2023 New York Laws › BNK - Banking › Article 15 - General Provisions Applicable to Banking Stock Corporations, Limited Liability Investment Companies, and Limited Liability Trust Companies › Title 6 - Stockholders › 6022 - Procedure to Enforce Stockholder's Right to Receive Payment for Shares.

§ 6022.  Procedure  to  enforce stockholder's right to receive payment
for shares. 1. A stockholder intending to  enforce  his  right  under  a
section  of  this  chapter  to  receive  payment  for  his shares if the
proposed corporate action referred to therein is taken shall  file  with
the  corporation, before the meeting of stockholders at which the action
is submitted to a vote, or at such meeting but before the vote,  written
objection to the action. The objection shall include a statement that he
intends  to  demand  payment for his shares if the action is taken. Such
objection is not required from any stockholder to whom  the  corporation
did  not  give notice of such meeting in accordance with this chapter or
where  the  proposed  action  is  authorized  by  written   consent   of
stockholders without a meeting.
2.  Within  ten days after the stockholders' authorization date, which
term as used in this section means the date on which  the  stockholders'
vote  authorizing  such  action  was  taken,  or  the date on which such
consent without a meeting was obtained from the requisite  stockholders,
the  corporation  shall  give  written  notice  of such authorization or
consent by  registered  mail  to  each  stockholder  who  filed  written
objection or from whom written objection was not required, excepting any
who voted for or consented in writing to the proposed action.
3.  Within  twenty  days  after  the  giving  of  notice  to  him, any
stockholder to whom the corporation was required to give such notice and
who elects to dissent shall file with the corporation a  written  notice
of such election, stating his name and residence address, the number and
classes  of  shares  as to which he dissents and a demand for payment of
the fair value of his shares.
4. A stockholder may not dissent as to less than all  of  the  shares,
held by him of record, that he owns beneficially. A nominee or fiduciary
may not dissent on behalf of any beneficial owner as to less than all of
the shares of such owner held of record by such nominee or fiduciary.
5.  Upon filing a notice of election to dissent, the stockholder shall
cease to have any of the rights of a stockholder except the right to  be
paid  the  fair  value  of  his  shares  and any other rights under this
section.  Withdrawal of a notice of election shall require  the  written
consent of the corporation. If a notice of election is withdrawn, or the
proposed  corporate  action  is abandoned or rescinded, or a court shall
determine that the stockholder is not entitled to  receive  payment  for
his  shares,  or  the  stockholder  shall otherwise lose his dissenter's
rights, he shall not have the right to receive payment  for  his  shares
and  he shall be reinstated to all his rights as a stockholder as of the
filing of his notice of election, including any  intervening  preemptive
rights  and  the  right  to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof,  at
the  election  of  the  corporation,  the  fair value thereof in cash as
determined by the board as of the time of such expiration or completion,
but without prejudice otherwise to any corporate  proceedings  that  may
have been taken in the interim.
6.  At  the time of filing the notice of election to dissent or within
one month thereafter  the  stockholder  shall  submit  the  certificates
representing  his  shares  to the corporation, or to its transfer agent,
which shall forthwith  note  conspicuously  thereon  that  a  notice  of
election  has  been  filed  and  shall  return  the  certificates to the
stockholder or other person  who  submitted  them  on  his  behalf.  Any
stockholder  who  fails  to submit his certificates for such notation as
herein specified shall, at the option of the  corporation  exercised  by
written  notice to him within forty-five days from the date of filing of
such notice of election to dissent, lose his dissenter's rights unless a

