CHAPTER 7.5. FORMATION OF CERTAIN BANK HOLDING COMPANIES
IC 28-1-7.5
Chapter 7.5. Formation of Certain Bank Holding Companies
IC 28-1-7.5-1
"Holding company" defined
Sec. 1. (a) As used in this chapter, "holding company" refers to acorporation that:
(1) is attempting to acquire all the outstanding shares of a bank,trust company, corporate fiduciary, or stock savings bank underthis chapter; or
(2) has completed such an acquisition;
depending upon the context in which the term is used.
(b) As used in this chapter, "stock savings bank" has the meaningset forth in IC 28-6.1-2-7.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.60; P.L.262-1995, SEC.13.
IC 28-1-7.5-2
Acquisition of bank, trust company, corporate fiduciary, or stocksavings bank by holding company under plan of exchange
Sec. 2. All the outstanding shares of common stock of any bank,trust company, corporate fiduciary, or stock savings bank may beacquired by any corporation organized under IC 23-1 if theacquisition is made under a plan of exchange approved in the mannerprovided in this chapter. Such a plan of exchange must provide for:
(1) the exchange of all the outstanding shares of common stockof the bank, trust company, corporate fiduciary, or stock savingsbank for shares of common stock to be issued by the holdingcompany at the rate of one (1) share of holding company stockfor each share of bank, trust company, corporate fiduciary, orstock savings bank stock; and
(2) the redemption by the holding company, underunconditional rights granted by its articles of incorporation orbylaws or by agreement between the holding company and itsshareholders, of all of the shares of common stock of theholding company that may be outstanding immediately beforethe exchange.
As added by P.L.238-1983, SEC.10. Amended by P.L.149-1986,SEC.62; P.L.122-1994, SEC.61; P.L.262-1995, SEC.14.
IC 28-1-7.5-3
Resolutions approving plan of exchange; contents; direction forsubmission to vote of shareholders
Sec. 3. (a) A bank, trust company, corporate fiduciary, or stocksavings bank and a holding company that desire to effect anexchange of securities must, by resolutions adopted by the board ofdirectors of each corporation, approve a plan of exchange which setsforth:
(1) the names of the holding company and the bank, trustcompany, corporate fiduciary, or stock savings bank; (2) the terms and conditions of the exchange;
(3) the mode of carrying the exchange into effect;
(4) the manner of redemption of all shares of common stock ofthe holding company that may be outstanding immediatelybefore the exchange;
(5) a restatement of such provisions of the articles ofincorporation of the holding company as may be considerednecessary or desirable to give effect to the exchange; and
(6) such other provisions with respect to the exchange as maybe considered necessary or desirable.
(b) The resolution of the board of directors of the bank, trustcompany, corporate fiduciary, or stock savings bank and, if the planof exchange provides for the amendment of the articles ofincorporation of the holding company, the resolution of the board ofdirectors of the holding company, must be submitted to a vote of theshareholders of the corporation, at a meeting of the shareholders. Themeeting may be an annual or a special meeting of the shareholders.If the meeting of any corporation at which the plan is to be submittedis an annual meeting, notice of the submission of the plan must beincluded in the notice of the annual meeting. If the meeting is aspecial meeting, the meeting must be called by the resolutiondesignating the meeting, and notice of the meeting must be given asprovided by law. A copy of the proposed plan of exchange must beincluded with the notice of the annual or special meeting ofshareholders given to each shareholder.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.62; P.L.262-1995, SEC.15.
IC 28-1-7.5-4
Filing plan of exchange and statement disclosing requiredinformation with department
Sec. 4. (a) The bank, trust company, corporate fiduciary, or stocksavings bank and the holding company shall file with the departmentthree (3) copies of the plan of exchange certified by an officer ofeach as having been approved in accordance with section 3 of thischapter. They shall also file a statement which includes:
(1) information as to the earnings and financial condition of thebank, trust company, corporate fiduciary, or stock savings bankas of the end of its last preceding year as filed with thedepartment, and similar information, to the extent readilyavailable, as of a date not earlier than one hundred twenty (120)days before the filing of the plan of exchange;
(2) a balance sheet of the holding company as of the date of themost recent statement of condition of the bank, trust company,corporate fiduciary, or stock savings bank required bysubdivision (1);
(3) a pro forma balance sheet of the holding company based onthe assumption that the plan of exchange was effective asproposed at the date of the balance sheet of the holdingcompany required by subdivision (2); (4) a description of the business intended to be done by theholding company and of any plans or proposals that the holdingcompany may have to sell its assets or merge or consolidatewith any other person, or to make any other material change inits investment policy, business, corporate structures, ormanagement;
(5) a list of all persons who are or who have been selected tobecome directors or officers of the holding company, adescription of their principal occupations, a list of all officesand positions held by them during the past five (5) years, andinformation about whether any of them:
(A) is under indictment for;
(B) has been convicted of; or
(C) has pleaded guilty or nolo contendere to:
a felony involving fraud, deceit, or misrepresentation under thelaws of Indiana or any other jurisdiction.
