Fiduciary out

Fiduciary out

A provision that permits the Board of Directors to terminate a proposed merger if a better deal arises with another party.

Fiduciary Out

A provision in some merger agreements allowing the board of directors of one of the companies to terminate the deal before it is finalized if it receives a better offer from another company. A fiduciary out provision exists because boards of directors have a responsibility to always act in the best interests of shareholders. A better offer for shareholders is almost always thought to be in their best interests.
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requiring a fiduciary out in every merger agreement, (3) and for the
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changed recommendation" fiduciary out, which the merger
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effective fiduciary out clause to exercise its continuing fiduciary
the opinion) and the Court's fiduciary out mandate (the
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a merger agreement that fails to contain a fiduciary out it is not
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Capital Gold has agreed to a non-solicitation period expiring on March 31, 2009, subject to fiduciary outs, and both parties have agreed to the payment of a break fee to the other party in the amount of US$4.