EXHIBIT C
DISSENTERS' RIGHTS
23B.13.010 DEFINITIONS. - As used in this chapter:
(1) "Corporation" means the issuer of the shares held by a
dissenter before the corporate action, or the surviving or
acquiring corporation by merger or share exchange of that
issuer.
(2) "Dissenter" means a shareholder who is entitled to
dissent from corporate action under RCW 23B.13.020 and who
exercises that right when and in the manner required by RCW
23B.13.200 through 23B.13.280.
(3) "Fair value," with respect to a dissenter's shares,
means the value of the shares immediately before the
effective date of the corporate action to which the
dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless
exclusion would be inequitable.
(4) "Interest" means interest from the effective date of
the corporate action until the date of payment, at the
average rate currently paid by the corporation on its
principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name
shares are registered in the records of a corporation or the
beneficial owner of shares to the extent of the rights
granted by a nominee certificate on file with a corporation.
(6) "Beneficial shareholder" means the person who is a
beneficial owner of shares held in a voting trust or by a
nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the
beneficial shareholder.
23B.13.020 RIGHT TO DISSENT - (1) A shareholder is
entitled to dissent from, and obtain payment of the fair
value of the shareholder's shares in the event of, any of
the following corporate actions:
(a). Consummation of a plan of merger to which the
corporation is a party (i) if shareholder approval is
required for the merger by RCW 23B.11.030, 23B.11.080, or
the articles of incorporation and the shareholder is
entitled to vote on the merger, or (ii) if the corporation
is a subsidiary that is merged with its parent under RCW
23B.11.040;
(b). Consummation of a plan of 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
plan;
(c). Consummation of a sale or exchange of all, or
substantially all, of the property of the corporation other
than in the usual and regular course of business, if the
shareholder is
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entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a
sale pursuant to court order or a sale for cash
pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the
shareholders within one year after the date of sale;
(d). An amendment of the articles of incorporation that
materially reduces the number of shares owned by the
shareholder to a fraction of a share if the fractional share
so created is to be acquired for cash under RCW 23B.06.040;
or
(e). Any corporate action taken pursuant to a shareholder
vote to the extent the articles of incorporation, bylaws, or
a resolution of the board of directors provides that voting
or nonvoting shareholders are entitled to dissent and obtain
payment for their shares.
(2) A shareholder entitled to dissent and obtain
payment for the shareholder's shares under this chapter may
not challenge the corporate action creating the
shareholder's entitlement unless the action fails to comply
with the procedural requirements imposed by this title, RCW
25.10.900 through 25.10.955, the articles of incorporation,
or the bylaws, or is fraudulent with respect to the
shareholder or the corporation
(3) The right of a dissenting shareholder to
obtain payment of the fair value of the shareholder's shares
shall terminate upon the occurrence of any one of the
following events:
(a). The proposed corporate action is abandoned or
rescinded;
(b). A court having jurisdiction permanently enjoins or sets
aside the corporate action; or
(c). The shareholder's demand for payment is withdrawn with
the written consent of the corporation.
23B.13.030 DISSENT OF NOMINEES AND BENEFICIAL OWNERS - (1)
A record shareholder may assert dissenters' rights as to
fewer than all the shares registered in the shareholders'
name only if the shareholder dissents with respect to all
shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each
person and notifies the corporation in writing of the name
and address of each person on whose behalf of the
shareholder asserts dissenters' rights. The rights of a
partial dissenter under this subsection are determined as if
the shares as to which the dissenter dissents and the
dissenter's other shares were registered in the names of
different shareholders.
(2). A beneficial shareholder may assert dissenters' rights
as to shares held on the beneficial shareholder's behalf
only if:
(a). The beneficial shareholder submits to the corporation
the record shareholder's written consent to the dissent not
later than the time the beneficial shareholder asserts
dissenters' rights; and
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(b). The beneficial shareholder does so with respect to all
shares of which such shareholder is the beneficial
shareholder or over which such shareholder has power to
direct the vote.
23B.13.200 NOTICE OF DISSENTERS' RIGHTS - (1) If proposed
corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders'
meeting, the meeting notice must state that shareholders are
or may be entitled to assert dissenters' rights under this
chapter and be accompanied by a copy of this chapter.
