IC 23-2-3.1-0.5 Legislative finding; purpose
Sec. 0.5. (a) The general assembly finds that it is often difficult
for corporate shareholders to obtain sufficient information to make
an informed and timely decision when faced with the questions of
accepting or rejecting a takeover offer. Moreover, there have
emerged a number of practices which have resulted in shareholders
of Indiana corporations losing the benefits of takeover offers because
they lacked the sophistication and ability to secure those benefits.
These practices have included multiple proration pools, two-step
transactions and similar practices, and have resulted in relatively
small shareholders losing both the advantages of the takeover offer
and their equity positions in the corporation.
(b) By enacting this chapter, it is the intent and purpose of the
general assembly to provide for full and fair disclosure of all material
information concerning takeover offers to shareholders of Indiana
corporations, so that the opportunity of each shareholder to make an
informed and well-reasoned investment decision may be secured. It
is also the purpose of the general assembly to protect shareholders of
Indiana corporations from being disadvantaged by those practices
described in subsection (a). Finally, it is the purpose of the general
assembly to provide for adequate disclosure and that protection in a
manner consistent with the Constitutions of the United States and of
Indiana. As added by Acts 1981, P.L.215, SEC.1. Amended by P.L.242-1983,
SEC.1.
IC 23-2-3.1-1 Definitions
Sec. 1. As used in this chapter:
"Affiliate" means any person controlling, controlled by, or under
the common control of another person.
"Beneficial owner of a security" means any person who, directly
or indirectly, has the power to vote or direct the voting of all or part
of the voting rights of the security, or has the power to dispose of or
direct the disposition of the security.
"Commissioner" means the securities commissioner as defined in
IC 23-19-1-2(4).
"Control" means possession, direct or indirect, of the power to
direct or to cause the direction of the management and policies of a
person, through the ownership of voting securities, by contract other
than a commercial contract for goods or nonmanagement services, or
otherwise, unless that power is the result of an official position or
corporate office. The term includes "controlling", "controlled by",
and "under common control with." Control is presumed to exist if
any person is the beneficial owner of ten percent (10%) or more of
any class of the voting securities of any other person. This
presumption may be rebutted only by a showing that control does not
exist in fact, at a hearing pursuant to section 9 of this chapter.
"Equity security" means:
(1) any share or similar security carrying, at the time of the
takeover offer, the right to vote on any matter by virtue of the
articles of incorporation, bylaws, or governing instrument of the
target company or the right to vote for directors or persons
performing substantially similar functions by operation of law;
(2) any security convertible into a security described in
subdivision (1) or any warrant or right to purchase that security;
or
(3) any other security which, for the protection of investors, is
an equity security pursuant to a regulation of the commissioner.
"Offeror" means a person who makes or in any way participates
in making a takeover offer. The term includes all affiliates of that
person and all persons who act jointly or in concert with that person
for the purpose of acquiring, holding, or disposing of, or exercising
any voting rights attached to, the equity securities of a target
company. It also includes the target company with respect to
acquisitions of its own equity securities and with respect to periods
of time when it is controlled by or under common control with the
offeror. It does not include a financial institution or broker-dealer
loaning funds or extending credit to any offeror in the ordinary
course of its business, or any accountant, attorney, financial
institution, broker-dealer, newspaper or magazine of general
circulation, consultant, or other person furnishing information,
services, or advice to or performing ministerial or administrative
duties for an offeror and not otherwise participating in the takeover
offer.
"Offeree" means a record or beneficial owner of equity securities
of the class which an offeror acquires or offers to acquire in
connection with a takeover offer.
"Person" means an individual, corporation, limited liability
company, association, partnership, trust, or other entity.
"Substantially equivalent terms" means terms under which the fair
market value of the consideration offered any offeree of a class of
equity securities of the target company (determined on a per share or
a per unit basis) are equal to the highest consideration offered in
connection with a takeover offer to any other offeree of that class
(determined on a per share or per unit basis).
"Takeover offer" means an offer to acquire or an acquisition of
any equity security of a target company, pursuant to a tender offer or
request or invitation for tenders, if, after the acquisition, the offeror
is directly or indirectly a record or beneficial owner of more than ten
percent (10%) of any class of the outstanding equity securities of the
target company.
"Target company" means an issuer of securities which is
organized under the laws of this state, has its principal place of
business in this state, and has substantial assets in this state. Target
company does not include:
(1) a financial institution subject to regulation by the
department of financial institutions under IC 28, if the takeover
offer is subject to approval by the department of financial
institutions;
(2) a corporation subject to regulation by the utility regulatory
commission under IC 8, if the takeover offer is subject to
approval of the commission; or
(3) a public utility, public utility holding company, bank
holding company, or savings association subject to regulation
by a federal agency, if the takeover offer is subject to the
approval by that federal agency. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.2; P.L.242-1983, SEC.2; P.L.23-1988, SEC.111;
P.L.8-1993, SEC.311; P.L.79-1998, SEC.21; P.L.27-2007, SEC.13.
IC 23-2-3.1-2 Compliance with designated sections
Sec. 2. A person shall not make a takeover offer unless the offer
is in compliance with sections 3, 4, 5.5, 6.5, 7, and 8 of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.3; P.L.242-1983, SEC.3; P.L.229-1989, SEC.1.
IC 23-2-3.1-3 Statement; filing with commissioner; copy to target company
Sec. 3. Any offeror, before making a takeover offer, shall:
(1) file any required statements with the commissioner in
compliance with sections 5 and 5.5 of this chapter; and
(2) not later than the filing date of the statements, deliver a copy
of each statement to the president of the target company at its
principal office. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.2.
IC 23-2-3.1-4 Statement; consent to service of process; filing fee
Sec. 4. Each statement required under section 5 or 5.5 of this
chapter must be accompanied by:
(1) a consent of the offeror to service of process specified in
IC 23-19-6-11; and
(2) a filing fee of seven hundred fifty dollars ($750). As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.3; P.L.27-2007, SEC.14.
IC 23-2-3.1-5 Contents of statement; document prepared under federal law
Sec. 5. (a) If the takeover offer is subject to any federal law,
including the Securities Exchange Act of 1934 (15 U.S.C. 78), the
statement must consist of one (1) copy of each document required to
be filed with the Securities and Exchange Commission or any other
federal agency.
(b) If the takeover offer is not subject to any requirement of
federal law, the statement must be filed on forms prescribed by the
commissioner and contain the following information:
(1) The identity of and material information concerning the
offeror, including:
(A) if the offeror is a corporation:
(i) information concerning its organization, including the
year and jurisdiction of its organization;
(ii) a description of each class of its capital stock and
long-term debt;
(iii) a description of the business done by the offeror and
its affiliates and any material changes of its business
during the past three (3) years;
(iv) a description of the location and character of the
principal properties of the offeror and its affiliates;
(v) a description of any material pending legal or
administrative proceedings in which the offeror or any of
its affiliates is a party;
(vi) the names of all directors and executive officers of the
offeror and their material business activities and
affiliations during the past three (3) years; and
(vii) audited financial statements of the offeror and its
affiliates for its three (3) most recent annual accounting
periods and interim financial statements for any current
period; and
(B) if the offeror is not a corporation:
(i) information concerning the background of the person,
including the person's material business activities and
affiliations during the past three (3) years; and
(ii) a description of any material pending legal or
administrative proceeding in which the person is a party.
(2) The source and amount of funds or other consideration used
or to be used in acquiring any equity security, including:
(A) a statement describing any securities being offered in
exchange for the equity securities of the target company; and
(B) if any part of the acquisition price is or will be
represented by borrowed funds or other consideration, a
description of the transaction and the names of all the
parties.
