2015 Indiana Code TITLE 23. BUSINESS AND OTHER ASSOCIATIONS ARTICLE 1. INDIANA BUSINESS CORPORATION LAW CHAPTER 42. CONTROL SHARE ACQUISITIONS
Download as PDF
IC 23-1-42
Chapter 42. Control Share Acquisitions
IC 23-1-42-1
"Control shares" defined
Sec. 1. As used in this chapter, "control shares" means shares that,
except for this chapter, would have voting power with respect to
shares of an issuing public corporation that, when added to all other
shares of the issuing public corporation owned by a person or in
respect to which that person may exercise or direct the exercise of
voting power, would entitle that person, immediately after acquisition
of the shares (directly or indirectly, alone or as a part of a group), to
exercise or direct the exercise of the voting power of the issuing
public corporation in the election of directors within any of the
following ranges of voting power:
(1) One-fifth (1/5) or more but less than one-third (1/3) of all
voting power.
(2) One-third (1/3) or more but less than a majority of all voting
power.
(3) A majority or more of all voting power.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-2
"Control share acquisition" defined
Sec. 2. (a) As used in this chapter, "control share acquisition"
means the acquisition (directly or indirectly) by any person of
ownership of, or the power to direct the exercise of voting power
with respect to, issued and outstanding control shares.
(b) For purposes of this section, shares acquired within ninety (90)
days or shares acquired pursuant to a plan to make a control share
acquisition are considered to have been acquired in the same
acquisition.
(c) For purposes of this section, a person who acquires shares in
the ordinary course of business for the benefit of others in good faith
and not for the purpose of circumventing this chapter has voting
power only of shares in respect of which that person would be able
to exercise or direct the exercise of votes without further instruction
from others.
(d) The acquisition of any shares of an issuing public corporation
does not constitute a control share acquisition if the acquisition is
consummated in any of the following circumstances:
(1) Before January 8, 1986.
(2) Pursuant to a contract existing before January 8, 1986.
(3) Pursuant to the laws of descent and distribution.
(4) Pursuant to the satisfaction of a pledge or other security
interest created in good faith and not for the purpose of
circumventing this chapter.
(5) Pursuant to a merger or plan of share exchange effected in
Indiana Code 2015
compliance with IC 23-1-40 if the issuing public corporation is
a party to the agreement of merger or plan of share exchange.
(e) The acquisition of shares of an issuing public corporation in
good faith and not for the purpose of circumventing this chapter by
or from:
(1) any person whose voting rights had previously been
authorized by shareholders in compliance with this chapter; or
(2) any person whose previous acquisition of shares of an
issuing public corporation would have constituted a control
share acquisition but for subsection (d);
does not constitute a control share acquisition, unless the acquisition
entitles any person (directly or indirectly, alone or as a part of a
group) to exercise or direct the exercise of voting power of the
corporation in the election of directors in excess of the range of the
voting power otherwise authorized.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-3
"Interested shares" defined
Sec. 3. As used in this chapter, "interested shares" means the
shares of an issuing public corporation in respect of which any of the
following persons may exercise or direct the exercise of the voting
power of the corporation in the election of directors:
(1) An acquiring person or member of a group with respect to a
control share acquisition.
(2) Any officer of the issuing public corporation.
(3) Any employee of the issuing public corporation who is also
a director of the corporation.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-4
"Issuing public corporation" defined
Sec. 4. (a) As used in this chapter, "issuing public corporation"
means a corporation that has:
(1) one hundred (100) or more shareholders;
(2) its principal place of business or its principal office in
Indiana, or that owns or controls assets within Indiana having a
fair market value of more than one million dollars ($1,000,000);
and
(3) either:
(A) more than ten percent (10%) of its shareholders resident
in Indiana;
(B) more than ten percent (10%) of its shares owned of
record or owned beneficially by Indiana residents; or
(C) one thousand (1,000) shareholders resident in Indiana.
(b) The residence of a record shareholder is presumed to be the
address appearing in the records of the corporation.
As added by P.L.149-1986, SEC.26. Amended by P.L.133-2009,
SEC.36.
Indiana Code 2015
IC 23-1-42-5
Voting rights under IC 23-1-42-9
Sec. 5. Unless the corporation's articles of incorporation or bylaws
provide that this chapter does not apply to control share acquisitions
of shares of the corporation before the control share acquisition,
control shares of an issuing public corporation acquired in a control
share acquisition have only such voting rights as are conferred by
section 9 of this chapter.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-6
Acquiring person statement
Sec. 6. Any person who proposes to make or has made a control
share acquisition may at the person's election deliver an acquiring
person statement to the issuing public corporation at the issuing
public corporation's principal office. The acquiring person statement
must set forth all of the following:
(1) The identity of the acquiring person and each other member
of any group of which the person is a part for purposes of
determining control shares.
