Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to promote competitiveness of the Massachusetts economy, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 1 of chapter 110D of the General Laws, as appearing in the 1988 Official Edition, is hereby amended by striking out subsection (a) and inserting in place thereof the following subsection:-

(a) "Associate", any person who directly or indirectly controls or is controlled by, or is under common control with, a person who is acting or intends to act jointly or in concert with a person in connection with a control share acquisition, "control", as used in this subsection meaning the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise; any corporation or organization of which a person is an officer, director or partner or in which a person performs a similar function; any direct or indirect beneficial owner of ten percent or more of any class of equity securities of a person; any trust or estate in which a person has a beneficial interest not represented by transferable shares or as to which a person serves as trustee or in a similar fiduciary capacity; and any relative or spouse of a person, or any relative of such spouse, any one of whom has the same residence as such person.

SECTION 2. Paragraph (2) of subsection (c) of said section 1 of said chapter 110D, as so appearing, is hereby amended by striking out clause (i) and inserting in place thereof the following clause:-

(i) before June twenty-sixth, nineteen hundred and eighty-seven; provided, however, that the aggregate of shares of beneficial ownership of which is acquired before such date is within the range of voting power established by paragraph (1).

SECTION 3. Said section 1 of said chapter 110D, as so appearing, is hereby further amended by striking out subsection (e) and inserting in place thereof the following subsection:-

(e) "Issuing public corporation", a corporation to which the provisions of paragraph (a) of section three of chapter one hundred and fifty-six B apply, a gas or electric company or combined gas and electric company to which section three of chapter one hundred and sixty-four apply or an association or trust which pursuant to said section three of said chapter one hundred and sixty-four owns beneficially a majority of the common stock of such a company; provided, however, that such issuing public corporation has:

(i) two hundred or more stockholders of record; and

(ii) its principal executive office or substantial assets within the commonwealth; and

(iii) either: more than ten percent of its stockholders of record residing within the commonwealth; or more than ten percent of its issued and outstanding shares owned of record by residents of the commonwealth.

The record date for determining the percentages and numbers of stockholders and shares specified in this subsection shall be the last stockholder record date before the control share acquisition as to which the determination is being made or, if earlier, before the date on which a control share acquisition statement relating thereto is filed under the provisions of section three. A stockholder record date is the date fixed by the board of directors or, if applicable, the date when transfer books are closed by the board of directors, in connection with determining stockholders entitled to notice of and vote at a meeting, or to consent or dissent, to receive any dividend or other distribution, or for the purpose of any other lawful action. If a stockholder record date has not been fixed by the board of directors within the preceding four months, the determination shall be made as of the end of the issuing public corporation's most recent fiscal quarter.

The residence of stockholder is presumed to be the address appearing in the records of the corporation. Shares held of record by brokers or nominees shall be disregarded for purposes of calculating the percentages and numbers specified in this subsection. Any shares of an issuing public corporation allocated to the account of an employee or former employee, or beneficiary of an employee or former employee, of such corporation and held in a plan that is qualified under section 401(a) of the Internal Revenue Code of 1986, as amended, and is a defined contribution plan within the meaning of section 414(i) of said Code shall be deemed, for the purposes of clause (iii), to be held of record by the employee, former employee or beneficiary to whose account such shares are allocated.

In the case of an issuing public corporation which is an association or trust, "references to articles of organization" mean the instrument or declaration of trust, references to "by-laws" include publicly announced resolutions of the directors; references to "directors", the "clerk" and "assistant clerk" mean the individuals performing similar functions; and references to the "corporation" or "such corporation" mean the association or trust.

SECTION 4. Subsection (b) of section 6 of said chapter 110D, as so appearing, is hereby amended by inserting after the word "corporation", in line 17, the words:- not later than.

SECTION 5. Section 1 of chapter 110E of the General Laws, as so appearing, is hereby amended by striking out subsection (a) and inserting in place thereof the following subsection:-

(a) "Associate", any person who directly or indirectly controls, or is controlled by, or is under common control with, a person or who is acting or intends to act jointly or in concert with a person in connection with a control share acquisition, "control", as used in this subsection, meaning the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise; any corporation or organization of which a person is an officer, director or partner or in which a person performs a similar function; any direct or indirect beneficial owner of ten percent or more of any class of equity securities of a person; any trust or estate in which a person has a beneficial interest not represented by transferable shares or as to which a person serves as trustee or in a similar fiduciary capacity; and any relative or spouse of a person, or any relative of such spouse, any one of whom has the same residence as such person.