(3) If the purpose of the acquisition is to gain control of the
target company, a statement of any plans or proposals or
negotiations with respect to the acquisition which the offeror
has upon gaining control to:
(A) liquidate the target company;
(B) sell its assets;
(C) effect its merger or consolidation; or
(D) make any other major change in its business, corporate
structure, management or personnel.
(4) The number of shares or units of any equity security of the
target company of which each offeror is the record or beneficial
owner or which the offeror has a right to acquire, directly or
indirectly.
(5) Information as to any contracts, arrangements,
understandings, or negotiations with any person concerning any
equity security of the target company, including:
(A) transfers of any equity security, joint ventures, loan or
option arrangements, puts and calls, guarantees of loan,
guarantees against loss, guarantees of profits, division of
losses or profits; or
(B) the giving or withholding of proxies;
naming the persons with whom those contracts, arrangements, or
understandings have been entered into.
(6) Information as to any contracts, arrangements,
understandings, or negotiations, with any officer, director,
administrator, manager, executive employee, or record or
beneficial owner of equity securities of the target company with
respect to the tender of any equity securities of the target
company, the purchase by the offeror of any equity securities
owned by that person otherwise than pursuant to the takeover
offer, the retention of any person in the person's present
position or in any other management position or with respect to
that person giving or withholding a favorable recommendation
to the takeover offer.
(7) A description of the provisions made or to be made for
providing all material information concerning the takeover offer
to the offerees, including a description of the proposed takeover
offer in the form proposed to be published or sent the offerees
initially disclosing the takeover offer.
(8) Any other information which the commissioner prescribes
by rule.
(c) In addition to information required under subsection (a) or (b),
a statement filed under this section must include the following
information:
(1) A description of any contract between the offeror and a
government (other than the United States, a state of the United
States, a commonwealth or possession of the United States, a
government in free association with the United States, or a
political subdivision of a state) executed during the three (3)
years preceding the date of the filing of the statement.
(2) A description of any subsidy received by the offeror from a
goverment described in subdivision (1) during the three (3)
years preceding the date of the filing of the statement.
(3) A list of any offices or appointments held under a
government described in subdivision (1) by the offeror if the
offeror is an individual, or by a member of the board of
directors or principal officer if the offeror is a corporation. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.4.
IC 23-2-3.1-5.5 Definitions; application of section
Sec. 5.5. (a) The definitions in IC 23-1-20 apply to this section,
except to the extent of any conflict with section 1 of this chapter.
(b) This section applies to:
(1) a foreign corporation incorporated under a law other than
the law of the United States or any state of the United States (as
defined in IC 1-1-4-1); or
(2) a person who is not a citizen of the United States.
(c) This section does not apply to the initiation of a new business
in Indiana by a person subject to this section.
(d) Notwithstanding any other provision of this title, a person
subject to this section may not make a takeover offer unless the
person files a statement with the commissioner under this subsection.
(e) The statement filed under subsection (d) must state the
following:
(1) The financial sources to be used by the person in the
takeover offer.
(2) The proposed consummation date of the takeover. As added by P.L.229-1989, SEC.5.
IC 23-2-3.1-6
Repealed
(Repealed by Acts 1981, P.L.215, SEC.11.)
IC 23-2-3.1-6.5 Terms of offer; requisites; number of offerees
Sec. 6.5. No takeover offer may be made which is not made to all
offerees holding the same class of equity securities of the target
company on substantially equivalent terms. A takeover offer to
purchase less than any or all equity securities of the same class of the
outstanding equity securities of the target company is not considered
as having been made to all offerees of that class on substantially
equivalent terms if the pro rata portion of equity securities of that
class tendered by any offeree which will be accepted by the offeror
is not equal to the highest pro rata portion of equity securities of that
class tendered by any other offeree which will be accepted by the
offeror. A takeover offer permitting offerees to elect to receive one
(1) or more differing kinds of consideration is not considered as
having been made to all offerees holding the same class of equity
securities of the target company on substantially equivalent terms if
proration occurs and the pro rata share of any one (1) or more
differing kinds of consideration which is allocable to any offeree is
not equal to the highest pro rata share allocable to any other offeree. As added by P.L.242-1983, SEC.4.
IC 23-2-3.1-7 Hearing; findings and order; notices; expenses; right to appear;
insurance companies
Sec. 7. (a) A hearing shall be held at any time within twenty (20)
business days after the required statements under sections 5 and 5.5
of this chapter are filed. If, following the hearing, and within twenty
(20) business days after a statement is filed, the commissioner finds
by a preponderance of the evidence that:
(1) the takeover statement fails to provide full and fair
disclosure to the offerees of all material information concerning
the takeover offer; or
(2) the takeover offer is not made to all offerees of the same
class of equity securities of the target company on substantially
equivalent terms; the commissioner shall by order prohibit the
purchase of shares tendered in response to the takeover offer or
condition purchase upon changes or modifications.
(b) At least five (5) days notice shall be given to the target
company, the offeror, and such other persons as the commissioner
may designate that a hearing will be held under this section.
(c) The expenses, including the cost of transcripts, of all hearings
held under this section shall be borne by the offeror. As security for
the payment of the expenses, the offeror shall file with the
commissioner an acceptable bond or other deposit in an amount
determined by the commissioner.
(d) The target company, the offeror, any offeree, and any other
person whose interests may be affected have the right to appear at
any hearing held pursuant to this chapter and to become a party to the
proceeding. Each such person has the right to present evidence,
examine and cross-examine witnesses, offer oral written arguments
and, in connection with the proceeding may conduct discovery
proceedings in the manner provided in the Indiana Rules of Trial
Procedure. The commissioner may employ any sanction or power
granted courts in the Indiana Rules of Trial Procedure, excluding the
power of contempt, to enforce the commissioner's discovery rulings
or orders.
(e) In the case of a takeover offer subject to the approval of the
insurance commissioner, the offeror within five (5) days after the
statement is filed shall mail a notice to all offerees of the target
company advising the offerees of the general terms and conditions of
the takeover offer and the date of the hearing at which they may
appear. No shares shall be tendered, or purchased by the offeror,
until after approval by both the securities commissioner and the
insurance commissioner. All expenses of notifying the offerees shall
be borne by the offeror. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.4; P.L.242-1983, SEC.5; P.L.229-1989, SEC.6.
IC 23-2-3.1-8 Purchase of shares; prohibition
Sec. 8. No shares shall be purchased or paid for pursuant to a
takeover offer within the first twenty (20) business days after the
offer is made. No shares shall be purchased or paid for in violation
of any order of the commissioner. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.5. IC 23-2-3.1-8.4 Subsequent acquisition of equity securities by offeror; equivalent
terms; limitation
Sec. 8.4. No offeror may acquire in any manner any equity
security of any class of a target company at any time within two (2)
years following the conclusion of a takeover offer with respect to
that class, including but not limited to acquisitions made by
purchase, exchange, merger, consolidation, partial or complete
liquidation, redemption, reverse stock split, and any other
recapitalization or reorganization, unless the holder of that equity
security is also afforded, at the time of that acquisition, a reasonable
opportunity to dispose of that security to the offeror upon
substantially equivalent terms. As added by P.L.242-1983, SEC.6.
IC 23-2-3.1-8.5 Statements of material fact; omissions; false or misleading
statements; fraudulent, deceptive, or manipulative acts
Sec. 8.5. In connection with any takeover offer, or any solicitation
of offerees in opposition to or in favor of any takeover offer, it is
unlawful for any person to make any untrue statement of a material
fact or to omit to state any material fact necessary in order to make
the statements made, in the light of the circumstances under which
they are made, not misleading, or to engage in any fraudulent,
deceptive, or manipulative acts or practices. As added by Acts 1981, P.L.215, SEC.6.
