§ 7-5.2-3 - Definitions.
SECTION 7-5.2-3
§ 7-5.2-3 Definitions. – As used in this section, unless the context requires otherwise, the term:
(1) "Affiliate" means a person that directly, or indirectlythrough one or more intermediaries, controls, or is controlled by, or is undercommon control with, a specified person.
(2) "Announcement date", when used in reference to anybusiness combination, means the date of the first public announcement of thefinal, definitive proposal for the business combination.
(3) "Associate", when used to indicate a relationship withany person, means:
(i) Any corporation or organization of which the person is adirector, officer, or partner or is, directly or indirectly, the beneficialowner of ten percent (10%) or more of any class of voting stock,
(ii) Any trust or other estate in which the person has asubstantial beneficial interest or as to which the person serves as trustee orin a similar fiduciary capacity, and
(iii) Any relative or spouse of the person, or any relativeof the spouse, who has the same residence as the person.
(4) "Beneficial owner", when used with respect to any stockmeans a person that:
(i) Individually or with or through any of its affiliates orassociates, beneficially owns the stock, directly or indirectly; or
(ii) Individually or with or through any of its affiliates orassociates, has:
(A) The right to acquire the stock, whether the right isexercisable immediately or only after the passage of time, pursuant to anyagreement, arrangement, or understanding, whether or not in writing, or uponthe exercise of conversion rights, exchange rights, warrants, or options, orotherwise; provided, however, that a person is not deemed the beneficial ownerof stock tendered pursuant to a tender or exchange offer made by the person'saffiliates or associates until the tendered stock is accepted for purchase orexchange; or
(B) The right to vote the stock pursuant to any agreement,arrangement, or understanding, whether or not in writing; provided, however,that a person is not deemed the beneficial owner of any stock under this itemif the agreement, arrangement, or understanding to vote the stock arises solelyfrom a revocable proxy or consent given in response to a proxy or consentsolicitation made in accordance with the applicable rules and regulations underthe Exchange Act, 15 U.S.C. § 78a et seq., and is not then reportable on aSchedule 13D under the Exchange Act, or any comparable or successor report; or
(C) Any agreement, arrangement, or understanding, whether ornot in writing for the purpose of acquiring, holding, voting (except votingpursuant to a revocable proxy or consent as described in item (B) of clause(ii) of this subparagraph), or disposing of the stock with any other personthat beneficially owns, or whose affiliate or associates beneficially own,directly or indirectly, the stock.
(5) "Business combination", when used in reference to anyresident domestic corporation and any interested shareholder of the residentdomestic corporation, means:
(i) Any merger or consolidation of the resident domesticcorporation or any subsidiary of the resident domestic corporation with:
(A) The interested shareholder, or
(B) Any other corporation, whether or not itself aninterested shareholder of the resident domestic corporation, which is, or afterthe merger or consolidation would be, an affiliate or associate of theinterested shareholder;
(ii) Any sale, lease, exchange, mortgage, pledge, transfer,or other disposition, in one transaction or a series of transactions, exceptproportionately as a stockholder of the corporation, to or with the interestedshareholder or any affiliate or associate of the interested shareholder,whether as a part of a dissolution or otherwise, of assets of the residentdomestic 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 aconsolidated 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 stock of theresident domestic corporation, or
(C) Representing ten percent (10%) or more of the earningpower or net income, determined on a consolidated basis, of the residentdomestic corporation;
(iii) Any transaction which results in the issuance ortransfer by the resident domestic corporation or by any subsidiary of theresident domestic corporation of any stock of the resident domestic corporationor of the subsidiary to the interested shareholder, except:
(I) Pursuant to the exercise, exchange, or conversion ofsecurities exercisable for, exchangeable for, or convertible into stock of theresident domestic corporation or any subsidiary which securities wereoutstanding prior to the time that the interested shareholder became such,