SECTION 6. Paragraph (2) of subsection (c) of said section 1 of said chapter 110E, as so appearing, is hereby amended by striking out clauses (i) and (ii) and inserting in place thereof the following two clauses:-

(i) before June twenty-sixth, nineteen hundred and eighty-seven; provided, however, that the aggregate of shares of beneficial ownership which is acquired before such date is within a range of voting power established by paragraph (1);

(ii) pursuant to a contract to acquire shares existing before June twenty-sixth, nineteen hundred and eighty-seven.

SECTION 7. Said section 1 of said chapter 110E, as so appearing, is hereby further amended by striking out subsection (e) and inserting in place thereof the following subsection:-

(e) "Issuing public corporation", a corporation that has been established, organized or chartered under laws other than those of the commonwealth that has:

(i) two hundred or more stockholders of record;

(ii) its principal executive office within the commonwealth and more of its employees or assets, including employees or assets of its majority owned subsidiaries, employed or located in the commonwealth than in any other state as of the end of any of its four fiscal quarters immediately preceding the control share acquisition as to which the determination is being made or, if earlier, immediately preceding the date on which a control share acquisition statement relating thereto is delivered pursuant to section three; and

(iii) either more than ten percent of its stockholders of record residing within the commonwealth or more than ten percent of its issued and outstanding shares owned of record by residents of the commonwealth.

The record date for determining the percentages and numbers of stockholders and shares specified in this subsection shall be the last stockholder record date before the control share acquisition as to which the determination is being made or, if earlier, before the date on which a control share acquisition statement relating thereto is filed under the provisions of section three. A stockholder record date is the date fixed by the board of directors or, if applicable, the date when transfer books are closed by the board of directors, in connection with determining stockholders entitled to notice of and vote at a meeting or to consent or dissent, to receive any dividend or other distribution, or for the purpose of any other lawful action. If a stockholder record date has not been fixed by the board of directors within the preceding four months, the determination shall be made as of the end of the issuing public corporation's most recent fiscal quarter.

The residence of each stockholder is presumed to be the address appearing in the records of the corporation. Shares held of record by brokers or nominees shall be disregarded for purposes of calculating the percentages and numbers specified in this subsection. Any shares of an issuing public corporation allocated to the account of an employee or former employee, or beneficiary of an employee or former employee, of such corporation and held in a plan that is qualified under section 401(a) of the Internal Revenue Code of 1986, as amended, and is a defined contribution plan within the meaning of section 414(i) of said Code shall be deemed, for the purposes of clause (iii), to be held of record by the employee, former employee or beneficiary to whose account such shares are allocated.

SECTION 8. The General Laws are hereby further amended by inserting after chapter 110E the following chapter:- `tuc CHAPTER 110F. BUSINESS COMBINATIONS WITH INTERESTED SHAREHOLDERS.

Section 1. A corporation shall not engage in any business combination with any interested stockholder for a period of three years following the date that such stockholder became an interested stockholder, unless:

(a) prior to such date the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or

(b) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least ninety percent of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding, those shares owned by (1) persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

(c) on or subsequent to such date the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

Section 2. The restrictions contained in section one shall not apply if:

(a) the corporation's original articles of organization contain a provision expressly electing not to be governed by this section;

(b) the corporation, by action of its board of directors, adopts an amendment to its by-laws within ninety days of the effective date of this chapter, expressly electing not to be governed by this chapter, which amendment shall not be further amended by the board of directors;

(c) the corporation, by action of its stockholders, adopts an amendment of its articles of organization or by-laws expressly electing not to be governed by this chapter; provided, however, that in addition to any other vote required by law, such amendment to the articles of organization or by-laws must be approved by the affirmative vote of a majority of the shares entitled to vote. An amendment adopted pursuant to this paragraph shall not be effective until twelve months after the adoption of such amendment and shall not apply to any business combination between such corporation and any person who became an interested stockholder of such corporation on or prior to the date of such adoption. A by-law amendment adopted pursuant to this paragraph shall not be further amended by the board of directors;

(d) the corporation does not have two hundred or more stockholders of record;

(e) the corporation does not have: (1) its principal executive office or substantial assets within the commonwealth unless as a result of action taken directly or indirectly by an interested stockholder; and (2) either more than ten percent of its stockholders of record residing within the commonwealth or more than ten percent of its issued and outstanding shares owned of record by residents of the commonwealth.

