Section 623. Procedure to enforce shareholder's right to receive payment for shares

(a) A shareholder intending to enforce his right under  a  section  of
  this chapter to receive payment for his shares if the proposed corporate
  action  referred  to  therein  is taken shall file with the corporation,
  before the meeting of shareholders at which the action is submitted to a
  vote, or at such meeting but before the vote, written objection  to  the
  action. The objection shall include a notice of his election to dissent,
  his  name  and residence address, the number and classes of shares as to
  which he dissents and a demand for payment of  the  fair  value  of  his
  shares  if the action is taken.  Such objection is not required from any
  shareholder to whom the corporation did not give notice of such  meeting
  in  accordance  with  this  chapter  or  where  the  proposed  action is
  authorized by written consent of shareholders without a meeting.
    (b) Within ten days after the shareholders' authorization date,  which
  term  as  used in this section means the date on which the shareholders'
  vote authorizing such action was  taken,  or  the  date  on  which  such
  consent  without a meeting was obtained from the requisite shareholders,
  the corporation shall give  written  notice  of  such  authorization  or
  consent  by  registered  mail  to  each  shareholder  who  filed written
  objection or from whom written objection was not required, excepting any
  shareholder who voted for or consented in writing to the proposed action
  and who thereby is deemed to have elected not to enforce  his  right  to
  receive payment for his shares.
    (c) Within  twenty  days  after  the  giving  of  notice  to  him, any
  shareholder from whom written objection was not required and who  elects
  to  dissent  shall  file  with  the corporation a written notice of such
  election, stating his name and residence address, the number and classes
  of shares as to which he dissents and a demand for payment of  the  fair
  value of his shares. Any shareholder who elects to dissent from a merger
  under section 905 (Merger of subsidiary corporation) or paragraph (c) of
  section   907   (Merger   or   consolidation  of  domestic  and  foreign
  corporations) or from a share exchange under paragraph  (g)  of  section
  913  (Share  exchanges)  shall file a written notice of such election to
  dissent within twenty days after the giving to him of a copy of the plan
  of merger or exchange or an outline of  the  material  features  thereof
  under section 905 or 913.
    (d) A  shareholder  may not dissent as to less than all of the shares,
  as to which he has a right to dissent, held by him of  record,  that  he
  owns  beneficially.  A nominee or fiduciary may not dissent on behalf of
  any beneficial owner as to less than all of the shares of such owner, as
  to which such nominee or fiduciary has  a  right  to  dissent,  held  of
  record by such nominee or fiduciary.
    (e) Upon  consummation  of the corporate action, the shareholder shall
  cease to have any of the rights of a shareholder except the right to  be
  paid  the  fair  value  of  his  shares  and any other rights under this
  section. A notice of election may be withdrawn by the shareholder at any
  time prior to his  acceptance  in  writing  of  an  offer  made  by  the
  corporation,  as  provided  in  paragraph (g), but in no case later than
  sixty days from the date of consummation of the corporate action  except
  that  if  the  corporation  fails to make a timely offer, as provided in
  paragraph (g), the time for withdrawing a notice of  election  shall  be
  extended  until  sixty  days  from  the  date  an  offer  is  made. Upon
  expiration of such time,  withdrawal  of  a  notice  of  election  shall
  require  the  written  consent  of  the  corporation.  In  order  to  be
  effective, withdrawal of a notice of election must be accompanied by the
  return to the corporation of any advance payment made to the shareholder
  as provided in paragraph (g).  If a notice of election is withdrawn,  or

  the  corporate  action is rescinded, or a court shall determine that the
  shareholder is not entitled to receive payment for his  shares,  or  the
  shareholder  shall  otherwise  lose his dissenters' rights, he shall not
  have  the  right  to  receive  payment  for  his  shares and he shall be
  reinstated to all his rights as a shareholder as of the consummation  of
  the  corporate  action,  including any intervening preemptive rights and
  the right to payment of any intervening dividend or  other  distribution
  or, if any such rights have expired or any such dividend or distribution
  other  than in cash has been completed, in lieu thereof, at the election
  of the corporation, the fair value thereof in cash as determined by  the
  board  as  of  the  time  of  such expiration or completion, but without
  prejudice otherwise to any corporate  proceedings  that  may  have  been
  taken in the interim.
