13.1-729 - Definitions.
§ 13.1-729. Definitions.
In this article:
"Affiliate" means a person who directly or indirectly through one or moreintermediaries controls, is controlled by, or is under common control withanother person or is a senior executive officer thereof.
"Beneficial shareholder" means a person who is the beneficial owner ofshares held in a voting trust or by a nominee on the beneficial owner'sbehalf.
"Corporation" means the issuer of the shares held by a shareholderdemanding appraisal and, for matters covered by §§ 13.1-734 through 13.1-740,includes the surviving entity in a merger.
"Fair value" means the value of the corporation's shares determined:
a. Immediately before the effectuation of the corporate action to which theshareholder objects;
b. Using customary and current valuation concepts and techniques generallyemployed for similar businesses in the context of the transaction requiringappraisal; and
c. Without discounting for lack of marketability or minority status except,if appropriate, for amendments to the articles pursuant to subdivision A 5 of§ 13.1-730.
"Interest" means interest from the effective date of the corporate actionuntil the date of payment, at the average rate currently paid by thecorporation on its principal bank loans or, if none, at a rate that is fairand equitable under all the circumstances.
"Interested transaction" means a corporate action described in subsection Aof § 13.1-730, other than a merger pursuant to § 13.1-719 or 13.1-719.1,involving an interested person in which any of the shares or assets of thecorporation are being acquired or converted. As used in this definition:
1. "Beneficial owner" means any person who, directly or indirectly, throughany contract, arrangement, or understanding, other than a revocable proxy,has or shares the power to vote, or to direct the voting of, shares; exceptthat a member of a national securities exchange is not deemed to be abeneficial owner of securities held directly or indirectly by it on behalf ofanother person solely because the member is the record holder of thesecurities if the member is precluded by the rules of the exchange fromvoting without instruction on contested matters or matters that may affectsubstantially the rights or privileges of the holders of the securities to bevoted. When two or more persons agree to act together for the purpose ofvoting their shares of the corporation, each member of the group formedthereby is deemed to have acquired beneficial ownership, as of the date ofthe agreement, of all voting shares of the corporation beneficially owned byany member of the group.
2. "Interested person" means a person, or an affiliate of a person, who atany time during the one-year period immediately preceding approval by theboard of directors of the corporate action:
a. Was the beneficial owner of 20% or more of the voting power of thecorporation, excluding any shares acquired pursuant to an offer for allshares having voting power if the offer was made within one year prior to thecorporate action for consideration of the same kind and of a value equal toor less than that paid in connection with the corporate action;
b. Had the power, contractually or otherwise, to cause the appointment orelection of 25% or more of the directors to the board of directors of thecorporation; or
c. Was a senior executive officer or director of the corporation or a seniorexecutive officer of any affiliate thereof, and that senior executive officeror director will receive, as a result of the corporate action, a financialbenefit not generally available to other shareholders as such, other than:
(1) Employment, consulting, retirement, or similar benefits establishedseparately and not as part of or in contemplation of the corporate action;
(2) Employment, consulting, retirement, or similar benefits established incontemplation of, or as part of, the corporate action that are not morefavorable than those existing before the corporate action or, if morefavorable, that have been approved on behalf of the corporation in the samemanner as is provided in § 13.1-691; or
(3) In the case of a director of the corporation who will, in the corporateaction, become a director of the acquiring entity in the corporate action orone of its affiliates, rights and benefits as a director that are provided onthe same basis as those afforded by the acquiring entity generally to otherdirectors of such entity or such affiliate.
"Preferred shares" means a class or series of shares whose holders havepreference over any other class or series of shares with respect todistributions.
"Record shareholder" means the person in whose name shares are registeredin the records of the corporation or the beneficial owner of shares to theextent of the rights granted by a nominee certificate on file with thecorporation.
"Senior executive officer" means the chief executive officer, chiefoperating officer, chief financial officer and anyone in charge of aprincipal business unit or function.
"Shareholder" means both a record shareholder and a beneficial shareholder.
(1985, c. 522; 1992, c. 575; 2005, c. 765; 2007, c. 165.)