IC 23-2-3.1-8.6 Exempt acquisitions; notice and hearing to precede order
Sec. 8.6. (a) The provisions of sections 2 through 7 of this chapter
do not apply to the following:
(1) An acquisition by an offeror, if the instant transaction and
all acquisitions of equity securities of the same class during the
preceding twelve (12) months by the offeror or any of its
affiliates do not exceed two percent (2%) of that class.
(2) An acquisition of equity securities of a target company
having seventy-five (75) or fewer holders of record of equity
securities at the time of the takeover offer.
(3) An acquisition determined by order of the commissioner to
be a takeover offer that is not made for the purpose of, and not
having the effect of, changing or influencing the control of a
target company.
(b) An order may only be adopted under subsection (a)(3) of this
section after a hearing. Not less than five (5) business days' notice of
a hearing must be given to the target company, the offeror, and such
other persons as the commissioner may designate.
(c) The burden of establishing entitlement to any exemption is on
the offeror. As added by Acts 1981, P.L.215, SEC.7. Amended by P.L.242-1983,
SEC.7. IC 23-2-3.1-9 Administration of chapter; regulations; immunity
Sec. 9. (a) This chapter shall be administered by the secretary of
state of Indiana by and through the commissioner, who may exercise
all powers granted to the commissioner under IC 23-19.
(b) Subject to the approval of the secretary of state, the
commissioner may promulgate regulations necessary to carry out the
purposes of this chapter under IC 4-22-2.
(c) Neither the secretary of state, nor the securities commissioner,
nor any employee of the securities division, shall be liable in their
individual capacity, except to the state of Indiana, for any act done
or omitted in connection with the performance of their respective
duties under the provisions of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.8; P.L.27-2007, SEC.15.
IC 23-2-3.1-10 Cease and desist orders; injunctions; subpoenas; production of
books and papers
Sec. 10. (a) Whenever it appears to the commissioner that any
person has engaged or is about to engage in any act or practice
constituting a violation of any provision of this chapter or any
regulation or order adopted under this chapter, the commissioner may
investigate and issue orders and notices, including ex parte cease and
desist orders without notice. In addition to all other remedies, he may
bring an action in any circuit or superior court in the name and on
behalf of the state of Indiana against any person or persons
participating in or about to participate in a violation of this chapter
to enjoin those persons from continuing or doing any act in violation
of this chapter or to enforce compliance with this chapter. In any
court proceedings, the commissioner may apply for and on due
showing be entitled to have issued the court's subpoena requiring:
(1) the appearance of any defendant or his employees or agents
to testify and give evidence concerning the acts or conduct or
things complained of; or
(2) the production of documents, books and records;
as may appear necessary for the hearing of the petition.
(b) Whenever any person has engaged or is about to engage in any
act or practice constituting a violation of this chapter or any
regulation or order adopted under this chapter, the offeror, target
company or any record or beneficial owner of an equity security of
the target company may bring an action in the circuit or superior
court of the county where the target company has its principal office
or Marion County to enjoin that person from continuing or doing any
act in violation of this chapter or to enforce compliance with this
chapter.
(c) Upon a proper showing, the court may grant a permanent or
preliminary injunction or temporary restraining order or may order
rescission of any sales, tenders for sale, purchases or tenders for
purchase of equity securities determined to be unlawful under this
chapter or any regulation or order of the commissioner. The court
may not require the commissioner to post a bond. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.9.
IC 23-2-3.1-11 Appeal; notice; transcript; disposition on appeal
Sec. 11. An appeal may be taken by any offeror, target company,
or other party to any proceeding before the commissioner from any
final order of the commissioner to the court of appeals for errors of
law under the same terms and conditions as govern appeals in
ordinary civil actions, except as otherwise provided in this section.
An assignment of errors that the decision, ruling, or order of the
commissioner is contrary to law is sufficient to present both the
sufficiency of the facts found to sustain the decision, ruling, or order,
and the sufficiency of the evidence to sustain the findings of facts
upon which it was rendered. Within twenty (20) days from the entry
of an order, the commissioner shall be served with a written notice
of the appeal which states the grounds upon which a reversal of the
final order is sought and with a demand in writing for a certified
transcript of the record and of all papers on file in the commissioner's
office affecting or relating to that order. The commissioner shall
within twenty (20) days after service of the notice of appeal make,
certify, and deliver to the appellant the transcript. The appellant
shall, within five (5) days after the receipt of the transcript, file the
transcript and a copy of the notice of appeal with the clerk of the
court. The notice of appeal shall stand as the appellant's assignment
of errors. If the order of the commissioner is reversed, the court shall
direct the commissioner's further action in the matter, including the
making and entering of any order and the conditions, limitations, or
restrictions to be contained in the order. However, the commissioner
is not barred from later revoking or altering the order for any proper
cause which may later accrue or be discovered. If the order is
affirmed, the appellant may file a new disclosure statement after
thirty (30) days from the ruling of the court of appeals if the
disclosure statement is not otherwise barred or limited. The appeal
does not suspend the operation of the order appealed from during the
pendency of the appeal unless upon proper order of the court. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.10; P.L.3-1989, SEC.138.
IC 23-2-3.1-0.5 Legislative finding; purpose
Sec. 0.5. (a) The general assembly finds that it is often difficult
for corporate shareholders to obtain sufficient information to make
an informed and timely decision when faced with the questions of
accepting or rejecting a takeover offer. Moreover, there have
emerged a number of practices which have resulted in shareholders
of Indiana corporations losing the benefits of takeover offers because
they lacked the sophistication and ability to secure those benefits.
These practices have included multiple proration pools, two-step
transactions and similar practices, and have resulted in relatively
small shareholders losing both the advantages of the takeover offer
and their equity positions in the corporation.
(b) By enacting this chapter, it is the intent and purpose of the
general assembly to provide for full and fair disclosure of all material
information concerning takeover offers to shareholders of Indiana
corporations, so that the opportunity of each shareholder to make an
informed and well-reasoned investment decision may be secured. It
is also the purpose of the general assembly to protect shareholders of
Indiana corporations from being disadvantaged by those practices
described in subsection (a). Finally, it is the purpose of the general
assembly to provide for adequate disclosure and that protection in a
manner consistent with the Constitutions of the United States and of
Indiana. As added by Acts 1981, P.L.215, SEC.1. Amended by P.L.242-1983,
SEC.1.
IC 23-2-3.1-1 Definitions
Sec. 1. As used in this chapter:
"Affiliate" means any person controlling, controlled by, or under
the common control of another person.
"Beneficial owner of a security" means any person who, directly
or indirectly, has the power to vote or direct the voting of all or part
of the voting rights of the security, or has the power to dispose of or
direct the disposition of the security.
"Commissioner" means the securities commissioner as defined in
IC 23-19-1-2(4).
"Control" means possession, direct or indirect, of the power to
direct or to cause the direction of the management and policies of a
person, through the ownership of voting securities, by contract other
than a commercial contract for goods or nonmanagement services, or
otherwise, unless that power is the result of an official position or
corporate office. The term includes "controlling", "controlled by",
and "under common control with." Control is presumed to exist if
any person is the beneficial owner of ten percent (10%) or more of
any class of the voting securities of any other person. This
presumption may be rebutted only by a showing that control does not
exist in fact, at a hearing pursuant to section 9 of this chapter.
"Equity security" means:
(1) any share or similar security carrying, at the time of the
takeover offer, the right to vote on any matter by virtue of the
articles of incorporation, bylaws, or governing instrument of the
target company or the right to vote for directors or persons
performing substantially similar functions by operation of law;
(2) any security convertible into a security described in
subdivision (1) or any warrant or right to purchase that security;
or
(3) any other security which, for the protection of investors, is
an equity security pursuant to a regulation of the commissioner.