    (f) At  the time of filing the notice of election to dissent or within
  one  month  thereafter  the  shareholder  of   shares   represented   by
  certificates  shall  submit  the certificates representing his shares to
  the corporation, or to its transfer agent, which  shall  forthwith  note
  conspicuously thereon that a notice of election has been filed and shall
  return the certificates to the shareholder or other person who submitted
  them   on   his   behalf.  Any  shareholder  of  shares  represented  by
  certificates who fails to submit his certificates for such  notation  as
  herein  specified  shall,  at the option of the corporation exercised by
  written notice to him within forty-five days from the date of filing  of
  such notice of election to dissent, lose his dissenter's rights unless a
  court,  for good cause shown, shall otherwise direct. Upon transfer of a
  certificate bearing such notation, each new certificate issued  therefor
  shall  bear  a  similar  notation together with the name of the original
  dissenting holder of the shares and a transferee shall acquire no rights
  in  the  corporation  except  those  which   the   original   dissenting
  shareholder had at the time of transfer.
    (g) Within  fifteen  days  after  the  expiration of the period within
  which shareholders may file their notices of  election  to  dissent,  or
  within  fifteen days after the proposed corporate action is consummated,
  whichever is later (but in no case  later  than  ninety  days  from  the
  shareholders'  authorization date), the corporation or, in the case of a
  merger or consolidation, the surviving or new corporation, shall make  a
  written  offer by registered mail to each shareholder who has filed such
  notice of election to pay for his shares at a specified price which  the
  corporation  considers  to  be  their  fair  value.  Such offer shall be
  accompanied by a statement setting forth the aggregate number of  shares
  with  respect to which notices of election to dissent have been received
  and the aggregate number of holders of such  shares.  If  the  corporate
  action has been consummated, such offer shall also be accompanied by (1)
  advance   payment  to  each  such  shareholder  who  has  submitted  the
  certificates representing his shares to the corporation, as provided  in
  paragraph  (f),  of  an  amount equal to eighty percent of the amount of
  such offer, or (2) as to each shareholder who has not yet submitted  his
  certificates  a statement that advance payment to him of an amount equal
  to eighty percent of the amount of  such  offer  will  be  made  by  the
  corporation  promptly  upon  submission  of  his  certificates.  If  the
  corporate action has not been consummated at the time of the  making  of
  the offer, such advance payment or statement as to advance payment shall
  be sent to each shareholder entitled thereto forthwith upon consummation
  of  the  corporate  action.  Every  advance  payment  or statement as to
  advance payment shall include advice to the shareholder  to  the  effect
  that  acceptance  of  such  payment  does not constitute a waiver of any
  dissenters' rights. If the corporate action  has  not  been  consummated
  upon  the  expiration  of  the ninety day period after the shareholders'

  authorization date, the offer may be conditioned upon  the  consummation
  of  such action. Such offer shall be made at the same price per share to
  all dissenting shareholders of  the  same  class,  or  if  divided  into
  series,  of  the same series and shall be accompanied by a balance sheet
  of the corporation whose shares the dissenting shareholder holds  as  of
  the latest available date, which shall not be earlier than twelve months
  before  the  making  of  such  offer, and a profit and loss statement or
  statements for not less than a twelve month period ended on the date  of
  such  balance  sheet  or,  if  the  corporation  was  not  in  existence
  throughout such twelve month period,  for  the  portion  thereof  during
  which   it   was   in  existence.  Notwithstanding  the  foregoing,  the
  corporation shall not be required to furnish a balance sheet  or  profit
  and loss statement or statements to any shareholder to whom such balance
  sheet  or  profit  and  loss  statement  or  statements  were previously
  furnished,  nor  if  in  connection  with  obtaining  the  shareholders'
  authorization  for  or  consent  to  the  proposed  corporate action the
  shareholders were furnished with a proxy or information statement, which
  included financial statements, pursuant to Regulation 14A or  Regulation
  14C  of  the United States Securities and Exchange Commission. If within
  thirty days after the making of such offer, the corporation  making  the
  offer  and  any  shareholder  agree  upon  the  price to be paid for his
  shares, payment therefor shall be  made  within  sixty  days  after  the
  making  of  such  offer  or  the  consummation of the proposed corporate
  action, whichever is later, upon the surrender of the  certificates  for
  any such shares represented by certificates.
