Piggy-back
From Wikipedia, the free encyclopedia
- See also: piggyback
Something that is piggy-backed is something that is riding on the back of something else. To piggy-back (or to go on a piggyback ride) is to ride on someone's back and/or shoulders.
To ride on someone's shoulders is a 'Shoulder Ride'. The word Piggyback is a corruption of 'Pick-a-Back' or choose a back to ride on.
This expression is used by analogy in several contexts, such as in ophthalmology, electrical engineering, computer engineering, computer science, structural geology and rail transport or intermodal freight transport. For example in space transportation systems, where the satellite is on the top of the launcher assembly, one says that the satellite is piggybacked on the missile.
The term piggy-back is also used for a product distribution strategy, where two companies that have product lines that complement each other grant access to each other's distribution channel structures so they may both expand their markets (e.g. abroad). This is a variation to the principle of cross selling.
[edit] Law
The Term Piggy back also applies to contractual agreements in law, more specifically shareholder selling rights. To apply, the piggy-back clause MUST be included in the corporation's shareholder agreement, which is part of the incorporation materials.
If one shareholder decides to sell shares to a third party, and if the sale of the shares would result in a change of control of the corporation, the offeror must notify all other shareholders. The other shareholders can 'piggy-back' into the original shareholders offer to the third party, and offer to sell their shares to the third party for the same agreed upon price. In order to purchase ANY of the shares, the third party must then purchase ALL shares included by the original shareholder, and any subsequent piggy backers.
- Eg. Chuck is a shareholder in Widgets Inc. Chuck wants to sell his shares in Widgets Inc. to Barney, for $55. Chuck owns 55% of the company. Bill is also a shareholder, and he owns 2 shares of the company. He does not like the looks of Barney, so he wants to piggy-back in on the deal, and sell his shares too. Thankfully, there IS a piggy-back agreement in the shareholder agreement. Bill notifies both Chuck and Barney in writing of his intentions. Barney must now buy BOTH Bill and Chuck's shares in the company.
