17-6712.   Appraisal rights for shares of stock ofconstituent corporation in a merger or consolidation; perfection; petition fordetermination of value of stock of all stockholders, procedure, determinationby court.(a) When used in this section, the word "stockholder" means a holder of recordof stock in a stock corporation and also a member of record of a nonstockcorporation; the words "stock" and "share" mean and include what is ordinarilymeant by those words and also membership or membership interest of a member ofa nonstock corporation.

      (b) (1)   Appraisal rights shall be available for the shares of any class orseries of stock of a constituent corporation in a merger or consolidation to beeffected pursuant to K.S.A. 17-6701, and amendments thereto, other than amerger effected pursuant to subsection (g) of K.S.A. 17-6701, and amendmentsthereto, K.S.A. 17-6702, 17-6704, 17-6707, 17-6708 or 17-7703, and amendmentsthereto, except that: (A) No appraisal rights under this section shall beavailable for the shares of any class or series of stock, which stock, ordepository receipts in respect thereof, at the record date fixed to determinethe stockholders entitled to receive notice of and to vote at the meeting ofstockholders to act upon the agreement of merger or consolidation, were eitherlisted on a national securities exchange or designated as a national marketsystem security on an interdealer quotation system by the national associationof securities dealers, inc., or held of record by more than 2,000 holders; (B)no appraisal rights shall be available for any shares of stock of theconstituent corporation surviving a merger if the merger did not require forits approval the vote of the stockholders of the surviving corporation asprovided in subsection (f) of K.S.A. 17-6701, and amendments thereto.

      (2)   Notwithstanding the provisions of subsections (b)(1)(A) and (b)(1)(B),appraisal rights under this section shall be available for the shares of anyclass or series of stock of a constituent corporation if the holders thereofare required by the terms of an agreement of merger or consolidation pursuantto K.S.A. 17-6701, 17-6702, 17-6704, 17-6707, 17-6708 and 17-7703, andamendments thereto, to accept for such stock anything except:

      (A)   Shares of stock of the corporation surviving or resulting from suchmerger or consolidation, or depository receipts in respect of suchshares of stock;

      (B)   shares of stock of any other corporation, or depository receipts inrespect of such shares of stock, which shares of stock, or depository receiptsin respect of such shares of stock, or depository receipts at the effectivedate of the merger or consolidation will be either listed on a nationalsecurities exchange or designated as a national market system security on aninterdealer quotation system by the national association of securities dealers,inc. or held of record by more than 2,000 holders;

      (C)   cash in lieu of fractional shares or fractional depository receiptsdescribed in the foregoing subparagraphs (A) and (B); or

      (D)   any combination of the shares of stock, depository receipts and cash inlieu of fractional shares or fractional depository receipts described in theforegoing subparagraphs (A), (B) and (C).

      (3)   In the event all of the stock of a subsidiary Kansas corporation party toa merger effected under K.S.A. 17-6703, and amendments thereto, is not owned bythe parent corporation immediately prior to the merger, appraisal rights shallbe available for the shares of the subsidiary Kansas corporation.

      (c)   Any corporation may provide in its articles of incorporation thatappraisal rights under this section shall be available for the shares of anyclass or series of its stock as a result of an amendment to its articles ofincorporation, any merger or consolidation in which the corporation is aconstituent corporation or the sale of all or substantially all of the assetsof the corporation. If the articles of incorporation contains such a provision,the procedures of this section, including those set forth in subsections (d)and (e), shall apply as nearly as is practicable.

      (d)   Appraisal rights shall be perfected as follows:

      (1)   If a proposed merger or consolidation for which appraisal rights areprovided under this section is to be submitted for approval at a meeting ofstockholders, the corporation, not less than 20 days prior to the meeting,shall notify each of its stockholders who was such on the record date for suchmeeting with respect to shares for which appraisal rights are availablepursuant to subsection (b) or (c) that appraisal rights are available for anyor all of the shares of the constituent corporations, and shall include in suchnotice a copy of this section. Each stockholder electing to demand theappraisal of such stockholder's shares shall deliver to the corporation, beforethe taking of the vote on the merger or consolidation, a written demand forappraisal of such stockholder's shares. Such demand will be sufficient if itreasonably informs the corporation of the identity of the stockholder and thatthe stockholder intends thereby to demand the appraisal of such stockholder'sshares. A proxy or vote against the merger or consolidation shall notconstitute such a demand. A stockholder electing to take such action must do soby a separate written demand as herein provided. Within 10 days after theeffective date of such merger or consolidation, the surviving or resultingcorporation shall notify each stockholder of each constituent corporation whohas complied with this subsection and has not voted in favor of or consented tothe merger or consolidation of the date that the merger or consolidation hasbecome effective; or