The record date for determining the percentages and numbers of stockholders and shares specified in subsections (d) and (e) shall be the last stockholder record date before any stockholder became an interested stockholder. A stockholder record date is the date fixed by the board of directors or, if applicable, the date when transfer books are closed by the board of directors, in connection with determining stockholders entitled to notice of and vote at a meeting, or to consent or dissent, to receive any dividend or other distribution, or for the purpose of any other lawful action. If a stockholder record date has not been fixed by the board of directors within the preceding four months, the determination shall be made as of the end of the corporation's most recent fiscal quarter. The residence of each stockholder is presumed to be the address appearing in the records of the corporation. Shares held of record by brokers or nominees shall be disregarded for purposes of calculating the percentages and numbers specified in this subsection. Any shares of a corporation allocated to the account of an employee or former employee, or beneficiary of an employee or former employee, of such corporation and held in a plan that is qualified under section 401(a) of the Internal Revenue Code of 1986, as amended, and is a defined contribution plan within the meaning of section 414(i) of said Code shall be deemed, for the purposes of clause (ii), to be held of record by the employee, former employee or beneficiary to whose account such shares are allocated.

In the case of a corporation which is an association or trust, references to "articles of organization" mean the instrument or declaration of trust; references to "by-laws" include publicly announced resolutions of the directors; references to "directors" mean the individuals performing similar functions; and references to the "corporation" or "such corporation" mean the association or trust.

(f) a stockholder becomes an interested stockholder inadvertently and (1) as soon as practicable divests sufficient shares so that the stockholder ceases to be an interested stockholder; and (2) would not, at any time within the three year period immediately prior to a business combination between the corporation and such stockholder, have been an interested stockholder but for the inadvertent acquisition; or

(g) the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which: (1) constitutes one of the transactions described in clause (ii) of paragraph (3); (2) is with or by a person who either was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of the corporation's board of directors; and (3) is approved or not opposed by a majority of the members of the board of directors then in office, but not less than one, who were directors prior to any person becoming an interested stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence shall be limited to:

(i) a merger or consolidation of the corporation, except for a merger in respect of which, pursuant to paragraph (2) of subsection (c) of section seventy-eight of chapter one hundred and fifty-six B, no vote of the stockholders of the corporation is required;

(ii) a sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, whether as part of a dissolution or otherwise, of assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation, other than to any direct or indirect wholly-owned subsidiary or to the corporation, having an aggregate market value equal to fifty percent or more of either that aggregate market value of all of the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation; or

(iii) a proposed tender or exchange offer for fifty percent or more of the outstanding voting stock of the corporation.

The corporation shall give not less than twenty days notice to all interested stockholders prior to the consummation of any of the transactions described in clause (i) or (ii) of paragraph (3) of subsection (g).

Notwithstanding the provisions of subsections (a), (b), (c) and (d), a corporation may elect by a provision of its original articles of organization or any amendment thereto to be governed by this chapter; provided, however, that any such amendment to the articles of organization shall not apply to restrict a business combination between the corporation and an interested stockholder of the corporation if the interested stockholder became such prior to the effective date of this chapter.

Section 3. As used in this chapter, the following words, unless the context clearly requires otherwise, shall have the following meanings:-

(a) "Affiliate", a person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another person.

(b) "Associate", when used to indicate a relationship with any person:

(1) any corporation or organization of which such person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent or more of any class of voting stock; (2) any trust or other estate in which such person has at least a twenty percent beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (3) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person.