(2) A statement that the acquiring person statement is given
pursuant to this chapter.
(3) The number of shares of the issuing public corporation
owned (directly or indirectly) by the acquiring person and each
other member of the group.
(4) The range of voting power under which the control share
acquisition falls or would, if consummated, fall.
(5) If the control share acquisition has not taken place:
(A) a description in reasonable detail of the terms of the
proposed control share acquisition; and
(B) representations of the acquiring person, together with a
statement in reasonable detail of the facts upon which they
are based, that the proposed control share acquisition, if
consummated, will not be contrary to law, and that the
acquiring person has the financial capacity to make the
proposed control share acquisition.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-7
Special meeting of shareholders
Sec. 7. (a) If the acquiring person so requests at the time of
delivery of an acquiring person statement and gives an undertaking
to pay the corporation's expenses of a special meeting, within ten (10)
days thereafter, the directors of the issuing public corporation shall
call a special meeting of shareholders of the issuing public
corporation for the purpose of considering the voting rights to be
accorded the shares acquired or to be acquired in the control share
acquisition.
(b) Unless the acquiring person agrees in writing to another date,
Indiana Code 2015
the special meeting of shareholders shall be held within fifty (50)
days after receipt by the issuing public corporation of the request.
(c) If no request is made, the voting rights to be accorded the
shares acquired in the control share acquisition shall be presented to
the next special or annual meeting of shareholders.
(d) If the acquiring person so requests in writing at the time of
delivery of the acquiring person statement, the special meeting must
not be held sooner than thirty (30) days after receipt by the issuing
public corporation of the acquiring person statement.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-8
Notice
Sec. 8. (a) If a special meeting is requested, notice of the special
meeting of shareholders shall be given as promptly as reasonably
practicable by the issuing public corporation to all shareholders of
record as of the record date set for the meeting, whether or not
entitled to vote at the meeting.
(b) Notice of the special or annual shareholder meeting at which
the voting rights are to be considered must include or be accompanied
by both of the following:
(1) A copy of the acquiring person statement delivered to the
issuing public corporation pursuant to this chapter.
(2) A statement by the board of directors of the corporation,
authorized by its directors, of its position or recommendation,
or that it is taking no position or making no recommendation,
with respect to the proposed control share acquisition.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-9
Voting rights of acquired control shares; resolution
Sec. 9. (a) Control shares acquired in a control share acquisition
have the same voting rights as were accorded the shares before the
control share acquisition only to the extent granted by resolution
approved by the shareholders of the issuing public corporation.
(b) To be approved under this section, the resolution must be
approved by:
(1) each voting group entitled to vote separately on the proposal
by a majority of all the votes entitled to be cast by that voting
group, with the holders of the outstanding shares of a class
being entitled to vote as a separate voting group if the proposed
control share acquisition would, if fully carried out, result in any
of the changes described in IC 23-1-38-4(a); and
(2) each voting group entitled to vote separately on the proposal
by a majority of all the votes entitled to be cast by that group,
excluding all interested shares.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-10
Indiana Code 2015
Redemption of acquired control shares
Sec. 10. (a) If authorized in a corporation's articles of
incorporation or bylaws before a control share acquisition has
occurred, control shares acquired in a control share acquisition with
respect to which no acquiring person statement has been filed with
the issuing public corporation may, at any time during the period
ending sixty (60) days after the last acquisition of control shares by
the acquiring person, be subject to redemption by the corporation at
the fair value thereof pursuant to the procedures adopted by the
corporation.
(b) Control shares acquired in a control share acquisition are not
subject to redemption after an acquiring person statement has been
filed unless the shares are not accorded full voting rights by the
shareholders as provided in section 9 of this chapter.
As added by P.L.149-1986, SEC.26.
IC 23-1-42-11
Dissenters' rights; "fair value" defined
Sec. 11. (a) Unless otherwise provided in a corporation's articles
of incorporation or bylaws before a control share acquisition has
occurred, in the event control shares acquired in a control share
acquisition are accorded full voting rights and the acquiring person
has acquired control shares with a majority or more of all voting
power, all shareholders of the issuing public corporation have
dissenters' rights as provided in this chapter.
(b) As soon as practicable after such events have occurred, the
board of directors shall cause a notice to be sent to all shareholders
of the corporation advising them of the facts and that they have
dissenters' rights to receive the fair value of their shares pursuant to
IC 23-1-44.
(c) As used in this section, "fair value" means a value not less than
the highest price paid per share by the acquiring person in the control
share acquisition.
As added by P.L.149-1986, SEC.26.
Indiana Code 2015
Disclaimer: These codes may not be the most recent version. Indiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
