Washington Stockholders' Rights Plan of Datascope Corp.

• Category: Corporations - Public - ReIncorporation
• State: Multi-State
• Control #: US-CC-8-162B
• Format: Word; Rich Text

Description

This sample form, a detailed Stockholders' Rights Plan document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

The Washington Stockholders' Rights Plan of Data scope Corp., also referred to as a "poison pill" or "shareholders' rights plan," is a defensive strategy implemented by the company to protect its shareholders against hostile takeovers or other potential threats. This detailed description will explore the purpose and working mechanism of the Washington Stockholders' Rights Plan, highlighting its benefits and different types. The Washington Stockholders' Rights Plan is designed to deter and resist unsolicited attempts by acquiring entities to take over or control Data scope Corp. without proper consent from the existing shareholders. It provides shareholders with certain rights and privileges to defend their interests and ensure equitable treatment during any change in control or ownership. At its core, the Washington Stockholders' Rights Plan issues rights or "poison pills" to the existing shareholders of Data scope Corp. Each right enables the shareholder to purchase additional shares of the company's stock at a significant discount, typically exercised when an acquiring entity crosses a specified threshold of ownership (e.g., acquiring a certain percentage of outstanding shares). This triggers dilution, making it more costly or complicated for the acquiring entity to gain control and reducing the financial attractiveness of the takeover. The Washington Stockholders' Rights Plan consists of two main types: 1. Flip-in Rights: These rights grant existing shareholders (except the acquiring entity) the option to purchase additional Data scope Corp. shares at a discount. When a potential acquirer crosses the predetermined threshold specified in the plan, these rights become exercisable by shareholders, encouraging them to increase their stake in the company, thus diluting the acquiring entity's ownership. 2. Flip-over Rights: Flip-over rights come into effect when an acquisition or merger occurs. In this scenario, shareholders (excluding the acquiring entity) are entitled to acquire shares of the acquiring entity at a discounted price. This provision incentivizes existing shareholders to support a merger or acquisition that maximizes shareholder value, ensuring they receive fair consideration in the event of a change in control. The Washington Stockholders' Rights Plan serves several purposes, including: 1. Protecting shareholder value: By providing a defense against hostile takeover attempts, the plan aims to preserve the long-term value of Data scope Corp. and prevent undervaluation or inadequate control transfer. 2. Negotiating leverage: The plan gives the board of directors and existing shareholders negotiating leverage with potential acquirers, fostering fairer terms and conditions for any change in control transaction. 3. Time for evaluation: By diluting the acquiring entity's ownership, the plan buys time for the board of directors and shareholders to assess the potential impact of a takeover and evaluate alternative strategies or offers. In summary, the Washington Stockholders' Rights Plan of Data scope Corp. is a vital defensive measure designed to safeguard shareholder interests and deter hostile takeovers. The plan comprises flip-in and flip-over rights, empowering shareholders to purchase additional shares at discounted prices when specific thresholds are met. By implementing this plan, Data scope Corp. seeks to protect long-term shareholder value, negotiate more favorable outcomes, and gain time for thorough evaluation in the face of potential takeovers.