Severance pay following transfer of control or attempted transfer of control of registered corporation; definitions
Section 184. (a) As used in this section, the following words, unless the context clearly requires otherwise, shall have the following meanings:
''Control transferor'', the person or persons who exercise control, including the power to hire and fire, before a contested meeting date; provided, however, that such person or persons are a registered corporation subject to subsection (b) of section 8.06 of chapter 156D and are subject to a contested meeting.
''Registered corporation'', any corporation subject to subsection (b) of section 8.06 of chapter 156D which has a class of voting stock registered under the Securities Exchange Act of 1934, as amended, hereinafter referred to as the ''act''; provided, however, that if a corporation is subject to subsection (a) of such section 8.06 at the time it ceases to have any class of voting stock so registered, such corporation shall nonetheless be deemed to be a registered corporation for a period of 12 months following the date it ceased to have such stock so registered.
(b) Any employee of a control transferor whose employment is terminated within the shorter of either: (i) a period of twelve calendar months following a contested meeting date of such control transferor or (ii) the period between a contested meeting date of such control transferor and a transfer of control of such control transferor is entitled to a one time lump-sum payment from the control transferor 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) 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; or
(iv) an individual or a fiduciary who holds the securities or the beneficial interest therein for the benefit of any of the foregoing persons.
(4) The control transferee obtained control through the enforcement of rights under pledge or other security interest created in good faith and not for the purpose of circumventing the purposes of this section 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.
(d) Any amounts paid to an employee pursuant to subsection (b) of this section shall be credited against any amounts payable by a control transferee to such employee pursuant to section one hundred and eighty-three of this chapter. The control transferor is responsible for maintaining such records as may be required for adequate implementation of this provision.
(e) The control transferor 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 ten business days of the occurrence of a contested meeting. Such control transferor shall also provide written notice to the department that a contested meeting 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 in 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 this chapter. 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 this chapter.
(g) For purposes of determining eligibility under subsection (b), all determinations shall be as of the contested meeting date, unless specifically stated otherwise in this section.
(h) The attorney general may promulgate such rules and regulations as may be required for the implementation of this section.