(II) Pursuant to a dividend or distribution paid or made, orthe exercise, exchange, or conversion of securities exercisable for,exchangeable for, or convertible into stock of the resident domesticcorporation or any subsidiary which security is distributed, pro rata to allholders of a class or series of stock of the resident domestic corporationsubsequent to the time the interested shareholder became such,
(III) Pursuant to an exchange offer by the resident domesticcorporation to purchase stock made on the same terms to all holders of thestock, or
(IV) Any issuance or transfer of stock by the residentdomestic corporation;
(B) Provided, however, that in no case under subdivisions(5)(iii)(A)(I) – (IV) shall there be an increase in the interestedshareholder's proportionate share of the stock of any class or series of theresident domestic corporation or of the voting stock of the resident domesticcorporation;
(iv) The adoption of any plan or proposal for the liquidationor dissolution of the resident domestic corporation proposed by, or pursuant toany agreement, arrangement, or understanding, whether or not in writing withthe interested shareholder or any affiliate or associate of the interestedshareholder;
(v) Any reclassification of securities, including, withoutlimitation, any stock split, stock dividend, or other distribution of stock inrespect to stock, any reverse stock split, or recapitalization of the residentdomestic corporation, any merger or consolidation of the resident domesticcorporation with any subsidiary of the resident domestic corporation, or anyother transaction, whether or not with or into or otherwise involving theinterested shareholder, proposed by, or pursuant to any agreement, arrangement,or understanding, whether or not in writing, with the interested shareholder orany affiliate or associate of the interested shareholder, which has the effect,directly or indirectly, of increasing the proportionate share of theoutstanding shares of any class or series of voting stock or securitiesconvertible into voting stock of the resident domestic corporation or anysubsidiary of the resident domestic corporation which is directly or indirectlyowned by the interested shareholder or any affiliate or associate of theinterested shareholder, except as a result of immaterial changes due tofractional share adjustments; or
(vi) Any receipt by the interested shareholder or anyaffiliate or associate of the interested shareholder of the benefit, directlyor indirectly, except proportionately as a shareholder of the resident domesticcorporation, of any loans, advances, guarantees, pledges, or other financialassistance, benefits, any tax credits, or other tax advantages provided by orthrough the resident domestic corporation, except as expressly permitted insubdivisions (5)(i) through (5)(vi).
(6) "Common stock" means any stock other than preferred stock.
(7) "Consummation date", with respect to any businesscombination, means the date of consummation of the business combination, or, inthe case of a business combination as to which a shareholder vote is taken, thelater of the business day prior to the vote or twenty (20) days prior to thedate of consummation of the business combination.
(8) "Control", including the terms "controlling", "controlledby", and "under common control with", means the possession, directly orindirectly, or the power to direct or cause the direction of the management andpolicies of a person, whether through the ownership of voting stock, bycontract, or otherwise. A person's beneficial ownership of ten percent (10%) ormore of a corporation's outstanding voting stock creates a presumption that theperson has control of the corporation. Notwithstanding what was previouslystated, above, a person is not deemed to have control of a corporation if theperson holds voting stock, in good faith and not for the purpose ofcircumventing this section, as an agent, bank, broker, nominee, custodian, ortrustee for one or more beneficial owners who do not individually or as a grouphave control of the corporation.
(9) "Exchange Act" means the Act of Congress known as theSecurities Exchange Act of 1934, 15 U.S.C. § 78a et seq., as it has been,and may subsequently be, amended.
(10) "Interested shareholder", when used in reference to anyresident domestic corporation, means any person, other than the residentdomestic corporation or any subsidiary of the resident domestic corporation orany employee benefit plan maintained by resident domestic corporation, that:
(i) Is the beneficial owner, directly or indirectly, of tenpercent (10%) or more of the outstanding voting stock of the resident domesticcorporation; or
(B) Is an affiliate or associate of the resident domesticcorporation and at any time within a five (5) year period immediately prior tothe date in question was the beneficial owner, directly or indirectly, of tenpercent (10%) or more of the then outstanding voting stock of the residentdomestic corporation.
