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Apr 1, 2009 (Vol. 29, No. 7)

Staying Ahead of Activist Stockholders

Six Steps Every Public Company Should Be Taking to Maintain Control This Year

  • Tips on How to Maintain Control of Your Company

    • Prepare Immediate Reaction Team
    • Create a small group that plans for and is then capable of responding to activist activity.

    • Monitor Trading Activity
      Watch out daily for share accumulation by activist holders and potential acquirers.

    • Know and Prepare Your Board
      Maintain board unification on key decisions to keep activists from targeting vulnerable directors.

    • Institute Advance Notice Provisions
    • Restrict activists’ opportunity to force board turnover by adding advance notice bylaw.

    • Limit Stockholder Special Meetings
    • Eliminate or make difficult the right of stockholders to call special meetings.

    • Implement Indemnification Rights
    • Avoid potential loss of expense advancement by entering into contractual agreements with directors.



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