§ 55-13-02. Right to dissent. - North Carolina Statutes

§ 55‑13‑02.  Rightto dissent.

(a)        In addition to anyrights granted under Article 9, a shareholder is entitled to dissent from, andobtain payment of the fair value of his shares in the event of, any of thefollowing corporate actions:

(1)        Consummation of aplan of merger to which the corporation (other than a parent corporation in amerger whose shares are not affected under G.S. 55‑11‑04) is aparty unless (i) approval by the shareholders of that corporation is notrequired under G.S. 55‑11‑03(g) or (ii) such shares are thenredeemable by the corporation at a price not greater than the cash to bereceived in exchange for such shares;

(2)        Consummation of aplan of share exchange to which the corporation is a party as the corporationwhose shares will be acquired, unless such shares are then redeemable by thecorporation at a price not greater than the cash to be received in exchange forsuch shares;

(2a)      Consummation of aplan of conversion pursuant to Part 2 of Article 11A of this Chapter;

(3)        Consummation of asale or exchange of all, or substantially all, of the property of thecorporation other than as permitted by G.S. 55‑12‑01, including asale in dissolution, but not including a sale pursuant to court order or a salepursuant to a plan by which all or substantially all of the net proceeds of thesale will be distributed in cash to the shareholders within one year after thedate of sale;

(4)        An amendment of thearticles of incorporation that materially and adversely affects rights inrespect of a dissenter's shares because it (i) alters or abolishes apreferential right of the shares; (ii) creates, alters, or abolishes a right inrespect of redemption, including a provision respecting a sinking fund for theredemption or repurchase, of the shares; (iii) alters or abolishes a preemptiveright of the holder of the shares to acquire shares or other securities; (iv)excludes or limits the right of the shares to vote on any matter, or tocumulate votes, other than an amendment of the articles of incorporation permittingaction without meeting to be taken by less than all shareholders entitled tovote, without advance notice, or both, as provided in G.S. 55‑7‑04;(v) reduces the number of shares owned by the shareholder to a fraction of ashare if the fractional share so created is to be acquired for cash under G.S.55‑6‑04; or (vi) changes the corporation into a nonprofitcorporation or cooperative organization; or

(5)        Any corporate actiontaken pursuant to a shareholder vote to the extent the articles of incorporation,bylaws, or a resolution of the board of directors provides that voting ornonvoting shareholders are entitled to dissent and obtain payment for theirshares.

(b)        A shareholderentitled to dissent and obtain payment for his shares under this Article maynot challenge the corporate action creating his entitlement, including withoutlimitation a merger solely or partly in exchange for cash or other property,unless the action is unlawful or fraudulent with respect to the shareholder orthe corporation.

(c)        Notwithstanding anyother provision of this Article, there shall be no right of shareholders todissent from, or obtain payment of the fair value of the shares in the eventof, the corporate actions set forth in subdivisions (1), (2), or (3) of subsection(a) of this section if the affected shares are any class or series which, atthe record date fixed to determine the shareholders entitled to receive noticeof and to vote at the meeting at which the plan of merger or share exchange orthe sale or exchange of property is to be acted on, were (i) listed on anational securities exchange or designated as a national market system securityon an interdealer quotation system by the National Association of SecuritiesDealers, Inc., or (ii) held by at least 2,000 record shareholders. Thissubsection does not apply in cases in which either:

(1)        The articles ofincorporation, bylaws, or a resolution of the board of directors of thecorporation issuing the shares provide otherwise; or

(2)        In the case of aplan of merger or share exchange, the holders of the class or series arerequired under the plan of merger or share exchange to accept for the sharesanything except:

a.         Cash;

b.         Shares, or sharesand cash in lieu of fractional shares of the surviving or acquiringcorporation, or of any other corporation which, at the record date fixed todetermine the shareholders entitled to receive notice of and vote at themeeting at which the plan of merger or share exchange is to be acted on, wereeither listed subject to notice of issuance on a national securities exchangeor designated as a national market system security on an interdealer quotationsystem by the National Association of Securities Dealers, Inc., or held by atleast 2,000 record shareholders; or

c.         A combination ofcash and shares as set forth in sub‑subdivisions a. and b. of thissubdivision. (1925,c. 77, s. 1; c. 235; 1929, c. 269; 1939, c. 279; 1943, c. 270; G.S., ss. 55‑26,55‑167; 1955, c. 1371, s. 1; 1959, c. 1316, ss. 30, 31; 1969, c. 751, ss.36, 39; 1973, c. 469, ss. 36, 37; c. 476, s. 193; 1989, c. 265, s. 1; 1989(Reg. Sess., 1990), c. 1024, s. 12.18; 1991, c. 645, s. 12; 1997‑202, s.1; 1999‑141, s. 1; 2001‑387, s. 26; 2003‑157, s. 1.)