(6) a description of any plans or proposals that the holdingcompany may have to liquidate the bank, trust company,corporate fiduciary, or stock savings bank to sell its assets ormerge or consolidate it with any person, or to make any othermaterial change in its investment policy, business, corporatestructure, or management;
(7) a copy of a preliminary proxy or information statementprepared for distribution to the shareholders of the bank, trustcompany, corporate fiduciary, or stock savings bank settingforth all material facts relating to the holding company and theproposed plan of exchange; and
(8) such other information as the director may prescribe.
(b) The statement must:
(1) assert the completeness and accuracy of the informationreferred to in subsection (a)(1) through (a)(8); and
(2) be made under oath or affirmation by an officer of the bank,trust company, corporate fiduciary, or stock savings bank andan officer of the holding company.
If any material change occurs in the facts set forth in the statementfiled with the department, an amendment setting forth the change,together with copies of all documents and other material relevant tothe change, shall be filed with the department within five (5)business days after the parties learn of the change.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.63; P.L.262-1995, SEC.16; P.L.213-2007, SEC.36;P.L.217-2007, SEC.34.
IC 28-1-7.5-5
Public hearing; requisites; procedures
Sec. 5. (a) At the time of the filing of a plan of exchange with thedepartment, the bank, trust company, corporate fiduciary, or stocksavings bank may submit a written request asking the department tohold a hearing on the matter. If such a request is submitted, thedepartment shall hold a public hearing upon the fairness of the terms,
conditions, and provisions of the plan of exchange and the proposedissuance and exchange of stock of the holding company for the stockof the bank, trust company, corporate fiduciary, or stock savingsbank. In addition, the department may on its own motion hold sucha public hearing. The shareholders of the bank, the trust company,the corporate fiduciary, and the holding company and any otherinterested party may appear and become a party to the proceeding atany public hearing at which the fairness of the exchange is to bedetermined. The department shall require the bank, trust company,corporate fiduciary, or stock savings bank and the holding companyto produce such evidence as the director considers necessary to thehearing.
(b) The department shall commence any public hearing held underthis section not less than thirty (30) days and not more than onehundred twenty (120) days after the date on which the plan ofexchange is filed with the department. The hearing shall be held atsuch place, date, and time as the department shall specify. Thehearing may be held by any member or members of the department,by the director of the department, by a deputy director of thedepartment, by the supervisor of the department's division of banksand trust companies, or by any employee of the departmentdesignated by the members of the department. At least ten (10) daysbefore the hearing, the applicant shall publish notice of the hearingin a newspaper of general circulation in the county or counties wherethe principal offices of the bank, trust company, corporate fiduciary,or stock savings bank and the holding company are located and in thecounty where the hearing will be held. Written notice of the hearingshall be mailed at least ten (10) days before the hearing by the bank,trust company, corporate fiduciary, or stock savings bank and by theholding company to all of their respective shareholders. All expensesof publication, court reporter fees, department expenses, and hearingroom fees shall be paid by:
(1) the bank, trust company, corporate fiduciary, or stocksavings bank;
(2) the holding company; or
(3) both;
as specified in the plan of exchange.
(c) Except as otherwise provided in this section, the hearing andthe determination made by the department are subject to IC 4-21.5-3.
As added by P.L.238-1983, SEC.10. Amended by P.L.7-1987,SEC.158; P.L.14-1992, SEC.74; P.L.122-1994, SEC.64;P.L.262-1995, SEC.17.
IC 28-1-7.5-6
Approval or disapproval of plan of exchange by department;order; findings of fact; judicial review
Sec. 6. (a) The department shall issue an order approving the planof exchange as delivered to it by the bank, trust company, corporatefiduciary, or stock savings bank and the holding company, includingany modifications to the plan as the board of directors of each
corporation may approve, unless it finds that:
(1) the plan, including any modifications, would adverselyaffect the financial stability or management of the bank, trustcompany, corporate fiduciary, or stock savings bank or thegeneral capacity or intention to continue the safe and soundconduct of the bank, trust company, corporate fiduciary, orstock savings bank;
(2) the terms and conditions of the plan of exchange are unfairand unreasonable to the shareholders of the bank, trustcompany, corporate fiduciary, or stock savings bank; or
(3) the plans or proposals that the holding company has toliquidate the bank, trust company, corporate fiduciary, or stocksavings bank, sell its assets or consolidate or merge it with anyperson, or to make any other material change in its investmentpolicy, business, corporate structure, or management, are unfairand unreasonable to the shareholders of the bank, trustcompany, corporate fiduciary, or stock savings bank and not inthe public interest.