(c) "Business combination", when used in reference to any corporation and any interested stockholder of such corporation:

(1) any merger or consolidation of the corporation or any direct or indirect majority-owned subsidiary of the corporation with (i) the interested stockholder, or (ii) any other corporation if the merger or consolidation is caused by the interested stockholder;

(2) any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, except proportionately as a stockholder of such corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the corporation or of any direct or indirect majority-owned subsidiary of the corporation which assets have an aggregate market value equal to ten percent or more of either the aggregate market value of all the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation;

(3) any transaction which results in the issuance or transfer by the corporation or by any direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested stockholder, except:

(i) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of such corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder 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 such corporation or any such subsidiary which security is distributed pro rata to all holders of a class or series of stock of such corporation subsequent to the time the interested stockholder became such;

(iii) pursuant to an exchange offer by the corporation to purchase stock made on the same terms to all holders of such stock; or

(iv) an issuance or transfer of stock by the corporation; provided, however, that in no case under clauses (ii) to (iv), inclusive, shall there be an increase in the interested stockholder's proportionate share of the stock of any class or series of the corporation or of the voting stock of the corporation;

(4) any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series of the corporation or any such subsidiary which is owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or

(5) any receipt by the interested stockholder of the benefit, directly or indirectly, except proportionately as a stockholder of such corporation, of any loans, advances, guarantees, pledges or other financial benefits, other than those expressly permitted in paragraphs (1) to (4), inclusive, provided by or through the corporation or any direct or indirect majority-owned subsidiary.

(d) "Confidentiality", for the purpose of paragraph (2) of subsection (b) of subsection 1 that the corporation's management, excluding any independent plan trustee, has no knowledge as to whether employee participants in employee stock plans have tendered their shares in a tender or exchange offer.

(e) "Control", including the term "controlling", "controlled by" and "under common control with", the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of twenty percent or more of a corporation's outstanding voting stock shall be presumed to have control of such corporation, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this chapter, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such corporation.

(f) "Corporation", a corporation to which the provisions of paragraph (a) of section three of chapter one hundred and fifty-six B apply, a gas or electric company or combined gas and electric company to which section three of chapter one hundred and sixty-four applies or an association or trust which owns beneficially a majority of the common stock of such a company or a trust company to which the provisions of chapter one hundred and seventy-two apply, a savings bank in stock form to which certain provisions of said chapter one hundred and seventy-two apply pursuant to section thirty-four C of chapter one hundred and sixty-eight, or a cooperative bank in stock form to which certain provisions of said chapter one hundred and seventy-two apply pursuant to section twenty-six C of chapter one hundred and seventy.

(g) "Interested stockholder", any person other than the corporation and any direct or indirect majority-owned subsidiary of the corporation, that:

(1) is the owner of five percent or more of the outstanding voting stock of the corporation; or

(2) is an affiliate or associate of the corporation and was the owner of five percent or more of the outstanding voting stock of the corporation at any time within the three year period immediately preceding the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of such person; provided, however, that the term "interested stockholder" shall not include:

(i) any person who (A) owned shares in excess of the five percent limitation set forth herein as of, or acquired such shares pursuant to a tender offer commenced prior to, the effective date of this chapter or pursuant to an exchange offer announced prior to the aforesaid date and commenced within ninety days thereafter and continued to own shares in excess of such five percent limitation or would have but for action by the corporation; or (B) acquired said shares from a person described in subclause (A) by gift, inheritance or in a transaction in which no consideration was exchange; or

(ii) any person whose ownership of shares in excess of the five percent limitation set forth herein is the result of action taken solely by the corporation; provided, however, that such person shall be an interested stockholder if thereafter he acquires additional shares of voting stock of the corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of subsection (j) but shall not include any other unissued stock of such corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options or otherwise.

Notwithstanding the foregoing provisions, the applicable percentage for purposes of this paragraph shall be fifteen percent in place of five percent for a person eligible to file schedule 13-G under the rules of the Securities and Exchange Commission with respect to securities of the corporation as long as such person continues to be so eligible.

