Full Text of HB5376 94th General Assembly
HB5376enr 94TH GENERAL ASSEMBLY
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HB5376 Enrolled |
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LRB094 18006 LCT 53310 b |
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| AN ACT concerning business.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Business Corporation Act of 1983 is amended | 5 |
| by changing Sections 6.15, 8.75, 11.70, and 12.56 as follows:
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| (805 ILCS 5/6.15) (from Ch. 32, par. 6.15)
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| Sec. 6.15. Issuance of fractional shares or scrip. A | 8 |
| corporation may, but shall not be obliged to, issue a | 9 |
| certificate for
a fractional share, and, by action of its board | 10 |
| of directors, may in lieu
thereof, pay cash equal to the fair
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| value of said fractional share, or issue
scrip in registered or | 12 |
| bearer form which shall entitle the holder to receive
a | 13 |
| certificate for a full share upon the surrender of such scrip | 14 |
| aggregating
a full share. A certificate for a fractional share | 15 |
| shall, but scrip shall
not unless otherwise provided therein, | 16 |
| entitle the holder to exercise fractional
voting rights, to | 17 |
| receive dividends thereon and to participate in any of
the | 18 |
| assets of the corporation in the event of liquidation. The | 19 |
| board of
directors may cause such scrip to be issued subject to | 20 |
| the condition that
it shall become void if not exchanged for | 21 |
| certificates representing full
shares before a specified date, | 22 |
| or subject to the condition that the shares
for which such | 23 |
| scrip is exchangeable may be sold by the corporation or by
an | 24 |
| agent on behalf of the holder thereof and the proceeds thereof | 25 |
| distributed
to the holders of such scrip or subject to any | 26 |
| other conditions which the
board of directors may deem
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| advisable.
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| For purposes of this Section, "fair value", with respect to | 29 |
| the cashout of a fractional share, means the proportionate | 30 |
| interest of the fractional share in the corporation, without | 31 |
| any discount for minority status or, absent extraordinary | 32 |
| circumstance, lack of marketability.
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LRB094 18006 LCT 53310 b |
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| (Source: P.A. 83-1025.)
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| (805 ILCS 5/8.75) (from Ch. 32, par. 8.75)
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| Sec. 8.75. Indemnification of officers, directors, | 4 |
| employees and agents;
insurance.
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| (a) A corporation may indemnify any person who was or is a | 6 |
| party,
or is threatened to be made a party to any threatened, | 7 |
| pending or completed
action, suit or proceeding, whether civil, | 8 |
| criminal, administrative or
investigative (other than an | 9 |
| action by or in the right of the corporation)
by reason of the | 10 |
| fact that he or she is or was a director, officer, employee
or | 11 |
| agent of the corporation, or who is or was serving at the | 12 |
| request of the
corporation as a director, officer, employee or | 13 |
| agent of another corporation,
partnership, joint venture, | 14 |
| trust or other enterprise, against expenses
(including | 15 |
| attorneys' fees), judgments, fines and amounts paid in | 16 |
| settlement
actually and reasonably incurred by such person in | 17 |
| connection with such action,
suit or proceeding, if such person | 18 |
| acted in good faith and in a manner he or
she reasonably | 19 |
| believed to be in, or not opposed to the best interests of the
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| corporation, and, with respect to any criminal action or | 21 |
| proceeding, had no
reasonable cause to believe his or her | 22 |
| conduct was unlawful. The termination
of any action, suit or | 23 |
| proceeding by judgment, order, settlement, conviction,
or upon | 24 |
| a plea of nolo contendere or its equivalent, shall not, of | 25 |
| itself,
create a presumption that the person did not act in | 26 |
| good faith and in a manner
which he or she reasonably believed | 27 |
| to be in or not opposed to the best
interests of the | 28 |
| corporation or, with respect to any criminal action or
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| proceeding, that the person had reasonable cause to believe | 30 |
| that his or her
conduct was unlawful.
