CHAPTER 43. BUSINESS COMBINATIONS
IC 23-1-43
Chapter 43. Business Combinations
IC 23-1-43-1
"Affiliate" defined
Sec. 1. As used in this chapter, "affiliate" means a person that
directly, or indirectly through one (1) or more intermediaries,
controls, is controlled by, or is under common control with, a
specified person.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-2
"Announcement date" defined
Sec. 2. As used in this chapter, "announcement date", when used
in reference to any business combination, means the date of the first
public announcement of the final, definitive proposal for the business
combination.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-3
"Associate" defined
Sec. 3. As used in this chapter, "associate", when used to indicate
a relationship with any person, means:
(1) any corporation or organization of which the person is an
officer or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of voting
shares;
(2) any trust or other estate in which the person has a substantial
beneficial interest or as to which the person serves as trustee or
in a similar fiduciary capacity; and
(3) any relative or spouse of the person, or any relative of the
spouse, who has the same home as the person.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-4
"Beneficial owner" defined
Sec. 4. As used in this chapter, "beneficial owner", when used
with respect to any shares, has the meaning set forth in
IC 23-1-20-3.5.
As added by P.L.149-1986, SEC.27. Amended by P.L.133-2009,
SEC.37.
IC 23-1-43-5
"Business combination" defined
Sec. 5. As used in this chapter, "business combination", when
used in reference to any resident domestic corporation and any
interested shareholder of the resident domestic corporation, means
any of the following:
(1) Any merger of the resident domestic corporation or any
subsidiary of the resident domestic corporation with:
(A) the interested shareholder; or
(B) any other corporation (whether or not itself an interested
shareholder of the resident domestic corporation) that is, or
after the merger or consolidation would be, an affiliate or
associate of the interested shareholder.
(2) Any sale, lease, exchange, mortgage, pledge, transfer, or
other disposition (in one (1) transaction or a series or
transactions) to or with the interested shareholder or any
affiliate or associate of the interested shareholder of assets of
the resident domestic corporation or any subsidiary of the
resident domestic corporation:
(A) having an aggregate market value equal to ten percent
(10%) or more of the aggregate market value of all the
assets, determined on a consolidated basis, of the resident
domestic corporation;
(B) having an aggregate market value equal to ten percent
(10%) or more of the aggregate market value of all the
outstanding shares of the resident domestic corporation; or
(C) representing ten percent (10%) or more of the earning
power or net income, determined on a consolidated basis, of
the resident domestic corporation.
(3) The issuance or transfer by the resident domestic
corporation or any subsidiary of the resident domestic
corporation (in one (1) transaction or a series of transactions) of
any shares of the resident domestic corporation or any
subsidiary of the resident domestic corporation that have an
aggregate market value equal to five percent (5%) or more of
the aggregate market value of all the outstanding shares of the
resident domestic corporation to the interested shareholder or
any affiliate or associate of the interested shareholder except
under the exercise of warrants or rights to purchase shares
offered, or a dividend or distribution paid or made, pro rata to
all shareholders of the resident domestic corporation.
(4) The adoption of any plan or proposal for the liquidation or
dissolution of the resident domestic corporation proposed by, or
under any agreement, arrangement, or understanding (whether
or not in writing) with, the interested shareholder or any
affiliate or associate of the interested shareholder.
(5) Any:
(A) reclassification of securities (including without
limitation any share split, share dividend, or other
distribution of shares in respect of shares, or any reverse
share split);
(B) recapitalization of the resident domestic corporation;
(C) merger or consolidation of the resident domestic
corporation with any subsidiary of the resident domestic
corporation; or
(D) other transaction (whether or not with or into or
otherwise involving the interested shareholder);
proposed by, or under any agreement, arrangement, or
understanding (whether or not in writing) with, the interested
shareholder or any affiliate or associate of the interested
shareholder, that has the effect (directly or indirectly) of
increasing the proportionate share of the outstanding shares of
any class or series of voting shares or securities convertible into
voting shares of the resident domestic corporation or any
subsidiary of the resident domestic corporation that is directly
or indirectly owned by the interested shareholder or any
affiliate or associate of the interested shareholder, except as a
result of immaterial changes due to fractional share
adjustments.
