corporation refuses to issue new uncertificated shares

or a new certificate of stock in place of a certificate theretofore

issued by it, or by any corporation of which it is the lawful

successor, alleged to have been lost, stolen or destroyed, the

owner of the lost, stolen or destroyed certificate or such owner's

legal representatives may apply to the Court of Chancery for an

order requiring the corporation to show cause why it should not

issue new uncertificated shares or a new certificate of stock in

place of the certificate so lost, stolen or destroyed. Such

application shall be by a complaint which shall state the name of

the corporation, the number and date of the certificate, if known

or ascertainable by the plaintiff, the number of shares of stock

represented thereby and to whom issued, and a statement of

the circumstances attending such loss, theft or destruction.

Thereupon the court shall make an order requiring the

corporation to show cause at a time and place therein

designated, why it should not issue new uncertificated shares or

a new certificate of stock in place of the one described in the

complaint. A copy of the complaint and order shall be served

upon the corporation at least 5 days before the time designated

in the order.

(b) If, upon hearing, the court is satisfied that the plaintiff is

the lawful owner of the number of shares of capital stock, or

any part thereof, described in the complaint, and that the

certificate therefor has been lost, stolen or destroyed, and no

sufficient cause has been shown why new uncertificated shares

or a new certificate should not be issued in place thereof, it shall

make an order requiring the corporation to issue and deliver to

the plaintiff new uncertificated shares or a new certificate for

such shares. In its order the court shall direct that, prior to the

issuance and delivery to the plaintiff of such new uncertificated

shares or a new certificate, the plaintiff give the corporation a

bond in such form and with such security as to the court

appears sufficient to indemnify the corporation against any

claim that may be made against it on account of the alleged

loss, theft or destruction of any such certificate or the issuance

of such new uncertificated shares or new certificate. No

corporation which has issued uncertificated shares or a

certificate pursuant to an order of the court entered hereunder

shall be liable in an amount in excess of the amount specified in

such bond. (8 Del. C. 1953, § 168; 56 Del. Laws, c. 50; 64 Del.

Laws, c. 112, § 16; 71 Del. Laws, c. 339, § 25.)

§ 169. Situs of ownership of stock.

For all purposes of title, action, attachment, garnishment and

jurisdiction of all courts held in this State, but not for the

purpose of taxation, the situs of the ownership of the capital

stock of all corporations existing under the laws of this State,

whether organized under this chapter or otherwise, shall be

regarded as in this State. (8 Del. C. 1953, § 169; 56 Del. Laws,

c. 50.)

§ 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.

(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.)

§ 171. Special purpose reserves.

The directors of a corporation may set apart out of any of the

funds of the corporation available for dividends a reserve or

reserves for any proper purpose and may abolish any such

reserve. (8 Del. C. 1953, § 171; 56 Del. Laws, c. 50.)

§ 172. Liability of directors and committee members as to

dividends or stock redemption.

A member of the board of directors, or a member of any

committee designated by the board of directors, shall 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 its officers or

employees, or committees of the board of directors, or by any

other person as to matters the director 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, as to the value and amount of the assets,

liabilities and/or net profits of the corporation or any other facts

pertinent to the existence and amount of surplus or other funds

from which dividends might properly be declared and paid, or

with which the corporation's stock might properly be purchased

or redeemed. (8 Del. C. 1953, § 172; 56 Del. Laws, c. 50; 56

Del. Laws, c. 186, § 10; 66 Del. Laws, c. 136, § 5.)

§ 173. Declaration and payment of dividends.

No corporation shall pay dividends except in accordance with

this chapter. Dividends may be paid in cash, in property, or in

shares of the corporation's capital stock. If the dividend is to be

paid in shares of the corporation's theretofore unissued capital

stock the board of directors shall, by resolution, direct that

there be designated as capital in respect of such shares an

amount which is not less than the aggregate par value of par

value being declared as a dividend and, in the case of shares

without par value being declared as a dividend, such amount as

shall be determined by the board of directors. No such

designation as capital shall be necessary if shares are being

distributed by a corporation pursuant to a split-up or division of

its