EXHIBIT 99.2
MARYLAND GENERAL CORPORATION LAW
TITLE 3, SUBTITLE 2. RIGHTS OF OBJECTING STOCKHOLDERS
ss. 3-201. "Successor" defined.
(a) Corporation amending charter.- In this subtitle, except as provided in
subsection (b) of this section, "successor" includes a corporation which amends
its charter in a way which alters the contract rights, as expressly set forth in
the charter, of any outstanding stock, unless the right to do so is reserved by
the charter of the corporation.
(b) Corporation whose stock is acquired.- When used with reference to a
share exchange, "successor" means the corporation the stock of which was
acquired in the share exchange.
ss.3-202. Right to fair value of stock.
(a) General rule.- Except as provided in subsection (c) of this section, a
stockholder of a Maryland corporation has the right to demand and receive
payment of the fair value of the stockholder's stock from the successor if:
(1) The corporation consolidates or merges with another corporation;
(2) The stockholder's stock is to be acquired in a share exchange;
(3) The corporation transfers its assets in a manner requiring action
underss.3-105 (e) of this title;
(4) The corporation amends its charter in a way which alters the
contract rights, as expressly set forth in the charter, of any outstanding stock
and substantially adversely affects the stockholder's rights, unless the right
to do so is reserved by the charter of the corporation; or
(5) The transaction is governed by ss. 3-602 of this title or exempted
by ss. 3-603 (b) of this title.
(b) Basis of fair value.-
(1) Fair value is determined as of the close of business:
(i) With respect to a merger under ss. 3-106 of this title of a 90
percent or more owned subsidiary with or into its parent corporation, on the day
notice is given or waived under ss. 3-106; or
(ii) With respect to any other transaction, on the day the
stockholders voted on the transaction objected to.
(2) Except as provided in paragraph (3) of this subsection, fair value
may not include any appreciation or depreciation which directly or indirectly
results from the transaction objected to or from its proposal.
(3) In any transaction governed by ss. 3-602 of this title or exempted
by ss. 3-603 (b) of this title, fair value shall be value determined in
accordance with the requirements of ss. 3-603 (b) of this title.
(c) When right to fair value does not apply.- Unless the transaction is
governed by ss. 3-602 of this title or is exempted by ss. 3-603 (b) of this
title, a stockholder may not demand the fair value of the stockholder's stock
and is bound by the terms of the transaction if:
(1) The stock is listed on a national securities exchange, is designated
as a national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc., or is designated for trading
on the NASDAQ Small Cap Market:
(i) With respect to a merger under ss. 3-106 of this title of a 90
percent or more owned subsidiary with or into its parent corporation, on the
date notice is given or waived under ss. 3-106; or
(ii) With respect to any other transaction, on the record date for
determining stockholders entitled to vote on the transaction objected to;
(2) The stock is that of the successor in a merger, unless:
(i) The merger alters the contract rights of the stock as
expressly set forth in the charter, and the charter does not reserve the right
to do so; or
(ii) The stock is to be changed or converted in whole or in part in
the merger into something other than either stock in the successor or cash,
scrip, or other rights or interests arising out of provisions for the treatment
of fractional shares of stock in the successor;
(3) The stock is not entitled to be voted on the transaction or the
stockholder did not own the shares of stock on the record date for determining
stockholders entitled to vote on the transaction;
(4) The charter provides that the holders of the stock are not entitled
to exercise the rights of an objecting stockholder under this subtitle; or
(5) The stock is that of an open-end investment company registered with
the Securities and Exchange Commission under the Investment Company Act of 1940
and the value placed on the stock in the transaction is its net asset value.
ss. 3-203. Procedure by stockholder.
(a) Specific duties.- A stockholder of a corporation who desires to receive
payment of the fair value of the stockholder's stock under this subtitle:
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(1) Shall file with the corporation a written objection to the proposed
transaction:
(i) With respect to a merger under ss. 3-106 of this title of a 90
percent or more owned subsidiary with or into its parent corporation, within 30
days after notice is given or waived under ss. 3-106; or
(ii) With respect to any other transaction, at or before the
stockholders' meeting at which the transaction will be considered or, in the
case of action taken under ss. 2-505 (b) of this article, within 10 days after
the corporation gives the notice required by ss. 2-505 (b) of this article;
(2) May not vote in favor of the transaction; and
(3) Within 20 days after the Department accepts the articles for record,
shall make a written demand on the successor for payment for the stockholder's
stock, stating the number and class of shares for which the stockholder demands
payment.
