CHAPTER 43. BUSINESS COMBINATIONS

IC 23-1-43
    Chapter 43. Business Combinations

IC 23-1-43-1
"Affiliate" defined
    Sec. 1. As used in this chapter, "affiliate" means a person thatdirectly, or indirectly through one (1) or more intermediaries,controls, is controlled by, or is under common control with, aspecified person.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-2
"Announcement date" defined
    Sec. 2. As used in this chapter, "announcement date", when usedin reference to any business combination, means the date of the firstpublic announcement of the final, definitive proposal for the businesscombination.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-3
"Associate" defined
    Sec. 3. As used in this chapter, "associate", when used to indicatea relationship with any person, means:
        (1) any corporation or organization of which the person is anofficer or partner or is, directly or indirectly, the beneficialowner of ten percent (10%) or more of any class of votingshares;
        (2) any trust or other estate in which the person has a substantialbeneficial interest or as to which the person serves as trustee orin a similar fiduciary capacity; and
        (3) any relative or spouse of the person, or any relative of thespouse, who has the same home as the person.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-4
"Beneficial owner" defined
    Sec. 4. As used in this chapter, "beneficial owner", when usedwith respect to any shares, has the meaning set forth inIC 23-1-20-3.5.
As added by P.L.149-1986, SEC.27. Amended by P.L.133-2009,SEC.37.

IC 23-1-43-5
"Business combination" defined
    Sec. 5. As used in this chapter, "business combination", whenused in reference to any resident domestic corporation and anyinterested shareholder of the resident domestic corporation, meansany of the following:
        (1) Any merger of the resident domestic corporation or anysubsidiary of the resident domestic corporation with:            (A) the interested shareholder; or
            (B) any other corporation (whether or not itself an interestedshareholder of the resident domestic corporation) that is, orafter the merger or consolidation would be, an affiliate orassociate of the interested shareholder.
        (2) Any sale, lease, exchange, mortgage, pledge, transfer, orother disposition (in one (1) transaction or a series ortransactions) to or with the interested shareholder or anyaffiliate or associate of the interested shareholder of assets ofthe resident domestic corporation or any subsidiary of theresident domestic corporation:
            (A) having an aggregate market value equal to ten percent(10%) or more of the aggregate market value of all theassets, determined on a consolidated basis, of the residentdomestic corporation;
            (B) having an aggregate market value equal to ten percent(10%) or more of the aggregate market value of all theoutstanding shares of the resident domestic corporation; or
            (C) representing ten percent (10%) or more of the earningpower or net income, determined on a consolidated basis, ofthe resident domestic corporation.
        (3) The issuance or transfer by the resident domesticcorporation or any subsidiary of the resident domesticcorporation (in one (1) transaction or a series of transactions) ofany shares of the resident domestic corporation or anysubsidiary of the resident domestic corporation that have anaggregate market value equal to five percent (5%) or more ofthe aggregate market value of all the outstanding shares of theresident domestic corporation to the interested shareholder orany affiliate or associate of the interested shareholder exceptunder the exercise of warrants or rights to purchase sharesoffered, or a dividend or distribution paid or made, pro rata toall shareholders of the resident domestic corporation.
        (4) The adoption of any plan or proposal for the liquidation ordissolution of the resident domestic corporation proposed by, orunder any agreement, arrangement, or understanding (whetheror not in writing) with, the interested shareholder or anyaffiliate or associate of the interested shareholder.
        (5) Any:
            (A) reclassification of securities (including withoutlimitation any share split, share dividend, or otherdistribution of shares in respect of shares, or any reverseshare split);
            (B) recapitalization of the resident domestic corporation;
            (C) merger or consolidation of the resident domesticcorporation with any subsidiary of the resident domesticcorporation; or
            (D) other transaction (whether or not with or into orotherwise involving the interested shareholder);
        proposed by, or under any agreement, arrangement, or