"Offeror" means a person who makes or in any way participates
in making a takeover offer. The term includes all affiliates of that
person and all persons who act jointly or in concert with that person
for the purpose of acquiring, holding, or disposing of, or exercising
any voting rights attached to, the equity securities of a target
company. It also includes the target company with respect to
acquisitions of its own equity securities and with respect to periods
of time when it is controlled by or under common control with the
offeror. It does not include a financial institution or broker-dealer
loaning funds or extending credit to any offeror in the ordinary
course of its business, or any accountant, attorney, financial
institution, broker-dealer, newspaper or magazine of general
circulation, consultant, or other person furnishing information,
services, or advice to or performing ministerial or administrative
duties for an offeror and not otherwise participating in the takeover
offer.
"Offeree" means a record or beneficial owner of equity securities
of the class which an offeror acquires or offers to acquire in
connection with a takeover offer.
"Person" means an individual, corporation, limited liability
company, association, partnership, trust, or other entity.
"Substantially equivalent terms" means terms under which the fair
market value of the consideration offered any offeree of a class of
equity securities of the target company (determined on a per share or
a per unit basis) are equal to the highest consideration offered in
connection with a takeover offer to any other offeree of that class
(determined on a per share or per unit basis).
"Takeover offer" means an offer to acquire or an acquisition of
any equity security of a target company, pursuant to a tender offer or
request or invitation for tenders, if, after the acquisition, the offeror
is directly or indirectly a record or beneficial owner of more than ten
percent (10%) of any class of the outstanding equity securities of the
target company.
"Target company" means an issuer of securities which is
organized under the laws of this state, has its principal place of
business in this state, and has substantial assets in this state. Target
company does not include:
(1) a financial institution subject to regulation by the
department of financial institutions under IC 28, if the takeover
offer is subject to approval by the department of financial
institutions;
(2) a corporation subject to regulation by the utility regulatory
commission under IC 8, if the takeover offer is subject to
approval of the commission; or
(3) a public utility, public utility holding company, bank
holding company, or savings association subject to regulation
by a federal agency, if the takeover offer is subject to the
approval by that federal agency. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.2; P.L.242-1983, SEC.2; P.L.23-1988, SEC.111;
P.L.8-1993, SEC.311; P.L.79-1998, SEC.21; P.L.27-2007, SEC.13.
IC 23-2-3.1-2 Compliance with designated sections
Sec. 2. A person shall not make a takeover offer unless the offer
is in compliance with sections 3, 4, 5.5, 6.5, 7, and 8 of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.3; P.L.242-1983, SEC.3; P.L.229-1989, SEC.1.
IC 23-2-3.1-3 Statement; filing with commissioner; copy to target company
Sec. 3. Any offeror, before making a takeover offer, shall:
(1) file any required statements with the commissioner in
compliance with sections 5 and 5.5 of this chapter; and
(2) not later than the filing date of the statements, deliver a copy
of each statement to the president of the target company at its
principal office. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.2.
IC 23-2-3.1-4 Statement; consent to service of process; filing fee
Sec. 4. Each statement required under section 5 or 5.5 of this
chapter must be accompanied by:
(1) a consent of the offeror to service of process specified in
IC 23-19-6-11; and
(2) a filing fee of seven hundred fifty dollars ($750). As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.3; P.L.27-2007, SEC.14.
IC 23-2-3.1-5 Contents of statement; document prepared under federal law
Sec. 5. (a) If the takeover offer is subject to any federal law,
including the Securities Exchange Act of 1934 (15 U.S.C. 78), the
statement must consist of one (1) copy of each document required to
be filed with the Securities and Exchange Commission or any other
federal agency.
(b) If the takeover offer is not subject to any requirement of
federal law, the statement must be filed on forms prescribed by the
commissioner and contain the following information:
(1) The identity of and material information concerning the
offeror, including:
(A) if the offeror is a corporation:
(i) information concerning its organization, including the
year and jurisdiction of its organization;
(ii) a description of each class of its capital stock and
long-term debt;
(iii) a description of the business done by the offeror and
its affiliates and any material changes of its business
during the past three (3) years;
(iv) a description of the location and character of the
principal properties of the offeror and its affiliates;
(v) a description of any material pending legal or
administrative proceedings in which the offeror or any of
its affiliates is a party;
(vi) the names of all directors and executive officers of the
offeror and their material business activities and
affiliations during the past three (3) years; and
(vii) audited financial statements of the offeror and its
affiliates for its three (3) most recent annual accounting
periods and interim financial statements for any current
period; and
(B) if the offeror is not a corporation:
(i) information concerning the background of the person,
including the person's material business activities and
affiliations during the past three (3) years; and
(ii) a description of any material pending legal or
administrative proceeding in which the person is a party.
(2) The source and amount of funds or other consideration used
or to be used in acquiring any equity security, including:
(A) a statement describing any securities being offered in
exchange for the equity securities of the target company; and
(B) if any part of the acquisition price is or will be
represented by borrowed funds or other consideration, a
description of the transaction and the names of all the
parties.
(3) If the purpose of the acquisition is to gain control of the
target company, a statement of any plans or proposals or
negotiations with respect to the acquisition which the offeror
has upon gaining control to:
(A) liquidate the target company;
(B) sell its assets;
(C) effect its merger or consolidation; or
(D) make any other major change in its business, corporate
structure, management or personnel.
(4) The number of shares or units of any equity security of the
target company of which each offeror is the record or beneficial
owner or which the offeror has a right to acquire, directly or
indirectly.
(5) Information as to any contracts, arrangements,
understandings, or negotiations with any person concerning any
equity security of the target company, including:
(A) transfers of any equity security, joint ventures, loan or
option arrangements, puts and calls, guarantees of loan,
guarantees against loss, guarantees of profits, division of
losses or profits; or
(B) the giving or withholding of proxies;
naming the persons with whom those contracts, arrangements, or
understandings have been entered into.
(6) Information as to any contracts, arrangements,
understandings, or negotiations, with any officer, director,
administrator, manager, executive employee, or record or
beneficial owner of equity securities of the target company with
respect to the tender of any equity securities of the target
company, the purchase by the offeror of any equity securities
owned by that person otherwise than pursuant to the takeover
offer, the retention of any person in the person's present
position or in any other management position or with respect to
that person giving or withholding a favorable recommendation
to the takeover offer.
(7) A description of the provisions made or to be made for
providing all material information concerning the takeover offer
to the offerees, including a description of the proposed takeover
offer in the form proposed to be published or sent the offerees
initially disclosing the takeover offer.
(8) Any other information which the commissioner prescribes
by rule.
(c) In addition to information required under subsection (a) or (b),
a statement filed under this section must include the following
information:
(1) A description of any contract between the offeror and a
government (other than the United States, a state of the United
States, a commonwealth or possession of the United States, a
government in free association with the United States, or a
political subdivision of a state) executed during the three (3)
years preceding the date of the filing of the statement.
(2) A description of any subsidy received by the offeror from a
goverment described in subdivision (1) during the three (3)
years preceding the date of the filing of the statement.
(3) A list of any offices or appointments held under a
government described in subdivision (1) by the offeror if the
offeror is an individual, or by a member of the board of
directors or principal officer if the offeror is a corporation. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.4.
IC 23-2-3.1-5.5 Definitions; application of section
Sec. 5.5. (a) The definitions in IC 23-1-20 apply to this section,
except to the extent of any conflict with section 1 of this chapter.
(b) This section applies to:
(1) a foreign corporation incorporated under a law other than
the law of the United States or any state of the United States (as
defined in IC 1-1-4-1); or
(2) a person who is not a citizen of the United States.
