§ 12:1-1302 — Right to appraisal

§1-1302. Right to appraisal
A. A shareholder is entitled to appraisal rights and to obtain payment of the fair value
of that shareholder's shares, in the event of any of the following corporate actions:
(1) Consummation of a merger to which the corporation is a party if either of the
following apply:
(a) Shareholder approval is required for the merger by R.S. 12:1-1104, except that
appraisal rights shall not be available to any shareholder of the corporation with respect to
shares of any class or series that remain outstanding after consummation of the merger.
(b) The corporation is a subsidiary and the merger is governed by R.S. 12:1-1105.
(2) Consummation of a share exchange to which the corporation is a party as the
corporation whose shares will be acquired, except that appraisal rights shall not be available
to any shareholder of the corporation with respect to any class or series of shares of the
corporation that is not exchanged.
(3) Consummation of a disposition of assets pursuant to R.S. 12:1-1202, except that
appraisal rights shall not be available to any shareholder of the corporation with respect to
shares of any class or series if, under the terms of the corporate action approved by the
shareholders, there is to be distributed to shareholders in cash its net assets in excess of a
reasonable amount reserved to meet claims of the type described in R.S. 12:1-1406 and
1-1407, within one year after the shareholders' approval of the action and in accordance with
their respective interests determined at the time of distribution, and the disposition of assets
is not an interested transaction.
(4) An amendment of the articles of incorporation with respect to a class or series
of shares that reduces the number of shares of a class or series owned by the shareholder to
a fraction of a share if the corporation has the obligation or right to repurchase the fractional
share so created.
(5) Any other amendment to the articles of incorporation, merger, share exchange,
or disposition of assets to the extent provided by the articles of incorporation, bylaws, or a
resolution of the board of directors.
(6) Consummation of a domestication if the shareholder does not receive shares in
the foreign corporation resulting from the domestication that have terms as favorable to the
shareholder in all material respects, and represent at least the same percentage interest of the
total voting rights of the outstanding shares of the corporation, as the shares held by the
shareholder before the domestication.
(7) Consummation of a conversion of the corporation to nonprofit status pursuant
to Subpart C of Part 9 of this Chapter.
(8) Consummation of a conversion of the corporation to an unincorporated entity
pursuant to Subpart E of Part 9 of this Chapter.
B. Notwithstanding Subsection A of this Section, the availability of appraisal rights
under Paragraphs (A)(1), (2), (3), (4), (6), and (8) of this Section shall be limited in
accordance with the following provisions:
(1) Appraisal rights shall not be available for the holders of shares of any class or
series of shares which is one of the following:
(a) A covered security under Section 18(b)(1)(A) or (B) of the Securities Act of
1933, as amended.
(b) Traded in an organized market and has at least two thousand shareholders and
a market value of at least twenty million dollars, exclusive of the value of such shares held
by the corporation's subsidiaries, senior executives, and directors and by beneficial
shareholders and voting trust beneficial owners owning more than ten percent of such shares.
(c) Issued by an open end management investment company registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 and may
be redeemed at the option of the holder at net asset value.
(2) The applicability of Paragraph (B)(1) of this Section shall be determined as of
either of the following:
(a) The record date fixed to determine the shareholders entitled to receive notice of
the meeting of shareholders to act upon the corporate action requiring appraisal rights.
(b) The day before the effective date of such corporate action if there is no meeting
of shareholders.
(3) Paragraph (B)(1) of this Section shall not be applicable and appraisal rights shall
be available pursuant to Subsection A of this Section for the holders of any class or series of
shares who are required by the terms of the corporate action requiring appraisal rights to
accept for such shares anything other than cash or shares of any class or any series of shares
of any corporation, or any other proprietary interest of any other entity, that satisfies the
standards set forth in Paragraph (B)(1) of this Section at the time the corporate action
becomes effective or, in the case of the consummation of a disposition of assets pursuant to
R.S. 12:1-1202, unless such cash, shares, or proprietary interests are, under the terms of the
corporate action approved by the shareholders, to be distributed to the shareholders as part
of a distribution to shareholders of the net assets of the corporation in excess of a reasonable
amount to meet claims of the type described in R.S. 12:1-1406 and 1-1407, within one year
after the shareholders' approval of the action and in accordance with their respective interests
determined at the time of the distribution.
(4) Paragraph (B)(1) of this Section shall not be applicable and appraisal rights shall
be available pursuant to Subsection A of this Section for the holders of any class or series of
shares where the corporate action is an interested transaction.
C. Notwithstanding any other provision of this Section, the articles of incorporation
as originally filed or any amendment thereto may limit or eliminate appraisal rights for any
class or series of preferred shares, except for both of the following:
(1) No such limitation or elimination shall be effective if the class or series does not
have the right to vote separately as a voting group, alone or as part of a group, on the action
or if the action is a nonprofit conversion under Subpart C of Part 9 of this Chapter or a
conversion to an unincorporated entity under Subpart E of Part 9 of this Chapter, or a merger
having a similar effect.
(2) Any such limitation or elimination contained in an amendment to the articles of
incorporation that limits or eliminates appraisal rights for any of such shares that are
outstanding immediately prior to the effective date of such amendment, or that the
corporation is or may be required to issue or sell thereafter pursuant to any conversion,
exchange, or other right existing immediately before the effective date of such amendment
shall not apply to any corporate action that becomes effective within one year of that date if
such action would otherwise afford appraisal rights.

Legislative History

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.