Section: Words and phrases defined
As used in this act, the following terms shall have the respective meanings hereinafter set forth, unless the context shall otherwise require:
a. An "associate" of a person means:
(1) Any corporation or other organization of which such person is an officer, director or partner, or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;
(2) Any person who is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities of such person;
(3) Any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; or
(4) The spouse of such person, or any relative of such person or of such spouse who has the same home as such person.
(5) Any person acting jointly or in concert with the offeror for the purpose of acquiring, holding, or disposing of, or exercising any voting rights attached to the equity securities of a target company.
b. "Bureau" means the Bureau of Securities in the Division of Consumer Affairs in the Department of Law and Public Safety.
c. "Equity security" means:
(1) Any stock or similar security carrying, at the time of the takeover offer, the right to vote on any matter by virtue of the articles of incorporation, bylaws or governing instrument of the target company or the right to vote for directors or person performing substantially similar functions by operation of law;
(2) Any security convertible with or without consideration into stock or a similar security, as described in c.(1) above;
(3) Any warrant or right to purchase stock or a similar security, as described in c.(1) above;
(4) Any security carrying any warrant or right to purchase stock or similar security, as described in c.(1) above; or
(5) Any other security which for the protection of investors is deemed an equity security pursuant to regulation of the bureau chief.
d. "Number of shares" means, with respect to any equity security which is not stock or a similar security, the number of shares of stock or a similar security, as described in c.(1) above:
(1) Into which such security is convertible; or
(2) Which such equity security evidences or carries the right to purchase.
e. "Offeror" means a person who makes or in any way participates in making a takeover offer, and includes all affiliates and associates of that person. The term does not include a financial institution or broker-dealer loaning funds or extending credit to any offeror in the ordinary course of its business, or any accountant, attorney, financial institution, broker-dealer, newspaper or magazine of general circulation, consultant, or other person furnishing information, services or advice to or performing ministerial or administrative duties for an offeror and not otherwise participating in the takeover offer.
f. "Offeree" means a record or beneficial owner of any equity security which an offeror acquires or offers to acquire in connection with a takeover offer.
g. "Person" includes an individual, a partnership, a corporation, an unincorporated association or a trust.
h. "Shares" means and includes any equity security, however its units are denominated.
i. A "securityholder" of a specified person is one who owns any security of such person, including common stock, preferred stock, debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing.
j. A "subsidiary" of a company is any corporation whose outstanding stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation, irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency, is at the time owned by such company directly or indirectly.
k. An "offeror's presently owned shares" is the aggregate number of shares of a target company which are on the date of a takeover bid either beneficially owned or subject to a right of acquisition directly or indirectly, by the offeror and each associate of the offeror.
l . (1) A "takeover bid or takeover offer" is an offer made by an offeror directly or through an agent by advertisement or any other written or oral communication to offerees to purchase such number of shares of any class of equity securities of the target company that:
(a) Together with the offeror's presently owned shares of that class, will in the aggregate exceed 10% of the outstanding shares of such class; or
(b) Together with an offeror's presently owned shares of all classes of equity securities of the target company, will in the aggregate, after giving effect to all conversion and purchase rights held and to be acquired by the offeror, exceed 10% of the number of shares of stock or a similar security of the target company which will be outstanding.
(2) A "takeover bid" does not include, with respect to any class of securities of the target company:
(a) An isolated offer to purchase shares from individual shareholders not made to shareholders generally;
(b) An offer made by an issuer to purchase its own shares or shares of a subsidiary;
(c) An offer to purchase shares of a class not registered pursuant to s. 12 of the Securities Exchange Act of 1934;
(d) An offer made to not more than 10 persons in this State during any period of 12 consecutive months; or
(e) An offer as to which the target company, acting through its board of directors, recommends acceptance to its shareholders, provided that the terms thereof, including any inducements to officers or directors which are not made available to all shareholders, have been furnished to shareholders.
(f) An offer effected by or through a broker-dealer in the ordinary course of his business without solicitation of orders to sell equity securities of the target company;
(g) An offer, if the acquisition by the offeror, in the instant transaction and in all acquisitions of equity securities of the same class during the preceding 12 months, does not exceed 2% of that class of outstanding equity securities of the target company;
(h) An offer to purchase shares of a company whose capital assets do not exceed $5,000,000.00;
m. A "target company" is any corporation or other issuer of securities which is either organized under the laws of the state or has its principal place of business or substantial portion of its total assets in this State. A target company does not include:
(1) A domestic insurer subject to to the provisions of P.L.1970, c. 22 (C. 17:27A-1 et seq.); or
(2) A bank in the possession of the Commissioner of Banking pursuant to the provisions of C. 17:9A-266 et seq.; or
(3) A savings and loan association undergoing dissolution and liquidation pursuant to the provisions of C. 17:12B-288 et seq. and C. 17:12B-270.
L.1977, c. 76, s. 2, eff. April 27, 1977.
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