(b) Failure to comply with section.- A stockholder who fails to comply with
this section is bound by the terms of the consolidation, merger, share exchange,
transfer of assets, or charter amendment.
ss.3-204. Effect of demand on dividend and other rights.
A stockholder who demands payment for his stock under this subtitle:
(1) Has no right to receive any dividends or distributions payable to
holders of record of that stock on a record date after the close of business on
the day as at which fair value is to be determined under ss. 3-202 of this
subtitle; and
(2) Ceases to have any rights of a stockholder with respect to that
stock, except the right to receive payment of its fair value.
ss. 3-205. Withdrawal of demand.
A demand for payment may be withdrawn only with the consent of the successor.
ss.3-206. Restoration of dividend and other rights.
(a) When rights restored.- The rights of a stockholder who demands payment
are restored in full, if:
(1) The demand for payment is withdrawn;
(2) A petition for an appraisal is not filed within the time required by
this subtitle;
(3) A court determines that the stockholder is not entitled to relief;
or
(4) The transaction objected to is abandoned or rescinded.
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(b) Effect of restoration.- The restoration of a stockholder's rights
entitles him to receive the dividends, distributions, and other rights he would
have received if he had not demanded payment for his stock. However, the
restoration does not prejudice any corporate proceedings taken before the
restoration.
ss.3-207. Notice and offer to stockholders.
(a) Duty of successor.-
(1) The successor promptly shall notify each objecting stockholder in
writing of the date the articles are accepted for record by the Department.
(2) The successor also may send a written offer to pay the objecting
stockholder what it considers to be the fair value of his stock. Each offer
shall be accompanied by the following information relating to the corporation
which issued the stock:
(i) A balance sheet as of a date not more than six months before
the date of the offer;
(ii) A profit and loss statement for the 12 months ending on the
date of the balance sheet; and
(iii) Any other information the successor considers pertinent.
(b) Manner of sending notice.- The successor shall deliver the notice and
offer to each objecting stockholder personally or mail them to him by certified
mail, return receipt requested, bearing a postmark from the United States Postal
Service, at the address he gives the successor in writing, or, if none, at his
address as it appears on the records of the corporation which issued the stock.
ss.3-208. Petition for appraisal; consolidation of proceedings; joinder of
objectors.
(a) Petition for appraisal.- Within 50 days after the Department accepts the
articles for record, the successor or an objecting stockholder who has not
received payment for his stock may petition a court of equity in the county
where the principal office of the successor is located or, if it does not have a
principal office in this State, where the resident agent of the successor is
located, for an appraisal to determine the fair value of the stock.
(b) Consolidation of suits; joinder of objectors.-
(1) If more than one appraisal proceeding is instituted, the court shall
direct the consolidation of all the proceedings on terms and conditions it
considers proper.
(2) Two or more objecting stockholders may join or be joined in an
appraisal proceeding.
ss.3-209. Notation on stock certificate.
(a) Submission of certificate.- At any time after a petition for appraisal
is filed, the court may require the objecting stockholders parties to the
proceeding to submit their stock certificates to the clerk of the court for
notation on them that the appraisal proceeding is pending. If a stockholder
fails to comply with the order, the court may dismiss the proceeding as to him
or grant other appropriate relief.
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(b) Transfer of stock bearing notation.- If any stock represented by a
certificate which bears a notation is subsequently transferred, the new
certificate issued for the stock shall bear a similar notation and the name of
the original objecting stockholder. The transferee of this stock does not
acquire rights of any character with respect to the stock other than the rights
of the original objecting stockholder.
ss.3-210. Appraisal of fair value.
(a) Court to appoint appraisers.- If the court finds that the objecting
stockholder is entitled to an appraisal of his stock, it shall appoint three
disinterested appraisers to determine the fair value of the stock on terms and
conditions the court considers proper. Each appraiser shall take an oath to
discharge his duties honestly and faithfully.