(6) Any receipt by the interested shareholder or any affiliate or
associate of the interested shareholder of the benefit (directly or
indirectly, except proportionately as a shareholder of the
resident domestic corporation), of any loans, advances,
guarantees, pledges, or other financial assistance or any tax
credits or other tax advantages provided by or through the
resident domestic corporation.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-6
"Common shares" defined
Sec. 6. As used in this chapter, "common shares" means any
shares other than preferred shares.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,
SEC.121.
IC 23-1-43-7
"Consummation date" defined
Sec. 7. As used in this chapter, "consummation date", with respect
to any business combination, means the date of consummation of the
business combination or, in the case of a business combination as to
which a shareholder vote is taken, the later of:
(1) the business day before the vote; or
(2) twenty (20) days before the date of consummation of the
business combination.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-8
"Control" defined
Sec. 8. (a) As used in this chapter, "control", including the terms
"controlling", "controlled by", and "under common control with",
means the possession (directly or indirectly) of the power to direct
or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or
otherwise.
(b) A person's beneficial ownership of ten percent (10%) or more
of the voting power of a corporation's outstanding voting shares
creates a presumption that the person has control of the corporation.
(c) Notwithstanding subsections (a) and (b), a person is not
considered to have control of a corporation if the person holds voting
power, in good faith and not for the purpose of circumventing this
chapter, as an agent, bank, broker, nominee, custodian, or trustee for
one (1) or more beneficial owners who do not individually or as a
group have control of the corporation.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-9
"Exchange Act" defined
Sec. 9. As used in this chapter, "Exchange Act" means the Act of
Congress known as the Securities Exchange Act of 1934, as
amended.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-10
"Interested shareholder" defined
Sec. 10. (a) As used in this chapter, "interested shareholder",
when used in reference to any resident domestic corporation, means
any person (other than the resident domestic corporation or any
subsidiary of the resident domestic corporation) that is:
(1) the beneficial owner, directly or indirectly, of ten percent
(10%) or more of the voting power of the outstanding voting
shares of the resident domestic corporation; or
(2) an affiliate or associate of the resident domestic corporation
and at any time within the five (5) year period immediately
before the date in question was the beneficial owner, directly or
indirectly, of ten percent (10%) or more of the voting power of
the then outstanding shares of the resident domestic
corporation.
(b) For the purpose of determining whether a person is an
interested shareholder, the number of voting shares of the resident
domestic corporation considered to be outstanding includes shares
considered to be beneficially owned by the person through
application of section 4 of this chapter, but does not include any
other unissued shares of voting shares of the resident domestic
corporation that may be issuable under any agreement, arrangement,
or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-11
"Market value" defined
Sec. 11. As used in this chapter, "market value", when used in
reference to shares or property of any resident domestic corporation,
means the following:
(1) In the case of shares, the highest closing sale price of a share
during the thirty (30) day period immediately preceding the date
in question on the composite tape for New York Stock
Exchange listed shares, or, if the shares are not quoted on the
composite tape or not listed on the New York Stock Exchange,
on the principal United States securities exchange registered
under the Exchange Act on which the shares are listed, or, if the
shares are not listed on any such exchange, the highest closing
bid quotation with respect to a share during the thirty (30) day
period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or if no such quotation is
available, the fair market value on the date in question of a
share as determined by the board of directors of the resident
domestic corporation in good faith.
