§ 28-7-19.2 - Standards of corporate behavior.
SECTION 28-7-19.2
§ 28-7-19.2 Standards of corporatebehavior. – (a) As used in this section, the following words, unless the context clearlyrequires otherwise, have the following meanings:
(1) "Control" means the beneficial ownership of fifty percent(50%) or more of the outstanding voting securities of a control transferor;provided, that for the purposes of making percentage calculations, outstandingvoting securities includes any voting stock underlying convertible securities.
(2) "Control transferee" means the person or persons whoassume control following a transfer of control as defined in subsection (a)(8).
(3) "Control transferor" means the person or persons whoexercise control, including the power of hire and fire, before a transfer ofcontrol as defined in subsection (a)(8); provided, however, that the person orpersons are either:
(i) A corporation to which the provisions of chapters 1.1 and5.2 of Title 7 apply, a gas or electric company or combined gas and electriccompany subject to the provisions of chapter 1 of title 39, or an associationor trust which pursuant to chapter 1 of title 39 owns beneficially a majorityof the common stock of that company; provided, that the corporation employfifty (50) or more full-time employees, or employees working aggregate hoursequal to the sum of hours worked by fifty (50) full-time employees, and hasfifty (50) or more shareholders, in the state at some point in the twelve (12)calendar months prior to the transfer of control.
(ii) A foreign corporation established, organized, orchartered under laws other than those of this state; provided, that thecorporation employs fifty (50) or more full-time employees, or employeesworking aggregate hours equal to the sum of hours worked by fifty (50)full-time employees, and has fifty (50) or more shareholders, in the state atsome point in the twelve (12) calendar months prior to the transfer of control;and provided further that the corporation is not an out of state bankingassociation or banking corporation or insurance company authorized to transactbusiness in the state.
(4) "Department" means the department of labor and training.
(5) "Director" means the director of the department of laborand training.
(6) "Employee" means any person employed for hire by anemployer in any lawful employment.
(7) "Termination of employment" means the involuntarytermination of an employee's employment consistent with the eligibilitystandards for unemployment benefits under chapter 44 of this title.
(8) "Transfer of control" means a transaction or series oftransactions as a result of which any person is or becomes the "beneficialowner", directly or indirectly, of securities of a control transferorrepresenting fifty percent (50%) or more of the control transferor's thenoutstanding voting securities; provided, that a change in control will not bedeemed to have occurred solely because of the acquisition of securities as acontrol transferor, or any related reporting requirements under chapter 11 oftitle 7, by an employee benefit plan maintained by the control transferor forits employees.
(9) "Weekly compensation" means an employee's basecompensation in effect on the last payroll period ending prior to the transferof control for eligible employees pursuant to subsection (b) of this section orthe time of termination of employment for eligible employees pursuant tosubsection (c) of this section.
(10) "Year of service" means each full year during which theemployee has been employed by the control transferor as defined in subdivision(3) of this subsection.
(b) Any employee of a control transferor whose employment isterminated within twenty-four (24) calendar months after the transfer ofcontrol of his or her employer is entitled to a one time lump sum payment fromthe control transferee equal to the product of twice his or her weeklycompensation multiplied by each completed year of service. This severance payto eligible employees shall be in addition to any final wage payment to theemployee and shall be made within one regular pay period after the employee'slast day of work.
(c) Any employee of a control transferor whose employment isterminated within the shorter of the following periods prior to a controltransfer: (i) twelve (12) calendar months, or (ii) the period of time betweenwhich the control transferee obtained a five percent (5%) interest in thevoting securities of the control transferor and consummated a control transferby obtaining a fifty percent (50%) or greater interest pursuant to subdivision(a)(8) of this section, is entitled to a one-time lump sum payment from thecontrol transferee equal to the product of twice his or her weekly compensationmultiplied by each completed year of service. This severance pay to eligibleemployees shall be in addition to any final wage payment to the employee andshall be made within four (4) regular pay periods after the transfer of control.
(d) There shall be no liability for the one time payment toan otherwise eligible employee if:
(1) The employee is covered by an express contract providingfor payment in the event of termination of employment equal to or in excess ofthat provided by this section;
(2) The employee has been employed by the control transferorfor less than three (3) years;
(3) A transfer of control as defined in subdivision (a)(8) ofthis section is the result of the transfer of securities or the beneficialinterest in it, directly or indirectly, by sale, gift, bequest, or otherwise,in one transaction or a series of transactions, between:
(i) An individual and that individual's spouse;
(ii) An individual and that individual's sibling or thesibling's spouse;
(iii) An individual and that individual's lineal descendantsor their spouses;
(iv) An individual or a fiduciary who holds the securities orthe beneficial interest therein for the benefit of any of the foregoingpersons; or
(4) The control transferee obtained control throughenforcement of rights under pledge or other security interest created in goodfaith and not for the purpose of circumventing the purposes of this chapter oras a result of an assignment for the benefit of creditors, receivership,bankruptcy, enforcement by judicial process, or other similar proceeding,including a transferee obtaining its interest from the person enforcing thoserights or in connection with that proceeding.
(e) Upon assuming control, the control transferee shall beresponsible for providing written notice to each employee of the controltransferor and the collective bargaining representative or representatives, ifany, of the rights of employees under this section within thirty (30) days ofcompletion of a transfer of control. The control transferee shall also providewritten notice to the department that a control has occurred. The departmentshall assess a fine in an amount up to one thousand dollars ($1,000) forfailure to provide the notification.
(f) In the event any eligible employee is denied a lump sumpayment as a result of a violation of this section, the employee shall haveavailable all private civil and other remedies at law or equity. The departmentof labor and training may take any and all appropriate actions to enforce theprovisions of this section.
(g) For the purposes of determining eligibility undersubsections (b) and (c) of this section, all determinations shall be as of thedate of control transfer occurs unless specifically stated otherwise.
(h) The director may promulgate any regulations that may berequired for the implementation of this section.