CHAPTER 42. CONTROL SHARE ACQUISITIONS
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 toshares of an issuing public corporation that, when added to all othershares of the issuing public corporation owned by a person or inrespect to which that person may exercise or direct the exercise ofvoting power, would entitle that person, immediately afteracquisition of the shares (directly or indirectly, alone or as a part ofa group), to exercise or direct the exercise of the voting power of theissuing public corporation in the election of directors within any ofthe following ranges of voting power:
(1) One-fifth (1/5) or more but less than one-third (1/3) of allvoting power.
(2) One-third (1/3) or more but less than a majority of all votingpower.
(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 ofownership of, or the power to direct the exercise of voting powerwith 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 controlshare acquisition are considered to have been acquired in the sameacquisition.
(c) For purposes of this section, a person who acquires shares inthe ordinary course of business for the benefit of others in good faithand not for the purpose of circumventing this chapter has votingpower only of shares in respect of which that person would be ableto exercise or direct the exercise of votes without further instructionfrom others.
(d) The acquisition of any shares of an issuing public corporationdoes not constitute a control share acquisition if the acquisition isconsummated 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 securityinterest created in good faith and not for the purpose ofcircumventing this chapter.
(5) Pursuant to a merger or plan of share exchange effected incompliance with IC 23-1-40 if the issuing public corporation isa party to the agreement of merger or plan of share exchange. (e) The acquisition of shares of an issuing public corporation ingood faith and not for the purpose of circumventing this chapter byor from:
(1) any person whose voting rights had previously beenauthorized by shareholders in compliance with this chapter; or
(2) any person whose previous acquisition of shares of anissuing public corporation would have constituted a controlshare acquisition but for subsection (d);
does not constitute a control share acquisition, unless the acquisitionentitles any person (directly or indirectly, alone or as a part of agroup) to exercise or direct the exercise of voting power of thecorporation in the election of directors in excess of the range of thevoting 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 theshares of an issuing public corporation in respect of which any of thefollowing persons may exercise or direct the exercise of the votingpower of the corporation in the election of directors:
(1) An acquiring person or member of a group with respect toa control share acquisition.
(2) Any officer of the issuing public corporation.
(3) Any employee of the issuing public corporation who is alsoa 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 inIndiana, or that owns or controls assets within Indiana havinga fair market value of more than one million dollars($1,000,000); and
(3) either:
(A) more than ten percent (10%) of its shareholders residentin Indiana;
(B) more than ten percent (10%) of its shares owned ofrecord 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 theaddress appearing in the records of the corporation.
As added by P.L.149-1986, SEC.26. Amended by P.L.133-2009,SEC.36.
IC 23-1-42-5
Voting rights under IC 23-1-42-9 Sec. 5. Unless the corporation's articles of incorporation or bylawsprovide that this chapter does not apply to control share acquisitionsof shares of the corporation before the control share acquisition,control shares of an issuing public corporation acquired in a controlshare acquisition have only such voting rights as are conferred bysection 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 controlshare acquisition may at the person's election deliver an acquiringperson statement to the issuing public corporation at the issuingpublic corporation's principal office. The acquiring person statementmust set forth all of the following:
(1) The identity of the acquiring person and each other memberof any group of which the person is a part for purposes ofdetermining control shares.
(2) A statement that the acquiring person statement is givenpursuant to this chapter.
(3) The number of shares of the issuing public corporationowned (directly or indirectly) by the acquiring person and eachother member of the group.
(4) The range of voting power under which the control shareacquisition 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 theproposed control share acquisition; and
(B) representations of the acquiring person, together with astatement in reasonable detail of the facts upon which theyare based, that the proposed control share acquisition, ifconsummated, will not be contrary to law, and that theacquiring person has the financial capacity to make theproposed 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 ofdelivery of an acquiring person statement and gives an undertakingto pay the corporation's expenses of a special meeting, within ten(10) days thereafter, the directors of the issuing public corporationshall call a special meeting of shareholders of the issuing publiccorporation for the purpose of considering the voting rights to beaccorded the shares acquired or to be acquired in the control shareacquisition.
(b) Unless the acquiring person agrees in writing to another date,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 tothe next special or annual meeting of shareholders.
(d) If the acquiring person so requests in writing at the time ofdelivery of the acquiring person statement, the special meeting mustnot be held sooner than thirty (30) days after receipt by the issuingpublic 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 specialmeeting of shareholders shall be given as promptly as reasonablypracticable by the issuing public corporation to all shareholders ofrecord as of the record date set for the meeting, whether or notentitled to vote at the meeting.
(b) Notice of the special or annual shareholder meeting at whichthe voting rights are to be considered must include or beaccompanied by both of the following:
(1) A copy of the acquiring person statement delivered to theissuing 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 acquisitionhave the same voting rights as were accorded the shares before thecontrol share acquisition only to the extent granted by resolutionapproved by the shareholders of the issuing public corporation.
(b) To be approved under this section, the resolution must beapproved by:
(1) each voting group entitled to vote separately on the proposalby a majority of all the votes entitled to be cast by that votinggroup, with the holders of the outstanding shares of a classbeing entitled to vote as a separate voting group if the proposedcontrol share acquisition would, if fully carried out, result inany of the changes described in IC 23-1-38-4(a); and
(2) each voting group entitled to vote separately on the proposalby 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
Redemption of acquired control shares
Sec. 10. (a) If authorized in a corporation's articles ofincorporation or bylaws before a control share acquisition hasoccurred, control shares acquired in a control share acquisition with
respect to which no acquiring person statement has been filed withthe issuing public corporation may, at any time during the periodending sixty (60) days after the last acquisition of control shares bythe acquiring person, be subject to redemption by the corporation atthe fair value thereof pursuant to the procedures adopted by thecorporation.
(b) Control shares acquired in a control share acquisition are notsubject to redemption after an acquiring person statement has beenfiled unless the shares are not accorded full voting rights by theshareholders 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 articlesof incorporation or bylaws before a control share acquisition hasoccurred, in the event control shares acquired in a control shareacquisition are accorded full voting rights and the acquiring personhas acquired control shares with a majority or more of all votingpower, all shareholders of the issuing public corporation havedissenters' rights as provided in this chapter.
(b) As soon as practicable after such events have occurred, theboard of directors shall cause a notice to be sent to all shareholdersof the corporation advising them of the facts and that they havedissenters' rights to receive the fair value of their shares pursuant toIC 23-1-44.
(c) As used in this section, "fair value" means a value not lessthan the highest price paid per share by the acquiring person in thecontrol share acquisition.
As added by P.L.149-1986, SEC.26.