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90_HB0613sam001
LRB9002696NTsbam
1 AMENDMENT TO HOUSE BILL 613
2 AMENDMENT NO. . Amend House Bill 613 as follows:
3 on page 1, line 2, by replacing "Section 7.85" with "Sections
4 7.85 and 11.75"; and
5 on page 1, line 6, by replacing "Section 7.85" with "Sections
6 7.85 and 11.75"; and
7 on page 10, line 12, after "and", by inserting "either (I)";
8 and
9 on page 10, line 14, after "corporation", by inserting the
10 following:
11 "or (II) is an affiliate or associate of the corporation and
12 so continued (or so would have continued but for action by
13 the corporation) to be the owner of 15% or more of the
14 outstanding voting shares of the corporation at any time
15 within the 3-year period immediately prior to the date on
16 which it is sought to be determined whether such a person is
17 an interested shareholder"; and
18 on page 13, lines 6 and 7, by replacing "or organization"
19 with ", partnership, unincorporated association, or other
20 entity"; and
21 on page 15, immediately below line 9, by inserting the
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1 following:
2 "(12) "Shares" means, with respect to any
3 corporation, capital stock and, with respect to any other
4 entity, any equity interest.
5 (13) "Voting shares" means, with respect to any
6 corporation, shares of any class or series entitled to
7 vote generally in the election of directors and, with
8 respect to any entity that is not a corporation, any
9 equity interest entitled to vote generally in its
10 election of the governing body of the entity."; and
11 on page 15, below line 25, by inserting the following:
12 "(805 ILCS 5/11.75) (from Ch. 32, par. 11.75)
13 Sec. 11.75. Business combinations with interested
14 shareholders. (a) Notwithstanding any other provisions of
15 this Act, a corporation (as defined in this Section 11.75)
16 shall not engage in any business combination with any
17 interested shareholder for a period of 3 years following the
18 time date that such shareholder became an interested
19 shareholder, unless (1) prior to such time date the board of
20 directors of the corporation approved either the business
21 combination or the transaction which resulted in the
22 shareholder becoming an interested shareholder, or (2) upon
23 consummation of the transaction which resulted in the
24 shareholder becoming an interested shareholder, the
25 interested shareholder owned at least 85% of the voting
26 shares of the corporation outstanding at the time the
27 transaction commenced, excluding for purposes of determining
28 the number of shares outstanding those shares owned (i) by
29 persons who are directors and also officers and (ii) employee
30 stock plans in which employee participants do not have the
31 right to determine confidentially whether shares held subject
32 to the plan will be tendered in a tender or exchange offer,
33 or (3) at on or subsequent to such time date the business
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1 combination is approved by the board of directors and
2 authorized at an annual or special meeting of shareholders,
3 and not by written consent, by the affirmative vote of at
4 least 66 2/3% of the outstanding voting shares which are not
5 owned by the interested shareholder.
6 (b) The restrictions contained in this Section shall not
7 apply if:
8 (1) the corporation's original articles of
9 incorporation contains a provision expressly electing not
10 to be governed by this Section;
11 (2) the corporation, by action of its board of
12 directors, adopts an amendment to its by-laws within 90
13 days of the effective date of this amendatory Act of
14 1989, expressly electing not to be governed by this
15 Section, which amendment shall not be further amended by
16 the board of directors.