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| (b) A corporation may indemnify any person who was or is
a | 32 |
| party, or is threatened to be made a party to any threatened,
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| pending or completed action or suit by or in the right of the
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| corporation to procure a judgment in its favor by reason
of the | 35 |
| fact that such person is or was a director, officer, employee
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HB5376 Enrolled |
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| or agent of the corporation, or is or was serving at the | 2 |
| request
of the corporation as a director, officer, employee or | 3 |
| agent
of another corporation, partnership, joint venture, | 4 |
| trust or other
enterprise, against expenses (including | 5 |
| attorneys' fees) actually
and reasonably incurred by such | 6 |
| person in connection with the defense
or settlement of such | 7 |
| action or suit, if such person acted in good faith
and in a | 8 |
| manner he or she reasonably believed to be in, or not
opposed | 9 |
| to, the best interests of the corporation, provided that no
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| indemnification shall be made with respect to any claim, issue, | 11 |
| or matter as to
which such person has been adjudged to have | 12 |
| been liable to the corporation,
unless, and only to the extent | 13 |
| that the court in which such action or suit was
brought shall | 14 |
| determine upon application that, despite the adjudication of
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| liability, but in view of all the circumstances of the case, | 16 |
| such person is
fairly and reasonably entitled to indemnity for | 17 |
| such expenses as the court
shall deem proper.
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| (c) To the extent that a present or former director, | 19 |
| officer or employee
of a corporation has been successful, on | 20 |
| the merits or otherwise,
in the defense of any action, suit or | 21 |
| proceeding referred to in
subsections (a) and (b), or in | 22 |
| defense of any claim, issue or matter
therein, such person | 23 |
| shall be indemnified against expenses (including
attorneys' | 24 |
| fees) actually and reasonably incurred by such person in | 25 |
| connection
therewith, if the person acted in good faith and in | 26 |
| a manner he or she
reasonably believed to be in, or not opposed | 27 |
| to, the best interests of the
corporation.
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| (d) Any indemnification under subsections (a) and (b) | 29 |
| (unless ordered
by a court) shall be made by the corporation | 30 |
| only as authorized in the specific
case, upon a determination | 31 |
| that indemnification of the present or former
director, | 32 |
| officer,
employee or agent is proper in the circumstances | 33 |
| because he or she has met
the applicable standard of conduct | 34 |
| set forth in subsections (a) or (b). Such
determination shall | 35 |
| be made with respect to a person who is a director or
officer | 36 |
| at the time of the determination: (1) by the majority vote of |
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| the
directors who are not parties to such action, suit or
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| proceeding, even though less than a quorum, (2) by a committee | 3 |
| of the
directors who are not parties to such action, suit, or | 4 |
| proceeding, even though less than a quorum, designated by a | 5 |
| majority vote of the directors, even though less
than a quorum,
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| (3) if there are no such directors, or if the directors so
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| direct, by independent legal
counsel
in a written opinion, or | 8 |
| (4) by the shareholders.
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| (e) Expenses (including attorney's fees) incurred by an | 10 |
| officer or
director in defending a civil or criminal action, | 11 |
| suit or
proceeding may be paid by the corporation in advance of | 12 |
| the final disposition
of such action, suit or proceeding upon | 13 |
| receipt of an undertaking by or on
behalf of the director or | 14 |
| officer to repay
such amount if it
shall ultimately be | 15 |
| determined that such person is not
entitled to be indemnified
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| by the corporation as authorized in this Section.
Such expenses | 17 |
| (including attorney's fees) incurred by former directors and
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| officers or other employees and agents may be so paid on such | 19 |
| terms and
conditions, if any, as the corporation deems | 20 |
| appropriate.
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| (f) The indemnification and advancement of expenses | 22 |
| provided by or
granted under the other subsections of this | 23 |
| Section shall not be
deemed exclusive of any other rights to | 24 |
| which those seeking
indemnification or advancement of expenses | 25 |
| may be entitled under any
by-law, agreement, vote of | 26 |
| shareholders or disinterested directors, or
otherwise, both as | 27 |
| to action in his or her official capacity and as to action
in | 28 |
| another capacity while holding such office.
