§ 54-166. Rights of objecting members. - North Carolina Statutes

§ 54‑166.  Rights ofobjecting members.

(a)        Any member of anassociation effecting a merger or consolidation may give to the associationprior to or at the meeting of the members to which the proposal of merger orconsolidation is submitted to a vote, written notice that he objects to suchproposal. Within 20 days after the date on which the vote was taken, suchmember may, unless he votes in favor of the proposal, make written demand onthe association for payment of the fair market value of his stock or otherproperty rights or interest in the association. Such demand shall state thenumber and class of shares of stock owned by him or the nature and amount ofother property rights or interest owned by him in the association. In additionto any other right he may have in law or equity, a member giving such noticeshall be entitled, if and when the merger or consolidation is effected, to bepaid by the surviving or new association, the fair market value of such stock,or other property rights or interests, as of the day prior to the date on whichthe vote was taken, subject only to the surrender by him of the certificate orcertificates or other evidence of ownership of such stock or other propertyrights or interests.

(b)        If within 30 daysafter the date upon which the objecting member becomes entitled to payment forsuch stock or other property rights or interest, the fair market value of suchstock or other property rights or interests is agreed upon between the memberand the surviving or new association, as the case may be, payment thereforshall be made within 60 days after the agreement, upon surrender of thecertificate or other evidence of such property rights or interests, whereuponthe member shall cease to have any interest in such stock or other propertyrights or interests in the association.

(c)        If within the 30‑dayperiod mentioned in subsection (b) of this section the member and theassociation do not agree as to the fair market value of the stock or otherproperty rights or interests, the member may, within 60 days after theexpiration of the 30‑day period, file a petition in the superior court ofthe county in which the association has its registered office or principalplace of business asking for the appointment by the clerk of the superior courtof that county of three qualified and disinterested appraisers to appraise thefair market value of the stock or other property rights or interests. A summonsas in other cases of special proceedings, together with a copy of the petition,shall be served on the association at least 10 days prior to the hearing of thepetition by the court. The award of the appraisers, or a majority of them, ifno exceptions are filed thereto within 10 days after the award is filed incourt, shall be confirmed by the court, and when confirmed shall be final andconclusive. The member, upon depositing with the court the proper stockcertificates or other evidence of property rights or interests, shall beentitled to judgment against the association for the appraised value thereof asof the day prior to the date on which the vote was taken, together withinterest thereon to the date of the confirmation. If either party filesexceptions to the award within 10 days after the award is filed in court, thecase shall be transferred to the civil issue docket of the superior court fortrial during term and shall be there tried in the same manner, as near as maybe practicable, as is provided in Chapter 40A of the General Statutes for thetrial of cases under the eminent domain law of this State, and with the sameright of appeal to the appellate division as is permitted in that Chapter. Thecourt shall assess the cost of the proceedings as it shall deem equitable. Uponpayment of the judgment, the owner of the stock or other property rights orinterests shall cease to have any interest in the association and theassociation shall be entitled to have the stock certificates or other evidenceof the property rights or interests surrendered to the association by the clerkof court. Unless the member files a petition within the time herein prescribed,the member and all persons claiming under the member shall have no right ofpayment hereunder, but in that event nothing herein shall impair the member'sstatus as a member.

(d)        If in the noticessent to members in connection with the meeting to vote upon a proposed mergeror consolidation no reference is made as required by this Article to theprovisions of this section, any member entitled to but who did not availhimself of the provisions of this section, unless he voted for the proposal, isentitled, if he so demands in writing within one year after the effective dateof the merger or consolidation, to recover from the surviving or newassociation, as the case may be, any damage which he suffered from failure ofthe association of which he was a member to make the aforesaid reference.

(e)        The liability topay for shares or to pay damages imposed by this section on an associationextends to the successor association which acquires the assets of thepredecessor, whether by merger or consolidation.

(f)         Shares of stockacquired by an association pursuant to payment of the agreed fair market valuethereof or to payment of the judgment entered therefor as in this sectionprovided, may be held and disposed of by the association as in the case ofother treasury shares.

(g)        The provisions ofthis section shall not apply to a merger if on the date of the filing of thearticles of merger the surviving association is the owner of all theoutstanding shares of the other association, domestic or foreign, participatingin the merger and if such merger makes no changes in the relative rights of themembers of the surviving association.

(h)        Notwithstanding anyof the foregoing provisions of this section, no member of an associationeffecting a merger or consolidation, who objects thereto and makes writtendemand for payment of the fair market value of his stock or other propertyrights or interests in the association, as hereinbefore provided in thissection, shall be entitled to such payment at any time prior to the time thathe would otherwise be entitled to payment pursuant to valid provisions of suchstock, or valid provisions of the charter or the bylaws of the association, ineffect on the date of the vote for such merger or consolidation. However, inany case where the owner of such stock or other property rights or interests inthe association is not entitled, because of valid provisions of his stock, orbecause of valid provisions of the charter or bylaws of the association, topayment at the time hereinbefore provided in this section, the fair marketvalue of such stock or other property rights or interests in the association,as of the day prior to the date on which the vote was taken, may be determinedin any manner hereinbefore provided in this section, and the amount sodetermined, without interest, shall be an obligation of the surviving or newassociation, as the case may be, and shall be due and payable at the time thatthe owner thereof would be entitled to payment pursuant to valid provisions ofsuch stock, or valid provisions of the charter or the bylaws of theassociation. (1963,c. 1168, s. 13; 1973, c. 108, s. 19; 2001‑487, s. 38(c).)