An issue of a security that occurs automatically, but only when certain conditions are met. A contingent issue may be an anti-takeover measure. For example, a publicly-traded company may plan for a contingent issue in the event of a hostile takeover to make the takeover more expensive for the acquiring company. See also: Poison pill.
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An issue of securities that is to be distributed only when a specified event has occurred or when a given standard has been met. For example, the poison pill defense against hostile takeovers involves issuance of additional securities in the event that the raider acquires a certain percentage of the takeover target's outstanding stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.