understanding (whether or not in writing) with, the interestedshareholder or any affiliate or associate of the interestedshareholder, that has the effect (directly or indirectly) ofincreasing the proportionate share of the outstanding shares ofany class or series of voting shares or securities convertible intovoting shares of the resident domestic corporation or anysubsidiary of the resident domestic corporation that is directlyor indirectly owned by the interested shareholder or anyaffiliate or associate of the interested shareholder, except as aresult of immaterial changes due to fractional shareadjustments.
        (6) Any receipt by the interested shareholder or any affiliate orassociate of the interested shareholder of the benefit (directly orindirectly, except proportionately as a shareholder of theresident domestic corporation), of any loans, advances,guarantees, pledges, or other financial assistance or any taxcredits or other tax advantages provided by or through theresident domestic corporation.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-6
"Common shares" defined
    Sec. 6. As used in this chapter, "common shares" means anyshares other than preferred shares.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,SEC.121.

IC 23-1-43-7
"Consummation date" defined
    Sec. 7. As used in this chapter, "consummation date", with respectto any business combination, means the date of consummation of thebusiness combination or, in the case of a business combination as towhich a shareholder vote is taken, the later of:
        (1) the business day before the vote; or
        (2) twenty (20) days before the date of consummation of thebusiness combination.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-8
"Control" defined
    Sec. 8. (a) As used in this chapter, "control", including the terms"controlling", "controlled by", and "under common control with",means the possession (directly or indirectly) of the power to director cause the direction of the management and policies of a person,whether through the ownership of voting securities, by contract, orotherwise.
    (b) A person's beneficial ownership of ten percent (10%) or moreof the voting power of a corporation's outstanding voting sharescreates a presumption that the person has control of the corporation.
    (c) Notwithstanding subsections (a) and (b), a person is not

considered to have control of a corporation if the person holds votingpower, in good faith and not for the purpose of circumventing thischapter, as an agent, bank, broker, nominee, custodian, or trustee forone (1) or more beneficial owners who do not individually or as agroup have control of the corporation.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-9
"Exchange Act" defined
    Sec. 9. As used in this chapter, "Exchange Act" means the Act ofCongress known as the Securities Exchange Act of 1934, asamended.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-10
"Interested shareholder" defined
    Sec. 10. (a) As used in this chapter, "interested shareholder",when used in reference to any resident domestic corporation, meansany person (other than the resident domestic corporation or anysubsidiary of the resident domestic corporation) that is:
        (1) the beneficial owner, directly or indirectly, of ten percent(10%) or more of the voting power of the outstanding votingshares of the resident domestic corporation; or
        (2) an affiliate or associate of the resident domestic corporationand at any time within the five (5) year period immediatelybefore the date in question was the beneficial owner, directly orindirectly, of ten percent (10%) or more of the voting power ofthe then outstanding shares of the resident domesticcorporation.
    (b) For the purpose of determining whether a person is aninterested shareholder, the number of voting shares of the residentdomestic corporation considered to be outstanding includes sharesconsidered to be beneficially owned by the person throughapplication of section 4 of this chapter, but does not include anyother unissued shares of voting shares of the resident domesticcorporation that may be issuable under any agreement, arrangement,or understanding, or upon exercise of conversion rights, warrants oroptions, or otherwise.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-11
"Market value" defined
    Sec. 11. As used in this chapter, "market value", when used inreference to shares or property of any resident domestic corporation,means the following:
        (1) In the case of shares, the highest closing sale price of a shareduring the thirty (30) day period immediately preceding the datein question on the composite tape for New York StockExchange listed shares, or, if the shares are not quoted on thecomposite tape or not listed on the New York Stock Exchange,

