CHAPTER 733

An Act to amend and reenact §§ 13.1-75 and 18.1-78, as amended, of the
Code of Virginia, relating to rights of dissenting stockholders in
mergers or consolidations or upon sale or exchange of assets of stock
corporations.

[H 52]

Approved April 5, 1968

Be it enacted by the General Assembly of Virginia:

1. That §§ 13.1-75 and 18.1-78, as amended, of the Code of Virginia be
amended and reenacted as follows:

§ 13.1-75. Rights of dissenting stockholders in mergers or consolida-
tions.—If a stockholder of record of a corporation of this State which is
a party to a merger or consolidation shall not vote all or a specified number
of shares registered in his name in favor of a plan of merger or consolida-
tion and such stockholder, within fourteen days after the date on which
the vote was taken, shall make written demand on his corporation or on
the surviving or new corporation, domestic or foreign, for payment of the
fair value of such shares as of the day prior to the date on which the vote
was taken approving the merger or consolidation then, if the merger or
consolidation is effected, the surviving or new corporation shall pay the
amount of such fair value to such stockholder, upon surrender of his
certificate or certificates representing such shares. Such demand shall
state the number and class of the shares owned by such dissenting stock-
holder and covered by such demand. Any stockholder failing to make
demand within the fourteen-day period shall be bound by the terms of
the merger or consolidation. Any stockholder making such demand shall
thereafter be entitled only to payment for his shares as herein provided
and shall not be entitled to vote or exercise any other rights of a stock-
holder except that he shall receive an amount per share equal to all divi-
dends paid per share and they shall be credited against the payment sub-
sequently made pursuant to agreement or judgment.

Within fourteen days after the merger or consolidation is effected,
the surviving or new corporation, as the case may be, shall give notice
thereof to each such dissenting stockholder who has made demand as
herein provided for the payment of the fair value of his shares.

Within twenty days after demanding payment of the fair value of his
shares, each dissenting stockholder may withdraw such demand by written
notice to the corporation and thereupon his right to be paid the fair value
of his shares shall cease and his rights as a stockholder shall revive.
Within the same twenty day period, each dissenting stockholder who does
not so withdraw such demand shall submit the certificate or certificates
representing his shares to the corporation for notation thereon that such
demand has been made. His failure to do so shall, at the option of the cor-
poration, exercised by written notice to the stockholder within twenty
days thereafter terminate his rights under this section unless a court
of competent jurisdiction, for good and sufficient cause shown, shall other-
wise direct. If shares represented by a certificate on which notation has
been so made shall be transferred, each new certificate issued therefor
shall bear similar notation, together with the name of the original dis-
senting holder of such shares, and a transferee of such shares shall acquire
by such transfer no rights in the corporation other than those which the
original dissenting stockholder had after making demand for payment
of the fair value thereof.

If the value of such shares is agreed upon between such dissenting
stockholder and the surviving or new corporation, payment therefor shall
be made within ninety days after the date on which such merger or con-
solidation was effected, upon the surrender of his certificate or certificates
representing such shares. Upon payment of the agreed value such dis-
senting stockholder shall cease to have any interest in such shares.

If such stockholder and the surviving or new corporation do not so
agree, then such corporation, on the written demand of any stockholder,
shall, or at its election may, file a bill of complaint in the clerk’s office of a
Virginia court of equity in the county or city in which the registered
office of the corporation, or its principal place of business in Virginia,
is located praying that the fair value of such shares be found and deter-
mined. In the city of Richmond such court shall be the Chancery Court;
in the city of Norfolk, the Court of Law and Chancery; in the city of
Alexandria, the Corporation Court; and in the city of Roanoke, the Court
of Law and Chancery. All dissenting stockholders, wherever residing, shall
be made parties to the proceeding as an action against their shares quasi
in rem. A copy of the bill of complaint shall be served on each dissenting
stockholder who is a resident of Virginia and shall be served by registered
or certified mail on each nonresident. Service on all nonresidents shall also
be made by publication as prescribed by § 8-71 through § 8-73. All stock-
holders parties to the proceeding shall be entitled, after a hearing, without
a jury, to judgment against the surviving or new corporation for the
amount of such fair value as of the day prior to the date on which such
vote was taken approving such merger or consolidation. The judge may,
if he so elects, appoint one or more persons as appraisers to receive the
evidence and recommend a decision on the question of value. The judg-
ment shall be payable only upon and simultaneously with the surrender
to the surviving or new corporation of the certificate or certificates repre-
senting such shares. The costs of any such proceeding, including reason-
able fees and expenses of any appraisers, shall be paid by the corporation,
but the fees and expenses of counsel and experts retained by any party
in interest shall be paid by him. The judgment shall include an allowance
for interest at such rate as the judge may find to be fair and equitable
in all the circumstances upon the fair value of the stock of the stockholders
entitled thereto from the day prior to the date on which the vote was taken
on the plan of merger or consolidation until payment.
The right of a dissenting stockholder to be paid the fair value of his
shares as herein provided shall cease if and when the corporation shall
abandon the merger or consolidation * and in * such event his rights as a
stockholder shall thereupon revive, including the right to receive any
dividends not paid because of such dissent.