17 (3) the corporation, by action of its shareholders,
18 adopts an amendment to its articles of incorporation or
19 by-laws expressly electing not to be governed by this
20 Section, provided that, in addition to any other vote
21 required by law, such amendment to the articles of
22 incorporation or by-laws must be approved by the
23 affirmative vote of a majority of the shares entitled to
24 vote. An amendment adopted pursuant to this paragraph
25 shall be effective immediately in the case of a
26 corporation that both (i) has never had a class of voting
27 shares that falls within any of the categories set out in
28 paragraph (4) of this subsection (b) and (ii) has not
29 elected by a provision in its original articles of
30 incorporation or any amendment thereto to be governed by
31 this Section. In all other cases, an amendment adopted
32 pursuant to this paragraph shall not be effective until
33 12 months after the adoption of such amendment and shall
34 not apply to any business combination between such
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1 corporation and any person who became an interested
2 shareholder of such corporation on or prior to such
3 adoption. A by-law amendment adopted pursuant to this
4 paragraph shall not be further amended by the board of
5 directors;
6 (4) the he corporation does not have a class of
7 voting shares that is (i) listed on a national securities
8 exchange, (ii) authorized for quotation on the NASDAQ
9 Stock Market an inter-dealer quotation system of a
10 registered national securities association or (iii) held
11 of record by more than 2,000 shareholders, unless any of
12 the foregoing results from action taken, directly or
13 indirectly, by an interested shareholder or from a
14 transaction in which a person becomes an interested
15 shareholder;
16 (5) a shareholder becomes an interested shareholder
17 inadvertently and (i) as soon as practicable divests
18 itself of ownership of sufficient shares so that the
19 shareholder ceases to be an interested shareholder and
20 (ii) would not, at any time within the 3 year period
21 immediately prior to a business combination between the
22 corporation and such shareholder, have been an interested
23 shareholder but for the inadvertent acquisition of
24 ownership; or
25 (6) the business combination is proposed prior to
26 the consummation or abandonment of and subsequent to the
27 earlier of the public announcement or the notice required
28 hereunder of a proposed transaction which (i) constitutes
29 one of the transactions described in the second sentence
30 of this paragraph; (ii) is with or by a person who either
31 was not an interested shareholder during the previous 3
32 years or who became an interested shareholder with the
33 approval of the corporation's board of directors or
34 during the period described in paragraph (7) of this
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1 subsection (b); and (iii) is approved or not opposed by a
2 majority of the members of the board of directors then in
3 office (but not less than 1) who were directors prior to
4 any person becoming an interested shareholder during the
5 previous 3 years or were recommended for election or
6 elected to succeed such directors by a majority of such
7 directors. The proposed transactions referred to in the
8 preceding sentence are limited to (x) a merger or
9 consolidation of the corporation (except for a merger in
10 respect of which, pursuant to subsection (c) of Section
11 11.20 of this Act, no vote of the shareholders of the
12 corporation is required); (y) a sale, lease, exchange,
13 mortgage, pledge, transfer or other disposition (in one
14 transaction or a series of transactions), whether as part
15 of a dissolution or otherwise, of assets of the
16 corporation or of any direct or indirect majority-owned
17 subsidiary of the corporation (other than to any direct
18 or indirect wholly-owned subsidiary or to the
19 corporation) having an aggregate market value equal to
20 50% or more of either the aggregate market value of all
21 of the assets of the corporation determined on a
22 consolidated basis or the aggregate market value of all
23 the outstanding shares of the corporation; or (z) a
24 proposed tender or exchange offer for 50% or more of the
25 outstanding voting shares of the corporation. The
26 corporation shall give not less than 20 days notice to
27 all interested shareholders prior to the consummation of
28 any of the transactions described in clauses (x) or (y)
29 of the second sentence of this paragraph; or
30 (7) The business combination is with an interested
31 shareholder who became an interested shareholder at a
32 time when the restrictions contained in this Section did
33 not apply by reason of any of the paragraphs (1) through
34 (4) of this subsection (b), provided, however, that this
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1 paragraph (7) shall not apply if, at the time the
2 interested shareholder became an interested shareholder,
3 the corporation's articles of incorporation contained a
4 provision authorized by the last sentence of this
5 subsection (b). Notwithstanding paragraphs (1), (2), (3)
6 and (4) of this subsection and subparagraph (A) of
7 paragraph (5) of subsection (c), any domestic corporation
8 may elect by a provision of its original articles of
9 incorporation or any amendment thereto to be governed by
10 this Section, provided that any such amendment to the
11 articles of incorporation shall not apply to restrict a
12 business combination between the corporation and an
13 interested shareholder of the corporation if the
14 interested shareholder became such prior to the effective
15 date of the amendment.
16 (c) As used in this Section 11.75 only, the term:
17 (1) "Affiliate" means a person that directly, or
18 indirectly through one or more intermediaries, controls,
19 or is controlled by, or is under common control with,
20 another person.
21 (2) "Associate" when used to indicate a
22 relationship with any person, means (i) any corporation,
23 partnership, unincorporated association, or other entity
24 or organization of which such person is a director,
25 officer or partner or is, directly or indirectly, the
26 owner of 20% or more of any class of voting shares, (ii)
27 any trust or other estate in which such person has at
28 least a 20% beneficial interest or as to which such
29 person serves as trustee or in a similar fiduciary
30 capacity, and (iii) any relative or spouse of such
31 person, or any relative of such spouse, who has the same
32 residence as such person.
