As used in this subpart:

1. (1) “Acquire control” or “acquiring control” means any act or conduct by a person whereby the person obtains control, whether accomplished through the ownership of equity or voting securities, ownership of rights to acquire equity or voting securities, by management or consulting agreements or other contract, by proxy or power of attorney, by statutory mergers, by consummation of a tender offer, by acquisition of assets, or otherwise;
2. (2) Unless otherwise specified, “commission” means the Arkansas Racing Commission or the commission’s designee;
3. (3) “Control”, when used as a noun, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, and when used as a verb, means to possess, directly or indirectly, such power;
4. (4) “Controlling person”, with respect to a publicly traded corporation, means each person who controls the publicly traded corporation;
5. (5) “Corporate acquisition opposed by management” means an attempt to acquire control of a publicly traded corporation that is an affiliated company by means of a tender offer that is opposed by the board of directors of the affiliated company;
6. (6) “Corporate licensee” means a corporation that is licensed and registered with the Arkansas Racing Commission;

7. (7)

   1. (A) “Current market price” means the average of the daily closing prices for the twenty (20) consecutive trading days immediately preceding the date of a transaction or the closing price on the day immediately preceding the date of such transaction, whichever is higher.
   2. (B) For the purpose of this definition, the closing price for each day shall be the last reported sale price, regular way, or in case no such reported sale takes place on such date, the average of the last reported bid and asked prices, regular way, in either case on the principal national securities exchange registered under the Securities Exchange Act of 1934, 15 U.S.C. § 78a, on which such security is admitted to trading or listed, or if not listed or admitted to trading on any national securities exchange, the closing price of such security, or in case no reported sale takes place, the average of the closing bid and asked prices, on NASDAQ or any comparable system, or if such security is not listed or quoted on NASDAQ or any comparable system, the closing sale price, or in case no reported sale takes place, the average of the closing bid and asked prices, as furnished by any member of the National Association of Securities Dealers, Inc., selected from time to time by the issuer for that purpose;

8. (8) “Debt restructuring” means:

   1. (A) A proceeding under the United States Bankruptcy Code; or
   2. (B) Any out-of-court reorganization of a person that is insolvent or generally unable to pay its debts as they become due;

9. (9)

   1. (A) “Exceptional repurchase of securities” means the direct or indirect purchase by a corporation of securities representing beneficial ownership of more than one percent (1%) of its voting securities, whether in a single transaction or a series of related transactions, at a price more than ten percent (10%) above the current market price of such securities on the date of the agreement to purchase such securities from any person, other than a person who has been an executive officer or a member of the board of directors for at least the past two (2) years, who, on the date of the agreement to purchase, is the beneficial owner of more than three percent (3%) of the voting securities of such corporation and has been the beneficial owner of more than three percent (3%) of such securities for less than one (1) year, unless such purchase has been approved by the affirmative vote of a majority of the holders of voting securities voting on the transaction exclusive of the selling security holder, or is pursuant to the same offer and terms as made to all holders of voting securities of such class, other than holders, if any, who have consented in writing to be excluded from the class of offerees, executive officers, or members of the board of directors.
   2. (B) For the purpose of this definition, when determining whether a corporation has purchased more than one percent (1%) of its voting securities, the amount of voting securities of such corporation shall be deemed to include voting securities issuable pursuant to purchase rights where the price of the purchase rights is less than the current market price of such securities on a given determination date provided, however, that in any event, the amount of such voting securities beneficially owned by a selling security holder pursuant to purchase rights shall be included to determine the amount of the corporation’s voting securities for purposes of such computation if not otherwise included based on the foregoing provision;
10. (10) “Executive officer”, with respect to a publicly traded corporation, means the president, secretary, treasurer, any vice president in charge of a principal business function (such as sales, administration, or finance), and any other person who performs similar policy making functions for a publicly traded corporation;
11. (11) “Federal Securities Act” means 15 U.S.C. §§ 77a – 77aa, as amended from time to time, and the rules and regulations of the Securities and Exchange Commission now or hereafter promulgated thereunder;
12. (12) “Federal Securities Exchange Act” means 15 U.S.C. §§ 78a – 78kk, as amended from time to time, and the rules and regulations of the Securities and Exchange Commission now or hereafter promulgated thereunder;
13. (13) “Full disclosure” with respect to a transaction or to a series of transactions means a descriptive statement thereof that does not make an untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;