(b) If a hearing is held on the plan of exchange, the departmentshall issue its order approving or disapproving the plan within ninety(90) days of the date of hearing. The department shall include itsfindings of fact in the order. If the department approves the plan, thefindings of fact must include a finding that the terms and conditionsof the plan and of the issuance and exchange of holding companystock for stock of the bank, trust company, corporate fiduciary, orstock savings bank are fair and reasonable to the shareholders of thebank, trust company, corporate fiduciary, or stock savings bank. Anyparty to the proceedings aggrieved by the order is entitled to ajudicial review in accordance with IC 4-21.5-5.
(c) If no hearing is held on the plan of exchange, the departmentshall issue an order approving or disapproving the plan, within ninety(90) days after the date on which the plan of exchange is filed withthe department. The department may issue the order withoutincluding its findings of facts.
As added by P.L.238-1983, SEC.10. Amended by P.L.7-1987,SEC.159; P.L.122-1994, SEC.65; P.L.262-1995, SEC.18.
IC 28-1-7.5-7
Submission of plan of exchange to shareholders; procedures;voting rights; approval; abandonment
Sec. 7. (a) If a plan of exchange is approved by the department,the plan shall be submitted to a vote of the shareholders of the bank,trust company, corporate fiduciary, or stock savings bank and, if thearticles of incorporation of the holding company are to be amendedin the plan, to a vote of the shareholders of the holding company, atthe meeting or meetings of the shareholders directed by theresolutions of the board of directors of the corporation approving theplan of exchange. Each shareholder of the bank, trust company,corporate fiduciary, or stock savings bank shall be provided with acopy of a proxy or information statement setting forth material facts
regarding the holding company and the plan of exchange at the sametime as the shareholder is provided with the notice of the meeting.Three (3) copies of the definitive proxy or information statement,one (1) of which shall be marked to indicate the changes from thepreliminary statement filed under section 4 of this chapter, shall befiled with the department by the bank, trust company, corporatefiduciary, or stock savings bank not later than the date the statementis first sent, given, or delivered to shareholders.
(b) Each outstanding share of the bank, trust company, corporatefiduciary, or stock savings bank and, if the articles of incorporationof the holding company are to be amended in the plan, the holdingcompany, is entitled to one (1) vote, regardless of class, on theapproval of the plan of exchange unless the articles of incorporationin effect at the time of the vote provide for special, conditional, orlimited voting rights, or for no right to vote. The holders of theoutstanding shares of a class of the bank, trust company, corporatefiduciary, or stock savings bank and, if the articles of incorporationof the holding company are to be amended in the plan, the holdingcompany are entitled to vote as a separate class on a proposed planof exchange if the plan would:
(1) increase or decrease the aggregate number of authorizedshares of the class;
(2) effect an exchange or reclassification of all or part of theshares of the class into shares of another class;
(3) effect an exchange or reclassification, or create the right ofexchange, of all or part of the shares of another class into sharesof the class;
(4) change the designation, rights, preferences, or limitations ofall or part of the shares of the class;
(5) change the shares of all or part of the class into a differentnumber of shares of the same class;
(6) create a new class of shares having rights or preferenceswith respect to distributions or to dissolution that are prior,superior, or substantially equal to the shares of the class;
(7) increase the rights, preferences, or number of authorizedshares of any class that, after giving effect to the amendment,have rights or preferences with respect to distributions or todissolution that are prior, superior, or substantially equal to theshares of the class;
(8) limit or deny an existing preemptive right of all or part ofthe shares of the class; or
(9) cancel or otherwise affect rights to distributions ordividends that have accumulated but not yet been declared onall or part of the shares of the class.
(c) The plan of exchange is approved by the shareholders of acorporation when affirmative votes representing at least a majority(or such greater portion as the articles of incorporation may require)of the outstanding shares are received from shareholders entitled tovote on the plan. Notwithstanding shareholder adoption of the planof exchange and at any time before the filing of articles of exchange
with the secretary of state under section 9 of this chapter, the plan ofexchange may be abandoned by a resolution of the board of directorsof the bank, trust company, corporate fiduciary, or stock savingsbank or of the holding company.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.66; P.L.262-1995, SEC.19; P.L.213-2007, SEC.37;P.L.217-2007, SEC.35.