on the principal United States securities exchange registeredunder the Exchange Act on which the shares are listed, or, if theshares are not listed on any such exchange, the highest closingbid quotation with respect to a share during the thirty (30) dayperiod preceding the date in question on the NationalAssociation of Securities Dealers, Inc. Automated QuotationsSystem or any system then in use, or if no such quotation isavailable, the fair market value on the date in question of ashare as determined by the board of directors of the residentdomestic corporation in good faith.
        (2) In the case of property other than cash or shares, the fairmarket value of the property on the date in question asdetermined by the board of directors of the resident domesticcorporation in good faith.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-12
"Preferred shares" defined
    Sec. 12. As used in this chapter, "preferred shares" means anyclass or series of shares of a resident domestic corporation that underthe bylaws or articles of incorporation of the resident domesticcorporation:
        (1) is entitled to receive payment of dividends before anypayment of dividends on some other class or series of shares; or
        (2) is entitled in the event of any voluntary liquidation,dissolution, or winding up of the corporation to receive paymentor distribution of a preferential amount before any payments ordistributions are received by some other class or series ofshares.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,SEC.122.

IC 23-1-43-13
"Resident domestic corporation" defined
    Sec. 13. (a) As used in this chapter, "resident domesticcorporation" means a corporation that has one hundred (100) or moreshareholders.
    (b) A resident domestic corporation does not cease to be aresident domestic corporation by reason of events occurring oractions taken while the resident domestic corporation is subject tothis chapter.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-14
"Share" defined
    Sec. 14. As used in this chapter, "share" means:
        (1) any share or similar security, any certificate of interest, anyparticipation in any profit sharing agreement, any voting trustcertificate, or any certificate of deposit for a share; and
        (2) any security convertible, with or without consideration, into

shares, or any warrant, call, or other option or privilege ofbuying shares without being bound to do so, or any othersecurity carrying any right to acquire, subscribe to, or purchaseshares.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-15
"Share acquisition date" defined
    Sec. 15. As used in this chapter, "share acquisition date", withrespect to any person and any resident domestic corporation, meansthe date that the person first becomes an interested shareholder of theresident domestic corporation.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-16
"Subsidiary" defined
    Sec. 16. As used in this chapter, "subsidiary" of any residentdomestic corporation means any other corporation of which amajority of the outstanding voting shares entitled to be cast areowned (directly or indirectly) by the resident domestic corporation.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,SEC.123.

IC 23-1-43-17
"Voting shares" defined
    Sec. 17. As used in this chapter, "voting shares" means shares ofcapital stock of a corporation entitled to vote generally in the electionof directors.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-18
Business combination with interested shareholder within five yearsof share acquisition date
    Sec. 18. (a) Notwithstanding any other provision of this article(except sections 20 through 24 of this chapter), a resident domesticcorporation may not engage in any business combination with anyinterested shareholder of the resident domestic corporation for aperiod of five (5) years following the interested shareholder's shareacquisition date unless the business combination or the purchase ofshares made by the interested shareholder on the interestedshareholder's share acquisition date is approved by the board ofdirectors of the resident domestic corporation before the interestedshareholder's share acquisition date.
    (b) If a good faith proposal regarding a business combination ismade in writing to the board of directors of the resident domesticcorporation, the board of directors shall respond, in writing, withinthirty (30) days or such shorter period, if any, as may be required bythe Exchange Act, setting forth its reasons for its decision regardingthe proposal.
    (c) If a good faith proposal to purchase shares is made in writing