14. (14)

    1. (A) “Institutional investor” means:

       1. (i) A bank as defined in Section 3(a)(6) of the Federal Securities Exchange Act;
       2. (ii) An insurance company as defined in Section 2(a)(17) of the Investment Company Act of 1940, as amended;
       3. (iii) An investment company registered under Section 8 of the Investment Company Act of 1940, as amended;
       4. (iv) An investment advisor registered under Section 203 of the Investment Advisors Act of 1940, as amended;
       5. (v) Collective trust funds as defined in Section 3(c)(11) of the Investment Company Act of 1940, as amended;
       6. (vi) An employee benefit plan or pension fund that is subject to the Employee Retirement Income Security Act of 1974, as amended, excluding an employee benefit plan or pension fund sponsored by a publicly traded corporation registered with the Arkansas Racing Commission;
       7. (vii) A state or federal government pension plan;
       8. (viii) A group comprised entirely of persons specified in subdivisions (14)(A)(i) – (vii) of this section; or
       9. (ix) Such other persons as the Arkansas Racing Commission may determine for reasons consistent with the policies of this part.
    2. (B) To qualify as an institutional investor, a person other than a state or federal pension plan must meet the requirements of a qualified institutional buyer as defined in Rule 144A of the Federal Securities Act;

15. (15) “Plan of recapitalization” means a plan proposed by the Arkansas Racing Commission to the security holders of a publicly traded corporation that is an affiliated company, which plan:

    1. (A) Contains recommended action in response to a corporate acquisition opposed by management, which acquisition cannot be consummated until approval has been obtained pursuant to 23 CAR § 358-1611, and which acquisition has not been consummated, withdrawn, or terminated;
    2. (B) Involves either a cash dividend to voting securities or an exchange of voting securities held by security holders in return for a payment of cash or the issuance of securities of the issuer or a combination of cash and securities of the issuer, with an aggregate value in excess of fifty percent (50%) of the aggregate current market price of the voting securities of the company on the day of the public announcement of the plan of recapitalization; and
    3. (C) Is financed in substantial part by borrowings from financial institutions or the issuance of debt securities;
16. (16) “Public offering” means a sale of securities that is subject to the registration requirements of Section 5 of the Federal Securities Act, or that is exempt from such requirements solely by reason of an exemption contained in Section 3(a)10, 3(a)11, or 3(c) of said act or Regulation A adopted pursuant to Section 3(b) of said act;
17. (17) “Purchase rights” means a security or contractual right in securities issued or issuable on the exercise of options, warrants, or other beneficial interest in securities obtained for value upon the issuance of securities, or on conversion of other securities;

18. (18) “Speculative securities” means:

    1. (A) Securities, the value of which depends substantially upon proposed or promised future promotion or development rather than on material existing assets, conditions, or operating results; or
    2. (B) Securities, an investment in which involves an extraordinary risk of loss to the investor;
19. (19) “Tender offer” means a public offer by a person other than the issuer to purchase voting securities of a publicly traded corporation that is an affiliated company, made directly to security holders for the purpose of acquiring control of the affiliated company; and
20. (20) “Voting security” means a security the holder of which is entitled to vote for the election of a member or members of the board of directors or board of trustees of a corporation or a comparable person or persons in the case of a partnership, trust, or other form of business organization other than a corporation.

Codification Notes: The Securities Act of 1933 is codified at 15 U.S.C. § 77a et seq. The Securities and Exchange Act of 1934 is codified at 15 U.S.C. § 78a et seq. The Investment Company Act of 1940 is codified at 15 U.S.C. § 80a-1 et seq. The Employee Retirement Income Security Act of 1974 is codified generally at 29 U.S.C. § 1001 et seq.