    (h) The  following  procedure  shall apply if the corporation fails to
  make such offer within such period of fifteen days, or if it  makes  the
  offer  and any dissenting shareholder or shareholders fail to agree with
  it within the period of thirty days thereafter upon the price to be paid
  for their shares:
    (1) The corporation shall, within twenty days after the expiration  of
  whichever  is  applicable of the two periods last mentioned, institute a
  special proceeding in the supreme court  in  the  judicial  district  in
  which  the  office of the corporation is located to determine the rights
  of dissenting shareholders and to fix the fair value  of  their  shares.
  If,  in  the  case  of  merger  or  consolidation,  the surviving or new
  corporation is a foreign corporation without an office  in  this  state,
  such  proceeding  shall be brought in the county where the office of the
  domestic corporation, whose shares are to be valued, was located.
    (2) If the corporation fails to institute such proceeding within  such
  period  of  twenty  days,  any dissenting shareholder may institute such
  proceeding for the same purpose not later than  thirty  days  after  the
  expiration  of  such  twenty  day  period.  If  such  proceeding  is not
  instituted within such thirty day period, all dissenter's  rights  shall
  be  lost unless the supreme court, for good cause shown, shall otherwise
  direct.
    (3) All dissenting shareholders, excepting those who, as  provided  in
  paragraph  (g),  have  agreed  with the corporation upon the price to be
  paid for their shares, shall be made parties to such  proceeding,  which
  shall  have  the  effect of an action quasi in rem against their shares.
  The corporation shall serve a copy of the petition  in  such  proceeding
  upon  each dissenting shareholder who is a resident of this state in the
  manner provided by law for the service  of  a  summons,  and  upon  each
  nonresident   dissenting  shareholder  either  by  registered  mail  and
  publication, or in such  other  manner  as  is  permitted  by  law.  The
  jurisdiction of the court shall be plenary and exclusive.
    (4) The  court shall determine whether each dissenting shareholder, as
  to whom the corporation requests the court to make  such  determination,

  is  entitled  to receive payment for his shares. If the corporation does
  not request any such determination  or  if  the  court  finds  that  any
  dissenting shareholder is so entitled, it shall proceed to fix the value
  of  the  shares,  which,  for the purposes of this section, shall be the
  fair value as of  the  close  of  business  on  the  day  prior  to  the
  shareholders'  authorization  date.  In  fixing  the  fair  value of the
  shares, the court shall consider the nature of  the  transaction  giving
  rise  to  the  shareholder's right to receive payment for shares and its
  effects on the  corporation  and  its  shareholders,  the  concepts  and
  methods  then customary in the relevant securities and financial markets
  for determining fair value of shares of  a  corporation  engaging  in  a
  similar   transaction  under  comparable  circumstances  and  all  other
  relevant factors. The court shall determine the fair value of the shares
  without a jury and without referral to an appraiser or  referee.    Upon
  application  by  the corporation or by any shareholder who is a party to
  the proceeding, the  court  may,  in  its  discretion,  permit  pretrial
  disclosure,  including,  but  not limited to, disclosure of any expert's
  reports relating to the fair value of the shares whether or not intended
  for use at the trial in the proceeding and  notwithstanding  subdivision
  (d) of section 3101 of the civil practice law and rules.
    (5) The  final  order  in  the proceeding shall be entered against the
  corporation in favor of each dissenting shareholder who is  a  party  to
  the  proceeding  and  is entitled thereto for the value of his shares so
  determined.
    (6) The final order shall include an allowance for  interest  at  such
  rate  as  the  court  finds to be equitable, from the date the corporate
  action was consummated to the date of payment. In determining  the  rate
  of  interest,  the  court shall consider all relevant factors, including
  the rate of interest which the corporation would  have  had  to  pay  to
  borrow  money  during the pendency of the proceeding. If the court finds
  that the refusal of any shareholder to accept  the  corporate  offer  of
  payment for his shares was arbitrary, vexatious or otherwise not in good
  faith, no interest shall be allowed to him.