(b) Report of appraisers - Filing.- Within 60 days after their appointment,
unless the court sets a longer time, the appraisers shall determine the fair
value of the stock as of the appropriate date and file a report stating the
conclusion of the majority as to the fair value of the stock.
(c) Same - Contents.- The report shall state the reasons for the conclusion
and shall include a transcript of all testimony and exhibits offered.
(d) Same - Service; objection.-
(1) On the same day that the report is filed, the appraisers shall mail
a copy of it to each party to the proceedings.
(2) Within 15 days after the report is filed, any party may object to it
and request a hearing.
ss.3-211. Action by court on appraisers' report.
(a) Order of court.- The court shall consider the report and, on motion of
any party to the proceeding, enter an order which:
(1) Confirms, modifies, or rejects it; and
(2) If appropriate, sets the time for payment to the stockholder.
(b) Procedure after order.-
(1) If the appraisers' report is confirmed or modified by the order,
judgment shall be entered against the successor and in favor of each objecting
stockholder party to the proceeding for the appraised fair value of his stock.
(2) If the appraisers' report is rejected, the court may:
(i) Determine the fair value of the stock and enter judgment for
the stockholder; or
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(ii) Remit the proceedings to the same or other appraisers on terms
and conditions it considers proper.
(c) Judgment includes interest.-
(1) Except as provided in paragraph (2) of this subsection, a judgment
for the stockholder shall award the value of the stock and interest from the
date as at which fair value is to be determined under ss. 3-202 of this
subtitle.
(2) The court may not allow interest if it finds that the failure of the
stockholder to accept an offer for the stock made under ss. 3-207 of this
subtitle was arbitrary and vexatious or not in good faith. In making this
finding, the court shall consider:
(i) The price which the successor offered for the stock;
(ii) The financial statements and other information furnished to
the stockholder; and
(iii) Any other circumstances it considers relevant.
(d) Costs of proceedings.-
(1) The costs of the proceedings, including reasonable compensation and
expenses of the appraisers, shall be set by the court and assessed against the
successor. However, the court may direct the costs to be apportioned and
assessed against any objecting stockholder if the court finds that the failure
of the stockholder to accept an offer for the stock made under ss. 3-207 of this
subtitle was arbitrary and vexatious or not in good faith. In making this
finding, the court shall consider:
(i) The price which the successor offered for the stock;
(ii) The financial statements and other information furnished to
the stockholder; and
(iii) Any other circumstances it considers relevant.
(2) Costs may not include attorney's fees or expenses. The reasonable
fees and expenses of experts may be included only if:
(i) The successor did not make an offer for the stock
underss.3-207 of this subtitle; or
(ii) The value of the stock determined in the proceeding materially
exceeds the amount offered by the successor.
(e) Effect of judgment.- The judgment is final and conclusive on all parties
and has the same force and effect as other decrees in equity. The judgment
constitutes a lien on the assets of the successor with priority over any
mortgage or other lien attaching on or after the effective date of the
consolidation, merger, transfer, or charter amendment.
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ss. 3-212. Surrender of stock.
The successor is not required to pay for the stock of an objecting
stockholder or to pay a judgment rendered against it in a proceeding for an
appraisal unless, simultaneously with payment:
(1) The certificates representing the stock are surrendered to it,
indorsed in blank, and in proper form for transfer; or
(2) Satisfactory evidence of the loss or destruction of the certificates
and sufficient indemnity bond are furnished.
ss.3-213. Rights of successor with respect to stock.
(a) General rule.- A successor which acquires the stock of an objecting
stockholder is entitled to any dividends or distributions payable to holders of
record of that stock on a record date after the close of business on the day as
at which fair value is to be determined under ss. 3-202 of this subtitle.
(b) Successor in transfer of assets.- After acquiring the stock of an
objecting stockholder, a successor in a transfer of assets may exercise all the
rights of an owner of the stock.
(c) Successor in consolidation, merger, or share exchange.- Unless the
articles provide otherwise, stock in the successor of a consolidation, merger,
or share exchange otherwise deliverable in exchange for the stock of an
objecting stockholder has the status of authorized but unissued stock of the
successor. However, a proceeding for reduction of the capital of the successor
is not necessary to retire the stock or to reduce the capital of the successor
represented by the stock.
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