(2) In the case of property other than cash or shares, the fair
market value of the property on the date in question as
determined by the board of directors of the resident domestic
corporation in good faith.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-12
"Preferred shares" defined
Sec. 12. As used in this chapter, "preferred shares" means any
class or series of shares of a resident domestic corporation that under
the bylaws or articles of incorporation of the resident domestic
corporation:
(1) is entitled to receive payment of dividends before any
payment of dividends on some other class or series of shares; or
(2) is entitled in the event of any voluntary liquidation,
dissolution, or winding up of the corporation to receive payment
or distribution of a preferential amount before any payments or
distributions are received by some other class or series of
shares.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,
SEC.122.
IC 23-1-43-13
"Resident domestic corporation" defined
Sec. 13. (a) As used in this chapter, "resident domestic
corporation" means a corporation that has one hundred (100) or more
shareholders.
(b) A resident domestic corporation does not cease to be a
resident domestic corporation by reason of events occurring or
actions taken while the resident domestic corporation is subject to
this chapter.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-14
"Share" defined
Sec. 14. As used in this chapter, "share" means:
(1) any share or similar security, any certificate of interest, any
participation in any profit sharing agreement, any voting trust
certificate, or any certificate of deposit for a share; and
(2) any security convertible, with or without consideration, into
shares, or any warrant, call, or other option or privilege of
buying shares without being bound to do so, or any other
security carrying any right to acquire, subscribe to, or purchase
shares.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-15
"Share acquisition date" defined
Sec. 15. As used in this chapter, "share acquisition date", with
respect to any person and any resident domestic corporation, means
the date that the person first becomes an interested shareholder of the
resident domestic corporation.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-16
"Subsidiary" defined
Sec. 16. As used in this chapter, "subsidiary" of any resident
domestic corporation means any other corporation of which a
majority of the outstanding voting shares entitled to be cast are
owned (directly or indirectly) by the resident domestic corporation.
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,
SEC.123.
IC 23-1-43-17
"Voting shares" defined
Sec. 17. As used in this chapter, "voting shares" means shares of
capital stock of a corporation entitled to vote generally in the election
of directors.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-18
Business combination with interested shareholder within five years
of share acquisition date
Sec. 18. (a) Notwithstanding any other provision of this article
(except sections 20 through 24 of this chapter), a resident domestic
corporation may not engage in any business combination with any
interested shareholder of the resident domestic corporation for a
period of five (5) years following the interested shareholder's share
acquisition date unless the business combination or the purchase of
shares made by the interested shareholder on the interested
shareholder's share acquisition date is approved by the board of
directors of the resident domestic corporation before the interested
shareholder's share acquisition date.
(b) If a good faith proposal regarding a business combination is
made in writing to the board of directors of the resident domestic
corporation, the board of directors shall respond, in writing, within
thirty (30) days or such shorter period, if any, as may be required by
the Exchange Act, setting forth its reasons for its decision regarding
the proposal.
(c) If a good faith proposal to purchase shares is made in writing
to the board of directors of the resident domestic corporation, the
board of directors, unless it responds affirmatively in writing within
thirty (30) days or such shorter period, if any, as may be required by
the Exchange Act, is considered to have disapproved the share
purchase.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-19
Business combination with interested shareholder; requirements
Sec. 19. Notwithstanding any other provision of this article
(except sections 18 and 20 through 24 of this chapter), a resident
domestic corporation may not engage at any time in any business
combination with any interested shareholder of the resident domestic
corporation other than a business combination meeting all
requirements of the articles of incorporation of the domestic
corporation and the requirements specified in any of the following:
(1) A business combination approved by the board of directors
of the resident domestic corporation before the interested
shareholder's share acquisition date, or as to which the purchase
of shares made by the interested shareholder on the interested
shareholder's share acquisition date had been approved by the
board of directors of the resident domestic corporation before
the interested shareholder's share acquisition date.
(2) A business combination approved by the affirmative vote of
the holders of a majority of the outstanding voting shares not
beneficially owned by the interested shareholder proposing the
business combination, or any affiliate or associate of the
interested shareholder proposing the business combination, at
a meeting called for that purpose no earlier than five (5) years
after the interested shareholder's share acquisition date.
