10-2701 - Definitions

10-2701. Definitions

In this chapter, unless the context otherwise requires:

1. "Acquiring person" means a person that makes or proposes to make a control share acquisition. If two or more persons act as a partnership, syndicate or other group pursuant to any agreement, arrangement, relationship, understanding or otherwise, whether or not in writing, for the purposes of acquiring, owning or voting shares of an issuing public corporation, all members of the partnership, syndicate or other group constitute a person. Acquiring person does not include a licensed broker or dealer or licensed underwriter that purchases shares of an issuing public corporation solely for purposes of resale to the public and that is not acting in concert with an acquiring person.

2. "Affiliate" means a person that directly or indirectly controls, is controlled by or is under common control with a specified person.

3. "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.

4. "Associate", when used to indicate a relationship with any person, means any of the following:

(a) Any corporation or entity of which the person is an officer, director or partner or is, directly or indirectly, the beneficial owner of ten per cent or more of any class or series of shares or other equity interest.

(b) Any trust or estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or personal representative or in a similar fiduciary capacity.

5. "Beneficial owner", "beneficial ownership" and "beneficially owned", when used with respect to shares, refers to any of the following:

(a) A person who, directly or indirectly through any agreement, arrangement, relationship, understanding or otherwise, whether or not in writing, has or shares the power to vote, or direct the voting of the shares, or has or shares the power to dispose of or direct the disposition of the shares, except that:

(i) A person is not deemed the beneficial owner of shares tendered pursuant to a tender or exchange offer made by the person or any of the person's affiliates or associates until the tendered shares are accepted for purchase or exchange.

(ii) A person is not deemed the beneficial owner of shares with respect to which the person or any of the person's affiliates or associates has the power to vote or direct the voting arising solely from a revocable proxy given in response to a proxy solicitation required to be made and made in accordance with the applicable rules and regulations under the securities exchange act of 1934 and is not then reportable under that act on a schedule 13d or comparable report.

(iii) A person is not deemed the beneficial owner of shares to be issued to or transferred to the person or any of the person's affiliates or associates pursuant to terms of an agreement and plan of merger between the person and the issuing public corporation unless the merger is effective.

(b) A person who presently has the right to acquire shares through the exercise of options, warrants or rights, the conversion of convertible securities or otherwise. The shares subject to the options, warrants, rights or conversion privileges held by a person are deemed to be outstanding for the purpose of computing the percentage of outstanding shares of the class or series owned or voting power held by the person but are not deemed to be outstanding for the purpose of computing the percentage of the class or series owned or voting power held by any other person.

(c) A person whose relative or spouse, or any relative of the spouse, residing in the home of the person is the beneficial owner of the shares.

(d) A person who owns ten per cent or more of the total beneficial interest in or serves as trustee or personal representative in any trust or estate beneficially owning the shares.

(e) A person who owns ten per cent or more of the equity in any corporation or entity beneficially owning the shares.

(f) A person who is an affiliate of the person beneficially owning the shares.

6. "Business combination", when used in reference to any issuing public corporation and any interested shareholder of the issuing public corporation, means any of the following:

(a) Any merger or consolidation of the issuing public corporation or any subsidiary of the issuing public corporation with either:

(i) The interested shareholder.

(ii) Any other corporation or entity, whether or not itself an interested shareholder of the issuing public corporation, that is, or after the merger would be, an affiliate or associate of the interested shareholder, except that the foregoing does not include the merger of a wholly owned subsidiary of the issuing public corporation into the issuing public corporation or the merger of two or more wholly owned subsidiaries of the issuing public corporation.

(b) Any exchange, pursuant to a plan of exchange under the laws of this state or a comparable statute of any other state or jurisdiction, of shares of the issuing public corporation or any subsidiary of the issuing corporation for shares of either:

(i) The interested shareholder.

(ii) Any other corporation or entity, whether or not itself an interested shareholder of the issuing public corporation, that is, or after the exchange would be, an affiliate or associate of the interested shareholder.

(c) Any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in a single transaction or a series of transactions, to or with the interested shareholder or any affiliate or associate of the interested shareholder, of assets of the issuing public corporation or any subsidiary of the issuing public corporation to which any of the following applies:

(i) Has an aggregate market value, as defined in paragraph 12 of this section, equal to ten per cent or more of the aggregate market value of all the assets, determined on a consolidated basis, as of the end of the most recent fiscal quarter, of the issuing public corporation.

(ii) Has an aggregate market value, as defined in paragraph 12 of this section, equal to ten per cent or more of the aggregate market value of all the outstanding shares of the issuing public corporation.

(iii) Represents ten per cent or more of either the revenues or net income, determined on a consolidated basis for the most recent four fiscal quarters, or such shorter period as the issuing public corporation has been in existence, of the issuing public corporation.

(d) The issuance or transfer by the issuing public corporation or any subsidiary of the issuing public corporation, in a single transaction or a series of transactions, of any shares of the issuing public corporation or any subsidiary of the issuing public corporation that have an aggregate market value equal to five per cent or more of the aggregate market value of all the outstanding shares of the issuing public corporation to the interested shareholder or any affiliate or associate of the interested shareholder, except pursuant to 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 issuing public corporation.