      (2)   If the merger or consolidation was approved pursuant to K.S.A. 17-6518 orK.S.A. 17-6703, and amendments thereto, then, either a constituent corporationbefore the effective date of the merger or consolidation, or the surviving orresulting corporation within 10 days thereafter, shall notify each of theholders of any class or series of stock of such constituent corporation who areentitled to appraisal rights of the approval of the merger or consolidation andthat appraisal rights are available for any or all shares of such class orseries of stock of such constituent corporation, and shall include in suchnotice a copy of this section. Such notice may, and, if given on or after theeffective date of the merger or consolidation, shall, also notify suchstockholders of the effective date of the merger or consolidation. Anystockholder entitled to appraisal rights may, within 20 days after the date ofmailing of such notice, demand in writing from the surviving or resultingcorporation the appraisal of such holder's shares. Such demand will besufficient if it reasonably informs the corporation of the identity of thestockholder and that the stockholder intends thereby to demand the appraisal ofsuch holder's shares. If such notice did not notify stockholders of theeffective date of the merger or consolidation, either: (A) Each suchconstituent corporation shall send a second notice before the effective date ofthe merger or consolidation notifying each of the holders of any class orseries of stock of such constituent corporation that are entitled to appraisalrights of the effective date of the merger or consolidation; or (B) thesurviving or resulting corporation shall send such a second notice to all suchholders on or within 10 days after such effective date; provided, however, thatif such second notice is sent more than 20 days following the sending of thefirst notice, such second notice need only be sent to each stockholder who isentitled to appraisal rights and who has demanded appraisal of such holder'sshares in accordance with this subsection. An affidavit of the secretary orassistant secretary or of the transfer agent of the corporation that isrequired to give either notice that such notice has been given shall, in theabsence of fraud, be prima facie evidence of the facts stated therein. Forpurposes of determining the stockholders entitled to receive either notice,each constituent corporation may fix, in advance, a record date that shall benot more than 10 days prior to the date the notice is given, provided, that ifthe notice is given on or after the effective date of the merger orconsolidation, the record date shall be such effective date. If no record dateis fixed and the notice is given prior to the effective date, the record dateshall be the close of business on the day next preceding the day on which thenotice is given.

      (e)   Within 120 days after the effective date of the merger or consolidation,the surviving or resulting corporation or any stockholder who has complied withsubsections (a) and (d) and who is otherwise entitled to appraisal rights, mayfile a petition in the district court demanding a determination of the valueof the stock of all such stockholders. Notwithstanding the foregoing, at anytime within 60 days after the effective date of the merger or consolidation,any stockholder shall have the right to withdraw such stockholder's demand forappraisal and to accept the terms offered upon the merger or consolidation.Within 120 days after the effective date of the merger or consolidation, anystockholder who has complied with the requirements of subsection (a) and (d),upon written request, shall be entitled to receive from the corporationsurviving the merger or resulting from the consolidation a statement settingforth the aggregate number of shares not voted in favor of the merger orconsolidation and with respect to which demands for appraisal have beenreceived and the aggregate number of holders of such shares. Such writtenstatement shall be mailed to the stockholder within 10 days after suchstockholder's written request for such a statement is received by the survivingor resulting corporation or within 10 days after expiration of the period fordelivery of demands for appraisal under subsection (d), whichever is later.

