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Idaho Codess.30-1-1301
WEST'S IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
PART 13. DISSENTERS' RIGHTS
Current through End of 2001 Reg. Sess.
ss. 30-1-1301. Definitions
In this part:
(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 section 30-1-1302, Idaho Code, and who exercises that
right when and in the manner required by sections 30-1-1320 through 30-1-1328,
Idaho Code.
(3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation 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 the 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.
ss. 30-1-1302. Right to dissent
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of his 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 section
30-1-1103, Idaho Code, 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 section 30-1-1104, Idaho Code; (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 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
(1) year after the date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
(ii) Creates, alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(iii) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities; (iv) Excludes or limits the
right of the shares to vote on any matter, or to cumulate votes, other than
a limitation by dilution through issuance of shares or other securities
with similar voting rights; or
(v) 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 section 30-1-604, Idaho Code; 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 his shares
under this part may not challenge the corporate action creating his entitlement
unless the action is unlawful or fraudulent with respect to the shareholder or
the corporation.
(3) This section does not apply to the holders of shares of any class or
series if the shares of the class or series are redeemable securities issued by
a registered investment company as defined pursuant to the investment company
act of 1940 (15 U.S.C. 80a-15 U.S.C. 80a-64).
(4) Unless the articles of incorporation of the corporation provide
otherwise, this section does not apply to the holders of shares of a class or
series if the shares of the class or series were registered on a national
securities exchange, were listed on the national market systems of the national
association of securities dealers automated quotation system or were held of
record by at least two thousand (2,000) shareholders on the date fixed to
determine the shareholders entitled to vote on the proposed corporate action.
ss.30-1-1303. Dissent by nominees and beneficial owners
(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one (1) person and notifies the corporation in writing
of the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:
(a) He 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 (b) He does so with respect to all shares
of which he is the beneficial shareholder or over which he has power to
direct the vote.
ss.ss.30-1-1304 to 30-1-1319. [Reserved]
ss.30-1-1320. Notice of dissenters' rights
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, 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 part and be accompanied by a copy of this part.
(2) If corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is taken without a vote of shareholders, the corporation
shall notify in writing all shareholders entitled to assert dissenters' rights
that the action was taken and send them the dissenters' notice described in
section 30-1-1322, Idaho Code. Notice of intent to demand payment
ss.30-1-1321. Notice of intent to demand payment
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights:
(a) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(b) Must not vote his 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 his shares under this part.
ss. 30-1-1322. Dissenters' notice
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of section 30-1-1321, Idaho Code.
(2) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited; (b) Inform holders
of uncertificated 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 terms of the proposed corporate action and
requires that the person asserting dissenters' rights certify whether or
not he acquired beneficial ownership of the shares before that date; (d)
Set a date by which the corporation must receive the payment demand, which
date may not be fewer than thirty (30) nor more than sixty (60) days after
the date the notice in subsection (1) of this section is delivered; and (e)
Be accompanied by a copy of this part.
ss.30-1-1323. Duty to demand payment
(1) A shareholder sent a dissenters' notice described in section 30-1-1322,
Idaho Code, must demand payment, certify whether he acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to section 30-1-1322(2)(c), Idaho Code, and, with
respect to any certificated shares, deposit his certificates in accordance with
the terms of the notice.
(2) The shareholder who demands payment and, with respect to any
certificated shares, deposits his share certificates under subsection (1) of
this section retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(3) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this part.
ss. 30-1-1324. Share restrictions
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under section 30-1-1326, Idaho
Code.
(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
ss. 30-1-1325. Payment
(1) Except as provided in section 30-1-1327, Idaho Code, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with section 30-1-1323, Idaho
Code, the amount the corporation estimates to be the fair value of his 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 (16) 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) A statement of the corporation's estimate of 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 section 30-1-1328, Idaho Code; and (e) A copy of this part.
ss.30-1-1326. Failure to take action
(1) If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 30-1-1322, Idaho Code, and repeat the payment
demand procedure.
ss. 30-1-1327. After-acquired shares
(1) A corporation may elect to withhold payment required by section
30-1-1325, Idaho Code, from a dissenter unless he 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 his demand. The corporation shall send with its offer a statement of its
estimate of 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
section 30-1-1328, Idaho Code.
ss.30-1-1328. Procedure if shareholder dissatisfied with payment or offer
(1) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate, less any payment under section 30-1-1325, Idaho Code, or reject
the corporation's offer under section 30-1-1327, Idaho Code, and demand payment
of the fair value of his shares and interest due, if:
(a) The dissenter believes that the amount paid under section
30-1-1325, Idaho Code, or offered under section 30-1-1327, Idaho Code, is
less than the fair value of his shares or that the interest due is
incorrectly calculated;
(b) The corporation fails to make payment under section 30-1-1325,
Idaho Code, within sixty (60) days after the date set for demanding
payment; or
(c) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set
for demanding payment.
(2) A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under subsection (1)
of this section within thirty (30) days after the corporation made or offered
payment for his shares.
ss.30-1-1329. [Reserved]
ss.30-1-1330. Court action to determine share value.
(1) If a demand for payment under section 30-1-1328, Idaho Code, remains
unsettled, the corporation shall commence a proceeding within sixty (60) 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 Idaho district
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 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 (1) 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.
(5) 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
his shares, plus interest, exceeds the amount paid by the corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired
shares for which the corporation elected to withhold payment under section
30-1-1327, Idaho Code.
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ss.30-1-1331. Court costs and counsel fees
(1) The court in an appraisal proceeding commenced under section 30-1-1330,
Idaho Code, 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 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 section 30-1-1328,
Idaho Code.
(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(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 sections 30-1-1320 through 30-1-1328, Idaho Code; or
(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 this part.
(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 to
dissenters who were benefited.