(2). If corporate action creating dissenters' rights under
RCW 23B.13.020 is taken without a vote of shareholders, the
corporation, within ten days after the effective date of
such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice
described in RCW 23B.13.220.
23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT - (1) If
proposed corporate action creating dissenters' rights under
RCW 23B.13.020 is submitted to a vote at a shareholders'
meeting, a shareholder who a wishes to assert dissenters'
rights must (a) deliver to the corporation before the vote
is taken written notice of the shareholder's intent to
demand payment for the shareholder's shares if the proposed
action is effected, and (b) not vote such shares in favor of
the proposed action.
(2). A shareholder who does not satisfy the requirements of
subsection (1) of this section is not entitled to payment
for the shareholders shares under this chapter.
23B.13.220 DISSENTERS' NOTICE - (1) If proposed corporate
action creating dissenters' rights under RCW 23B.13.020 is
authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who
satisfied the requirements of RCW 23B.13.210.
(2). The dissenters' notice must be sent within ten days
after the effective date of the corporate action, and must:
(a). State where the payment demand must be sent and where
and when certificates for certified shares must be
deposited;
(b). Inform holders of uncertified shares to what extent
transfer of the shares will be restricted after the payment
demand is received;
(c). Supply a form for demanding payment that includes the
date of the first announcement to news media or to
shareholders of the term of the proposed corporate action
and requires that the person asserting dissenters' rights
certify whether or not the person acquired beneficial
ownership of the shares before that date;
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(d). Set a date by which the corporation must receive the
payment demand, which date may not be fewer than thirty nor
more than sixty days after the date the notice in subsection
(1) of this section is delivered; and
(e). Be accompanied by a copy of this chapter.
23B.13.230 DUTY TO DEMAND PAYMENT - (1) A shareholder sent
a dissenters' notice described in RCW 23B.13.220 must demand
payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set
forth in the dissenters' notice pursuant to RCW
23B.13.220(2)(c), and deposit the shareholder's certificates
in accordance with the terms of the notice.
(2). The shareholder who demands payment and deposits the
shareholder's share certificates, under subsection (1) of
this section retains all other rights of a shareholder until
the proposed corporate action is effected.
(3). A shareholder who does not demand payment or deposit
the shareholders' certificates where required, each by the
date set in the dissenters' notice, is not entitled to
payment for the shareholder's shares under this chapter.
23B.12.240 SHARE RESTRICTIONS - (1) The corporation may
restrict the transfer of uncertified shares from the date
the demand for their payment is received until the proposed
corporate action is effected or the restriction is released
under RCW 23B.13.260.
(2). The person for whom dissenters' rights are asserted as
to uncertificated shares retains all other rights of a
shareholder until the effective date of the proposed
corporate action.
23B.13.250 PAYMENT - (1) Except as provided in RCW
23B.13.270, within thirty days of the later of the effective
date of the proposed corporate action, or the date the
payment demand is received, the corporation shall pay each
dissenter who complied with RCW 23B.l3.230 the amount the
corporation estimates to be the fair value of the
shareholder's shares plus accrued interest.
(2). The payment must be accompanied by:
(a). The corporation's balance sheet as of the end of a
fiscal year ending not more than sixteen months before the
date of payment, an income statement for that year, a
statement of changes in shareholders' equity for that year,
and the latest available interim financial statements, if
any;
(b). An explanation of how the corporation estimated the
fair value of the shares;
(c). An explanation of how the interest was calculated;
(d). A statement of the dissenter's right to demand payment
under RCW 23B.13.280; and
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(e)E. A copy of this chapter.
23B.13.260 FAILURE TO TAKE ACTION - (1) If the corporation
does not effect the proposed action within sixty days after
the date set for demanding payment and depositing share
certificates, the corporation shall return the deposited
certificates and release any transfer restrictions imposed
on uncertificated shares.
(2). If after returning deposited certificates and releasing
transfer restrictions, the corporation wishes to undertake
the proposed action, it must send a new dissenters' notice
under RCW 23B.13.220 and repeat the payment demand
procedure.
23B.13.270 AFTER-ACQUIRED SHARES - (1) A corporation may
elect to withhold payment required by RCW 23B.13.250 from a
dissenter unless the dissenter was the beneficial owner of
the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media
or to shareholders of the terms of the proposed corporate
action.
