“Appraisal Right” is a legal right provided to Minority Stockholders in many states, which, when invoked, requires the independent valuation of the fair market value of the current stock price in order to prevent corporations from selling their shares for less than they currently are worth. The Appraisal Right is intended to protect Stockholders opposed to a Merger or Acquisition by requiring the acquiring company to repurchase their shares for the fair market value determined by the independent valuation.

For example, under Section 262 of Delaware’s General Corporation Law, Stockholders must vote against the Merger in order to exercise their Appraisal Rights.  Accordingly, the acquiring company in a Merger sometimes requires that a significant number of the Stockholders of the selling company approve the Merger in order to lower the number of Stockholders that potentially could exercise their Appraisal Rights.