Terms Used In Rhode Island General Laws 7-5.2-8

• Business combination: when used in reference to any resident domestic corporation and any interested shareholder of the resident domestic corporation, means:

  (i)  Any merger or consolidation of the resident domestic corporation or any subsidiary of the resident domestic corporation with:

  (A)  The interested shareholder; or

  (B)  Any other corporation, whether or not itself an interested shareholder of the resident domestic corporation, that is, or after the merger or consolidation would be, an affiliate or associate of the interested shareholder;

  (ii)  Any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, except proportionately as a stockholder of the corporation, to or with the interested shareholder or any affiliate or associate of the interested shareholder, whether as a part of a dissolution or otherwise, of assets of the resident domestic corporation or any subsidiary of the resident domestic corporation:

  (A)  Having an aggregate market value equal to ten percent (10%) or more of the aggregate market value of all the assets, determined on a consolidated basis, of the resident domestic corporation;

  (B)  Having an aggregate market value equal to ten percent (10%) or more of the aggregate market value of all the outstanding stock of the resident domestic corporation; or

  (C)  Representing ten percent (10%) or more of the earning power or net income, determined on a consolidated basis, of the resident domestic corporation;

  (iii)(A)  Any transaction that results in the issuance or transfer by the resident domestic corporation, or by any subsidiary of the resident domestic corporation, of any stock of the resident domestic corporation or of the subsidiary to the interested shareholder, except:

  (I)  Pursuant to the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into stock of the resident domestic corporation or any subsidiary which securities were outstanding prior to the time that the interested shareholder became such;

  (II)  Pursuant to a dividend or distribution paid or made, or the exercise, exchange, or conversion of securities exercisable for, exchangeable for, or convertible into stock of the resident domestic corporation or any subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the resident domestic corporation subsequent to the time the interested shareholder became such;

  (III)  Pursuant to an exchange offer by the resident domestic corporation to purchase stock made on the same terms to all holders of the stock; or

  (IV)  Any issuance or transfer of stock by the resident domestic corporation;

  (B)  Provided, however, that in no case under subsections (5)(iii)(A)(I) — (IV) shall there be an increase in the interested shareholder's proportionate share of the stock of any class or series of the resident domestic corporation or of the voting stock of the resident domestic corporation;

  (iv)  The adoption of any plan or proposal for the liquidation or dissolution of the resident domestic corporation proposed by, 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;

  (v)  Any reclassification of securities, including, without limitation, any stock split, stock dividend, or other distribution of stock in respect to stock, any reverse stock split, or recapitalization of the resident domestic corporation, any merger or consolidation of the resident domestic corporation with any subsidiary of the resident domestic corporation, or any other transaction, whether or not with or into or otherwise involving the interested shareholder, proposed by, 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 voting stock or securities convertible into voting stock of the resident domestic corporation or any subsidiary of the resident domestic 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; or

  (vi)  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 resident domestic corporation, of any loans, advances, guarantees, pledges, or other financial assistance, benefits, any tax credits, or other tax advantages provided by or through the resident domestic corporation, except as expressly permitted in subsections (5)(i) through (5)(vi). See Rhode Island General Laws 7-5.2-3

• Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

History of Section.
P.L. 1990, ch. 138, § 1.