§ 23-1-43-19 — Business combination with interested shareholder; requirements

Indiana § 23-1-43-19

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 1: INDIANA BUSINESS CORPORATION LAW
• Ch. 43: Business Combinations

Text

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).

Legislative History

As added by P.L.149-1986, SEC.27. Amended by P.L.5-1988, SEC.124.