17-1642.   Payment for interest of member objecting tomerger; demand forpayment; appraisal and determination of value; taxation of costs; status ofmember's interest; section inapplicable to certain member's interest.(a) Except as provided in subsection (j), the association orcorporation surviving or resulting fromany merger or consolidation, within 10 days after the effective date of themerger or consolidation, shall notify each member or stockholder of anyassociation or corporation of thisstate so merging or consolidating who objected thereto in writing and whoseshares either were not entitled to vote or were not voted in favor of themerger or consolidation, and who filed such written objection with theassociation or corporation before the taking of the vote on the merger orconsolidation, thatthe merger or consolidation has become effective. If any such member orstockholder, within20 days after the date of mailing of the notice, shall demand in writing, fromthe association or corporation surviving or resulting from the merger orconsolidation, payment of the value of the member's or stockholder's interest,the surviving orresulting association or corporation shall pay to the member or stockholder,within 30 daysafter the expiration of the period of 20 days, the value of the member'sor stockholder's interest on the effective date of the merger or consolidation,exclusive of anyelement of value arising from the expectation or accomplishment of the mergeror consolidation.

      (b)   If during a period of 30 days following the period of 20 days providedfor in subsection (a), the association and any such member or stockholder failto agree uponthe value of such member's or stockholder's interest, any such member orstockholder, or the association orcorporation surviving or resulting from the merger or consolidation, may demanda determination of the value of the member's or stockholder's interest by anappraiser orappraisers to be appointed by the district court, by filing a petition with thecourt within four months after the expiration of the thirty-day period.

      (c)   Upon the filing of any such petition by a member or stockholder, serviceof a copyshall bemade upon the surviving association or corporation, which shall file with theclerk of the district court, within 10 days after such service, a duly verifiedlist containing the names and addresses of all members or stockholders who havedemandedpayment for such member's or stockholder's interest and with whom agreements asto the value ofsuch member's or stockholder's interest have not been reached by theassociation or corporation.If the petition is filed by the surviving association or corporation, thepetition shall be accompanied by such duly verified list. The survivingassociation or corporation shall give notice of the time and place fixed forthe hearing ofsuch petition pursuant to subsection (c) of K.S.A. 60-303, and amendmentsthereto, to themembers or stockholders shown upon the list at the addresses thereinstated and noticeshall also be given by publishing a notice at least once, at least one weekbefore the day of the hearing, in a newspaper of general circulation in thecounty in which the district court is located. The court may direct suchadditional publication of notice as the court deems advisable. The forms ofthe notices by mail and by publication shall be approved by the court.

      (d)   After the hearing on the petition the court shall determine the membersor stockholders who have complied with the provisions of this section andbecome entitled tothe valuation of and payment for such member's or stockholder's interest, andshall appoint anappraiser or appraisers to determine such value. The appraiser or appraisersmay examine anyof the books and records of the associations or corporations the stock of whichsuch appraiser or appraisers is charged with the duty of valuing, and followinganinvestigation, the appraiser or appraisers shall make a determination of thevalue of themember'sor stockholder's interest. The appraiser or appraisers shall also afford areasonableopportunity to the parties interested to submit to the appraiser or appraiserspertinent evidence on the value of the member's or stockholder's interest. Theappraiser orappraisers, also, shall have the powers and authority conferred upon masters byK.S.A. 60-253, and amendments thereto.

      (e)   The appraiser or appraisers shall determine the value of the stock ofthemembers or stockholders adjudged by the district court to be entitled topayment therefor andshall file a report respecting such value in the office of theclerk of the district court, and notice of the filing of such report shall begiven by thepetitioners to the parties in interest. Such report shall besubject to exceptions to be heard before the court both upon the law and facts.The court by decree shall determine the value of the stock of the membersor stockholders entitled to payment and shall direct the payment of such value,together withinterest, if any, to the members or stockholders entitled by the surviving orresultingcorporation. Upon payment of the judgment by the surviving or resultingcorporation, the clerk of the district court shall surrender to the survivingassociation or corporation the certificates of shares of stock held by theclerk pursuant to subsection (f). The decree may be enforced as other judgmentsofthe district court may be enforced, whether such surviving or resultingassociation be an association of this state or of any other state.

      (f)   At the time of appointing the appraiser or appraisers, the court shallrequire the members or stockholders who hold certificated shares and whodemanded payment forthe shares to submit the certificates of stock to the clerk of the court, to beheld by the clerk pending the appraisal proceedings. If any member orstockholder fails tocomply with such direction, the court shall dismiss the proceedings as to suchmember or stockholder.

      (g)   The cost of any such appraisal, including reasonable fees and expensesof the appraiser or appraisers, but exclusive of fees of counsel or of expertsretained byany party, shall be determined by the court and taxed upon the parties to suchappraisal or any of them as appears to be equitable, except that the cost ofgiving the notice by publication and by certified mail shall be paid by thesurviving association or corporation.Postjudgment interest, if any, shall be in accordance with K.S.A. 16-204, andamendments thereto, to be paid uponthe value of the stock of the members or stockholders entitled thereto.

      (h)   Any member or stockholder who has demanded payment of the member's orstockholder's interest as hereinprovided shall not thereafter be entitled to vote such member's orstockholder's stock for anypurpose or be entitled to the payment of dividends or other distributionon such stock, except dividends or other distributions payable to members orstockholders ofrecord at a date which is prior to the effective date ofthe merger or consolidation, unless the appointment of an appraiser orappraisers shall not be applied for within the time herein provided, or theproceeding be dismissed as to such member or stockholder, or unless such memberor stockholder with thewritten approval of the surviving association or corporation shall deliver tothe association or corporation a written withdrawal of the member's orstockholder's objectionsto and an acceptance of the merger or consolidation, in any of which cases theright of such member or stockholder to payment for the member's orstockholder's interest shall cease.

      (i)   The shares of the surviving or resulting association or corporationinto which the shares of such objecting members or stockholders would have beenconverted hadthey assented to the merger or consolidation shall have the status ofauthorized and unissued shares of the surviving or resulting association orcorporation.

      (j)   This section shall not be applicable to the members, stockholders orother holders of equity securities of the surviving association or corporationin any merger where the active members of the surviving association orcorporation continue to be eligible to be members of the surviving associationor corporation after the merger and the agreement of merger does not amend thearticles of incorporation, and shall not apply to the members, stockholders orother holders of equity securities of the constituent association orcorporationnot surviving the merger in any merger where the active members of suchconstituent association or corporation are eligible to become members of thesurviving association or corporation on the same terms and conditions as othersimilarly classified members of the surviving association or corporation.

      History:   L. 1991, ch. 74, § 6;L. 2000, ch. 175, § 1; July 1.