(3) A business combination that meets all of the following
conditions:
(A) The aggregate amount of the cash and the market value
as of the consummation date of consideration other than cash
to be received per share by holders of outstanding common
shares of the resident domestic corporation in the business
combination is at least equal to the higher of the following:
(i) The highest per share price paid by the interested
shareholder, at a time when the interested shareholder was
the beneficial owner (directly or indirectly) of five percent
(5%) or more of the outstanding voting shares of the
resident domestic corporation, for any common shares of
the same class or series acquired by it within the five (5)
year period immediately before the announcement date
with respect to the business combination or within the five
(5) year period immediately before, or in, the transaction
in which the interested shareholder became an interested
shareholder, whichever is higher; plus, in either case,
interest compounded annually from the earliest date on
which the highest per share acquisition price was paid
through the consummation date at the rate for one (1) year
United States Treasury obligations from time to time in
effect; less the aggregate amount of any cash dividends
paid, and the market value of any dividends paid other
than in cash, per common share since the earliest date, up
to the amount of the interest.
(ii) The market value per common share on the
announcement date with respect to the business
combination or on the interested shareholder's share
acquisition date, whichever is higher; plus interest
compounded annually from that date through the
consummation date at the rate for one (1) year United
States Treasury obligations from time to time in effect;
less the aggregate amount of any cash dividends paid, and
the market value of any dividends paid other than in cash,
per common share since that date, up to the amount of the
interest.
(B) The aggregate amount of the cash and the market value
as of the consummation date of consideration other than cash
to be received per share by holders of outstanding shares of
any class or series of shares, other than common shares, of
the resident domestic corporation is at least equal to the
highest of the following (whether or not the interested
shareholder has previously acquired any shares of the class
or series of shares):
(i) The highest per share price paid by the interested
shareholder, at a time when the interested shareholder was
the beneficial owner (directly or indirectly) of five percent
(5%) or more of the outstanding voting shares of the
resident domestic corporation, for any shares of the class
or series of shares acquired by it within the five (5) year
period immediately before the announcement date with
respect to the business combination or within the five (5)
year period immediately before, or in, the transaction in
which the interested shareholder became an interested
shareholder, whichever is higher; plus, in either case,
interest compounded annually from the earliest date on
which the highest per share acquisition price was paid
through the consummation date at the rate for one (1) year
United States Treasury obligations from time to time in
effect; less the aggregate amount of any cash dividends
paid, and the market value of any dividends paid other
than in cash, per share of the class or series of shares since
the earliest date, up to the amount of the interest.
(ii) The highest preferential amount per share to which the
holders of shares of the class or series of shares are
entitled in the event of any voluntary liquidation,
dissolution, or winding up of the resident domestic
corporation, plus the aggregate amount of any dividends
declared or due as to which the holders are entitled before
payment of dividends on some other class or series of
shares (unless the aggregate amount of the dividends is
included in the preferential amount).
(iii) The market value per share of the class or series of
shares on the announcement date with respect to the
business combination or on the interested shareholder's
share acquisition date, whichever is higher; plus interest
compounded annually from that date through the
consummation date at the rate for one (1) year United
States Treasury obligations from time to time in effect;
less the aggregate amount of any cash dividends paid, and
the market value of any dividends paid other than in cash,
per share of the class or series of shares since that date, up
to the amount of the interest.
(C) The consideration to be received by holders of a
particular class or series of outstanding shares (including
common shares) of the resident domestic corporation in the
business combination is in cash or in the same form as the
interested shareholder has used to acquire the largest number
of shares of the class or series of shares previously acquired
by it, and the consideration shall be distributed promptly.
(D) The holders of all outstanding shares of the resident
domestic corporation not beneficially owned by the
interested shareholder immediately before the consummation
of the business combination are entitled to receive in the
business combination cash or other consideration for the
shares in compliance with clauses (A), (B), and (C).