court, for good cause shown, shall otherwise direct. Upon transfer of  a
certificate  bearing such notation, each new certificate issued therefor
shall bear a similar notation together with the  name  of  the  original
dissenting holder of the shares and a transferee shall acquire no rights
in   the   corporation   except  those  which  the  original  dissenting
stockholder had after filing his notice of election.
7. Within seven days after the expiration of the period  within  which
stockholders  may  file  their notices of election to dissent, or within
seven days after the proposed corporate action is consummated, whichever
is later, the corporation or, in the case of  a  merger,  the  receiving
corporation,  shall  make  a  written  offer  by registered mail to each
stockholder who has filed such notice of election to pay for his  shares
at  a  specified  price which the corporation considers to be their fair
value. Such offer shall be made at the  same  price  per  share  to  all
dissenting stockholders of the same class, or if divided into series, of
the  same  series  and  shall  be  accompanied by a balance sheet of the
corporation whose shares the dissenting  stockholder  holds  as  of  the
latest  available  date,  which  shall not be earlier than twelve months
before the making of such offer, and a  profit  and  loss  statement  or
statements  for not less than a twelve month period ended on the date of
such  balance  sheet  or,  if  the  corporation  was  not  in  existence
throughout  such  twelve  month  period,  for the portion thereof during
which it was in existence.  If within thirty days after  the  making  of
such  offer,  the corporation making the offer and any stockholder agree
upon the price to be paid for his shares, payment therefor shall be made
within sixty days after the making of such offer upon the  surrender  of
the certificates representing such shares.
8.  The  following  procedure  shall apply if the corporation fails to
make such offer within such period of seven days, or  if  it  makes  the
offer  and any dissenting stockholder or stockholders fail to agree with
it within the period of thirty days thereafter upon the price to be paid
for their shares:
(a) The corporation or,  in  the  case  of  a  merger,  the  receiving
corporation  shall, within twenty days after the expiration of whichever
is applicable of the two periods last  mentioned,  institute  a  special
proceeding  in  the  supreme court in the judicial district in which the
office of  the  corporation  is  located  to  determine  the  rights  of
dissenting stockholders and to fix the fair value of their shares.
(b)  If the corporation fails to institute such proceeding within such
period of twenty days, any dissenting  stockholder  may  institute  such
proceeding  for  the  same  purpose not later than thirty days after the
expiration of  such  twenty  day  period.  If  such  proceeding  is  not
instituted  within  such thirty day period, all dissenter's rights shall
be lost unless the supreme court, for good cause shown, shall  otherwise
direct.
(c)  All  dissenting stockholders, excepting those who, as provided in
subdivision seven, have agreed with the corporation upon the price to be
paid for their shares, shall be made parties to such  proceeding,  which
shall  have  the  effect of an action quasi in rem against their shares.
The corporation shall serve a copy of the petition  in  such  proceeding
upon  each dissenting stockholder who is a resident of this state in the
manner provided by law for the service  of  a  summons,  and  upon  each
nonresident   dissenting  stockholder  either  by  registered  mail  and
publication, or in such  other  manner  as  is  permitted  by  law.  The
jurisdiction of the court shall be plenary and exclusive.
(d)  The court shall determine whether each dissenting stockholder, as
to whom the corporation requests the court to make  such  determination,
is  entitled  to receive payment for his shares. If the corporation does

not request any such determination  or  if  the  court  finds  that  any
dissenting stockholder is so entitled, it shall proceed to fix the value
of  the  shares,  which,  for the purposes of this section, shall be the
fair  value  as  of  the  close  of  business  on  the  day prior to the
stockholders'  authorization  date,  excluding   any   appreciation   or
depreciation  directly or indirectly induced by such corporate action or
its proposal. The court may, if it so elects, appoint  an  appraiser  to
receive evidence and recommend a decision on the question of fair value.
Such  appraiser  shall have the power, authority and duties specified in
the order appointing him, or any amendment thereof.
(e) The final order in the proceeding shall  be  entered  against  the
corporation  in  favor  of each dissenting stockholder who is a party to
the proceeding and is entitled thereto for the value of  his  shares  so
determined.
(f)  The  final  order shall include an allowance for interest at such
rate as  the  court  finds  to  be  equitable,  from  the  stockholders'
authorization  date  to the date of payment. If the court finds that the
refusal of any stockholder to accept the corporate offer of payment  for
his  shares  was arbitrary, vexatious or otherwise not in good faith, no
interest shall be allowed to him.
(g) The costs and expenses of such proceeding shall be  determined  by
the court and shall be assessed against the corporation, or, in the case
of  a  merger, the receiving corporation, except that all or any part of
such costs and expenses may be apportioned and assessed,  as  the  court
may determine, against any or all of the dissenting stockholders who are
parties  to  the  proceeding  if  the  court finds that their refusal to
accept the corporate offer was arbitrary, vexatious or otherwise not  in
good  faith. Such expenses shall include reasonable compensation for and
the reasonable expenses of the appraiser, but shall exclude the fees and
expenses of counsel for and experts employed by  any  party  unless  the
court,  in  its discretion, awards such fees and expenses. In exercising
such discretion, the court shall consider any of  the  following:
(A)
that  the  fair value of the shares as determined materially exceeds the
amount which such corporation offered to pay; (B) that no offer was made
by such corporation; and (C) that such corporation failed  to  institute
the special proceeding within the period specified therefor.
(h) Within sixty days after final determination of the proceeding, the
corporation or, in the case of a merger, the receiving corporation shall
pay  to each dissenting stockholder the amount found to be due him, upon
surrender of the certificates representing his shares.
9. Shares acquired by the corporation upon the payment of  the  agreed
value  therefor  or of the amount due under the final order, as provided
in this section, shall  be  dealt  with  as  provided  in  section  five
thousand  fourteen,  except that, in the case of a merger, they shall be
disposed of as provided in the plan of merger or consolidation.
10. The enforcement by a stockholder of his right to  receive  payment
for  his  shares  in  the  manner  provided  herein  shall  exclude  the
enforcement by such stockholder of any other right  to  which  he  might
otherwise  be  entitled by virtue of share ownership, except as provided
in subdivision five, and except that this section shall not exclude  the
right  of such stockholder to bring or maintain an appropriate action to
obtain relief on the ground that such corporate action  will  be  or  is
illegal or fraudulent as to him.
11. Except as otherwise expressly provided in this section, any notice
to  be  given by a corporation to a stockholder under this section shall
be given in the manner provided in section six thousand five.