The Maryland Stockholders' Rights Plan of Data scope Corp., also known as a "poison pill" strategy, is a defensive measure designed to protect the interests of the company and its shareholders in the event of a hostile takeover or significant stock acquisition. This plan is specifically tailored for Data scope Corp., a Maryland-based corporation operating in the medical equipment industry. The main purpose of the Maryland Stockholders' Rights Plan is to deter unwanted takeover attempts by triggering certain rights and restrictions that make it financially unattractive for potential acquirers or hostile shareholders. This plan can be classified into different types based on the specific provisions and conditions outlined: 1. Trigger Mechanism: The plan typically activates or "triggers" when one or more shareholders, often referred to as "triggering persons," acquire a certain percentage of Data scope Corp.'s outstanding shares. This threshold is usually set at a significant level, such as 10% or 15%, to prevent hostile takeovers or creeping acquisitions without the approval of the company's board. 2. Rights Issuance: Once the trigger threshold is crossed, the plan allows existing shareholders (excluding the triggering persons) to receive "rights" or "poison pills." These rights are typically distributed as a dividend at no cost to all shareholders, entitling them to purchase additional shares or securities at a significantly discounted price. 3. Dilution Protection: The Maryland Stockholders' Rights Plan aims to dilute the holdings of the triggering persons, making it economically unfavorable for them to pursue a takeover. If triggered, the plan enables shareholders (except for the triggering persons) to purchase additional shares of Data scope Corp. stock at a lower price, thereby diluting the ownership and control of the triggering persons. 4. Reducing Financial Incentive: The plan imposes certain restrictions on the triggering persons, making it difficult for them to gain control without the approval or cooperation of Data scope Corp.'s board. These restrictions may include prohibiting the triggering persons from acquiring additional shares beyond a certain limit, disqualifying them from voting on specific matters, or imposing higher voting thresholds for certain actions. 5. Shareholder Empowerment: The Maryland Stockholders' Rights Plan of Data scope Corp. empowers shareholders by giving them more control and influence over the company's future. By triggering this plan, shareholders are provided with the option to potentially increase their investment while ensuring the board retains the ability to make informed decisions in the best interests of all shareholders. It is essential to note that the specific details and provisions of the Maryland Stockholders' Rights Plan may vary for different corporations and depend on the company's objectives and strategies. Additionally, the implementation or alteration of such plans often require board and shareholder approval, ensuring transparency and accountability in its deployment.
Maryland Stockholders' Rights Plan of Datascope Corp.
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