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| (g) A corporation may purchase and maintain insurance on | 30 |
| behalf of
any person who is or was a director, officer, | 31 |
| employee or agent of the
corporation, or who is or was serving | 32 |
| at the request of the corporation as a
director, officer, | 33 |
| employee or agent of another corporation, partnership,
joint | 34 |
| venture, trust or other enterprise, against any liability | 35 |
| asserted
against such person and incurred by such person in any | 36 |
| such capacity, or
arising out of his or her status as such, |
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HB5376 Enrolled |
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| whether or not the corporation would
have the power to | 2 |
| indemnify such person against such liability under the
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| provisions of this Section.
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| (h) If a corporation indemnifies or advances expenses to a
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| director or officer under subsection (b) of this Section, the | 6 |
| corporation shall report the
indemnification or advance in | 7 |
| writing to the shareholders with or before the
notice of the | 8 |
| next shareholders meeting.
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| (i) For purposes of this Section, references to "the | 10 |
| corporation" shall
include, in addition to the surviving | 11 |
| corporation, any merging corporation
(including any | 12 |
| corporation having merged with a merging corporation) absorbed
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| in a merger which, if its separate existence had continued, | 14 |
| would have had
the power and authority to indemnify its | 15 |
| directors, officers, and employees
or agents, so that any | 16 |
| person who was a director, officer, employee or agent
of such | 17 |
| merging corporation, or was serving at the request of such | 18 |
| merging
corporation as a director, officer, employee or agent | 19 |
| of another corporation,
partnership, joint venture, trust or | 20 |
| other enterprise, shall stand in the
same position under the | 21 |
| provisions of this Section with respect to
the surviving | 22 |
| corporation as such person would have with respect to such
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| merging corporation if its separate existence had continued.
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| (j) For purposes of this Section, references to "other | 25 |
| enterprises" shall
include employee benefit plans; references | 26 |
| to "fines" shall include any
excise taxes assessed on a person | 27 |
| with respect to an employee benefit plan;
and references to | 28 |
| "serving at the request of the corporation" shall include
any | 29 |
| service as a director, officer, employee or agent of the | 30 |
| corporation
which imposes duties on, or involves services by | 31 |
| such director, officer,
employee, or agent with respect to an | 32 |
| employee benefit plan, its participants,
or beneficiaries. A | 33 |
| person who acted in good faith and in a manner he or
she | 34 |
| reasonably believed to be in the best interests of the | 35 |
| participants
and beneficiaries of an employee benefit plan | 36 |
| shall be deemed to have acted
in a manner "not opposed to the |
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HB5376 Enrolled |
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LRB094 18006 LCT 53310 b |
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| best interest of the corporation" as referred
to in this | 2 |
| Section.
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| (k) The indemnification and advancement of expenses | 4 |
| provided by or granted
under this Section shall, unless | 5 |
| otherwise provided when authorized or
ratified, continue as to | 6 |
| a person who has ceased to be a director, officer,
employee, or | 7 |
| agent and shall inure to the benefit of the heirs, executors, | 8 |
| and
administrators of that person.
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| (l) The changes to this Section made by this amendatory Act | 10 |
| of the 92nd
General Assembly apply only to actions commenced on | 11 |
| or after the
effective date of this amendatory Act of the 92nd | 12 |
| General Assembly.
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| (Source: P.A. 91-464, eff. 1-1-00; 92-33, eff. 7-1-01.)
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| (805 ILCS 5/11.70) (from Ch. 32, par. 11.70)
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| Sec. 11.70. Procedure to Dissent.
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| (a) If the corporate action giving rise to the right to
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| dissent is to be approved at a meeting of shareholders, the | 18 |
| notice of meeting
shall inform the shareholders of their right | 19 |
| to dissent and the procedure
to dissent. If, prior to the | 20 |
| meeting, the corporation furnishes to the
shareholders | 21 |
| material information with respect to the transaction that
will | 22 |
| objectively enable a shareholder to vote on the transaction and | 23 |
| to
determine whether or not to exercise dissenters' rights, a | 24 |
| shareholder may
assert dissenters' rights only if the | 25 |
| shareholder delivers to the corporation
before the vote is | 26 |
| taken a written demand for payment for his or her shares
if the | 27 |
| proposed action is consummated, and the shareholder does not
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| vote in favor of the proposed action.