(ii) The term "interested shareholder" does not include:
(A) Any person who:
(I) Owned shares in excess of the ten percent (10%)limitation stated in these provisions as of, or acquired the shares pursuant toa tender offer commenced prior to, July 3, 1990 or pursuant to an exchangeoffer announced prior to that date and commenced within ninety (90) dayssubsequently and continued to own shares in excess of the percent limitation orwould have but for action taken by the resident domestic corporation, or
(II) Acquired the shares from a person described in (I) bygift, inheritance, or in a transaction in which no consideration was exchanged;or
(B) Any person whose ownership of shares in excess of the tenpercent (10%) limitation stated above is the result of action taken solely bythe resident domestic corporation However, the person becomes an interestedshareholder if he or she subsequently acquires additional shares of votingstock of the resident domestic corporation, except as a result of furthercorporate action not caused, directly or indirectly, by the person.
(iii) For the purpose of determining whether a person is aninterested shareholder, the number of shares of voting stock of the residentdomestic corporation deemed outstanding includes shares deemed beneficiallyowned by the person through application of subdivision (4) of this section butdoes not include any other unissued shares of voting stock of the residentdomestic corporation which are issuable pursuant to any agreement, arrangementor understanding, or upon exercise of conversion rights, warrants, or options,or otherwise.
(11) "Market value", when used in reference to stock orproperty of any resident domestic corporation, means:
(i) In the case of stock, the highest closing sale priceduring the thirty (30) day period immediately preceding the date in question ofa share of stock on the composite tape for stocks listed on the New York stockexchange, or, if the stock is not quoted on the composite tape or if the stockis not listed on the exchange, on the principal United States securitiesexchange registered under the exchange act on which the stock is listed, or, ifthe stock is not listed on any exchange, the highest closing bid quotation withrespect to a share of the stock during the thirty (30) day period preceding thedate in question on the national association of securities dealers, inc.automated quotations system or any system then in use, or if no quotations areavailable, the fair market value on the date in question of a share of thestock as determined in good faith by the board of directors of the residentdomestic corporation; and
(ii) In the case of property other than cash or stock, thefair market value of the property on the date in question as determined in goodfaith by the board of directors of the resident domestic corporation.
(12) "Preferred stock" means any class or series of stock ofa resident domestic corporation under which the bylaws or articles ofincorporation of the resident domestic corporation is entitled to receivepayment of dividends prior to any payment of dividends on some other class orseries of stock, or is entitled in the event of any voluntary liquidation,dissolution, or winding up of the resident domestic corporation to receivepayment or distribution of a preferential amount before any payments ordistributions are received by some other class or series of stock.
(13) "Resident domestic corporation" means an issuer ofvoting stock which:
(i) Is organized under the laws of this state; and
(ii) Either (A) has its principal executive offices andsignificant business operations located in this state; or (B) has, alone or incombination with one or more of its subsidiaries, at least two hundred fifty(250) employees or twenty-five percent (25%) of the total number of allemployees of itself and the subsidiaries employed primarily within the state;and
(iii) Has at least five percent (5%) of its voting stockowned beneficially by residents of this state or at least five percent (5%) ofits shareholders are residents of this state. For purposes of this section, theresidence of a partnership, unincorporated association, trust, or similarorganization is the principal office of the organization.
(D) No resident domestic corporation, which is organizedunder the laws of this state, ceases to be a resident domestic corporation byreason of events occurring or actions taken while the resident domesticcorporation is subject to the provisions of this section.
(14) "Stock" means:
(i) Any stock or similar security, any certificate ofinterest, any participation in any profit sharing agreement, any voting trustcertificate, or any certificate of deposit for stock; and
(ii) Any security convertible, with or without consideration,into stock, or any warrant, call, or other option or privilege of buying stockwithout being bound to do so, or any other security carrying any right toacquire, subscribe to, or purchase stock.
(15) "Stock acquisition date", with respect to any person andany resident domestic corporation, means the date that the person first becomesan interested shareholder of the resident domestic corporation.
(16) "Subsidiary" of any person means any other corporationof which a majority of the voting stock is owned, directly or indirectly, bythe person.
(17) "Voting stock" means shares of capital stock of acorporation entitled to vote generally in the election of directors.