IC 28-1-7.5-8
Dissenting shareholders; demand for payment of value of shares;withdrawal of demand; determination of value; procedures;limitations
Sec. 8. (a) If a shareholder votes in opposition to a plan ofexchange at the meeting at which the plan is adopted by theshareholders, the shareholder may, within thirty (30) days after thedate of the meeting, make written objection to the exchange anddemand that the bank, trust company, corporate fiduciary, or stocksavings bank pay him the value of his shares. If the plan of exchangeis effected, the bank, trust company, corporate fiduciary, or stocksavings bank shall pay to the shareholder, upon surrender of thecertificate or certificates representing his shares, the value of theshares as of the day before the date on which the vote was takenapproving the plan of exchange. Any shareholder failing to makedemand within the thirty (30) day period is bound by the terms of theplan of exchange. Immediately after making such a demand, theshareholder, except as provided in subsection (b), is entitled topayment as provided in this section, ceases to be a shareholder, andis not entitled to vote or to exercise any other rights of a shareholder.
(b) A demand for payment made under subsection (a) may not bewithdrawn unless the bank, trust company, corporate fiduciary, orstock savings bank consents to the withdrawal. With respect to ashareholder who has made a demand for payment, the right of theshareholder to be paid the value of his shares ceases and his status asa shareholder is restored, without prejudice to any corporateproceedings which may have been taken during the interim, and theshares held by the shareholder shall be treated for all purposes as ifno objection and demand had been made by the shareholder, if:
(1) the shareholder's request to withdraw his demand isconsented to by the bank, trust company, corporate fiduciary, orstock savings bank;
(2) the plan of exchange is abandoned;
(3) the shareholders revoke the authority to effect the exchange;
(4) a petition for the determination of value by a court is notfiled within the time provided in this section; or
(5) a court of competent jurisdiction determines that theshareholder is not entitled to the relief provided by this section.
(c) Within ten (10) days after the plan of exchange is effected, thebank, trust company, corporate fiduciary, or stock savings bank shallmail or deliver written notice of the date of that action to eachdissenting shareholder who has made demand under this section. The
bank, trust company, corporate fiduciary, or stock savings bank shalluse the shareholder's address which appears on the corporate records.The notice shall include a written offer to the shareholder to pay forthe shareholder's shares at a specified price considered by thecorporation to be the value of the shares. If within thirty (30) daysafter the date on which the plan of exchange was effected the valueof the shares is agreed upon, the bank, trust company, corporatefiduciary, or stock savings bank shall make payment to theshareholder for the shares. The bank, trust company, corporatefiduciary, or stock savings bank shall make the payment withinninety (90) days after the date on which the plan of exchange waseffected, upon surrender of the certificates representing the shares.Upon payment of the agreed value, the dissenting shareholder ceasesto have any interest in the shares.
(d) If within the period of thirty (30) days a dissenting shareholderand the bank, trust company, corporate fiduciary, or stock savingsbank do not agree, then either the bank, trust company, corporatefiduciary, or stock savings bank or the dissenting shareholder mayfile a petition in a circuit or superior court in the county in this statewhere the principal office of the bank, trust company, corporatefiduciary, or stock savings bank is located requesting that the courtdetermine the value of the shares. However, such a petition must befiled within ninety (90) days after the date on which the plan ofexchange was effected.
(e) The court shall render judgment against the bank, trustcompany, corporate fiduciary, or stock savings bank for payment ofan amount equal to the value of each dissenting share multiplied bythe number of dissenting shares that any dissenting shareholder whois a party is entitled to require the bank, trust company, corporatefiduciary, or stock savings bank to purchase. The judgment ispayable only upon the endorsement and delivery to the bank, trustcompany, corporate fiduciary, or stock savings bank of thecertificates for the shares described in the judgment. Any party mayappeal from the judgment.
(f) Within twenty (20) days after payment is demanded for ashareholder's shares, the shareholder shall submit the certificates tothe bank, trust company, corporate fiduciary, or stock savings bankfor notation on the certificates that demand for payment has beenmade. The failure of the shareholder to do so, at the option of thebank, trust company, corporate fiduciary, or stock savings bank,terminates the shareholder's rights under this section unless a court,for good and sufficient cause shown, otherwise directs. If shares aretransferred, each new certificate issued for those shares shall bear anotation, together with the name of the original dissenting holder ofthe shares, and a transferee of the shares acquires by the transfer norights in the bank, trust company, corporate fiduciary, or stocksavings bank other than those which the original dissentingshareholder had after making demand for payment of the value of theshares.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,
SEC.67; P.L.262-1995, SEC.20.