    (7) Each  party  to  such  proceeding  shall  bear  its  own costs and
  expenses, including the fees and expenses of  its  counsel  and  of  any
  experts employed by it. Notwithstanding the foregoing, the court may, in
  its  discretion,  apportion  and  assess  all  or any part of the costs,
  expenses and fees incurred by the corporation against any or all of  the
  dissenting shareholders who are parties to the proceeding, including any
  who  have  withdrawn  their notices of election as provided in paragraph
  (e), if the court finds that their refusal to accept the corporate offer
  was arbitrary, vexatious or otherwise not in good faith. The court  may,
  in  its  discretion,  apportion and assess all or any part of the costs,
  expenses and fees incurred by any or all of the dissenting  shareholders
  who  are  parties to the proceeding against the corporation if the court
  finds any of the following: (A) that the fair value  of  the  shares  as
  determined  materially  exceeds the amount which the corporation offered
  to pay; (B) that no offer or required advance payment was  made  by  the
  corporation;  (C)  that  the corporation failed to institute the special
  proceeding within the period specified therefor; or (D) that the  action
  of the corporation in complying with its obligations as provided in this
  section  was  arbitrary,  vexatious  or  otherwise not in good faith. In
  making any determination as  provided  in  clause  (A),  the  court  may
  consider the dollar amount or the percentage, or both, by which the fair
  value of the shares as determined exceeds the corporate offer.
    (8) Within sixty days after final determination of the proceeding, the
  corporation shall pay to each dissenting shareholder the amount found to

  be  due  him,  upon  surrender  of  the certificates for any such shares
  represented by certificates.
    (i) Shares  acquired by the corporation upon the payment of the agreed
  value therefor or of the amount due under the final order,  as  provided
  in  this  section,  shall  become  treasury  shares  or  be cancelled as
  provided in section 515 (Reacquired shares), except that, in the case of
  a merger or consolidation, they may be held and disposed of as the  plan
  of merger or consolidation may otherwise provide.
    (j) No  payment  shall  be made to a dissenting shareholder under this
  section at a time when the corporation is insolvent or when such payment
  would make it insolvent.  In  such  event,  the  dissenting  shareholder
  shall, at his option:
    (1) Withdraw  his  notice  of  election,  which shall in such event be
  deemed withdrawn with the written consent of the corporation; or
    (2) Retain his status as a claimant against the corporation and, if it
  is liquidated, be  subordinated  to  the  rights  of  creditors  of  the
  corporation,   but   have   rights   superior   to   the  non-dissenting
  shareholders, and if it is not liquidated, retain his right to  be  paid
  for  his shares, which right the corporation shall be obliged to satisfy
  when the restrictions of this paragraph do not apply.
    (3) The  dissenting  shareholder  shall  exercise  such  option  under
  subparagraph  (1)  or  (2)  by written notice filed with the corporation
  within thirty days after the corporation has given  him  written  notice
  that  payment  for his shares cannot be made because of the restrictions
  of this paragraph. If the dissenting shareholder fails to exercise  such
  option as provided, the corporation shall exercise the option by written
  notice  given  to  him  within  twenty days after the expiration of such
  period of thirty days.
    (k) The enforcement by a shareholder of his right to  receive  payment
  for  his  shares  in  the  manner  provided  herein  shall  exclude  the
  enforcement by such shareholder of any other right  to  which  he  might
  otherwise  be  entitled by virtue of share ownership, except as provided
  in paragraph (e), and except that this section  shall  not  exclude  the
  right  of such shareholder to bring or maintain an appropriate action to
  obtain relief on the ground that such corporate action  will  be  or  is
  unlawful or fraudulent as to him.
    (l) Except as otherwise expressly provided in this section, any notice
  to  be  given by a corporation to a shareholder under this section shall
  be given in the manner provided in section 605 (Notice  of  meetings  of
  shareholders).
    (m) This  section  shall  not  apply to foreign corporations except as
  provided in subparagraph (e) (2) of section 907 (Merger or consolidation
  of domestic and foreign corporations).