§ 183 — Severance pay upon termination following transfer of control of employer; definitions

Section 183. (a) As used in this section, the following words, unless the context clearly requires otherwise, shall have the following meanings:—''Control'', the beneficial ownership of fifty percent or more of the outstanding voting securities of a control transferor; provided, however, that for the purposes of making percentage calculations outstanding voting securities shall include any voting stock underlying convertible securities.''Control transferee'', the person or persons who assume control following a transfer of control as defined herein.''Control transferor'', the person or persons who exercise control, including the power to hire and fire, before a transfer of control as defined herein; provided, however, that such person or persons are either:(i) a corporation to which the provisions of paragraph (1) of section 17.01 of chapter 156D apply, a gas or electric company or combined gas and electric company to which section 3 of chapter 164 applies or an association or trust which pursuant to said section 3 of said chapter 164 owns beneficially a majority of the common stock of such a company or a trust company to which the provisions of chapter 172 apply, a savings bank to which certain provisions of said chapter 172 apply pursuant to section 34C of chapter 168, a cooperative bank in stock form to which certain provisions of chapter 172 apply pursuant to section 26C of chapter 170, or a national bank, federally chartered savings and loan association in stock form, or a federal savings bank in stock form; provided, however, that such corporation, trust company, savings bank, cooperative bank, national bank, federally chartered savings and loan association in stock form or a federal savings bank in stock form employs 50 or more full-time employees, or employees working aggregate hours equal to the sum of hours worked by 50 full-time employees, in the commonwealth at some point in the 12 calendar months before the transfer of control; and, provided further, that the term ''control transferor'' as defined in this clause (i) shall also be deemed to include any such trust company, savings bank, cooperative bank, national bank, federally chartered savings and loan association in stock form, or a federal savings bank in stock form if, immediately before the transfer of control, the control of such trust company, savings bank, cooperative bank, national bank, federally chartered savings and loan association in stock form, or a federal savings bank in stock form is held by such control transferor.(ii) a foreign corporation established, organized or chartered under laws other than those of the commonwealth; provided, however, that such corporation employs fifty or more full-time employees, or employees working aggregate hours equal to the sum of hours worked by fifty full-time employees, in the commonwealth at some point in the twelve calendar months prior to the transfer of control; and provided, further, that such corporation is not admitted to do business pursuant to section one hundred and fifty of chapter one hundred and seventy-five.''Employee'', any person employed for hire by an employer in any lawful employment.''Termination of employment'', the involuntary termination of an employee's employment consistent with the eligibility standards for unemployment benefits under section twenty-five of chapter one hundred and fifty-one A.''Transfer of control'', a transaction or series of transactions as a result of which any person, as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934 hereinafter referred to as the ''act'', is or becomes the ''beneficial owner'', as defined in Rule 13d–3 under the act, directly or indirectly, of securities of a control transferor representing fifty percent or more of the control transferor's then outstanding voting securities; provided, however, that a change in control will not be deemed to have occurred solely because of the acquisition of securities of a control transferor, or any reporting requirement under the act relating thereto, by an employee benefit plan maintained by the control transferor for its employees.''Weekly compensation'', an employee's base compensation in effect on the last payroll period ending prior to the transfer of control for employees eligible pursuant to subsection (b) or the time of termination of employment for employees eligible pursuant to subsection (c).''Year of service'', each full year during which the employee has been employed by the control transferor as defined herein.(b) Any employee of a control transferor whose employment is terminated within twenty-four calendar months after the transfer of control of his employer is entitled to a one time lump sum payment from the control transferee equal to the product of twice his weekly compensation multiplied by each completed year of service. Such severance pay to eligible employees shall be in addition to any final wage payment to the employee and shall be made within one regular pay period after the employee's last day of work.(c) Any employee of a control transferor whose employment is terminated within the shorter of the following periods prior to a control transfer: (1) twelve calendar months; or (2) the period of time between which the control transferee obtained a five percent interest in the voting securities of the control transferor and consummated a control transfer by obtaining a fifty percent or greater interest pursuant to a transfer of control as defined herein, is entitled to a one time lump sum payment from the control transferee equal to the product of twice his weekly compensation multiplied by each completed year of service. Such severance pay to eligible employees shall be in addition to any final wage payment to the employee and shall be made within four regular pay periods after such transfer of control.(d) There shall be no liability for the one time payment to an otherwise eligible employee if:(1) The employee is covered by an express contract providing for such payment in the event of termination of employment in excess of that provided by this section;(2) The employee has been employed by the control transferor for less than three years;(3) A transfer of control as defined herein is the result of the transfer of securities or the beneficial interest therein, 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 the sibling's spouse;(iii) an individual and that individual's lineal descendants or their spouses;(iv) an individual or a fiduciary who holds the securities or the beneficial interest therein for the benefit of any of the foregoing persons; or(4) The control transferee obtained control through enforcement of rights under pledge or other security interest created in good faith and not for the purpose of circumventing the purposes of this chapter or as 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 such rights or in connection with such proceeding.(e) Upon assuming control, the control transferee shall be responsible for providing written notice to each employee of the control transferor and the collective bargaining representative, if any, of the rights of employees under this section within thirty days of completion of a transfer of control. The control transferee shall also provide written notice to the department that a control transfer has occurred. The attorney general shall assess a fine in an amount up to one thousand dollars for failure to provide such notification.(f) In the event any eligible employee is denied a lump-sum payment as a result of a violation of this section, such employee shall have available in addition to private civil and other remedies available at law or equity, the remedies provided under sections one hundred and forty-eight to one hundred and fifty, inclusive, of chapter one hundred and forty-nine. The attorney general may take any and all appropriate actions to enforce the provisions of this section under the authority provided in said sections one hundred and forty-eight to one hundred and fifty, inclusive, of said chapter one hundred and forty-nine.(g) For the purposes of determining eligibility under subsections (b) and (c), all determinations shall be as of the date the control transfer occurs unless specifically stated otherwise.(h) The attorney general may promulgate such rules and regulations as may be required for the implementation of this section.