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| (b) If the corporate action giving rise to the right to | 30 |
| dissent is not
to be approved at a meeting of shareholders, the | 31 |
| notice to shareholders
describing the action taken under | 32 |
| Section 11.30 or Section 7.10 shall inform
the shareholders of | 33 |
| their right to dissent and the procedure to dissent.
If, prior | 34 |
| to or concurrently with the notice, the corporation furnishes
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| to the shareholders material information with respect to the |
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LRB094 18006 LCT 53310 b |
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| transaction
that will objectively enable a shareholder to | 2 |
| determine whether or not to
exercise dissenters' rights, a | 3 |
| shareholder may assert dissenter's rights
only if he or she | 4 |
| delivers to the corporation within 30 days from the date
of | 5 |
| mailing the notice a written demand for payment for his or her | 6 |
| shares.
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| (c) Within 10 days after the date on which the corporate | 8 |
| action giving
rise to the right to dissent is effective or 30 | 9 |
| days after the shareholder
delivers to the corporation the | 10 |
| written demand for payment, whichever is
later, the corporation | 11 |
| shall send each shareholder who has delivered a written
demand | 12 |
| for payment a statement setting forth the opinion of the | 13 |
| corporation
as to the estimated fair value of the shares, the | 14 |
| corporation's latest balance
sheet as of the end of a fiscal | 15 |
| year ending not earlier than 16 months
before the delivery of | 16 |
| the statement, together with the statement of income
for that | 17 |
| year and the latest available interim financial statements, and
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| either a commitment to pay for the shares of the dissenting | 19 |
| shareholder
at the estimated fair value thereof upon | 20 |
| transmittal to the corporation of the
certificate or | 21 |
| certificates, or other evidence of ownership, with respect
to | 22 |
| the shares, or instructions to the dissenting shareholder to | 23 |
| sell
his or her shares within 10 days after delivery of the | 24 |
| corporation's statement
to the shareholder. The corporation | 25 |
| may instruct the shareholder to sell
only if there is a public | 26 |
| market for the shares at which the shares may
be readily sold. | 27 |
| If the shareholder does not sell within that 10 day
period | 28 |
| after being so instructed by the corporation, for purposes of | 29 |
| this
Section the shareholder shall be deemed to have sold his | 30 |
| or her shares at
the average closing price of the shares, if | 31 |
| listed on a national exchange,
or the average of the bid and | 32 |
| asked price with respect to the shares quoted
by a principal | 33 |
| market maker, if not listed on a national exchange, during
that | 34 |
| 10 day period.
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| (d) A shareholder who makes written demand for payment | 36 |
| under this
Section retains all other rights of a shareholder |
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HB5376 Enrolled |
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| until those rights are
cancelled or modified by the | 2 |
| consummation of the proposed corporate action.
Upon | 3 |
| consummation of that action, the corporation shall pay to each
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| dissenter who transmits to the corporation the certificate or | 5 |
| other
evidence of ownership of the shares the amount the | 6 |
| corporation estimates to
be the fair value of the shares, plus | 7 |
| accrued interest, accompanied by a
written explanation of how | 8 |
| the interest was calculated.
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| (e) If the shareholder does not agree with the opinion of | 10 |
| the
corporation as to the estimated fair value of the shares or | 11 |
| the amount of
interest due, the shareholder, within 30 days | 12 |
| from the delivery of the
corporation's statement of value, | 13 |
| shall notify the corporation in writing
of the shareholder's | 14 |
| estimated fair value and amount of interest due and
demand | 15 |
| payment for the difference between the shareholder's estimate | 16 |
| of
fair value and interest due and the amount of the payment by | 17 |
| the
corporation or the proceeds of sale by the shareholder, | 18 |
| whichever is
applicable because of the procedure for which the | 19 |
| corporation opted
pursuant to subsection (c).