(c) This section does not apply to the initiation of a new business
in Indiana by a person subject to this section.
(d) Notwithstanding any other provision of this title, a person
subject to this section may not make a takeover offer unless the
person files a statement with the commissioner under this subsection.
(e) The statement filed under subsection (d) must state the
following:
(1) The financial sources to be used by the person in the
takeover offer.
(2) The proposed consummation date of the takeover. As added by P.L.229-1989, SEC.5.
IC 23-2-3.1-6
Repealed
(Repealed by Acts 1981, P.L.215, SEC.11.)
IC 23-2-3.1-6.5 Terms of offer; requisites; number of offerees
Sec. 6.5. No takeover offer may be made which is not made to all
offerees holding the same class of equity securities of the target
company on substantially equivalent terms. A takeover offer to
purchase less than any or all equity securities of the same class of the
outstanding equity securities of the target company is not considered
as having been made to all offerees of that class on substantially
equivalent terms if the pro rata portion of equity securities of that
class tendered by any offeree which will be accepted by the offeror
is not equal to the highest pro rata portion of equity securities of that
class tendered by any other offeree which will be accepted by the
offeror. A takeover offer permitting offerees to elect to receive one
(1) or more differing kinds of consideration is not considered as
having been made to all offerees holding the same class of equity
securities of the target company on substantially equivalent terms if
proration occurs and the pro rata share of any one (1) or more
differing kinds of consideration which is allocable to any offeree is
not equal to the highest pro rata share allocable to any other offeree. As added by P.L.242-1983, SEC.4.
IC 23-2-3.1-7 Hearing; findings and order; notices; expenses; right to appear;
insurance companies
Sec. 7. (a) A hearing shall be held at any time within twenty (20)
business days after the required statements under sections 5 and 5.5
of this chapter are filed. If, following the hearing, and within twenty
(20) business days after a statement is filed, the commissioner finds
by a preponderance of the evidence that:
(1) the takeover statement fails to provide full and fair
disclosure to the offerees of all material information concerning
the takeover offer; or
(2) the takeover offer is not made to all offerees of the same
class of equity securities of the target company on substantially
equivalent terms; the commissioner shall by order prohibit the
purchase of shares tendered in response to the takeover offer or
condition purchase upon changes or modifications.
(b) At least five (5) days notice shall be given to the target
company, the offeror, and such other persons as the commissioner
may designate that a hearing will be held under this section.
(c) The expenses, including the cost of transcripts, of all hearings
held under this section shall be borne by the offeror. As security for
the payment of the expenses, the offeror shall file with the
commissioner an acceptable bond or other deposit in an amount
determined by the commissioner.
(d) The target company, the offeror, any offeree, and any other
person whose interests may be affected have the right to appear at
any hearing held pursuant to this chapter and to become a party to the
proceeding. Each such person has the right to present evidence,
examine and cross-examine witnesses, offer oral written arguments
and, in connection with the proceeding may conduct discovery
proceedings in the manner provided in the Indiana Rules of Trial
Procedure. The commissioner may employ any sanction or power
granted courts in the Indiana Rules of Trial Procedure, excluding the
power of contempt, to enforce the commissioner's discovery rulings
or orders.
(e) In the case of a takeover offer subject to the approval of the
insurance commissioner, the offeror within five (5) days after the
statement is filed shall mail a notice to all offerees of the target
company advising the offerees of the general terms and conditions of
the takeover offer and the date of the hearing at which they may
appear. No shares shall be tendered, or purchased by the offeror,
until after approval by both the securities commissioner and the
insurance commissioner. All expenses of notifying the offerees shall
be borne by the offeror. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.4; P.L.242-1983, SEC.5; P.L.229-1989, SEC.6.
IC 23-2-3.1-8 Purchase of shares; prohibition
Sec. 8. No shares shall be purchased or paid for pursuant to a
takeover offer within the first twenty (20) business days after the
offer is made. No shares shall be purchased or paid for in violation
of any order of the commissioner. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.5. IC 23-2-3.1-8.4 Subsequent acquisition of equity securities by offeror; equivalent
terms; limitation
Sec. 8.4. No offeror may acquire in any manner any equity
security of any class of a target company at any time within two (2)
years following the conclusion of a takeover offer with respect to
that class, including but not limited to acquisitions made by
purchase, exchange, merger, consolidation, partial or complete
liquidation, redemption, reverse stock split, and any other
recapitalization or reorganization, unless the holder of that equity
security is also afforded, at the time of that acquisition, a reasonable
opportunity to dispose of that security to the offeror upon
substantially equivalent terms. As added by P.L.242-1983, SEC.6.
IC 23-2-3.1-8.5 Statements of material fact; omissions; false or misleading
statements; fraudulent, deceptive, or manipulative acts
Sec. 8.5. In connection with any takeover offer, or any solicitation
of offerees in opposition to or in favor of any takeover offer, it is
unlawful for any person to make any untrue statement of a material
fact or to omit to state any material fact necessary in order to make
the statements made, in the light of the circumstances under which
they are made, not misleading, or to engage in any fraudulent,
deceptive, or manipulative acts or practices. As added by Acts 1981, P.L.215, SEC.6.
IC 23-2-3.1-8.6 Exempt acquisitions; notice and hearing to precede order
Sec. 8.6. (a) The provisions of sections 2 through 7 of this chapter
do not apply to the following:
(1) An acquisition by an offeror, if the instant transaction and
all acquisitions of equity securities of the same class during the
preceding twelve (12) months by the offeror or any of its
affiliates do not exceed two percent (2%) of that class.
(2) An acquisition of equity securities of a target company
having seventy-five (75) or fewer holders of record of equity
securities at the time of the takeover offer.
(3) An acquisition determined by order of the commissioner to
be a takeover offer that is not made for the purpose of, and not
having the effect of, changing or influencing the control of a
target company.
(b) An order may only be adopted under subsection (a)(3) of this
section after a hearing. Not less than five (5) business days' notice of
a hearing must be given to the target company, the offeror, and such
other persons as the commissioner may designate.
(c) The burden of establishing entitlement to any exemption is on
the offeror. As added by Acts 1981, P.L.215, SEC.7. Amended by P.L.242-1983,
SEC.7. IC 23-2-3.1-9 Administration of chapter; regulations; immunity
Sec. 9. (a) This chapter shall be administered by the secretary of
state of Indiana by and through the commissioner, who may exercise
all powers granted to the commissioner under IC 23-19.
(b) Subject to the approval of the secretary of state, the
commissioner may promulgate regulations necessary to carry out the
purposes of this chapter under IC 4-22-2.
(c) Neither the secretary of state, nor the securities commissioner,
nor any employee of the securities division, shall be liable in their
individual capacity, except to the state of Indiana, for any act done
or omitted in connection with the performance of their respective
duties under the provisions of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.8; P.L.27-2007, SEC.15.
IC 23-2-3.1-10 Cease and desist orders; injunctions; subpoenas; production of
books and papers
Sec. 10. (a) Whenever it appears to the commissioner that any
person has engaged or is about to engage in any act or practice
constituting a violation of any provision of this chapter or any
regulation or order adopted under this chapter, the commissioner may
investigate and issue orders and notices, including ex parte cease and
desist orders without notice. In addition to all other remedies, he may
bring an action in any circuit or superior court in the name and on
behalf of the state of Indiana against any person or persons
participating in or about to participate in a violation of this chapter
to enjoin those persons from continuing or doing any act in violation
of this chapter or to enforce compliance with this chapter. In any
court proceedings, the commissioner may apply for and on due
showing be entitled to have issued the court's subpoena requiring:
(1) the appearance of any defendant or his employees or agents
to testify and give evidence concerning the acts or conduct or
things complained of; or
(2) the production of documents, books and records;
as may appear necessary for the hearing of the petition.
