Morris, Nichols, Arsht & Tunnell LLP
MONTH-IN-BRIEF (Apr 2023)
Amendment to Certificate of Incorporation Adopting Provision to Exculpate Officers from Monetary Liability for Breaches of Fiduciary Duty under Section 102(b)(7) of the DGCL Does Not Trigger a Class Vote of Stockholders under Section 242(b)(2) of the DGCL
Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Fox Corporation In re Snap Inc. Section 242 Litigation, C.A. No. 2022-1007-JTL (Del. Ch. March 29, 2023) (Transcript) (Laster, V.C.)
By Pamela Millard, Potter Anderson & Corroon LLP
In August 2022, Section 102(b)(7) of the Delaware General Corporation Law (DGCL) was amended to extend exculpation rights for breaches of the fiduciary duty of care to senior officers, as well as directors, of a Delaware corporation. The amendments permit a corporation to adopt exculpatory language in its certificate of incorporation limiting the personal liability of both directors and officers, including the president, CEO, COO, CFO, chief legal officer, controller, treasurer, chief accounting officers, and others “identified in the corporation’s public filings with the SEC” or who have consented through a written agreement to accept service of process on the corporation’s behalf.