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| (f) If, within 60 days from delivery to the corporation of | 21 |
| the
shareholder notification of estimate of fair value of the | 22 |
| shares and
interest due, the corporation and the dissenting | 23 |
| shareholder have not
agreed in writing upon the fair value of | 24 |
| the shares and interest due, the
corporation shall either pay | 25 |
| the difference in value demanded by the
shareholder, with | 26 |
| interest, or file a petition in the circuit court of the
county | 27 |
| in which either the registered office or the principal office | 28 |
| of the
corporation is located, requesting the court to | 29 |
| determine the fair value of
the shares and interest due. The | 30 |
| corporation shall make all dissenters,
whether or not residents | 31 |
| of this State, whose demands remain unsettled
parties to the | 32 |
| proceeding as an action against their shares and all parties
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| shall be served with a copy of the petition. Nonresidents may | 34 |
| be served by
registered or certified mail or by publication as | 35 |
| provided by law. Failure
of the corporation to commence an | 36 |
| action pursuant to this Section shall not
limit or affect the |
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| right of the dissenting shareholders to otherwise
commence an | 2 |
| action as permitted by law.
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| (g) The jurisdiction of the court in which the proceeding | 4 |
| is commenced
under subsection (f) by a corporation is plenary | 5 |
| and exclusive. The court
may appoint one or more persons as | 6 |
| appraisers to receive evidence and
recommend decision on the | 7 |
| question of fair value. The appraisers have the
power described | 8 |
| in the order appointing them, or in any amendment to it.
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| (h) Each dissenter made a party to the proceeding is | 10 |
| entitled to
judgment for the amount, if any, by which the court | 11 |
| finds that the fair
value of his or her shares, plus interest, | 12 |
| exceeds the amount paid by the
corporation or the proceeds of | 13 |
| sale by the shareholder, whichever amount
is applicable.
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| (i) The court, in a proceeding commenced under subsection
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| (f), shall determine all costs of the proceeding, including the | 16 |
| reasonable
compensation and expenses of the appraisers, if any, | 17 |
| appointed by the
court under subsection (g), but shall exclude | 18 |
| the fees and expenses of
counsel and experts for the respective | 19 |
| parties. If the fair value of the
shares as determined by the | 20 |
| court materially exceeds the amount which the
corporation | 21 |
| estimated to be the fair value of the shares or if no estimate
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| was made in accordance with subsection (c), then all or any | 23 |
| part of the
costs may be assessed against the corporation. If | 24 |
| the amount which any
dissenter estimated to be the fair value | 25 |
| of the shares materially exceeds
the fair value of the shares | 26 |
| as determined by the court, then all or any
part of the costs | 27 |
| may be assessed against that dissenter. The court may
also | 28 |
| assess the fees and expenses of counsel and experts for the | 29 |
| respective
parties, in amounts the court finds equitable, as | 30 |
| follows:
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| (1) Against the corporation and in favor of any or all | 32 |
| dissenters if
the court finds that the corporation did not | 33 |
| substantially comply with the
requirements of subsections | 34 |
| (a), (b), (c), (d), or (f).
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| (2) Against either the corporation or a dissenter and | 36 |
| in favor of any
other party if the court finds that the |
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HB5376 Enrolled |
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| party against whom the fees and
expenses are assessed acted | 2 |
| arbitrarily, vexatiously, or not in good faith
with respect | 3 |
| to the rights provided by this Section.
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| If the court finds that the services of counsel for any | 5 |
| dissenter were of
substantial benefit to other dissenters | 6 |
| similarly situated and that the
fees for those services should | 7 |
| not be assessed against the corporation, the
court may award to | 8 |
| that counsel reasonable fees to be paid out of the
amounts | 9 |
| awarded to the dissenters who are benefited. Except as | 10 |
| otherwise
provided in this Section, the practice, procedure, | 11 |
| judgment and costs shall
be governed by the Code of Civil | 12 |
| Procedure.