to the board of directors of the resident domestic corporation, theboard of directors, unless it responds affirmatively in writing withinthirty (30) days or such shorter period, if any, as may be required bythe Exchange Act, is considered to have disapproved the sharepurchase.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-19
Business combination with interested shareholder; requirements
    Sec. 19. Notwithstanding any other provision of this article(except sections 18 and 20 through 24 of this chapter), a residentdomestic corporation may not engage at any time in any businesscombination with any interested shareholder of the resident domesticcorporation other than a business combination meeting allrequirements of the articles of incorporation of the domesticcorporation and the requirements specified in any of the following:
        (1) A business combination approved by the board of directorsof the resident domestic corporation before the interestedshareholder's share acquisition date, or as to which the purchaseof shares made by the interested shareholder on the interestedshareholder's share acquisition date had been approved by theboard of directors of the resident domestic corporation beforethe interested shareholder's share acquisition date.
        (2) A business combination approved by the affirmative vote ofthe holders of a majority of the outstanding voting shares notbeneficially owned by the interested shareholder proposing thebusiness combination, or any affiliate or associate of theinterested shareholder proposing the business combination, ata meeting called for that purpose no earlier than five (5) yearsafter the interested shareholder's share acquisition date.
        (3) A business combination that meets all of the followingconditions:
            (A) The aggregate amount of the cash and the market valueas of the consummation date of consideration other than cashto be received per share by holders of outstanding commonshares of the resident domestic corporation in the businesscombination is at least equal to the higher of the following:
                (i) The highest per share price paid by the interestedshareholder, at a time when the interested shareholder wasthe beneficial owner (directly or indirectly) of five percent(5%) or more of the outstanding voting shares of theresident domestic corporation, for any common shares ofthe same class or series acquired by it within the five (5)year period immediately before the announcement datewith respect to the business combination or within the five(5) year period immediately before, or in, the transactionin which the interested shareholder became an interestedshareholder, whichever is higher; plus, in either case,interest compounded annually from the earliest date onwhich the highest per share acquisition price was paid

through the consummation date at the rate for one (1) yearUnited States Treasury obligations from time to time ineffect; less the aggregate amount of any cash dividendspaid, and the market value of any dividends paid otherthan in cash, per common share since the earliest date, upto the amount of the interest.
                (ii) The market value per common share on theannouncement date with respect to the businesscombination or on the interested shareholder's shareacquisition date, whichever is higher; plus interestcompounded annually from that date through theconsummation date at the rate for one (1) year UnitedStates Treasury obligations from time to time in effect;less the aggregate amount of any cash dividends paid, andthe market value of any dividends paid other than in cash,per common share since that date, up to the amount of theinterest.
            (B) The aggregate amount of the cash and the market valueas of the consummation date of consideration other than cashto be received per share by holders of outstanding shares ofany class or series of shares, other than common shares, ofthe resident domestic corporation is at least equal to thehighest of the following (whether or not the interestedshareholder has previously acquired any shares of the classor series of shares):
                (i) The highest per share price paid by the interestedshareholder, at a time when the interested shareholder wasthe beneficial owner (directly or indirectly) of five percent(5%) or more of the outstanding voting shares of theresident domestic corporation, for any shares of the classor series of shares acquired by it within the five (5) yearperiod immediately before the announcement date withrespect to the business combination or within the five (5)year period immediately before, or in, the transaction inwhich the interested shareholder became an interestedshareholder, whichever is higher; plus, in either case,interest compounded annually from the earliest date onwhich the highest per share acquisition price was paidthrough the consummation date at the rate for one (1) yearUnited States Treasury obligations from time to time ineffect; less the aggregate amount of any cash dividendspaid, and the market value of any dividends paid otherthan in cash, per share of the class or series of shares sincethe earliest date, up to the amount of the interest.
                (ii) The highest preferential amount per share to which theholders of shares of the class or series of shares areentitled in the event of any voluntary liquidation,dissolution, or winding up of the resident domesticcorporation, plus the aggregate amount of any dividendsdeclared or due as to which the holders are entitled before

payment of dividends on some other class or series ofshares (unless the aggregate amount of the dividends isincluded in the preferential amount).
                (iii) The market value per share of the class or series ofshares on the announcement date with respect to thebusiness combination or on the interested shareholder'sshare acquisition date, whichever is higher; plus interestcompounded annually from that date through theconsummation date at the rate for one (1) year UnitedStates Treasury obligations from time to time in effect;less the aggregate amount of any cash dividends paid, andthe market value of any dividends paid other than in cash,per share of the class or series of shares since that date, upto the amount of the interest.
            (C) The consideration to be received by holders of aparticular class or series of outstanding shares (includingcommon shares) of the resident domestic corporation in thebusiness combination is in cash or in the same form as theinterested shareholder has used to acquire the largest numberof shares of the class or series of shares previously acquiredby it, and the consideration shall be distributed promptly.
            (D) The holders of all outstanding shares of the residentdomestic corporation not beneficially owned by theinterested shareholder immediately before the consummationof the business combination are entitled to receive in thebusiness combination cash or other consideration for theshares in compliance with clauses (A), (B), and (C).
            (E) After the interested shareholder's share acquisition dateand before the consummation date with respect to thebusiness combination, the interested shareholder has notbecome the beneficial owner of any additional voting sharesof the resident domestic corporation except:
                (i) as part of the transaction that resulted in the interestedshareholder becoming an interested shareholder;
                (ii) by virtue of proportionate share splits, share dividends,or other distributions of shares in respect of shares notconstituting a business combination under section 5(5) ofthis chapter;
                (iii) through a business combination meeting all of theconditions of section 18 of this chapter and this section; or
                (iv) through purchase by the interested shareholder at anyprice that, if the price had been paid in an otherwisepermissible business combination the announcement dateand consummation date of which were the date of thepurchase, would have satisfied the requirements of clauses(A), (B), and (C).
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,SEC.124.