(h) "Owner", including the terms "own" and "owned", when used with respect to any stock, a person that individually or with or through any of its affiliates or associates: (1) beneficially owns such stock, directly or indirectly; or (2) has (i) the right to acquire such stock, whether such right is exercisable immediately or only after the passage of time, pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered stock is accepted for purchase or exchange; or (ii) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person's right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons; or (3) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting, except voting pursuant to a revocable proxy or consent as described in subclause (ii) of paragraph (2) of this subsection, or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

(i) "Person", any individual, corporation, partnership, unincorporated association or other entity.

(j) "Voting stock", stock of any class or series entitled to vote generally in the election of directors.

Section 4. No provision of a corporation's articles of organization or by-laws shall require, for any vote of stockholders required by this chapter, a greater vote of stockholders than that specified in this chapter.

SECTION 9. Chapter 149 of the General Laws is hereby amended by inserting after section 20D the following section:-

Section 20E. No business combination transaction shall result in the termination or impairment of the provisions of any labor contract covering persons engaged in employment in the commonwealth negotiated by a labor organization or by a collective bargaining agent or other representative. Notwithstanding such business combination transaction, such labor contract shall continue in effect until its termination date or until otherwise agreed upon by the parties to such contract or their successors.

As used in this section, the following words, unless the context clearly requires otherwise, shall have the following meanings:-

"Business combination transaction", any merger or consolidation, sale, lease, exchange or other disposition, in one transaction or a series of transactions, whether of all or substantially all the property and assets, including its good will, of the business operations that are the subject of the labor contract referred to in the first paragraph or any transfer of a controlling interest in such business operations;

"Employment", an individual's entire service, performed within and without the commonwealth, if the service is localized in the commonwealth. Service shall be deemed to be localized in the commonwealth if: (i) the service is performed entirely within the commonwealth; or (ii) the service is performed both within and without the commonwealth but the service performed without the commonwealth is incidental to the individual's service within the commonwealth, as where such service is temporary or transitory in nature or consists of isolated transactions.

Employment shall include an individual's service, performed within and without the commonwealth, if the service is not localized in any state, but some of the service is performed in the commonwealth; and (i) the individual's base of operations is in the commonwealth; or (ii) if there is no base of operations, then the place for which such service is directed or controlled is in the commonwealth; or (iii) the individual's base of operations or place from which such service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in the commonwealth.

In the event that an employee is denied or fails to receive wages, benefits or wage supplements 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 under the provisions of sections one hundred and forty-eight to one hundred and fifty, inclusive, of chapter one hundred and forty-nine. The department may take any and all appropriate action to enforce the provisions of this section including, but not limited to, injunctions, cease and desist orders and penalties provided for in sections one hundred and forty-eight to one hundred and fifty, inclusive.

Recovery pursuant to a violation of this section shall be applicable to secure recovery against the merged, consolidated or resulting corporation or other successor employer, notwithstanding the provisions of this section or any other general or special law to the contrary.

SECTION 10. Chapter 149 of the General Laws is hereby amended by adding the following section:-

Section 183. (a) As used in this section, the following words, unless the context clearly requires otherwise, shall have the following meanings:-

"Commissioner", the commissioner of the department of labor and industries.

"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 (a) of section three of chapter one hundred and fifty-six B apply, a gas or electric company or combined gas and electric company to which section three of chapter one hundred and sixty-four applies or an association or trust which pursuant to said section three of said chapter one hundred and sixty-four owns beneficially a majority of the common stock of such a company or a trust company to which the provisions of chapter one hundred and seventy-two apply, a savings bank to which certain provisions of said chapter one hundred and seventy-two apply pursuant to section thirty-four C of chapter one hundred and sixty-eight, a cooperative bank in stock form to which certain provisions of chapter one hundred and seventy-two apply pursuant to section twenty-six C of chapter one hundred and seventy, 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 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 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 prior to 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.

"Department", the department of labor and industries.

"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 department 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 department of labor and industries 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 commissioner may promulgate such rules and regulations as may be required for the implementation of this section with the approval of the secretary of labor.

SECTION 11. Chapter 156B of the General Laws is hereby amended by inserting after section 32 the following section:-

Section 32A. The terms and conditions of any rights or options issued by the corporation, including those outstanding on the effective date of this section, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer, receipt or holding of such rights or options by any person owning or offering to acquire a specified number or percentage of the outstanding stock or other securities of the corporation, or any transferees of any such persons, or that preclude or limit such actions based on such other factors, including the nature or identity of such persons, as the directors determine to be reasonable and in the best interests of the corporation. Nothing contained in this section shall affect the duties or standard of care of a director pursuant to section sixty-five of this chapter.

