§ 28-7-19.2. Standards of corporate behavior.
(a) As used in this section, the following words, unless the context clearly requires
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, outstanding voting securities includes any voting stock underlying
convertible securities.
(2) "Control transferee� means the person or persons who assume control following a transfer
of control as defined in subsection (a)(8).
(3) "Control transferor� means the person or persons who exercise control, including the
power of hire and fire, before a transfer of control as defined in subsection (a)(8);
provided, however, that the person or persons are either:
(i) A corporation to which the provisions of chapters 1.1 and 5.2 of Title 7 apply, a
gas or electric company or combined gas and electric company subject to the provisions
of chapter 1 of title 39, or an association or trust which pursuant to chapter 1 of title 39 owns beneficially a majority of the common stock of that company; provided, that
the corporation employ fifty (50) or more full-time employees, or employees working
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 at some point in the twelve
(12) calendar months prior to the transfer of control.
(ii) A foreign corporation established, organized, or chartered under laws other than those
of this state; provided, that the corporation employs fifty (50) or more full-time
employees, or employees working 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
at some 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 banking association
or banking corporation or insurance company authorized to transact business in the
state.
(4) "Department� means the department of labor and training.
(5) "Director� means the director of the department of labor and training.
(6) "Employee� means any person employed for hire by an employer in any lawful employment.
(7) "Termination of employment� means the involuntary termination of an employee's employment
consistent with the eligibility standards for unemployment benefits under chapter
44 of this title.
(8) "Transfer of control� means a transaction or series of transactions as a result of
which any person is or becomes the "beneficial owner,� directly or indirectly, of
securities of a control transferor representing fifty percent (50%) or more of the
control transferor's then outstanding voting securities; provided, that a change in
control will not be deemed to have occurred solely because of the acquisition of securities
as a control transferor, or any related reporting requirements under chapter 11 of title 7, by an employee benefit plan maintained by the control transferor for its employees.
(9) "Weekly compensation� means an employee's base compensation in effect on the last
payroll period ending prior to the transfer of control for eligible employees pursuant
to subsection (b) of this section or the time of termination of employment for eligible
employees pursuant to subsection (c) of this section.
(10) "Year of service� means each full year during which the employee has been employed
by the control transferor as defined in subsection (a)(3) of this section.
(b) Any employee of a control transferor whose employment is terminated within twenty-four
(24) calendar months after the transfer of control of his or her employer is entitled
to a one-time lump sum payment from the control transferee equal to the product of
twice his or her weekly compensation multiplied by each completed year of service.
This 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: (i) Twelve (12) calendar months,
or (ii) The period of time between which the control transferee obtained a five percent
(5%) interest in the voting securities of the control transferor and consummated a
control transfer by obtaining a fifty percent (50%) or greater interest pursuant to
subsection (a)(8) of this section, is entitled to a one-time lump sum payment from
the control transferee equal to the product of twice his or her weekly compensation
multiplied by each completed year of service. This severance pay to eligible employees
shall be in addition to any final wage payment to the employee and shall be made within
four (4) regular pay periods after the 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 payment in the event
of termination of employment equal to or in excess of that provided by this section;
(2) The employee has been employed by the control transferor for less than three (3) years;
(3) A transfer of control as defined in subsection (a)(8) of this section is the result
of the transfer of securities or the beneficial interest 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 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 those rights
or in connection with that 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
or representatives, if any, of the rights of employees under this section within thirty
(30) days of completion of a transfer of control. The control transferee shall also
provide written notice to the department that a control has occurred. The department
shall assess a fine in an amount up to one thousand dollars ($1,000) for failure to
provide the notification.
(f) In the event any eligible employee is denied a lump sum payment as a result of a violation
of this section, the employee shall have available all private civil and other remedies
at law or equity. The department of labor and training may take any and all appropriate
actions to enforce the provisions of this section.
(g) For the purposes of determining eligibility under subsections (b) and (c) of this
section, all determinations shall be as of the date of control transfer occurs unless
specifically stated otherwise.
(h) The director may promulgate any regulations that may be required for the implementation
of this section.