IC 23-1-43-20 Corporation having shares registered under Exchange Act;application of chapter
    Sec. 20. This chapter does not apply to any business combinationof a resident domestic corporation that does not, as of the shareacquisition date, have a class of voting shares registered with theSecurities and Exchange Commission under Section 12 of theExchange Act, unless the corporation's articles of incorporationprovide otherwise.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-21
Amendment of articles of incorporation making corporationsubject to this chapter; application of chapter
    Sec. 21. This chapter does not apply to any business combinationof a resident domestic corporation the articles of incorporation ofwhich have been amended to provide that the resident domesticcorporation is subject to this chapter and that has not had a class ofvoting shares registered with the Securities and ExchangeCommission under Section 12 of the Exchange Act on the effectivedate of the amendment, and that is a business combination with aninterested shareholder whose share acquisition date is before theeffective date of the amendment.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-22
Election not to be covered by this chapter; application of chapter
    Sec. 22. This chapter does not apply to any business combinationof a resident domestic corporation:
        (1) the original articles of incorporation of which contain aprovision expressly electing not to be governed by this chapter;
        (2) that, before the earlier of:
            (A) September 1, 1987; or
            (B) thirty (30) days after the date specified by a resolution ofthe board of directors adopted under IC 23-1-17-3(b), if theboard of directors adopts such a resolution;
        adopts an amendment to the resident domestic corporation'sbylaws expressly electing not to be governed by this chapter;however, an election under this subdivision may be rescindedby subsequent amendment of the bylaws; or
        (3) that adopts an amendment to the resident domesticcorporation's articles of incorporation, approved by theaffirmative vote of the holders, other than interestedshareholders and their affiliates and associates, of a majority ofthe outstanding voting shares of the resident domesticcorporation, excluding the voting shares of interestedshareholders and their affiliates and associates, expresslyelecting not to be governed by this chapter, if the amendment tothe articles of incorporation is not to be effective until eighteen(18) months after the vote of the resident domestic corporation'sshareholders and does not apply to any business combination of

the resident domestic corporation with an interested shareholderwhose share acquisition date is on or before the effective dateof the amendment.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-23
Inadvertent interested shareholder; application of chapter
    Sec. 23. This chapter does not apply to any business combinationof a resident domestic corporation with an interested shareholder ofthe resident domestic corporation who became an interestedshareholder inadvertently, if the interested shareholder:
        (1) as soon as practicable, divests itself of a sufficient amountof the voting shares of the corporation so that it no longer is thebeneficial owner (directly or indirectly) of ten percent (10%) ormore of the outstanding voting shares of the resident domesticcorporation; and
        (2) would not at any time within the five (5) year periodpreceding the announcement date with respect to the businesscombination have been an interested shareholder but for theinadvertent acquisition.
As added by P.L.149-1986, SEC.27.

IC 23-1-43-24
Interested shareholder on January 7, 1986; application of chapter
    Sec. 24. This chapter does not apply to any business combinationwith an interested shareholder who was an interested shareholder onJanuary 7, 1986.
As added by P.L.149-1986, SEC.27.