Appraisal and Going-Private Toolkit: Special Committee Charters, Fairness Opinions, and Valuation Records

Document type: Toolkit Practice area: Corporate — Mergers and Acquisitions Jurisdiction: Delaware, with Exchange Act overlay Last reviewed: 5 September 2026

Tool 1 — The controller's conditioned proposal letter

The most important document in the transaction, because it fixes the standard of review. Everything else is downstream.

[Date]

Board of Directors [Company], Inc.

Dear Members of the Board:

[Holdco] (together with its affiliates, "we") currently beneficially owns approximately []% of the outstanding shares of common stock of [Company] (the "Company"). We are writing to propose a transaction in which we would acquire all of the outstanding shares of common stock of the Company not owned by us for **$[] in cash per share**.

We wish to be clear about the conditions on which we are prepared to proceed. Any transaction will be subject to, and we will not proceed with any transaction absent, each of the following, neither of which will be waivable by us:

(a) the review, negotiation, and approval of the transaction by a special committee of the Board consisting solely of directors who are independent of us and of the Company's management, which committee shall be empowered to retain its own legal and financial advisors at the Company's expense, to negotiate the terms of any transaction, and to reject this proposal or any revised proposal definitively; and

(b) the affirmative vote of the holders of a majority of the outstanding shares of common stock not owned by us or our affiliates or by any officer or director of the Company.

We will not proceed with a transaction that is not approved by the special committee and by such a vote of the unaffiliated stockholders.

In the interest of full disclosure, we advise the Board that we are interested only in acquiring shares we do not own, and we are not interested in selling our shares in, or otherwise supporting, any alternative transaction involving the Company.

This letter does not constitute a binding offer or agreement. We have set no deadline for a response and impose no time limit on the special committee's deliberations.

Annotations.

• "Neither of which will be waivable by us" — the non-waiver commitment is essential. A waivable condition is not a protection.
• "To reject this proposal ... definitively" — condition 3 of the six. Use this exact concept.
• "We are not interested in selling" — painful but mandatory. It is material, it will surface, and volunteering it converts a disclosure claim into a disclosed fact.
• "We have set no deadline" — coercion defeats condition 6. Never impose an exploding price.
• Timing — this letter must precede any substantive economic negotiation. Preliminary joint valuation work with management can start the clock too early.

Tool 2 — Special committee charter

RESOLVED, that a Special Committee of the Board (the "Committee") is hereby established, consisting of [] and [], each of whom the Board has determined is independent of [Holdco], its affiliates, and the Company's management with respect to the Proposal;

RESOLVED FURTHER, that the Committee is hereby delegated the full power and authority of the Board, to the fullest extent permitted by law, to:

(i) review, evaluate, and negotiate the Proposal and the terms of any transaction contemplated thereby; (ii) retain, at the Company's expense, such legal counsel, financial advisors, and other advisors as the Committee determines, on terms the Committee determines, without further approval of the Board; (iii) determine whether the Proposal or any transaction is advisable and in the best interests of the Company and its stockholders other than [Holdco] and its affiliates; (iv) reject the Proposal and terminate discussions at any time, in its sole discretion; (v) evaluate, to the extent the Committee deems appropriate, alternatives to the Proposal; (vi) make a recommendation to the Board and to the stockholders; and (vii) take such other actions as the Committee deems necessary or advisable;

RESOLVED FURTHER, that the Board shall not approve or recommend the Proposal or any transaction contemplated thereby without the prior favorable recommendation of the Committee;

RESOLVED FURTHER, that each member of the Committee shall receive compensation of $[__] for service, payable without regard to whether any transaction is consummated;

RESOLVED FURTHER, that management is directed to provide the Committee and its advisors with full and prompt access to books, records, personnel, and facilities.

Annotations.

• The negative resolution ("the Board shall not approve ... without the prior favorable recommendation") is what makes the committee's rejection power real. Without it, the committee can be bypassed.
• Compensation not contingent on consummation removes an argument that the committee was paid to close.
• Two members are acceptable where both are genuinely independent and engaged, but three is safer if the pool allows.
• Do not include authority "to consider a sale of the Company" if the controller has said it will not sell — describing an authority the committee cannot exercise misleads the record.

Tool 3 — Non-waivable conditions in the merger agreement

Section [__]. Conditions to Each Party's Obligations. The obligations of each party to effect the Merger are subject to the satisfaction of the following conditions, which may not be waived by any party:

(a) Special Committee Approval. The Special Committee shall have approved this Agreement and the Merger and shall not have withdrawn or adversely modified such approval.

(b) Majority of the Minority Approval. This Agreement shall have been adopted by the affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock other than shares owned by (i) Parent, Merger Sub, or any of their respective affiliates, (ii) any officer or director of the Company, and (iii) any person having an agreement, arrangement, or understanding with Parent regarding the Merger (the "Unaffiliated Stockholder Approval").

Annotations.

• The parenthetical exclusions matter enormously and are frequently drafted too narrowly. Exclude affiliates, officers, directors, and any holder with a side arrangement.
• Draft the non-waiver into the agreement itself. If the condition is waivable by agreement of the parties, it is waivable, and a closing-eve waiver destroys MFW.
• Confirm the tabulation method with the transfer agent before filing the proxy: how will the excluded population be identified in the vote?