(2). To the extent the corporation elects to withhold
payment under subsection (1) of this section, after taking
the proposed corporate action, it shall estimate the fair
value of the shares, plus accrued interest, and shall pay
this amount to each dissenter who agrees to accept it in
full satisfaction of the dissenter's demand. The
corporation shall send with its offer an explanation of how
it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the
dissenter's right to demand payment under RCW 23B.13.280.
23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH
PAYMENT OR OFFER - (1) A dissenter may notify the
corporation in writing of the dissenter's own estimate of
the fair value of the dissenter's shares and amount of
interest due, and demand payment of the dissenter's
estimate, less any payment under RCW 23B.13.250, or reject
the corporation's offer under RCW 23 B.13.270 and demand
payment of the dissenter's estimate of the fair value of the
dissenter's shares and interest due, if:
(a). The dissenter believes that the amount paid under RCW
23B.13.250 or offered under RCW 23B.13.270 is less than the
fair value of the dissenter's shares or that the interest
due is incorrectly calculated;
(b). The corporation fails to make payment under RCW
23B.13.250 within sixty days after the date set for
demanding payment; or
(c). The corporation does not effect the proposed action and
does not return the deposited certificates or release the
transfer restrictions imposed on uncertificated shares
within sixty days after the date set for demanding payment.
(2) A dissenter waives the right to demand payment
under this section unless the dissenter notifies the
corporation of the dissenter's demand in writing under
subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's
shares.
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23B.13.300 COURT ACTION - (1) If a demand for payment
under RCW 23B.13.280 remains unsettled, the corporation
shall commence a proceeding within sixty days after
receiving the payment demand and petition the court to
determine the fair value of the shares and accrued interest.
If the corporation does not commence the proceeding within
the sixty-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(2). The corporation shall commence the proceeding in the
superior court of the county where a corporation's principal
office, or, if none in this state, its registered office, is
located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence
the proceeding in the county in this state where the
registered office of the domestic corporation merged with or
whose shares were acquired by the foreign corporation was
located.
(3). The corporation shall make all dissenters, whether or
not residents of this state, whose demands remain unsettled,
parties to the proceeding as in an action against their
shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or
certified mail or by publication as provided by law.
(4). The corporation may join as a party to the proceeding
any shareholder who claims to be a dissenter but who has
not, in the opinion of the corporation, complied with the
provisions of this chapter. If the court determines that
such shareholder has not complied with the provisions of
this chapter, the shareholder shall be dismissed as a party.
(5). The jurisdiction of the court in which the proceeding
is commenced under subsection (2) of this section is plenary
and exclusive. The court may appoint one or more persons as
appraisers to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment
to it. The dissenters are entitled to the same discovery
rights as parties in other civil proceedings.
(6). Each dissenter made a party to the proceeding is
entitled to judgment (a) for the amount, if any, by which
the court finds the fair value of the dissenter's shores,
plus interest, exceeds the amount paid by the corporation,
or (b) for the fair value, plus accrued interest, of the
dissenter's after-acquired shares for which the corporation
elected to withhold payment under RCW 23B.13.270.
23B.13.310 COURT COSTS AND COUNSEL FEES - (1) The court in
a proceeding commenced under RCW 23B.13.300 shall determine
all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the
court. The court shall assess the costs against the
corporation, except that the court may assess the costs
against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the
dissenters acted arbitrarily, vexatiously, or not in good
faith in demanding payment under RCW 23B.13.280.
(2). The court may also assess the fees and expenses of
counsel and experts for the respective parties, in amounts
the court finds equitable:
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(a). Against the corporation and in favor of any or all
dissenters if the court finds the corporation did not
substantially comply with the requirements of RCW 23B.13.200
through 23B. 13.280;
(b). Against either the corporation or a dissenter, in favor
of any other party, if the court finds that the party
against whom the fees and expenses are assessed acted
arbitrarily, vexatiously, or not in good faith with respect
to the rights provided by Chapter 23B.13 RCW.
(3). If the court finds that the services of counsel for any
dissenter were of substantial benefit to other dissenters
similarly situated, and that the fees for those services
should not be assessed against the corporation, the court
may award to these counsel reasonable fees to be paid out of
the amounts awarded the dissenters who were benefited.
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