SECTION 12. Said chapter 156B, as so appearing, is hereby further amended by striking out section 34, as appearing in the 1988 Official Edition, and inserting in place thereof the following section:-

Section 34. (a) Special meetings of the stockholders of a corporation not described in subsection (b) may be called by the president or by the directors, and shall be called by the clerk, or in the case of the death, absence, incapacity or refusal of the clerk, by another officer, upon written application of one or more stockholders who hold at least ten percent in interest of the capital stock entitled to vote thereat. In the event that none of the officers is able and willing to call a special meeting, the supreme judicial or superior court, upon application of one or more stockholders who hold at least ten percent in interest of the capital stock entitled to vote thereat, shall have jurisdiction to authorize one or more of such stockholders to call a meeting by giving such notice as is required by law.

(b) Special meetings of the stockholders of a corporation with a class of voting stock registered under the Securities Exchange Act of 1934, as amended, may be called by the president or by the directors and, unless otherwise provided in the articles of organization or by-laws, shall be called by the clerk, or in case of the death, absence, incapacity or refusal of the clerk, by any other officer, upon written application of one or more stockholders who hold at least forty percent in interest of the capital stock entitled to vote thereat. In case none of the officers is able and willing to call a special meeting, the supreme judicial or superior court, upon application of one or more stockholders who hold at least forty percent in interest, or such other percentage as shall be specified in the corporation's articles of organization or by-laws, of the capital stock entitled to vote thereat, shall have jurisdiction in equity to authorize one or more of such stockholders to call a meeting by giving such notice as is required by law.

SECTION 13. Section 65 of said chapter 156B, as so appearing, is hereby amended by inserting after the first sentence the following sentence:- In determining what he reasonably believes to be in the best interests of the corporation, a director may consider the interests of the corporation's employees, suppliers, creditors and customers, the economy of the state, region and nation, community and societal considerations, and the long-term and short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation.

SECTION 14. Section 12 of chapter 172 of the General Laws, as appearing in the 1988 Official Edition, is hereby amended by adding the following sentence:- Except as otherwise provided in the articles of organization or by-laws of the corporation, special meetings of the stockholders may be called pursuant to the provisions of section thirty-four of chapter one hundred and fifty-six B.

SECTION 15. Section 13 of said chapter 172, as so appearing, is hereby amended by inserting after the second paragraph the following paragraph:-

In determining what he or she reasonably believes to be in the best interests of such corporation, in considering proposed business combinations, as defined in paragraph (c) of section three of chapter one hundred and ten F, a director may consider the interests of the corporation's employees, suppliers, creditors and customers; the economy of the state, region and nation, community and societal considerations, and the long-term and short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation.

SECTION 16. Section 24 of said chapter 172, as so appearing, is hereby amended by adding the following paragraph:-

F. Rights and Options. - The terms and conditions of any rights or options issued by any such corporation, including those outstanding on the effective date of this section, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer, receipt or holding of such rights or options by any person or persons owning or offering to acquire a specified number or percentage of the outstanding stock or other securities of the corporation, or any transferees of any such persons, or that preclude or limit such actions based on such other factors, including the nature or identity of such persons, as the directors determine to be reasonable and in the best interests of the corporation. Nothing contained in this section shall affect the duties or standard of care of a director. The issuance of any shares of the capital stock of the corporation upon the exercise of any such options or rights shall require the prior approval of the commissioner and shall be subject to such conditions as the commissioner may impose.

SECTION 17. The secretary of economic affairs and the secretary of labor shall compile annually commencing on July first, nineteen hundred and eighty-nine, a written report of the effects of section one hundred and eighty-three of chapter one hundred and forty-nine of the General Laws. Said report shall include, but not be limited to, the number of transactions and employees covered by said section one hundred and eighty-three and the size of the lump sum payments received by eligible employees. Said report shall be filed annually with the clerk of the house of representatives who shall forward the same to the joint committee on commerce and labor.