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| (j) As used in this Section:
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| (1) "Fair value", with respect to a dissenter's shares, | 15 |
| means the
proportionate interest of the shareholder in the | 16 |
| corporation, without discount for minority status or, | 17 |
| absent extraordinary circumstance, lack of marketability,
| 18 |
| value of the shares immediately before the consummation of | 19 |
| the corporate
action to which the dissenter objects | 20 |
| excluding any appreciation or
depreciation in anticipation | 21 |
| of the corporate action, unless exclusion
would be | 22 |
| inequitable.
| 23 |
| (2) "Interest" means interest from the effective date | 24 |
| of the corporate
action until the date of payment, at the | 25 |
| average rate currently paid by the
corporation on its | 26 |
| principal bank loans or, if none, at a rate that is fair
| 27 |
| and equitable under all the circumstances.
| 28 |
| (Source: P.A. 86-1156.)
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| (805 ILCS 5/12.56)
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| Sec. 12.56. Shareholder remedies: non-public corporations.
| 31 |
| (a) In an action by a shareholder in a corporation that has
| 32 |
| no shares listed on a national securities exchange or regularly
| 33 |
| traded in a market maintained by one or more members of a
| 34 |
| national or affiliated securities association, the Circuit | 35 |
| Court
may order one or more of the remedies listed in |
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| subsection (b) if
it is established that:
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| (1) The directors are deadlocked, whether because of
| 3 |
| even division in the number of directors or because of | 4 |
| greater than
majority voting requirements in the articles | 5 |
| of incorporation or
the by-laws or otherwise, in the | 6 |
| management of the corporate
affairs; the shareholders are | 7 |
| unable to break the deadlock; and
either irreparable injury | 8 |
| to the corporation is thereby caused or
threatened or the | 9 |
| business of the corporation can no longer be
conducted to | 10 |
| the general advantage of the shareholders; or
| 11 |
| (2) The shareholders are deadlocked in voting power
and | 12 |
| have failed, for a period that includes at least 2
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| consecutive annual meeting dates, to elect successors to
| 14 |
| directors whose terms have expired and either irreparable | 15 |
| injury
to the corporation is thereby caused or threatened | 16 |
| or the
business of the corporation can no longer be | 17 |
| conducted to the
general advantage of the shareholders; or
| 18 |
| (3) The directors or those in control of the
| 19 |
| corporation have acted, are acting, or will act in a manner | 20 |
| that
is illegal, oppressive, or fraudulent with respect to | 21 |
| the
petitioning shareholder whether in his or her capacity | 22 |
| as a
shareholder, director, or officer; or
| 23 |
| (4) The corporation assets are being misapplied or
| 24 |
| wasted.
| 25 |
| (b) The relief which the court may order in an action under
| 26 |
| subsection (a) includes but is not limited to the following:
| 27 |
| (1) The performance, prohibition, alteration, or
| 28 |
| setting aside of any action of the corporation or of its
| 29 |
| shareholders, directors, or officers of or any other party | 30 |
| to the
proceedings;
| 31 |
| (2) The cancellation or alteration of any provision in
| 32 |
| the corporation's articles of incorporation or by-laws;
| 33 |
| (3) The removal from office of any director or
officer;
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| (4) The appointment of any individual as a director or
| 35 |
| officer;
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| (5) An accounting with respect to any matter in
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| dispute;
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| (6) The appointment of a custodian to manage the
| 3 |
| business and affairs of the corporation to serve for the | 4 |
| term and
under the conditions prescribed by the court;
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| (7) The appointment of a provisional director to serve
| 6 |
| for the term and under the conditions prescribed by the | 7 |
| court;
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| (8) The submission of the dispute to mediation or
other | 9 |
| forms of non-binding alternative dispute resolution;
| 10 |
| (9) The payment of dividends;
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| (10) The award of damages to any aggrieved party;
| 12 |
| (11) The purchase by the corporation or one or more
| 13 |
| other shareholders of all, but not less than all, of the | 14 |
| shares
of the petitioning shareholder for their fair value | 15 |
| and on the
terms determined under subsection (e); or
| 16 |
| (12) The dissolution of the corporation if the court
| 17 |
| determines that no remedy specified in subdivisions (1) | 18 |
| through
(11) or other alternative remedy is sufficient to | 19 |
| resolve the
matters in dispute. In determining whether to | 20 |
| dissolve the
corporation, the court shall consider among | 21 |
| other relevant
evidence the financial condition of the | 22 |
| corporation but may not
refuse to dissolve the corporation | 23 |
| solely because it has
accumulated earnings or current | 24 |
| operating profits.
