Rights Plan (Poison Pill) Term Sheet
Dilution Impact Simulator
Impact on Hostile Acquirer if Pill is Triggered:
SUMMARY OF RIGHTS PLAN TERMS
Company: [Company Name]
Date: [Date]
1. ISSUANCE OF RIGHTS
The Board of Directors of [Company Name] (the "Company") has declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of Common Stock.
2. TRIGGERING EVENT
The Rights become exercisable only if a person or group (an "Acquiring Person") acquires beneficial ownership of __% or more of the Company's Common Stock (the "Triggering Event").
Exemptions: Passive institutional investors (e.g., 13G filers) may trigger at __%.
3. FLIP-IN PROVISION
Upon a Triggering Event, each Right (other than Rights held by the Acquiring Person, which become void) entitles the holder to purchase $__ worth of Common Stock for the Exercise Price of $__.
Effectively, this allows existing shareholders to purchase stock at a __% discount to the current market price, causing substantial dilution to the Acquiring Person.
4. REDEMPTION & EXPIRATION
Redemption: The Board may redeem the Rights at a price of $__ per Right at any time before a Triggering Event.
Expiration: The Rights Plan will expire on __ unless extended by the Board or ratified by shareholders.
* This summary is for discussion purposes only and does not constitute a binding legal agreement. Subject to Delaware General Corporation Law (DGCL).
Trigger Thresholds
Define when the Poison Pill is activated.
Economic Structure (The "Flip-In")
Define the mathematical penalty.
Simulation Inputs
Input hypothetical market data to drive the visual simulator on the dashboard.