(e) The adoption of any plan or proposal for the liquidation or dissolution of the issuing public corporation, or any reincorporation of the issuing public corporation in another state or jurisdiction, proposed by, on behalf of or pursuant to any agreement, arrangement or understanding, whether or not in writing, with the interested shareholder or any affiliate or associate of the interested shareholder.

(f) Any reclassification of securities, including any share dividend or split, reverse share split or other distribution of shares in respect of shares, recapitalization of the issuing public corporation, merger or consolidation of the issuing public corporation with any subsidiary of the issuing public corporation, exchange of shares of the issuing public corporation with any subsidiary of the issuing public corporation or other transaction, whether or not with or into or otherwise involving the interested shareholder, proposed by, on behalf of or pursuant to 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 shares, or securities that are exchangeable for or convertible into or that carry a right to acquire shares, of the issuing public corporation or any subsidiary of the issuing public 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.

(g) 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 issuing public corporation, of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by or through the issuing public corporation or any subsidiary of the issuing public corporation.

7. "Consummation date", with respect to any business combination, means the date on which the business combination is effective, except in the case of a business combination as to which a shareholder vote is taken by the shareholders of the issuing public corporation, in which case it means the later of:

(a) The business day before the vote.

(b) Twenty days before the date on which the business combination is effective.

8. "Control", "controlling", "controlled by" or "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. A person's beneficial ownership of ten per cent or more of the voting power of a corporation's outstanding securities creates a presumption that the person has control of the corporation. 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 avoiding article 2 of this chapter, as an agent, bank, broker, nominee, custodian or trustee for one or more beneficial owners who do not individually or as a group have control of the corporation.

9. "Control share acquisition" means an acquisition, directly or indirectly, by an acquiring person of beneficial ownership of shares of an issuing public corporation that, except for article 2 of this chapter, would, when added to all other shares of the issuing public corporation beneficially owned by the acquiring person, entitle the acquiring person, immediately after the acquisition, to exercise or direct the exercise of a new range of voting power within any of the ranges specified in section 10-2722, subsection A, paragraph 4, but does not include any of the following:

(a) An acquisition by a donee pursuant to an inter vivos gift not made to avoid article 2 of this chapter or by a distributee as defined in section 14-1201.

(b) An acquisition pursuant to a security agreement not created to avoid article 2 of this chapter.

(c) An acquisition under chapter 1, article 4 of this title if the issuing public corporation or a subsidiary is a party to the transaction.

(d) An acquisition from the issuing public corporation.

(e) An acquisition for the benefit of others by a person acting in good faith and not made to avoid article 2 of this chapter to the extent that the person may not exercise or direct the exercise of voting power or dispose of or direct the disposition of the shares except on the instruction of others.

All shares, the beneficial ownership of which is acquired within a one hundred twenty day period, and all shares, the beneficial ownership of which is acquired pursuant to a plan to make a control share acquisition, are deemed to have been acquired in the same acquisition.

10. "Interested shareholder", when used in reference to any issuing public corporation, means any person, other than the issuing public corporation or any subsidiary of the issuing public corporation, that is either:

(a) The beneficial owner, directly or indirectly, of ten per cent or more of the voting power of the outstanding shares of the issuing public corporation.

(b) An affiliate or associate of the issuing public corporation who at any time within the three year period immediately before the date in question was the beneficial owner of ten per cent or more of the voting power of the then outstanding shares of the issuing public corporation.

11. "Issuing public corporation" means a corporation that has a class of equity securities registered pursuant to section 12 or is subject to section 15(d) of the securities exchange act of 1934 or has elected to be subject to all or part of this chapter pursuant to section 10-2706 and which either:

(a) Is incorporated under the laws of this state.

(b) Has its principal place of business or its principal executive office located in this state and owns or controls assets located within this state that have a fair market value of at least one million dollars and has more than five hundred employees residing in this state.

12. "Market value", when used in reference to stock or property of any issuing public corporation, means the following:

(a) In the case of stock, the highest closing sale price during the thirty day period immediately preceding the date in question of the stock on the composite tape for New York stock exchange listed stock or, if the stock is 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 securities exchange act of 1934 on which the stock is listed or, if the stock is not listed on any such exchange, on the national association of securities dealers, inc. automated quotations national market system or, if the stock is not quoted on the national association of securities dealers, inc. automated quotations national market system, the highest closing bid quotation during the thirty day period preceding the date in question of the stock 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 the stock as determined in good faith by the board of directors of the issuing public corporation.

(b) In the case of property other than cash or stock, the fair market value of the property on the date in question as determined in good faith by the board of directors of the issuing public corporation.

13. "Person" means an individual, a corporation, a partnership, a syndicate, an association, a joint stock company, a trust in which the interests of the beneficiaries are evidenced by securities, an unincorporated organization or entity or a government or political subdivision of a government.

14. "Share acquisition date", with respect to any person and any issuing public corporation, means the date that the person first becomes an interested shareholder of the issuing public corporation.

15. "Shares" means those shares presently entitled to vote in the election of directors of the issuing public corporation.

16. "Subsidiary of a person" means a corporation or entity of which the person is the beneficial owner of a majority of the voting power of the corporation or entity.

17. "Tender offer" means a tender offer under the securities exchange act of 1934.