(b) Whenever any person has engaged or is about to engage in any
act or practice constituting a violation of this chapter or any
regulation or order adopted under this chapter, the offeror, target
company or any record or beneficial owner of an equity security of
the target company may bring an action in the circuit or superior
court of the county where the target company has its principal office
or Marion County to enjoin that person from continuing or doing any
act in violation of this chapter or to enforce compliance with this
chapter.
(c) Upon a proper showing, the court may grant a permanent or
preliminary injunction or temporary restraining order or may order
rescission of any sales, tenders for sale, purchases or tenders for
purchase of equity securities determined to be unlawful under this
chapter or any regulation or order of the commissioner. The court
may not require the commissioner to post a bond. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.9.
IC 23-2-3.1-11 Appeal; notice; transcript; disposition on appeal
Sec. 11. An appeal may be taken by any offeror, target company,
or other party to any proceeding before the commissioner from any
final order of the commissioner to the court of appeals for errors of
law under the same terms and conditions as govern appeals in
ordinary civil actions, except as otherwise provided in this section.
An assignment of errors that the decision, ruling, or order of the
commissioner is contrary to law is sufficient to present both the
sufficiency of the facts found to sustain the decision, ruling, or order,
and the sufficiency of the evidence to sustain the findings of facts
upon which it was rendered. Within twenty (20) days from the entry
of an order, the commissioner shall be served with a written notice
of the appeal which states the grounds upon which a reversal of the
final order is sought and with a demand in writing for a certified
transcript of the record and of all papers on file in the commissioner's
office affecting or relating to that order. The commissioner shall
within twenty (20) days after service of the notice of appeal make,
certify, and deliver to the appellant the transcript. The appellant
shall, within five (5) days after the receipt of the transcript, file the
transcript and a copy of the notice of appeal with the clerk of the
court. The notice of appeal shall stand as the appellant's assignment
of errors. If the order of the commissioner is reversed, the court shall
direct the commissioner's further action in the matter, including the
making and entering of any order and the conditions, limitations, or
restrictions to be contained in the order. However, the commissioner
is not barred from later revoking or altering the order for any proper
cause which may later accrue or be discovered. If the order is
affirmed, the appellant may file a new disclosure statement after
thirty (30) days from the ruling of the court of appeals if the
disclosure statement is not otherwise barred or limited. The appeal
does not suspend the operation of the order appealed from during the
pendency of the appeal unless upon proper order of the court. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.10; P.L.3-1989, SEC.138.
IC 23-2-3.1-0.5 Legislative finding; purpose
Sec. 0.5. (a) The general assembly finds that it is often difficult
for corporate shareholders to obtain sufficient information to make
an informed and timely decision when faced with the questions of
accepting or rejecting a takeover offer. Moreover, there have
emerged a number of practices which have resulted in shareholders
of Indiana corporations losing the benefits of takeover offers because
they lacked the sophistication and ability to secure those benefits.
These practices have included multiple proration pools, two-step
transactions and similar practices, and have resulted in relatively
small shareholders losing both the advantages of the takeover offer
and their equity positions in the corporation.
(b) By enacting this chapter, it is the intent and purpose of the
general assembly to provide for full and fair disclosure of all material
information concerning takeover offers to shareholders of Indiana
corporations, so that the opportunity of each shareholder to make an
informed and well-reasoned investment decision may be secured. It
is also the purpose of the general assembly to protect shareholders of
Indiana corporations from being disadvantaged by those practices
described in subsection (a). Finally, it is the purpose of the general
assembly to provide for adequate disclosure and that protection in a
manner consistent with the Constitutions of the United States and of
Indiana. As added by Acts 1981, P.L.215, SEC.1. Amended by P.L.242-1983,
SEC.1.
IC 23-2-3.1-1 Definitions
Sec. 1. As used in this chapter:
"Affiliate" means any person controlling, controlled by, or under
the common control of another person.
"Beneficial owner of a security" means any person who, directly
or indirectly, has the power to vote or direct the voting of all or part
of the voting rights of the security, or has the power to dispose of or
direct the disposition of the security.
"Commissioner" means the securities commissioner as defined in
IC 23-19-1-2(4).
"Control" means possession, direct or indirect, of the power to
direct or to cause the direction of the management and policies of a
person, through the ownership of voting securities, by contract other
than a commercial contract for goods or nonmanagement services, or
otherwise, unless that power is the result of an official position or
corporate office. The term includes "controlling", "controlled by",
and "under common control with." Control is presumed to exist if
any person is the beneficial owner of ten percent (10%) or more of
any class of the voting securities of any other person. This
presumption may be rebutted only by a showing that control does not
exist in fact, at a hearing pursuant to section 9 of this chapter.
"Equity security" means:
(1) any share or similar security carrying, at the time of the
takeover offer, the right to vote on any matter by virtue of the
articles of incorporation, bylaws, or governing instrument of the
target company or the right to vote for directors or persons
performing substantially similar functions by operation of law;
(2) any security convertible into a security described in
subdivision (1) or any warrant or right to purchase that security;
or
(3) any other security which, for the protection of investors, is
an equity security pursuant to a regulation of the commissioner.
"Offeror" means a person who makes or in any way participates
in making a takeover offer. The term includes all affiliates of that
person and all persons who act jointly or in concert with that person
for the purpose of acquiring, holding, or disposing of, or exercising
any voting rights attached to, the equity securities of a target
company. It also includes the target company with respect to
acquisitions of its own equity securities and with respect to periods
of time when it is controlled by or under common control with the
offeror. It does not include a financial institution or broker-dealer
loaning funds or extending credit to any offeror in the ordinary
course of its business, or any accountant, attorney, financial
institution, broker-dealer, newspaper or magazine of general
circulation, consultant, or other person furnishing information,
services, or advice to or performing ministerial or administrative
duties for an offeror and not otherwise participating in the takeover
offer.
"Offeree" means a record or beneficial owner of equity securities
of the class which an offeror acquires or offers to acquire in
connection with a takeover offer.
"Person" means an individual, corporation, limited liability
company, association, partnership, trust, or other entity.
"Substantially equivalent terms" means terms under which the fair
market value of the consideration offered any offeree of a class of
equity securities of the target company (determined on a per share or
a per unit basis) are equal to the highest consideration offered in
connection with a takeover offer to any other offeree of that class
(determined on a per share or per unit basis).
"Takeover offer" means an offer to acquire or an acquisition of
any equity security of a target company, pursuant to a tender offer or
request or invitation for tenders, if, after the acquisition, the offeror
is directly or indirectly a record or beneficial owner of more than ten
percent (10%) of any class of the outstanding equity securities of the
target company.
"Target company" means an issuer of securities which is
organized under the laws of this state, has its principal place of
business in this state, and has substantial assets in this state. Target
company does not include:
(1) a financial institution subject to regulation by the
department of financial institutions under IC 28, if the takeover
offer is subject to approval by the department of financial
institutions;
(2) a corporation subject to regulation by the utility regulatory
commission under IC 8, if the takeover offer is subject to
approval of the commission; or
(3) a public utility, public utility holding company, bank
holding company, or savings association subject to regulation
by a federal agency, if the takeover offer is subject to the
approval by that federal agency. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.2; P.L.242-1983, SEC.2; P.L.23-1988, SEC.111;
P.L.8-1993, SEC.311; P.L.79-1998, SEC.21; P.L.27-2007, SEC.13.
IC 23-2-3.1-2 Compliance with designated sections
Sec. 2. A person shall not make a takeover offer unless the offer
is in compliance with sections 3, 4, 5.5, 6.5, 7, and 8 of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.3; P.L.242-1983, SEC.3; P.L.229-1989, SEC.1.
