2011 Connecticut Code
Title 33 Corporations
Chapter 601 Business Corporations
Sec. 33-856. Right to appraisal.

      Sec. 33-856. Right to appraisal. (a) A shareholder is entitled to appraisal rights, and to obtain payment of the fair value of that shareholder's shares, in the event of any of the following corporate actions:

      (1) Consummation of a merger to which the corporation is a party (A) if shareholder approval is required for the merger by section 33-817 and the shareholder is entitled to vote on the merger, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger, or (B) if the corporation is a subsidiary and the merger is governed by section 33-818;

      (2) Consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the exchange, except that appraisal rights shall not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not exchanged;

      (3) Consummation of a disposition of assets pursuant to section 33-831 if the shareholder is entitled to vote on the disposition;

      (4) An amendment of the certificate of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created; or

      (5) Any other merger, share exchange, disposition of assets or amendment to the certificate of incorporation to the extent provided by the certificate of incorporation, the bylaws or a resolution of the board of directors.

      (b) Notwithstanding subsection (a) of this section, the availability of appraisal rights under subdivisions (1), (2), (3) and (4) of subsection (a) of this section shall be limited in accordance with the following provisions:

      (1) Appraisal rights shall not be available for the holders of shares of any class or series of shares which is:

      (A) A covered security under Section 18(b)(1)(A) or (B) of the Securities Act of 1933, as amended;

      (B) Traded in an organized market and has at least two thousand shareholders and a market value of at least twenty million dollars, exclusive of the value of such shares held by the corporation's subsidiaries, senior executives, directors and beneficial shareholders owning more than ten per cent of such shares; or

      (C) Issued by an open-end management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and may be redeemed at the option of the holder at net asset value.

      (2) The applicability of subdivision (1) of this subsection shall be determined as of: (A) The record date fixed to determine the shareholders entitled to receive notice of, and to vote at, the meeting of shareholders to act upon the corporate action requiring appraisal rights; or (B) the day before the effective date of such corporate action if there is no meeting of shareholders.

      (3) Subdivision (1) of this subsection shall not be applicable and appraisal rights shall be available pursuant to subsection (a) of this section for the holders of any class or series of shares who are required by the terms of the corporate action requiring appraisal rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in subdivision (1) of this subsection at the time the corporate action becomes effective.

      (4) Subdivision (1) of this subsection shall not be applicable and appraisal rights shall be available pursuant to subsection (a) of this section for the holders of any class or series of shares where the corporate action is an interested transaction.

      (c) Notwithstanding any other provision of this section, the certificate of incorporation as originally filed or any amendment thereto may limit or eliminate appraisal rights for any class or series of preferred shares, but any such limitation or elimination contained in an amendment to the certificate of incorporation that limits or eliminates appraisal rights for any of such shares that are outstanding immediately prior to the effective date of such amendment or that the corporation is or may be required to issue or sell thereafter pursuant to any conversion, exchange or other right existing immediately before the effective date of such amendment shall not apply to any corporate action that becomes effective within one year of that date if such action would otherwise afford appraisal rights.

      (d) Where the right to be paid the value of shares is made available to a shareholder by this section, such remedy shall be the exclusive remedy as holder of such shares against the corporate actions described in this section, whether or not the shareholder proceeds as provided in sections 33-855 to 33-872, inclusive.

      (P.A. 94-186, S. 148, 215; P.A. 96-271, S. 111, 254; P.A. 01-199, S. 16; P.A. 09-55, S. 3.)

      History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced "articles" of incorporation with "certificate" of incorporation where appearing, effective January 1, 1997; P.A. 01-199 substantially revised section including amending Subsec. (a) to provide that a shareholder is entitled to "appraisal rights" in the event of certain corporate action rather than to "dissent from" such action, revising Subdivs. (1) to (5), inclusive, of Subsec. (a) re transactions which afford appraisal rights, adding new Subsec. (b) re market exception to the availability of appraisal rights and the availability of appraisal rights in conflict transactions, adding new Subsec. (c) re limitation or elimination of appraisal rights for preferred shares, redesignating former Subsec. (b) as Subsec. (d) and making technical changes throughout section for purposes of gender neutrality; P.A. 09-55 amended Subsec. (b) to replace former provisions of Subdiv. (1)(A) re listed shares with provision re shares that are a covered security, replace in Subdiv. (1)(B) "not so listed or designated but has at least two thousand shareholders and the outstanding shares of such class or series has a market value of at least twenty million dollars" with "Traded in an organized market and has at least two thousand shareholders and a market value of at least twenty million dollars", add new Subdiv. (1)(C) re shares issued by an open-end management investment company, and replace former Subdivs. (4) and (5) with new Subdiv. (4) re availability of appraisal rights where corporate action is an interested transaction, and amended Subsec. (d) to replace "corporate transactions" with "corporate actions".