Tool 4 — Proxy disclosure checklist for the "Background of the Merger"

The background section is where cases are won and lost. Include, in chronological narrative:

1. Every contact between the controller and the company relating to a potential transaction, including preliminary and informal ones, with dates.
2. The date the committee was formed and the date of its first meeting.
3. Each committee meeting, with attendees and the substance of what was decided.
4. Every price proposal and counterproposal, with the date and the party.
5. Each rejection, and how long the parties went without contact.
6. The identity and selection process for each adviser, including alternatives considered.
7. Every set of projections, when prepared, by whom, for what purpose, and how they differ.
8. The reason for any projection revision, in the words the committee actually received.
9. Any committee member removed or recused, and the reason.
10. Management's post-closing arrangements, when they were first discussed and with whom.
11. The controller's statement regarding alternative transactions.
12. Any dissent within the committee or the board.

Test for completeness: ask whether a reader of the background section could reconstruct the negotiation without the underlying documents. If not, it is too thin.

Tool 5 — Fairness opinion request and review points

What the committee should require of its financial adviser:

• A written opinion addressed to the committee, opining on fairness from a financial point of view to the holders of shares other than the controller and its affiliates.
• Underlying analyses in a written board presentation, including:
  • Discounted cash flow, with the projections used, the discount rate range and its derivation, and the terminal value methodology;
  • Selected companies analysis, with the selection criteria and the multiples;
  • Selected transactions analysis, with the same;
  • Premiums paid analysis, if used, with the reference set;
  • Historical trading analysis, including the unaffected price.
• A written statement of relationships and compensation: fees for this engagement and their contingency, fees received from the controller and the company over the prior two years, expected future engagements, and any financing role.

Review points for committee counsel:

• Does the opinion rely on projections the committee has actually interrogated?
• Are the analyses summarized in the proxy at a level that lets a stockholder evaluate assumptions, not merely see ranges?
• Is the opinion date close to the signing date?
• Does the engagement letter permit the opinion and analyses to be described in the proxy?

Tool 6 — Appraisal demand letter (record holder)

[Date] — Delivered by [method producing receipt]

[Company], Inc. Attention: Corporate Secretary

Re: Demand for Appraisal — [Company] / [Merger]

Cede & Co., as nominee of The Depository Trust Company and the record holder of the shares described below, hereby demands appraisal of the fair value of such shares pursuant to Section 262 of the Delaware General Corporation Law in connection with the proposed merger described in the Company's [proxy statement] dated [__].

Record holder: Cede & Co. Beneficial owner for whose account this demand is made: [Name] Number of shares as to which appraisal is demanded: [] shares of common stock DTC participant: [Broker], participant number []

The undersigned has not voted and will not vote such shares in favor of the merger, and will continuously hold such shares through the effective date of the merger.

Please direct all notices required by Section 262 to the beneficial owner at the address below, with a copy to counsel.

Annotations.

• The demand must come from the record holder — Cede — not the beneficial owner. Coordinate with the broker and DTC well in advance.
• Specify the exact share count, and do not demand for more shares than will be continuously held.
• Obtain the cede breakdown confirming the demand and keep it with the file.
• Deliver before the vote, by a method that produces proof of the delivery date.

Tool 7 — Section 262(e) information request

Pursuant to Section 262(e) of the Delaware General Corporation Law, the undersigned, having complied with the requirements of Section 262, hereby requests a statement setting forth (i) the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received, and (ii) the aggregate number of holders of such shares. Please provide such statement within ten days of receipt as required by the statute.

Why to send it. It is the only way to learn, before committing to litigation, whether the 1% and $1 million thresholds are satisfied and whether other dissenters exist. Send it early in the 120-day window.

Tool 8 — Prepayment notice (respondent side)

Pursuant to Section 262(h) of the Delaware General Corporation Law, the Surviving Corporation hereby pays to [Petitioner] the sum of $[__], representing $[] per share for the [] shares as to which [Petitioner] has demanded appraisal.

This payment is made without prejudice to the Surviving Corporation's position that the fair value of the shares is not more than the amount paid, and without any admission. Interest shall accrue only as provided in Section 262(h) following this payment.

Annotations.

• Prepay early; the benefit is a function of elapsed time.
• Prepaying the full merger consideration is cleaner than prepaying a discounted figure and avoids a satellite dispute.
• Acceptance by the petitioner waives nothing; do not represent otherwise.
• Notify the court and update the scheduling order.

Tool 9 — Valuation record index

Build this index at the outset, on either side. It is the map of the case.

A discipline worth adopting: maintain the index as a live document with a column for "produced / withheld / disputed." In a case where the buyer is aligned with the respondent, the index is how you show the court what is missing.

Related documents

• Appraisal rights and controller going-private transactions: fair value, MFW, and the price that sticks
• Pursuing or defending an appraisal claim: a practical guide
• Going-private transaction checklist
• Acquisition agreement toolkit: reps, schedules, escrows, earnouts, and claim notices
• Books-and-records toolkit: demand letters, production protocols, and confidentiality orders