      (f)   Upon the filing of any such petition by a stockholder, service of a copythereof shall be made upon the surviving or resulting corporation, which shallwithin 20 days after such service file in the office of the clerk of the courtin which the petition was filed a duly verified list containing the names andaddresses of all stockholders who have demanded payment for their shares andwith whom agreements as to the value of their shares have not been reached bythe surviving or resulting corporation. If the petition shall be filed by thesurviving or resulting corporation, the petition shall be accompanied by such aduly verified list. The clerk of the court, if so ordered by the court, shallgive notice of the time and place fixed for the hearing of such petition byregistered or certified mail to the surviving or resulting corporation and tothe stockholders shown on the list at the addresses therein stated. Such noticeshall also be given by one or more publications at least one week before theday of the hearing, in a newspaper of general circulation published in thecounty in which the court is located or such publication as the court deemsadvisable. The forms of the notices by mail and by publication shall beapproved by the court, and the costs thereof shall be borne by the surviving orresulting corporation.

      (g)   At the hearing on such petition, the court shall determine thestockholders who have complied with this section and who have become entitledto appraisal rights. The court may require the stockholders who have demandedan appraisal for their shares and who hold stock represented by certificates tosubmit their certificates of stock to the clerk of the court for notationthereon of the pendency of the appraisal proceedings; and if any stockholderfails to comply with such direction, the court may dismiss the proceedings asto such stockholder.

      (h)   After determining the stockholders entitled to an appraisal, the courtshall appraise the shares, determining their fair value exclusive of anyelement of value arising from the accomplishment or expectation of the mergeror consolidation, together with a fair rate of interest, if any, to be paidupon the amount determined to be the fair value. In determining such fairvalue, the court shall take into account all relevant factors. In determiningthe fair rate of interest, the court may consider all relevant factors,including the rate of interest which the surviving or resulting corporationwould have had to pay to borrow money during the pendency of the proceeding.Upon application by the surviving or resulting corporation or by anystockholder entitled to participate in the appraisal proceeding, the court may,in its discretion, permit discovery or other pretrial proceedings and mayproceed to trial upon the appraisal prior to the final determination of thestockholder entitled to an appraisal. Any stockholder whose name appears on thelist filed by the surviving or resulting corporation pursuant to subsection (f)and who has submitted such stockholder's certificates of stock to the clerk ofthe court, if such is required, may participate fully in all proceedings untilit is finally determined that such stockholder is not entitled to appraisalrights under this section.

      (i)   The court shall direct the payment of the fair value of the shares,together with interest, if any, by the surviving or resulting corporation tothe stockholders entitled thereto. Interest may be simple or compound, as thecourt may direct. Payment shall be so made to each such stockholder, in thecase of holders of uncertificated stock forthwith, and the case of holders ofshares represented by certificates upon the surrender to the corporation of thecertificates representing such stock. The court's decree may be enforced asother decrees in the district court may be enforced, whether such surviving orresulting corporation be a corporation of this state or of any state.

      (j)   The costs of the proceeding may be determined by the court and taxed uponthe parties as the court deems equitable in the circumstances. Upon applicationof a stockholder, the court may order all or a portion of the expenses incurredby any stockholder in connection with the appraisal proceeding, including,without limitation, reasonable attorney's fees and the fees and expenses ofexperts, to be charged pro rata against the value of all the shares entitled toan appraisal.

      (k)   From and after the effective date of the merger or consolidation, nostockholder who has demanded appraisal rights as provided in subsection (d)shall be entitled to vote such stock for any purpose or to receive payment ofdividends or other distributions on the stock, except dividends or otherdistributions payable to stockholders of record at a date which is prior to theeffective date of the merger or consolidation; provided, however, that if nopetition for an appraisal shall be filed within the time provided in subsection(e), or if such stockholder shall deliver to the surviving or resultingcorporation a written withdrawal of such stockholder's demand for an appraisaland an acceptance of the merger or consolidation, either within 60 days afterthe effective date of the merger or consolidation as provided in subsection (e)or thereafter with the written approval of the corporation, then the right ofsuch stockholder to an appraisal shall cease. Notwithstanding the foregoing, noappraisal proceeding in the district court shall be dismissed as to anystockholder without the approval of the court, and such approval may beconditioned upon such terms as the court deems just.

      (l)   The shares of the surviving or resulting corporation to which the sharesof such objecting stockholders would have been converted had they assented tothe merger or consolidation shall have the status of authorized and unissuedshares of the surviving or resulting corporation.

      History:   L. 1972, ch. 52, § 90;L. 1973, ch. 100, § 9;L. 1986, ch. 399, § 14;L. 1996, ch. 135, § 2;L. 2004, ch. 143, § 56; Jan. 1, 2005.