IC 23-2-3.1-3 Statement; filing with commissioner; copy to target company
Sec. 3. Any offeror, before making a takeover offer, shall:
(1) file any required statements with the commissioner in
compliance with sections 5 and 5.5 of this chapter; and
(2) not later than the filing date of the statements, deliver a copy
of each statement to the president of the target company at its
principal office. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.2.
IC 23-2-3.1-4 Statement; consent to service of process; filing fee
Sec. 4. Each statement required under section 5 or 5.5 of this
chapter must be accompanied by:
(1) a consent of the offeror to service of process specified in
IC 23-19-6-11; and
(2) a filing fee of seven hundred fifty dollars ($750). As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.3; P.L.27-2007, SEC.14.
IC 23-2-3.1-5 Contents of statement; document prepared under federal law
Sec. 5. (a) If the takeover offer is subject to any federal law,
including the Securities Exchange Act of 1934 (15 U.S.C. 78), the
statement must consist of one (1) copy of each document required to
be filed with the Securities and Exchange Commission or any other
federal agency.
(b) If the takeover offer is not subject to any requirement of
federal law, the statement must be filed on forms prescribed by the
commissioner and contain the following information:
(1) The identity of and material information concerning the
offeror, including:
(A) if the offeror is a corporation:
(i) information concerning its organization, including the
year and jurisdiction of its organization;
(ii) a description of each class of its capital stock and
long-term debt;
(iii) a description of the business done by the offeror and
its affiliates and any material changes of its business
during the past three (3) years;
(iv) a description of the location and character of the
principal properties of the offeror and its affiliates;
(v) a description of any material pending legal or
administrative proceedings in which the offeror or any of
its affiliates is a party;
(vi) the names of all directors and executive officers of the
offeror and their material business activities and
affiliations during the past three (3) years; and
(vii) audited financial statements of the offeror and its
affiliates for its three (3) most recent annual accounting
periods and interim financial statements for any current
period; and
(B) if the offeror is not a corporation:
(i) information concerning the background of the person,
including the person's material business activities and
affiliations during the past three (3) years; and
(ii) a description of any material pending legal or
administrative proceeding in which the person is a party.
(2) The source and amount of funds or other consideration used
or to be used in acquiring any equity security, including:
(A) a statement describing any securities being offered in
exchange for the equity securities of the target company; and
(B) if any part of the acquisition price is or will be
represented by borrowed funds or other consideration, a
description of the transaction and the names of all the
parties.
(3) If the purpose of the acquisition is to gain control of the
target company, a statement of any plans or proposals or
negotiations with respect to the acquisition which the offeror
has upon gaining control to:
(A) liquidate the target company;
(B) sell its assets;
(C) effect its merger or consolidation; or
(D) make any other major change in its business, corporate
structure, management or personnel.
(4) The number of shares or units of any equity security of the
target company of which each offeror is the record or beneficial
owner or which the offeror has a right to acquire, directly or
indirectly.
(5) Information as to any contracts, arrangements,
understandings, or negotiations with any person concerning any
equity security of the target company, including:
(A) transfers of any equity security, joint ventures, loan or
option arrangements, puts and calls, guarantees of loan,
guarantees against loss, guarantees of profits, division of
losses or profits; or
(B) the giving or withholding of proxies;
naming the persons with whom those contracts, arrangements, or
understandings have been entered into.
(6) Information as to any contracts, arrangements,
understandings, or negotiations, with any officer, director,
administrator, manager, executive employee, or record or
beneficial owner of equity securities of the target company with
respect to the tender of any equity securities of the target
company, the purchase by the offeror of any equity securities
owned by that person otherwise than pursuant to the takeover
offer, the retention of any person in the person's present
position or in any other management position or with respect to
that person giving or withholding a favorable recommendation
to the takeover offer.
(7) A description of the provisions made or to be made for
providing all material information concerning the takeover offer
to the offerees, including a description of the proposed takeover
offer in the form proposed to be published or sent the offerees
initially disclosing the takeover offer.
(8) Any other information which the commissioner prescribes
by rule.
(c) In addition to information required under subsection (a) or (b),
a statement filed under this section must include the following
information:
(1) A description of any contract between the offeror and a
government (other than the United States, a state of the United
States, a commonwealth or possession of the United States, a
government in free association with the United States, or a
political subdivision of a state) executed during the three (3)
years preceding the date of the filing of the statement.
(2) A description of any subsidy received by the offeror from a
goverment described in subdivision (1) during the three (3)
years preceding the date of the filing of the statement.
(3) A list of any offices or appointments held under a
government described in subdivision (1) by the offeror if the
offeror is an individual, or by a member of the board of
directors or principal officer if the offeror is a corporation. As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989,
SEC.4.
IC 23-2-3.1-5.5 Definitions; application of section
Sec. 5.5. (a) The definitions in IC 23-1-20 apply to this section,
except to the extent of any conflict with section 1 of this chapter.
(b) This section applies to:
(1) a foreign corporation incorporated under a law other than
the law of the United States or any state of the United States (as
defined in IC 1-1-4-1); or
(2) a person who is not a citizen of the United States.
(c) This section does not apply to the initiation of a new business
in Indiana by a person subject to this section.
(d) Notwithstanding any other provision of this title, a person
subject to this section may not make a takeover offer unless the
person files a statement with the commissioner under this subsection.
(e) The statement filed under subsection (d) must state the
following:
(1) The financial sources to be used by the person in the
takeover offer.
(2) The proposed consummation date of the takeover. As added by P.L.229-1989, SEC.5.
IC 23-2-3.1-6
Repealed
(Repealed by Acts 1981, P.L.215, SEC.11.)
IC 23-2-3.1-6.5 Terms of offer; requisites; number of offerees
Sec. 6.5. No takeover offer may be made which is not made to all
offerees holding the same class of equity securities of the target
company on substantially equivalent terms. A takeover offer to
purchase less than any or all equity securities of the same class of the
outstanding equity securities of the target company is not considered
as having been made to all offerees of that class on substantially
equivalent terms if the pro rata portion of equity securities of that
class tendered by any offeree which will be accepted by the offeror
is not equal to the highest pro rata portion of equity securities of that
class tendered by any other offeree which will be accepted by the
offeror. A takeover offer permitting offerees to elect to receive one
(1) or more differing kinds of consideration is not considered as
having been made to all offerees holding the same class of equity
securities of the target company on substantially equivalent terms if
proration occurs and the pro rata share of any one (1) or more
differing kinds of consideration which is allocable to any offeree is
not equal to the highest pro rata share allocable to any other offeree. As added by P.L.242-1983, SEC.4.
IC 23-2-3.1-7 Hearing; findings and order; notices; expenses; right to appear;
insurance companies
Sec. 7. (a) A hearing shall be held at any time within twenty (20)
business days after the required statements under sections 5 and 5.5
of this chapter are filed. If, following the hearing, and within twenty
(20) business days after a statement is filed, the commissioner finds
by a preponderance of the evidence that:
(1) the takeover statement fails to provide full and fair
disclosure to the offerees of all material information concerning
the takeover offer; or
(2) the takeover offer is not made to all offerees of the same
class of equity securities of the target company on substantially
equivalent terms; the commissioner shall by order prohibit the
purchase of shares tendered in response to the takeover offer or
condition purchase upon changes or modifications.
(b) At least five (5) days notice shall be given to the target
company, the offeror, and such other persons as the commissioner
may designate that a hearing will be held under this section.
(c) The expenses, including the cost of transcripts, of all hearings
held under this section shall be borne by the offeror. As security for
the payment of the expenses, the offeror shall file with the
commissioner an acceptable bond or other deposit in an amount
determined by the commissioner.
