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Texas Business Organizations Code - Section 10.354. Rights Of Dissent And Appraisal

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 10.354. Rights Of Dissent And Appraisal

§ 10.354. RIGHTS OF DISSENT AND APPRAISAL.  (a) Subject 
to Subsection (b), an owner of an ownership interest in a domestic 
entity subject to dissenters' rights is entitled to:
		(1)  dissent from:                                                            
			(A)  a plan of merger to which the domestic entity 
is a party if owner approval is required by this code and the owner 
owns in the domestic entity an ownership interest that was entitled 
to vote on the plan of merger;
			(B)  a sale of all or substantially all of the 
assets of the domestic entity if owner approval is required by this 
code and the owner owns in the domestic entity an ownership interest 
that was entitled to vote on the sale;
			(C)  a plan of exchange in which the ownership 
interest of the owner is to be acquired;
			(D)  a plan of conversion in which the domestic 
entity is the converting entity if owner approval is required by 
this code and the owner owns in the domestic entity an ownership 
interest that was entitled to vote on the plan of conversion;  or
			(E)  a merger effected under Section 10.006 in 
which:                      
				(i)  the owner is entitled to vote on the 
merger;  or                     
				(ii)  the ownership interest of the owner is 
converted or exchanged;  and 
		(2)  subject to compliance with the procedures set 
forth in this subchapter, obtain the fair value of that ownership 
interest through an appraisal.
	(b)  Notwithstanding Subsection (a), subject to Subsection 
(c), an owner may not dissent from a plan of merger or conversion in 
which there is a single surviving or new domestic entity or non-code 
organization, or from a plan of exchange, if:
		(1)  the ownership interest, or a depository receipt in 
respect of the ownership interest, held by the owner is part of a 
class or series of ownership interests, or depository receipts in 
respect of ownership interests, that are, on the record date set for 
purposes of determining which owners are entitled to vote on the 
plan of merger, conversion, or exchange, as appropriate:
			(A)  listed on a national securities exchange or a 
similar system;         
			(B)  listed on the Nasdaq Stock Market or a 
successor quotation system;    
			(C)  designated as a national market security on 
an interdealer quotation system by the National Association of 
Securities Dealers, Inc., or a successor system;  or
			(D)  held of record by at least 2,000 owners;                                
		(2)  the owner is not required by the terms of the plan 
of merger, conversion, or exchange, as appropriate, to accept for 
the owner's ownership interest any consideration that is different 
from the consideration to be provided to any other holder of an 
ownership interest of the same class or series as the ownership 
interest held by the owner, other than cash instead of fractional 
shares or interests the owner would otherwise be entitled to 
receive;  and
		(3)  the owner is not required by the terms of the plan 
of merger, conversion, or exchange, as appropriate, to accept for 
the owner's ownership interest any consideration other than:
			(A)  ownership interests, or depository receipts 
in respect of ownership interests, of a domestic entity or non-code 
organization of the same general organizational type that, 
immediately after the effective date of the merger, conversion, or 
exchange, as appropriate, will be part of a class or series of 
ownership interests, or depository receipts in respect of ownership 
interests, that are:
				(i)  listed on a national securities 
exchange or authorized for listing on the exchange on official 
notice of issuance;
				(ii)  approved for quotation as a national 
market security on an interdealer quotation system by the National 
Association of Securities Dealers, Inc., or a successor entity;  or
				(iii)  held of record by at least 2,000 
owners;                           
			(B)  cash instead of fractional ownership 
interests the owner would otherwise be entitled to receive;  or
			(C)  any combination of the ownership interests 
and cash described by Paragraphs (A) and (B).
	(c)  Subsection (b) shall not apply to a domestic entity that 
is a subsidiary with respect to a merger under Section 10.006.

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.  Amended by 
Acts 2005, 79th Leg., ch. 64, § 39, eff. Jan. 1, 2006.

Last modified: August 11, 2007