2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 13. CORPORATE GOVERNANCE CHAPTER 3. PREEMPTIVE RIGHTS.REACQUISITION AND REISSUE OF SHARES
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IC 28-13-3
Chapter 3. Preemptive Rights)Reacquisition and Reissue of
Shares
IC 28-13-3-1
Unissued shares; acquisition rights subject to articles of
incorporation
Sec. 1. The shareholders of a corporation do not have a
preemptive right to acquire the corporation's unissued shares except
to the extent the articles of incorporation so provide.
As added by P.L.14-1992, SEC.163.
IC 28-13-3-2
Security convertible into or carrying right to subscribe for or
acquire shares; election to have preemptive rights; applicable
principles
Sec. 2. (a) For purposes of sections 1 and 2 of this chapter,
"shares" includes a security convertible into or carrying a right to
subscribe for or acquire shares.
(b) A statement included in the articles of incorporation that "the
corporation elects to have preemptive rights" (or similar words)
means that the following principles apply except to the extent the
articles of incorporation expressly provide otherwise:
(1) The shareholders of the corporation have a preemptive right,
granted on uniform terms and conditions prescribed by the
board of directors to provide a fair and reasonable opportunity
to exercise the right, to acquire proportional amounts of the
corporation's unissued shares upon the decision of the board of
directors to issue the shares.
(2) A shareholder may waive the preemptive right. A waiver
evidenced by a writing is irrevocable even though the waiver is
not supported by consideration.
(3) There is no preemptive right with respect to any of the
following:
(A) Shares issued as compensation to directors, officers,
agents, or employees of the corporation, the corporation's
subsidiaries, or the corporation's affiliates.
(B) Shares issued to satisfy conversion or option rights
created to provide compensation to directors, officers,
agents, or employees of the corporation, the corporation's
subsidiaries, or the corporation's affiliates.
(C) Shares authorized in the articles of incorporation that are
issued within six (6) months from the effective date of
incorporation.
(D) Shares sold otherwise than for money or promissory
notes.
(4) Holders of shares of any class without general voting rights
but with preferential rights to distributions or assets have no
preemptive rights with respect to shares of the class.
(5) Holders of shares of any class with general voting rights but
without preferential rights to distributions or assets have no
preemptive rights with respect to shares of any class with
preferential rights to distributions or assets unless the shares
with preferential rights are convertible into or carry a right to
subscribe for or acquire shares without preferential rights.
(6) Shares subject to preemptive rights that are not acquired by
shareholders may be issued to any person for one (1) year after
being offered to shareholders at a consideration set by the board
of directors that is not lower than the consideration set for the
exercise of preemptive rights. An offer at a lower consideration
or after the expiration of one (1) year is subject to the
shareholders' preemptive rights.
As added by P.L.14-1992, SEC.163.
IC 28-13-3-3
Acquisition of own shares by corporation; reduction of authorized
shares; contents of articles; treasury shares; unlawful reduction of
shares producing insolvency
Sec. 3. (a) A corporation may acquire its own shares pursuant to
an adopted resolution that is submitted to and approved by the
director prior to such acquisition of shares. Unless a resolution of the
board of directors or the corporation's articles of incorporation
provide otherwise, shares so acquired constitute authorized but
unissued shares.
(b) If the board resolution or articles of incorporation prohibit the
reissue of acquired shares, the number of authorized shares is
reduced by the number of shares acquired, effective upon amendment
of the articles of incorporation.
(c) Articles of amendment for purposes of subsections (b) and (f):
(1) may be adopted by the board of directors without
shareholder action;
(2) shall be delivered to the director of the department for
approval or disapproval; and
(3) if approved by the director of the department, shall be
delivered to the secretary of state for filing by the director of the
department.
(d) The articles filed with the secretary of state must state the
following:
(1) The name of the corporation.
(2) The reduction in the number of authorized shares, itemized
by class and series.
(3) The action resulting in the reduction and a copy of the board
resolution authorizing the action.
(4) The total number of authorized shares, itemized by class and
series, remaining after reduction of the shares.
(e) A corporation has authority to use, hold, acquire, cancel, and
dispose of treasury shares.
(f) Unless the board of directors adopts an amendment to the
corporation's articles of incorporation to reduce the number of
authorized shares, as provided in subsection (c), treasury shares of
the corporation that are canceled shall be treated as authorized but
unissued shares. Such shares may be canceled by the adoption of a
board resolution stating that the shares are to be canceled. The
resolution shall be submitted to and approved by the director.
(g) A reduction of the issued and outstanding shares of capital
stock of a corporation that renders the corporation insolvent is not
lawful.
As added by P.L.14-1992, SEC.163.
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