blankmind--
I'm no expert on securities law, so could you (or anyone else)
explain just exactly how the below "Poison Pill" serves to
deter a takeover. It doesn't say just what this Preferred Share
is.
Also, it's my understanding that any VVUS short sellers are liable
to pay the full costs of any dividends, warrants, rights, etc. that are issued by VVUS while they hold a short position.
How does this work if the company issues these Preferred Share Rights
in response to a takeover bid? Do the shorts have to try and buy
these on the open market? If so, are there any examples in recent history where this has occurred?
Finally, can someone explain how many shares are entitled for
voting at a shareholder meeting when we have so many shorts?
That is, have the institutions who lent out their shares temporarily relinquished their right to vote for the lent-out shares?
Cheers, David
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from the 10/97 10-Q
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ANTI-TAKEOVER EFFECT OF SHAREHOLDER RIGHTS PLAN AND CERTAIN
CHARTER AND BYLAW
PROVISIONS
In February 1996, the Company's Board of Directors authorized the Company's reincorporation in the State of Delaware and adopted a Shareholder Rights Plan. The Company's reincorporation into
the State of Delaware was approved by its stockholders and effective in May 1996. The Shareholder Rights Plan provides for a dividend distribution of one Preferred Shares Purchase Right
(a "Right") on each outstanding share of the Company's Common Stock. The Rights will become exercisable following the tenth day after a person or group announces acquisition of 20% or more of
the Company's Common Stock, or announces commencement of a tender offer, the consummation of which would result in ownership by the person or group of 20% or more of the Company's Common Stock. The Company will be entitled to redeem the Rights at $0.01 per Right at any time on or before the tenth day following acquisition by a person or group of 20% of more of the Company's Common Stock. |