| 25 |
| (c) The remedies set forth in subsection (b) shall not be
| 26 |
| exclusive of other legal and equitable remedies which the court
| 27 |
| may impose.
| 28 |
| (d) In determining the appropriate relief to order pursuant
| 29 |
| to this Section, the court may take into consideration the
| 30 |
| reasonable expectations of the corporation's shareholders as | 31 |
| they
existed at the time the corporation was formed and | 32 |
| developed
during the course of the shareholders' relationship | 33 |
| with the
corporation and with each other.
| 34 |
| (e) If the court orders a share purchase,
it shall:
| 35 |
| (i) Determine the fair value of the shares, with or
| 36 |
| without the assistance of appraisers, taking into |
|
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LRB094 18006 LCT 53310 b |
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| 1 |
| account any
impact on the value of the shares resulting | 2 |
| from the actions
giving rise to a petition under this | 3 |
| Section;
| 4 |
| (ii) Consider any financial or legal constraints | 5 |
| on the
ability of the corporation or the purchasing | 6 |
| shareholder to
purchase the shares;
| 7 |
| (iii) Specify the terms of the purchase, | 8 |
| including, if
appropriate, terms for installment | 9 |
| payments, interest at the rate
and from the date | 10 |
| determined by the court to be equitable,
subordination | 11 |
| of the purchase obligation to the rights of the
| 12 |
| corporation's other creditors, security for a deferred | 13 |
| purchase
price, and a covenant not to compete or other | 14 |
| restriction on the
seller;
| 15 |
| (iv) Require the seller to deliver all of his or | 16 |
| her
shares to the purchaser upon receipt of the | 17 |
| purchase price or the
first installment of the purchase | 18 |
| price; and
| 19 |
| (v) Retain jurisdiction to enforce the purchase | 20 |
| order
by, among other remedies, ordering the | 21 |
| corporation to be
dissolved if the purchase is not | 22 |
| completed in accordance with the
terms of the purchase | 23 |
| order.
| 24 |
| For purposes of this subsection (e), "fair value", with | 25 |
| respect to a petitioning shareholder's shares, means the | 26 |
| proportionate interest of the shareholder in the corporation, | 27 |
| without any discount for minority status or, absent | 28 |
| extraordinary circumstances, lack of marketability.
| 29 |
| The purchase ordered pursuant to this subsection (e) shall
| 30 |
| be consummated within 20 days after the date the order becomes
| 31 |
| final unless before that time the corporation files with the
| 32 |
| court a notice of its intention to dissolve and articles of
| 33 |
| dissolution are properly filed with the Secretary of State | 34 |
| within
50 days after filing the notice with the court.
| 35 |
| After the purchase order is entered and before the
purchase | 36 |
| price is fully paid, any party may petition the court to
modify |
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LRB094 18006 LCT 53310 b |
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| 1 |
| the terms of the purchase and the court may do so if it
finds | 2 |
| that such changes are equitable.
| 3 |
| Unless the purchase order is modified by the court, the
| 4 |
| selling shareholder shall have no further rights as a | 5 |
| shareholder
from the date the seller delivers all of his or her | 6 |
| shares to the
purchaser or such other date specified by the | 7 |
| court.
| 8 |
| If the court orders shares to be purchased by one or
more | 9 |
| other shareholders, in allocating the shares to be purchased
by | 10 |
| the other shareholders, unless equity requires otherwise, the
| 11 |
| court shall attempt to preserve the existing distribution of
| 12 |
| voting rights and other designations, preferences,
| 13 |
| qualifications, limitations, restrictions and special or | 14 |
| relative
rights among the holders of the class or classes and | 15 |
| may direct
that holders of a specific class or classes shall | 16 |
| not participate
in the purchase.
| 17 |
| (f) When the relief requested by the petition includes the | 18 |
| purchase of the petitioner's shares, then at any time within 90 | 19 |
| days after the filing of the
petition under this Section, or at | 20 |
| such time determined by the
court to be equitable, the | 21 |
| corporation or one or more
shareholders may elect to purchase | 22 |
| all, but not less than all, of
the shares owned by the | 23 |
| petitioning shareholder for their fair
value. An election | 24 |
| pursuant to this Section shall state in
writing the amount | 25 |
| which the electing party will pay for the
shares.
