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Supreme Court of Delaware
January 20, 1942, Decided
No Number in Original
[*316] [***414] LAYTON, Chief Justice, delivering the opinion of the court:
The complainant in the court below sought to enjoin the consummation of an amendment to the charter of the respondent [*317] company, a Delaware corporation, by which the number of authorized shares of a class of stock would be increased. It was prayed, inter alia, that the proposed amendment be declared void, either in general, or as to the complainant and all other holders of common shares similarly situated; and that the filing and recording of the certificate of amendment in the proper State and County offices be enjoined. A demurrer to the bill of complaint was sustained (ante p. 16, 21 A.2d 178); the complainant elected to take final [**2] judgment; and from a decree dismissing the bill this appeal was taken.
Prior to January 10, 1940, the appellee's authorized capital stock was as follows:
260,000 shares of no par value preferred stock entitled to a non-cumulative dividend of $ 1.00 a year out of the net profits, subject to redemption at $ 17.50 a share plus any declared and unpaid dividends thereon, and, on liquidation, entitled to $ 15.00 a share. The amended charter provided that if in any year a dividend on the preferred stock "shall be declared by the Board of Directors, and such dividend shall not be declared payable in cash, either wholly or in part, then any difference between the amount declared payable in cash and a dividend of One ($ 1.00) Dollar per share upon outstanding preferred stock shall be declared [***415] and paid in Class A stock of the corporation to be issued at par";
500,000 shares of Class A stock of the par value of $ 1.00, entitled to an annual six percent cumulative dividend, redeemable at par plus all accrued and unpaid dividends, but subject to the prior rights of the preferred stock.
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24 A.2d 315 *; 1942 Del. LEXIS 8 **; 26 Del. Ch. 411 ***
HARTFORD ACCIDENT AND INDEMNITY COMPANY, Complainant Below, Appellant, vs. W. S. DICKEY CLAY MANUFACTURING COMPANY, Defendant Below, Appellee.
Prior History: [**1] APPEAL from a decree of the Court of Chancery.
Disposition: Decree of the court sustained.
shares, stock, common shares, dividend, special right, voting, rights, charter, propose an amendment, common stock, affirmative vote, preferred stock, par value, shareholders, decrease, relative position, preferences, powers, certificate of incorporation, capital stock, voting power, stockholders, subordinate, conferred, elect, preferred shares, purposes
Business & Corporate Law, Corporations, Articles of Incorporation & Bylaws, Amendments to Articles of Incorporation, Corporate Governance, General Overview, Shareholders, Meetings & Voting, Corporate Finance, Initial Capitalization & Stock Subscriptions, Classes of Stock, Dividends & Reacquisition of Shares, Disposition of Reacquired Shares, Corporate Formation, Corporate Existence, Powers & Purpose, Annual Meetings, Governments, State & Territorial Governments, Elections, Legislation, Interpretation, Effect & Operation, Amendments