33 (3) "Business combination" when used in reference
34 to any corporation and any interested shareholder of such
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1 corporation, means:
2 (A) any merger or consolidation of the
3 corporation or any direct or indirect majority-owned
4 subsidiary of the corporation with (i) the
5 interested shareholder, or (ii) with any other
6 corporation if the merger or consolidation is caused
7 by the interested shareholder and as a result of
8 such merger or consolidation subsection (a) of this
9 Section is not applicable to the surviving
10 corporation;
11 (B) any sale, lease, exchange, mortgage,
12 pledge, transfer or other disposition (in one
13 transaction or a series of transactions), except
14 proportionately as a shareholder of such
15 corporation, to or with the interested shareholder,
16 whether as part of a dissolution or otherwise, of
17 assets of the corporation or of any direct or
18 indirect majority-owned subsidiary of the
19 corporation which assets have an aggregate market
20 value equal to 10% or more of either the aggregate
21 market value of all the assets of the corporation
22 determined on a consolidated basis or the aggregate
23 market value of all the outstanding shares of the
24 corporation;
25 (C) any transaction which results in the
26 issuance or transfer by the corporation or by any
27 direct or indirect majority-owned subsidiary of the
28 corporation of any shares of the corporation or of
29 such subsidiary to the interested shareholder,
30 except (i) pursuant to the exercise, exchange or
31 conversion of securities exercisable for,
32 exchangeable for or convertible into shares of such
33 corporation or any such subsidiary which securities
34 were outstanding prior to the time that the
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1 interested shareholder became such, (ii) pursuant to
2 a dividend or distribution paid or made, or the
3 exercise, exchange or conversion of securities
4 exercisable for, exchangeable for or convertible
5 into shares of such corporation or any such
6 subsidiary which security is distributed, pro rata
7 to all holders of a class or series of shares of
8 such corporation subsequent to the time the
9 interested shareholder became such, (iii) pursuant
10 to an exchange offer by the corporation to purchase
11 shares made on the same terms to all holders of said
12 shares, or (iv) any issuance or transfer of shares
13 by the corporation, provided however, that in no
14 case under clauses (ii), (iii) and (iv) above shall
15 there be an increase in the interested shareholder's
16 proportionate share of the shares of any class or
17 series of the corporation or of the voting shares of
18 the corporation;
19 (D) any transaction involving the corporation
20 or any direct or indirect majority-owned subsidiary
21 of the corporation which has the effect, directly or
22 indirectly, of increasing the proportionate share of
23 the shares of any class or series, or securities
24 convertible into the shares of any class or series,
25 of the corporation or of any such subsidiary which
26 is owned by the interested shareholder, except as a
27 result of immaterial changes due to fractional share
28 adjustments or as a result of any purchase or
29 redemption of any shares of any class or series not
30 caused, directly or indirectly, by the interested
31 shareholder; or
32 (E) any receipt by the interested shareholder
33 of the benefit, directly or indirectly (except
34 proportionately as a shareholder of such
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1 corporation) of any loans, advances, guarantees,
2 pledges, or other financial benefits (other than
3 those expressly permitted in subparagraphs (A)
4 through (D) of this paragraph (3)) provided by or
5 through the corporation or any direct or indirect
6 majority owned subsidiary; or
7 (F) any receipt by the interested shareholder
8 of the benefit, directly or indirectly, (except
9 proportionately as a shareholder of such
10 corporation) of any assets, loans, advances,
11 guarantees, pledges or other financial benefits
12 (other than those expressly permitted in
13 subparagraphs (A) through (D) of this paragraph (3))
14 provided by or through any "defined benefit pension
15 plan" (as defined in Section 3 of the Employee
16 Retirement Income Security Act) of the corporation
17 or any direct or indirect majority owned subsidiary.
18 (4) "Control", including the term "controlling",
19 "controlled by" and "under common control with", means
20 the possession, directly or indirectly, of the power to
21 direct or cause the direction of the management and
22 policies of a person, whether through the ownership of
23 voting shares, by contract or otherwise. A person who is
24 the owner of 20% or more of the a corporation's
25 outstanding voting shares of any corporation,
26 partnership, unincorporated association, or other entity
27 shall be presumed to have control of such entity
28 corporation, in the absence of proof by preponderance of
29 the evidence to the contrary. Notwithstanding the
30 foregoing, a presumption of control shall not apply where
31 such person holds voting shares, in good faith and not
32 for the purpose of circumventing this Section, as an
33 agent, bank, broker, nominee, custodian or trustee for
34 one or more owners who do not individually or as a group
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1 have control of such entity corporation.
2 (5) "Corporation" means a domestic corporation
3 that:
4 (A) has any equity securities registered under
5 Section 12 of the Securities Exchange Act of 1934 or
6 is subject to Section 15(d) of that Act; and
7 (B) either
8 (i) has its principal place of business
9 or its principal executive office located in
10 Illinois; or
11 (ii) owns or controls assets located
12 within Illinois that have a fair market value
13 of at least $1,000,000, and
14 (C) either
15 (i) has more than 10% of its shareholders
16 resident in Illinois;
17 (ii) has more than 10% of its shares
18 owned by Illinois residents; or
19 (iii) has 2,000 shareholders resident in
20 Illinois.
21 The residence of a shareholder is presumed to be the
22 address appearing in the records of the corporation.