(d) The target company, the offeror, any offeree, and any other
person whose interests may be affected have the right to appear at
any hearing held pursuant to this chapter and to become a party to the
proceeding. Each such person has the right to present evidence,
examine and cross-examine witnesses, offer oral written arguments
and, in connection with the proceeding may conduct discovery
proceedings in the manner provided in the Indiana Rules of Trial
Procedure. The commissioner may employ any sanction or power
granted courts in the Indiana Rules of Trial Procedure, excluding the
power of contempt, to enforce the commissioner's discovery rulings
or orders.
(e) In the case of a takeover offer subject to the approval of the
insurance commissioner, the offeror within five (5) days after the
statement is filed shall mail a notice to all offerees of the target
company advising the offerees of the general terms and conditions of
the takeover offer and the date of the hearing at which they may
appear. No shares shall be tendered, or purchased by the offeror,
until after approval by both the securities commissioner and the
insurance commissioner. All expenses of notifying the offerees shall
be borne by the offeror. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.4; P.L.242-1983, SEC.5; P.L.229-1989, SEC.6.
IC 23-2-3.1-8 Purchase of shares; prohibition
Sec. 8. No shares shall be purchased or paid for pursuant to a
takeover offer within the first twenty (20) business days after the
offer is made. No shares shall be purchased or paid for in violation
of any order of the commissioner. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.5. IC 23-2-3.1-8.4 Subsequent acquisition of equity securities by offeror; equivalent
terms; limitation
Sec. 8.4. No offeror may acquire in any manner any equity
security of any class of a target company at any time within two (2)
years following the conclusion of a takeover offer with respect to
that class, including but not limited to acquisitions made by
purchase, exchange, merger, consolidation, partial or complete
liquidation, redemption, reverse stock split, and any other
recapitalization or reorganization, unless the holder of that equity
security is also afforded, at the time of that acquisition, a reasonable
opportunity to dispose of that security to the offeror upon
substantially equivalent terms. As added by P.L.242-1983, SEC.6.
IC 23-2-3.1-8.5 Statements of material fact; omissions; false or misleading
statements; fraudulent, deceptive, or manipulative acts
Sec. 8.5. In connection with any takeover offer, or any solicitation
of offerees in opposition to or in favor of any takeover offer, it is
unlawful for any person to make any untrue statement of a material
fact or to omit to state any material fact necessary in order to make
the statements made, in the light of the circumstances under which
they are made, not misleading, or to engage in any fraudulent,
deceptive, or manipulative acts or practices. As added by Acts 1981, P.L.215, SEC.6.
IC 23-2-3.1-8.6 Exempt acquisitions; notice and hearing to precede order
Sec. 8.6. (a) The provisions of sections 2 through 7 of this chapter
do not apply to the following:
(1) An acquisition by an offeror, if the instant transaction and
all acquisitions of equity securities of the same class during the
preceding twelve (12) months by the offeror or any of its
affiliates do not exceed two percent (2%) of that class.
(2) An acquisition of equity securities of a target company
having seventy-five (75) or fewer holders of record of equity
securities at the time of the takeover offer.
(3) An acquisition determined by order of the commissioner to
be a takeover offer that is not made for the purpose of, and not
having the effect of, changing or influencing the control of a
target company.
(b) An order may only be adopted under subsection (a)(3) of this
section after a hearing. Not less than five (5) business days' notice of
a hearing must be given to the target company, the offeror, and such
other persons as the commissioner may designate.
(c) The burden of establishing entitlement to any exemption is on
the offeror. As added by Acts 1981, P.L.215, SEC.7. Amended by P.L.242-1983,
SEC.7. IC 23-2-3.1-9 Administration of chapter; regulations; immunity
Sec. 9. (a) This chapter shall be administered by the secretary of
state of Indiana by and through the commissioner, who may exercise
all powers granted to the commissioner under IC 23-19.
(b) Subject to the approval of the secretary of state, the
commissioner may promulgate regulations necessary to carry out the
purposes of this chapter under IC 4-22-2.
(c) Neither the secretary of state, nor the securities commissioner,
nor any employee of the securities division, shall be liable in their
individual capacity, except to the state of Indiana, for any act done
or omitted in connection with the performance of their respective
duties under the provisions of this chapter. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.8; P.L.27-2007, SEC.15.
IC 23-2-3.1-10 Cease and desist orders; injunctions; subpoenas; production of
books and papers
Sec. 10. (a) Whenever it appears to the commissioner that any
person has engaged or is about to engage in any act or practice
constituting a violation of any provision of this chapter or any
regulation or order adopted under this chapter, the commissioner may
investigate and issue orders and notices, including ex parte cease and
desist orders without notice. In addition to all other remedies, he may
bring an action in any circuit or superior court in the name and on
behalf of the state of Indiana against any person or persons
participating in or about to participate in a violation of this chapter
to enjoin those persons from continuing or doing any act in violation
of this chapter or to enforce compliance with this chapter. In any
court proceedings, the commissioner may apply for and on due
showing be entitled to have issued the court's subpoena requiring:
(1) the appearance of any defendant or his employees or agents
to testify and give evidence concerning the acts or conduct or
things complained of; or
(2) the production of documents, books and records;
as may appear necessary for the hearing of the petition.
(b) Whenever any person has engaged or is about to engage in any
act or practice constituting a violation of this chapter or any
regulation or order adopted under this chapter, the offeror, target
company or any record or beneficial owner of an equity security of
the target company may bring an action in the circuit or superior
court of the county where the target company has its principal office
or Marion County to enjoin that person from continuing or doing any
act in violation of this chapter or to enforce compliance with this
chapter.
(c) Upon a proper showing, the court may grant a permanent or
preliminary injunction or temporary restraining order or may order
rescission of any sales, tenders for sale, purchases or tenders for
purchase of equity securities determined to be unlawful under this
chapter or any regulation or order of the commissioner. The court
may not require the commissioner to post a bond. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.9.
IC 23-2-3.1-11 Appeal; notice; transcript; disposition on appeal
Sec. 11. An appeal may be taken by any offeror, target company,
or other party to any proceeding before the commissioner from any
final order of the commissioner to the court of appeals for errors of
law under the same terms and conditions as govern appeals in
ordinary civil actions, except as otherwise provided in this section.
An assignment of errors that the decision, ruling, or order of the
commissioner is contrary to law is sufficient to present both the
sufficiency of the facts found to sustain the decision, ruling, or order,
and the sufficiency of the evidence to sustain the findings of facts
upon which it was rendered. Within twenty (20) days from the entry
of an order, the commissioner shall be served with a written notice
of the appeal which states the grounds upon which a reversal of the
final order is sought and with a demand in writing for a certified
transcript of the record and of all papers on file in the commissioner's
office affecting or relating to that order. The commissioner shall
within twenty (20) days after service of the notice of appeal make,
certify, and deliver to the appellant the transcript. The appellant
shall, within five (5) days after the receipt of the transcript, file the
transcript and a copy of the notice of appeal with the clerk of the
court. The notice of appeal shall stand as the appellant's assignment
of errors. If the order of the commissioner is reversed, the court shall
direct the commissioner's further action in the matter, including the
making and entering of any order and the conditions, limitations, or
restrictions to be contained in the order. However, the commissioner
is not barred from later revoking or altering the order for any proper
cause which may later accrue or be discovered. If the order is
affirmed, the appellant may file a new disclosure statement after
thirty (30) days from the ruling of the court of appeals if the
disclosure statement is not otherwise barred or limited. The appeal
does not suspend the operation of the order appealed from during the
pendency of the appeal unless upon proper order of the court. As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981,
P.L.215, SEC.10; P.L.3-1989, SEC.138.
