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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (8801)	11/4/1998 7:59:00 PM
From: BZOOKA	Read Replies (2) \| Respond to of 16960

FROM Fool board Post: <<The 3dfx plan is similar to one reported in Moran v. Household Int'l, 500 A.2d 1346 (Del. Sup. Ct. 1985). In that case the plan had two triggeres (1) someone announced a tender offer for 30% of Household's ("HH") shares or (2) someone aquired 20% of HH's shares. The Board of Directors adopted it without shareholder approval. Court upheld Board's action and said their decision was examined in light of the Business Judgment Rule (which almost always favors the BOD). In the HH case, each shareholder has 1 right per common share. When the 20% trigger was hit, the rights became nonredeemable by the company and the right could purchase 1/100 share of preferred for $100. If the rights was not exercised and thereafter a merger or consolodation occured, the Rights holder can exercise each right to purchase $200 of the common stock of the tender "offeror" (ie the aquirer) for $100. the court noted that this "flip-over" provision was at the heart of the controversey. So, if someone takes over TDFX the old TDFX shareholders then have a right to buy the aquirers shares at 50% value. (ie a big deterrrent). BTW, before the trigger hits TDFX will probably be able to redeem the preferred rights for peanuts. This allows them to redeem the rights if a "friendly" acquirer wants to make an offer to the comapny before aquirering 12% of the shares. IMO, it is a great move. If someone wants to do a hostile takeover the TDFX shareholders will win big because they not only get the takeover price, theythen get to buy the acuirers stock at 1/2 price. Like I said this has been upheld in Deleware. A lawsuits only argument would be that 12% is too low and precedent was 20%.>> Also, as a lawyer you do things that have been upheld before. the H plan was upheld, therefore, if I was recommending a strategy to 3dfx it would be to mirror the household plan that was approved. -------------------------------------------------------------------------------- Posted: Nov 4 1998 2:11PM EST as a reply to: Msg 1 by YahooFinance View Replies to this Message Stock Price Alerts. Buddy Lists. Instant Messages. Get It Here! Related Links Quote Profile Research Insider