23 Shares held by banks (except as trustee, executor or
24 guardian), securities dealers or nominees are disregarded
25 for purposes of calculating the percentages and numbers
26 in this paragraph (5).
27 (6) "Interested shareholder" means any person
28 (other than the corporation and any direct or indirect
29 majority-owned subsidiary of the corporation) that (i) is
30 the owner of 15% or more of the outstanding voting shares
31 of the corporation, or (ii) is an affiliate or associate
32 of the corporation and was the owner of 15% or more of
33 the outstanding voting shares of the corporation at any
34 time within the 3 year period immediately prior to the
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1 date on which it is sought to be determined whether such
2 person is an interested shareholder; and the affiliates
3 and associates of such person, provided, however, that
4 the term "interested shareholder" shall not include (x)
5 any person who (A) owned shares in excess of the 15%
6 limitation set forth herein as of, or acquired such
7 shares pursuant to a tender offer commenced prior to the
8 effective date of this amendatory Act of 1989 or pursuant
9 to an exchange offer announced prior to the aforesaid
10 date and commenced within 90 days thereafter and either
11 (I) and continued to own shares in excess of such 15%
12 limitation or would have but for action by the
13 corporation or (II) is an affiliate or associate of the
14 corporation and so continued (or so would have continued
15 but for action by the corporation) to be the owner of 15%
16 or more of the outstanding voting shares of the
17 corporation at any time within the 3-year period
18 immediately prior to the date on which it is sought to be
19 determined whether such a person is an interested
20 shareholder or (B) acquired said shares from a person
21 described in (A) above by gift, inheritance or in a
22 transaction in which no consideration was exchanged; or
23 (y) any person whose ownership of shares in excess of the
24 15% limitation set forth herein is the result of action
25 taken solely by the corporation, provided that such
26 person shall be an interested shareholder if thereafter
27 such person acquires additional shares of voting shares
28 of the corporation, except as a result of further
29 corporate action not caused, directly or indirectly, by
30 such person. For the purpose of determining whether a
31 person is an interested shareholder, the voting shares of
32 the corporation deemed to be outstanding shall include
33 shares deemed to be owned by the person through
34 application of paragraph (8) of this subsection, but
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1 shall not include any other unissued shares of such
2 corporation which may be issuable pursuant to any
3 agreement, arrangement or understanding, or upon exercise
4 of conversion rights, warrants or options, or otherwise.
5 (7) "Person" means any individual, corporation,
6 partnership, unincorporated association or other entity.
7 (7.5) "Shares" means, with respect to any
8 corporation, capital stock and, with respect to any other
9 entity, any equity interest.
10 (8) "Voting shares" means, with respect to any
11 corporation, shares of any class or series entitled to
12 vote generally in the election of directors and, with
13 respect to any entity that is not a corporation, any
14 equity interest entitled to vote generally in its
15 election of the governing body of the entity.
16 (9) "Owner" including the terms "own" and "owned"
17 when used with respect to any shares means a person that
18 individually or with or through any of its affiliates or
19 associates:
20 (A) beneficially owns such shares, directly or
21 indirectly; or
22 (B) has (i) the right to acquire such shares
23 (whether such right is exercisable immediately or
24 only after the passage of time) pursuant to any
25 agreement, arrangement or understanding, or upon the
26 exercise of conversion rights, exchange rights,
27 warrants or options, or otherwise; provided,
28 however, that a person shall not be deemed the owner
29 of shares tendered pursuant to a tender or exchange
30 offer made by such person or any of such person's
31 affiliates or associates until such tendered shares
32 is accepted for purchase or exchange; or (ii) the
33 right to vote such shares pursuant to any agreement,
34 arrangement or understanding; provided, however,
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1 that a person shall not be deemed the owner of any
2 shares because of such person's right to vote such
3 shares if the agreement, arrangement or
4 understanding to vote such shares arises solely from
5 a revocable proxy or consent given in response to a
6 proxy or consent solicitation made to 10 or more
7 persons; or
8 (C) has any agreement, arrangement or
9 understanding for the purpose of acquiring, holding,
10 voting (except voting pursuant to a revocable proxy
11 or consent as described in clause (ii) of
12 subparagraph (B) of this paragraph), or disposing of
13 such shares with any other person that beneficially
14 owns, or whose affiliates or associates beneficially
15 own, directly or indirectly, such shares.
16 (d) No provision of a certificate of incorporation or
17 by-law shall require, for any vote of shareholders required
18 by this Section a greater vote of shareholders than that
19 specified in this Section.
20 (e) The provisions of this Section 11.75 are severable
21 and any provision held invalid shall not affect or impair any
22 of the remaining provisions of this Section.
23 (Source: P.A. 86-126.)".