Shares acquired by the surviving or new corporation pursuant to the
payment of the agreed value thereof or to payment of the judgment
entered therefor, as in this section provided, together with any shares of
any constituent corporation held in the treasury of any constituent cor-
poration, shall be converted, pursuant to the plan of merger or consolida-
tion, into shares of the surviving or new corporation and may be held
and disposed of by such corporation as in the case of other treasury shares,
except, in any of the above cases, as the plan of merger or consolidation
may otherwise provide.

§ 13.1-78. Rights of dissenting stockholders upon sale or exchange
of assets.—In the event that a sale or exchange of all or substantially all
of the property and assets of a corporation otherwise than in the usual
and regular course of its business is authorized by a vote of the stockholders
of the corporation, any stockholder of record who shall not vote all or a
specified number of the shares registered in his name in favor of such a
sale or exchange may, within fourteen days after the date on which the
vote was taken, make written demand on the corporation for the payment
to him of the fair value of such shares as of the day prior to the date on
which the vote was taken. If the sale or exchange is effected, the cor-
poration shall pay the amount of such fair value to such stockholder,
upon surrender of his certificate or certificates representing such shares.
Such demand shall state the number and class of the shares owned by
such dissenting stockholder and covered by such demand. Any stock-
holder failing to make demand within the fourteen-day period shall be
bound by the terms of the sale or exchange. Any stockholder making such
demand shall thereafter be entitled only to payment for his shares as
herein provided and shall not be entitled to vote or exercise any other
rights of stockholders except that he shall receive an amount per share
equal to all dividends paid per share and they shall be credited against
the payment subsequently made pursuant to agreement or judgment.

Within fourteen days after the sale or exchange is effected, the cor-
poration shall give notice thereof to each dissenting stockholder who has
mace demand as herein provided for the payment of the fair value of

is shares.

Within twenty days after demanding payment of the fair value
of his shares, each dissenting stockholder may withdraw such demand by
written notice to the corporation and thereupon his right to be paid the
fair value of his shares shall cease and his rights as a stockholder shall
revive. Within the same twenty-day period, each dissenting stockholder
who does not so withdraw such demand shall submit the certificate or
certificates representing his shares to the corporation for notation thereon
that such demand has been made. His failure to do so shall, at the option
of the corporation, exercised by written notice to the stockholder within
twenty days thereafter terminate his rights under this section unless a
court of competent jurisdiction, for good and sufficient cause shown, shall
otherwise direct. If shares represented by a certificate on which notation
has been so made shall be transferred, each new certificate issued therefor
shall bear similar notation, together with the name of the original dis-
senting holder of such shares, and a transferee of such shares shall ac-
quire by such transfer no rights in the corporation other than those which
the original dissenting stockholder had after making demand for pay-
ment of the fair value thereof.

If the value of such shares is agreed upon between the dissenting
stockholder and the corporation, payment therefor shall be made within
ninety days after the date on which the sale or exchange was effected,
upon the surrender of his certificate or certificates representing such
shares. Upon payment of the agreed value, the dissenting stockholder
shall cease to have any interest in such shares or in the corporation.

If the stockholder and the corporation do not so agree, then such
corporation, on the written demand of any stockholder, shall, or at its
election may, file a bill of complaint in the clerk’s office of a Virginia
court of equity in the county or city in which the registered office of the
corporation, or its principal place of business in Virginia, is located pray-
ing that the fair value of such shares be found and determined. In the
city of Richmond such court shall be the Chancery Court; in the city of
Norfolk, the Court of Law and Chancery; in the city of Alexandria, the
Corporation Court; and in the city of Roanoke, the Court of Law and
Chancery. All dissenting stockholders, wherever residing, shall be made
parties to the proceeding as an action against their share quasi in rem. A
copy of the bill of complaint shall be served on each dissenting stock-
holder who is a resident of Virginia and shall be served by registered or
certified mail on each nonresident. Service on all nonresidents shall be
made by publication as prescribed by § 8-71 through § 8-73. All stockholders
parties to the proceedings shall be entitled, after a hearing without a
jury, to judgment against the corporation for the amount of such fair
value as of the day prior to the date on which such vote was taken approv-
ing such sale or exchange. The judge may, if he so elects, appoint one or
more persons aS appraisers to receive the evidence and recommend a de-
cision on the question of value. The judgment shall be payable only upon
and simultaneously with the surrender to the corporation of the certificate
or certificates representing such shares. The costs of any such proceeding,
including reasonable fees and expenses of any appraisers, shall be paid by
the corporation, but the fees and expenses of counsel and experts retained
by any party in interest shall be paid by him. The judgment shall include
an allowance for interest at such rate as the judge may find to be fair and
equitable in all the circumstances upon the fair value of the stock of the
stockholder entitled thereto from the day prior to the date on which the
vote was taken until payment.

The right of a dissenting stockholder to be paid the fair value of his
shares as herein provided shall cease if and when the corporation shall
abandon the sale or exchange * and in * such event his rights as a stock-
holder shall thereupon revive, including the right to receive any dividends
not paid because of such dissent.

Shares acquired by the corporation pursuant to the payment of the
agreed value thereof or to payment of the judgment entered therefor, as
in this section provided, may be held and disposed of by the corporation
as in the case of other treasury shares.