staggered terms

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Staggered Terms

An arrangement whereby only a certain number of members of a board of directors are elected in a given year. For example, a board of directors may have 10 members serving five year, staggered terms where two new members are elected each year. In addition to giving the board consistency in its membership, staggered terms makes hostile takeovers more difficult because the potential acquirer can replace only so many directors at a time.

staggered terms

Membership terms for a firm's directors that expire in different years. A firm with 12 directors might have 4-year terms with 3 seats up for election each year. Staggered terms make it more difficult for a raider to gain control of a board.
References in periodicals archive ?
Because Bebchuk and Cohen (2005) focus on a staggered board as a key antitakeover provision, we refer to the staggered board indicator as an index as well.
board members should be reelected annually--there should be no staggered board or multi-year appointments,
27) Weighing in on this debate, the BBJ study uses its result on the association of activism with long-term firm value to conclude that defensive measures such as the staggered board should be abandoned because they provide a significant impediment to value-increasing hedge fund activism.
28) Moreover, studies have found a negative relationship between staggered board provisions and share price, suggesting that obstacles to a change of control have a negative effect on firm value.
The 2014 board term initiates our transition to annual board elections and staggered board terms, so some of the board seats will be limited to a one- or two-year term, while a few have the usual three-year term.
directors on a staggered board can be removed only for cause.
Radnor, Pennsylvania-based Airgas has a staggered board, and only three members come up for reelection each year.
110) Furthermore, the election route may not even be available to a bidder faced with a staggered board.
The combined company will adopt a staggered board entrenching its members and the management of the company, irrespective of the combined company's performance.
A letter attached to the SEC filing requested that Tweeter's board of directors submit to its shareholders during the retailer's 2006 annual meeting a proposal to terminate its poison pill plan and eliminate a provision of its "certificate of incorporation that provides for a staggered board of directors.
CenturyTel's staggered board structure means only one-third of the board is up for election every year, so Alltel would be able to replace only one third of the board at the next shareholder's.
ITT has engineered a split of its business into three separate companies in such a way as to bypass shareholder approval, change to a staggered board and take on about $2 billion in debt.