(E) After the interested shareholder's share acquisition date
and before the consummation date with respect to the
business combination, the interested shareholder has not
become the beneficial owner of any additional voting shares
of the resident domestic corporation except:
(i) as part of the transaction that resulted in the interested
shareholder becoming an interested shareholder;
(ii) by virtue of proportionate share splits, share dividends,
or other distributions of shares in respect of shares not
constituting a business combination under section 5(5) of
this chapter;
(iii) through a business combination meeting all of the
conditions of section 18 of this chapter and this section; or
(iv) through purchase by the interested shareholder at any
price that, if the price had been paid in an otherwise
permissible business combination the announcement date
and consummation date of which were the date of the
purchase, would have satisfied the requirements of clauses
(A), (B), and (C).
As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988,
SEC.124.
IC 23-1-43-20
Corporation having shares registered under Exchange Act;
application of chapter
Sec. 20. This chapter does not apply to any business combination
of a resident domestic corporation that does not, as of the share
acquisition date, have a class of voting shares registered with the
Securities and Exchange Commission under Section 12 of the
Exchange Act, unless the corporation's articles of incorporation
provide otherwise.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-21
Amendment of articles of incorporation making corporation
subject to this chapter; application of chapter
Sec. 21. This chapter does not apply to any business combination
of a resident domestic corporation the articles of incorporation of
which have been amended to provide that the resident domestic
corporation is subject to this chapter and that has not had a class of
voting shares registered with the Securities and Exchange
Commission under Section 12 of the Exchange Act on the effective
date of the amendment, and that is a business combination with an
interested shareholder whose share acquisition date is before the
effective date of the amendment.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-22
Election not to be covered by this chapter; application of chapter
Sec. 22. This chapter does not apply to any business combination
of a resident domestic corporation:
(1) the original articles of incorporation of which contain a
provision expressly electing not to be governed by this chapter;
(2) that, before the earlier of:
(A) September 1, 1987; or
(B) thirty (30) days after the date specified by a resolution of
the board of directors adopted under IC 23-1-17-3(b), if the
board of directors adopts such a resolution;
adopts an amendment to the resident domestic corporation's
bylaws expressly electing not to be governed by this chapter;
however, an election under this subdivision may be rescinded
by subsequent amendment of the bylaws; or
(3) that adopts an amendment to the resident domestic
corporation's articles of incorporation, approved by the
affirmative vote of the holders, other than interested
shareholders and their affiliates and associates, of a majority of
the outstanding voting shares of the resident domestic
corporation, excluding the voting shares of interested
shareholders and their affiliates and associates, expressly
electing not to be governed by this chapter, if the amendment to
the articles of incorporation is not to be effective until eighteen
(18) months after the vote of the resident domestic corporation's
shareholders and does not apply to any business combination of
the resident domestic corporation with an interested shareholder
whose share acquisition date is on or before the effective date
of the amendment.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-23
Inadvertent interested shareholder; application of chapter
Sec. 23. This chapter does not apply to any business combination
of a resident domestic corporation with an interested shareholder of
the resident domestic corporation who became an interested
shareholder inadvertently, if the interested shareholder:
(1) as soon as practicable, divests itself of a sufficient amount
of the voting shares of the corporation so that it no longer is the
beneficial owner (directly or indirectly) of ten percent (10%) or
more of the outstanding voting shares of the resident domestic
corporation; and
(2) would not at any time within the five (5) year period
preceding the announcement date with respect to the business
combination have been an interested shareholder but for the
inadvertent acquisition.
As added by P.L.149-1986, SEC.27.
IC 23-1-43-24
Interested shareholder on January 7, 1986; application of chapter
Sec. 24. This chapter does not apply to any business combination
with an interested shareholder who was an interested shareholder on
January 7, 1986.
As added by P.L.149-1986, SEC.27.