Term
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Definition
| a kind of consolation price for the loser in a bidding war for a corporation that grants an option to buy certain assets. It can have the effect of deterring other bids. page 803 |
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Term
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Definition
| designed to weaken the differential voting structures common in German and Nordic companies. It enables the hostile bidder to break through prebid defenses, such as multiple voting rights and other measures that distribute control rights in a manner that is disproportionate to the cash flow rights, thereby ensuring that a bidder acquires a majority of the equity can successfully mount a takeover. page 189 |
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Term
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Definition
| an amount agreed to in a merger agreement to be paid to a friendly suitor company if, through no fault of the friendly suitor company, the agreement with the target company is not consummated. Barron's Business Law |
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Term
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Definition
| a principle of corporate law protecting directors and officers from liability for informed business decisions made in good faith and with due care, even though the decisions turned out to have been mistakes. Barron's Business Law. |
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Term
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Definition
| LEVERAGED BUYOUT in which TARGET COMPAY assets or activities are sold off to repay the debt that financed the TAKEOVER. Barron's Dictionary of Finance and Investment Terms page 71. |
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Term
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Definition
| a trust imposed by law against a person who wrongfully obtained and/or retains property; this trust is intended to correct fraud or other misconduct. Barron's Business Law |
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Term
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Definition
| a shareholder who owns sufficient shares to outvote the other shareholders and thus to control the corporation. Barron's Business Law |
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Term
| corporate opportunity doctrine |
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Definition
| a busienss opportunity available to a corporation; an officer or director who takes personal advantage of a corporate opportunity violates his/her duty to the corporation |
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Term
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Definition
| Antitakeover device whereby the target company sells (or grants an option to purchase) its most valuable assets -- its "crown jewels" -- to a third party, the effect of which is to make the company less attractive to an unfriendly bidder. (Understanding Securities Law) |
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Term
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Definition
| a anti-takeover device that can be redeemed only by the directors in office before the hostile biider gained control or their designated successors. page 821 |
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Term
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Definition
| devices, such as no-talk provisions, that can be economic, structural or both, that are used by parties to a friendly merger to dissuade other bidders and thereby protect the consummation of the friendly merger transaction. page 814 |
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Term
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Definition
| the standard of care a person owes to others in the law of torts, usually that degree of care that a reasonable person would exercise in the same situaiton. Barron's Business Law |
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Term
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Definition
| mandates that fiduciaries act in good faith and in what they believe to be the best interst of the corporation, subordinating their person interests to the welfare of the corporation. page 799. |
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Term
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Definition
| a clause allowing the board of directors to negotiate with other bidders or to terminate a merger agreement. page 815 |
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Term
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Definition
| a majority shareholder prevents a minority shareholder from participating in the decision-making process. Barron's Business Law |
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Term
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Definition
| The purchase of a substantial block of the subject company's securities by a (potentially) unfriendly suitor with the primary purpose of inducing the subject company to repurchase the block at a premium over the amount paid by the potential suitor. (Understanding Securities Law) |
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Term
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Definition
| members of the board of directors also employed by the corporation as officers and/or employees. Barron's Business Law |
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Term
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Definition
| if an officer, director, or controlling shareholder learns of an oppotuntiy in the course of his/her business for the corporation and if the opportunity is in the corporation's line of business, a court will not permit that person to keep the opportunity for personal gain. Barron's Business Law |
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Term
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Definition
| prohbits coercive two-tier offers by requiring any person who acquires 30 percent or more of a target company's stock to offer to buy all remaining shares at the hightest price paid to acquire the 30 percent block. page 829 |
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Term
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Definition
| generally requires the target's board of directors to remain neutral when faced with a hostile takeover bid and stipulates that once a takeover bid has been launched, the tartget's board cannot adopt any antitakeover devices, such as poison pills, without first obtaining the specific approval of shareholders. page 829 |
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Term
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Definition
| an anti-takover device that can not be redeemed for six months even if the insurgent's slate of directors was elected and wanted to redeem it. |
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Term
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Definition
| a target agrees to not actively solicit other bidders but retains the right to negotiate with parties who submit unsolicited bids to the target. page 816 |
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Term
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Definition
| a clause that permits a board to engage in discussions with and provide information to other bidders only if the board concludes, based on a written opinion of outside legal counsel, that engaging in discussions or providing information is required to prevent the board from breaching its fiduciary duties to its stockholders. page 815 |
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Term
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Definition
| Generally, an antitakeover provision (also called a "shareholder rights plan") whereby certain securities (such as rights or warrants) of the target company are triggered upon consummation of any enumerated transaction or event into common stock or other security of the target or of the acquirer or cash. (Understanding Securities Law) |
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Term
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Definition
| a limited power of attorney whereby a shareholder names a proxy (agent or represntative) to vote his/her shares. Barron's Business Law |
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Term
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Definition
| a battle for corporate control whereby an individual, group, or entity seeking to replace the board of directors with its own candidates tries to acquire a sufficient number of shareholder votes to do so. Barron's Business Law. |
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Term
| quasi-foreign corporation |
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Definition
| Under California law, a corporation incorporated elsewhere but have more than 50% of their stock owned by California residents and derive more than 50% of their sales, payroll, and property tax from activities in California. |
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Term
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Definition
| Once the judgment is made that a sale or breakup of the corporation is in the best interests of the shareholder or is inevitable, directors have a fiduciary duty to obtain the best available price for shareholder. page 813 |
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Term
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Definition
| a corporation's offer to buy back its stock or shareholder rights for a fair price. Barron's Business Law |
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Term
| shareholder derivative suit |
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Definition
| A suit by a shareholder to enforce a corporate cause of action. The corporation is a necessary party, and the relief which is granted is a judgment against a third person in favor of the corporation. An action is a derivative action when the action is based upon a primary right of the corporation, but is asserted on its behalf by the stockholder because of the corporoation's failure , deliberate or otherwise, to act upon the primary right. Black's Law Dictionary pages 443-444 |
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Term
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Definition
| a plan that would make any takeover not approved by the directors prohibitively expensive. page 820. |
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Term
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Definition
| accord by a RAIDER to abstain from buying shares of a company for a specified period. Barron's Dictionary of Finance and Investment Terms page 588 |
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Term
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Definition
| the threat that stockholders might tender their shares in ignorance or based upon mistaken belief when in reality the company's present strategic plan will deliver more value than the premium being offered. |
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Term
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Definition
| an amount agreed to in a merger agreement to be paid to a friendly suitor company if, through no fault of the friendly suitor company, the agreement with the target company is not consummated. Barron's Business Law |
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