- Any stockholder of record (“stockholder”) of a Delaware corporation who holds shares of stock on the date of the making of a demand pursuant to subsection (d) with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, and who has not voted in favor of the merger, shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock subject to the conditions of subsections (b) through (d).
- Appraisal rights are available in a merger to be effected pursuant to §§ 251-258 (except §251(g)), 263-264, or 267.
- However, no appraisal rights are available in a merger (except pursuant to §§ 253, 267) for
- any stock or depositary receipts in respect thereof that, at the record date fixed for the merger vote (or, in the case of a merger pursuant to § 251(h), immediately prior to the execution of the merger agreement), were either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders, and
- any stock of the surviving corporation whose vote was not required to approve the merger pursuant to 251(f), …
- … if the holders of such stock or depositary receipts can receive for their stock under the terms of the merger shares of stock (or corresponding depositary receipts) of either
- the surviving corporation or
- any other corporation, which stock at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders,
and, where applicable, cash in lieu of fractional shares.
- In a short-form merger under §§ 253 or 267 involving a Delaware subsidiary, appraisal rights are available only for the subsidiary’s shareholders.
- However, no appraisal rights are available in a merger (except pursuant to §§ 253, 267) for
- The charter may provide for appraisal rights in case of its amendment, any merger, or the sale of all or substantially all of the assets of the corporation. In this case, the provisions of this section shall apply as nearly as is practicable.
- Appraisal rights shall be perfected as follows:
- With respect to all shares for which appraisal rights are available under subsections (b) and (c), the corporation shall notify each holder of record of such rights not less than 20 days prior to the shareholder meeting set to vote on the merger, and shall include in such notice a copy of this section (and of §114, if one of the constituent corporations is a nonstock corporation). To perfect his appraisal rights, a stockholder must deliver a separate written demand for appraisal to the corporation before the stockholder vote. Within 10 days after the effective date of the merger, the surviving corporation shall notify each stockholder who has complied with this subsection and has not voted in favor of the merger of the date that the merger has become effective; or
- In a short-form merger under §§ 251(h), 253 or 267, or in a merger approved by written consent pursuant to § 228, it is sufficient if notice of the appraisal rights is given to eligible stockholders until within 10 days after the effective date of the merger. Within 20 days after giving such notice (or, in the case of §251(h) and if later, the consummation of the offer) any eligible stockholder may demand in writing the appraisal from the surviving corporation.
In that same or a separate notice and within the same time-limit, the corporation or the surviving corporation must also inform all eligible stockholders of the effective date of the merger.
“An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.”
“For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.”
- Within 120 days after the effective date of the merger, the surviving corporation or any stockholder who has complied with subsections (a) and (d) and who is otherwise entitled to appraisal rights, may file a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. However, within 60 days after the effective date of the merger, any stockholder who has not filed such petition or joined the proceeding as a named party can withdraw his demand for appraisal and accept the merger terms. The surviving corporation shall give a notice of the aggregate number of shares and shareholders who did not vote in favor of the merger and demanded appraisal (or, in the case of § 251(h), were not tendered, other than any excluded stock as defined in § 251(h)(6)d.) to any shareholder who so requests within 120 days after the effective date of the merger and who has complied with the requirements of subsections (a) and (d), within 10 days after the later of (1) receipt of the shareholder’s written request and (2) expiration of the period for delivery of demands for appraisal under subsection (d).Notwithstanding subsection (a), beneficial owners of stock held in street name can in their own name file the petition and make the request described in this subsection.
- The petition, if filed by the surviving corporation, shall be accompanied by a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. If the petition is filed by a stockholder, service of a copy thereof shall be made upon the surviving corporation, which shall file such duly verified list within 20 days after such service in the office of the Register in Chancery.”The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving corporation.”At the hearing on such petition, the Court shall, …
- … first, determine the stockholders who have complied with this section and who have become entitled to appraisal rights. However, the Court may proceed to trial upon the appraisal prior to the final determination, and until such final determination any stockholder named on the list filed by the surviving corporation pursuant to subsection (f) may participate fully in all proceedings.
“The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.”
The Court shall dismiss the proceedings with respect to shares listed on a national securities exchange immediately before the merger unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of their class or series, (2) the merger consideration for such total number of shares exceeds $1 million, or (3) the merger was approved pursuant to § 253 or § 267. - … second, appraise the shares, determining the shares’ fair value “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In so doing, the Court may consider all relevant factors. Interest shall be paid from the effective date of the merger through the date of payment. Unless the Court of Chancery determines otherwise in its discretion for good cause shown, interest shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge). If at any time before the entry of judgment, the surviving corporation pays to each stockholder entitled to appraisal an amount in cash, interest shall accrue thereafter only upon the difference, if any, between the amount so paid, and the fair value of the shares as determined by the Court plus interest theretofore accrued. The Court may, in its discretion, proceed with this step (h) before concluding step (g).
- … third, direct the payment of the appraised amount to the stockholders entitled thereto. In the case of shares represented by certificates, payment shall be conditioned upon the surrender to the corporation of the certificates.
- “The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.”
- From the effective date of the merger, no stockholder who has demanded appraisal rights as provided in subsection (d) shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e), or if such stockholder shall deliver to the surviving corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger as provided in subsection (e) or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease.Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just.
- The shares of the surviving corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger shall have the status of authorized and unissued shares of the surviving corporation.