| 26 |
| (1) The election shall be irrevocable unless the court
| 27 |
| determines that it is equitable to set aside or modify the
| 28 |
| election.
| 29 |
| (2) If the election to purchase is filed by one or
more | 30 |
| shareholders, the corporation shall, within 10 days
| 31 |
| thereafter, give written notice to all shareholders. The | 32 |
| notice
must state: (i) the name and number of shares owned | 33 |
| by the
petitioner; (ii) the name and number of shares owned | 34 |
| by each
electing shareholder; and (iii) the amount which | 35 |
| each electing
party will pay for the shares and must advise | 36 |
| the recipients of
their right to join in the election to |
|
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LRB094 18006 LCT 53310 b |
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| purchase shares.
Shareholders who wish to participate must | 2 |
| file notice of their
intention to join in a purchase no | 3 |
| later than 30 days after the
date of the notice to them or | 4 |
| at such time as the court in its
discretion may allow. All | 5 |
| shareholders who have filed an
election or notice of their | 6 |
| intention to participate in the
election to purchase | 7 |
| thereby become parties to the proceeding and
shall | 8 |
| participate in the purchase in proportion to their
| 9 |
| ownership of shares as of the date the first election was | 10 |
| filed,
unless they otherwise agree or the court otherwise | 11 |
| directs.
| 12 |
| (3) The court in its discretion may allow the
| 13 |
| corporation and all non-petitioning shareholders to file | 14 |
| an
election to purchase the petitioning shareholder's | 15 |
| shares at a
higher price. If the court does so, it shall | 16 |
| allow other
shareholders an opportunity to join in the | 17 |
| purchase at the higher
price in accordance with their | 18 |
| proportionate ownership interest.
| 19 |
| (4) After an election has been filed by the
corporation | 20 |
| or one or more shareholders, the proceeding filed
under | 21 |
| this Section may not be discontinued or settled, nor may
| 22 |
| the petitioning shareholder sell or otherwise dispose of | 23 |
| his or
her shares, unless the court determines that it | 24 |
| would be
equitable to the corporation and the shareholders, | 25 |
| other than the
petitioner, to permit the discontinuance, | 26 |
| settlement, sale, or
other disposition. In considering | 27 |
| whether equity exists to
approve any settlement, the court | 28 |
| may take into consideration the
reasonable expectations of | 29 |
| the shareholders as set forth in
subsection (d), including | 30 |
| any existing agreement among the
shareholders.
| 31 |
| (5) If, within 30 days of the filing of the latest
| 32 |
| election allowed by the court, the parties reach agreement | 33 |
| as to
the fair value and terms of purchase of the | 34 |
| petitioner's shares,
the court shall enter an order | 35 |
| directing the purchase of
petitioner's shares upon the | 36 |
| terms and conditions agreed to by
the parties.
|
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LRB094 18006 LCT 53310 b |
|
| 1 |
| (6) If the parties are unable to reach an agreement as
| 2 |
| provided for in paragraph (5) of this subsection (f), the | 3 |
| court,
upon application of any party, shall stay the
| 4 |
| proceeding under subsection (a) and shall determine the | 5 |
| fair value of the
petitioner's
shares pursuant to | 6 |
| subsection (e) as of the day before the date
on which the | 7 |
| petition under subsection (a) was filed or as of
such other | 8 |
| date as the court deems appropriate under the
| 9 |
| circumstances.
| 10 |
| (g) In any proceeding under this Section, the court shall
| 11 |
| allow reasonable compensation to the custodian, provisional
| 12 |
| director, appraiser, or other such person appointed by the | 13 |
| court
for services rendered and reimbursement or direct payment | 14 |
| of
reasonable costs and expenses, which amounts shall be paid | 15 |
| by the
corporation.
| 16 |
| (Source: P.A. 94-394, eff. 8-1-05.)
|
|