IC 28-1-7.5-9
Articles of exchange; requisites; filing; certificate of exchange;issuance; effectiveness of plan
Sec. 9. (a) After the plan of exchange is approved by shareholdersof the bank, trust company, corporate fiduciary, or stock savingsbank and, if required, by the shareholders of the holding company,and unless the plan of exchange is subsequently abandoned, thebank, trust company, corporate fiduciary, or stock savings bank andthe holding company shall prepare articles of exchange setting forth:
(1) the plan of exchange;
(2) the manner of the approval of the plan by the directors of theholding company and the bank, trust company, corporatefiduciary, or stock savings bank;
(3) the manner of its adoption and the vote by which adopted bythe shareholders; and
(4) the fact that the plan of exchange has been approved by thedepartment.
(b) The articles of exchange shall be signed under oath on behalfof each corporation. The articles of exchange shall be filed with thedepartment. The department shall, if it approves the articles ofexchange, endorse its approval on all copies and file them with thesecretary of state. The secretary of state shall endorse the approvalof the secretary of state on each of the copies and keep one (1) copyof the articles of exchange, issue a certificate of exchange, anddeliver the remaining copies to the holding company.
(c) The plan of exchange becomes effective upon the issuance ofthe certificate of exchange by the secretary of state, unless a laterdate is specified.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.68; P.L.262-1995, SEC.21.
IC 28-1-7.5-10
Plan of exchange; consummation by operation of law; effect
Sec. 10. At the time that the plan of exchange becomes effective:
(1) each shareholder ceases to be a shareholder of the bank,trust company, corporate fiduciary, or stock savings bank;
(2) the ownership of all shares of the issued and outstandingcommon stock of the bank, trust company, corporate fiduciary,or stock savings bank (except shares for which payment ofvalue is required to be made under section 8 of this chapter)vest in the holding company automatically without any physicaltransfer or deposit of certificates representing those shares;
(3) the articles of incorporation of the holding company areamended to the extent that any provisions of those articles arerestated in the plan of exchange;
(4) the holding company becomes the sole holder of thecommon stock of the bank, trust company, corporate fiduciary,or stock savings bank and has all of the rights, privileges,
immunities and powers, and (except as otherwise provided inthis chapter) is subject to all of the duties and liabilities, of ashareholder of a bank, trust company, corporate fiduciary, orstock savings bank; and
(5) depending upon which option is provided for in the plan ofexchange, certificates representing shares of common stock ofthe bank and trust company or corporate fiduciary (exceptshares for which payment of value is required to be made undersection 8 of this chapter) become certificates representing eithershares of the issued and outstanding common stock of theholding company, or the right to receive shares of stock issuedby the holding company upon such terms as are specified in theplan of exchange.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.69; P.L.262-1995, SEC.22.
IC 28-1-7.5-11
Redemption by holding company of its outstanding common stock
Sec. 11. Within thirty (30) days after the plan of exchangebecomes effective, the holding company shall redeem all shares ofcommon stock of the holding company that were outstandingimmediately before the effective time of the exchange. The holdingcompany shall redeem the shares in the manner provided in the planof exchange.
As added by P.L.238-1983, SEC.10.
IC 28-1-7.5-12
Separate and distinct corporations; effect upon liability
Sec. 12. The bank, trust company, corporate fiduciary, or stocksavings bank and the holding company are separate and distinctcorporations. Notwithstanding any acts or omissions of the officers,directors, or shareholders of the corporations, neither of thecorporations has any liability to the creditors, depositors, orshareholders of the other.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.70; P.L.262-1995, SEC.23.
IC 28-1-7.5-13
Exemption from requirements of IC 28-1-2-23
Sec. 13. An acquisition by a holding company of control of abank, trust company, corporate fiduciary, or stock savings bank isexempt from the requirements of IC 28-1-2-23 if the acquisition ismade under this chapter.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.71; P.L.262-1995, SEC.24.
IC 28-1-7.5-14
Acquisition under other lawful procedures unaffected
Sec. 14. This chapter does not prohibit the acquisition by aholding company of shares of stock of a bank, trust company,
corporate fiduciary, or stock savings bank under any other procedurethat may be authorized by law, under voluntary exchange, or underan agreement with shareholders.
As added by P.L.238-1983, SEC.10. Amended by P.L.122-1994,SEC.72; P.L.262-1995, SEC.25.
IC 28-1-7.5-15
Limitations of IC 28-2-14 unaffected
Sec. 15. This chapter does not affect the limitations imposed onbank holding companies by IC 28-2-14.
As added by P.L.238-1983, SEC.10. Amended by P.L.19-1986,SEC.48.