dead hand poison pill

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Dead Hand Poison Pill

A provision in some antitakeover measures stipulating that only persons who were members of the board of directors at the time the antitakeover measure was put into place have the power to rescind the antitakeover measure. More specifically, it may refer to the right of the board of directors to dilute the stock holdings of the person or institution taking over by issuing more stocks and giving them to themselves. The intent is to make the hostile takeover prohibitively expensive for the party taking over. Dead hand poison pills are controversial and have been challenged in some jurisdictions.

dead hand poison pill

A special type of poison pill antitakeover defense in which only ousted directors can rescind the poison pill. Poison pill plans are put in place in order to make a hostile takeover prohibitively expensive by issuing a huge number of new shares.
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The apparent implication is that we should therefore not be offended by the dead hand provision in the pill, which also contains the "continuing director" concept.
Lubrizol concedes in its response to our proposal that its dead hand provision prevents a potential acquiror from replacing the current board with directors who could approve the acquiror's acquisition proposal.
OTHER COMPANIES HAVE PULLED THEIR DEAD HAND PROVISIONS
companies, has asked a number of other companies to drop their dead hand provisions.
CPF noted that while the overwhelming majority of rights plans do not contain dead hand provisions (which have been invalidated in a number of jurisdictions, including Delaware), provisions resulting in the triggering of the pill against CBBI's shareholders merely because they exercise their existing rights as shareholders by, for example, seeking to call a shareholders meeting are virtually unprecedented.
Last Friday the company announced that it had removed the `dead hand' provisions from its poison pill, but the board retained the poison pill itself and the right to reinstate the dead hand provisions at any time without shareholder approval.
A number of other companies have eliminated the dead hand provisions of their poison pills at the request of TIAA-CREF.
Toll Brothers" that dead hand provisions are subject to challenge in Delaware on both statutory and fiduciary grounds.
These votes clearly show that dead hand provisions are completely unacceptable to shareholders," said Peter Clapman, TIAA-CREF senior vice president and chief counsel, Investments.
Towards that end, TIAA-CREF will file additional shareholder resolutions with companies that have dead hand poison pills and will withhold voting support for director nominees at companies that this year adopted plans with dead hand provisions.