In today's world, where Microsoft's actions are commonplace, many corporations face the danger of being taken over. However, there are many defenses to this possibility. Here are some terms and their definitions that describe what corporations try to do to prevent a takeover:

Crown Jewel: The corporation sells off the company's most valuable asset to a third party, thus making the company less attractive.

Golden Parachute: I'm sure most of you have heard of this and know what it is. When a company is taken over, their top management usually will change. Knowing this, the company might establish special termination or retirement benefits that would have to be paid to top management if they are "retired." The "parachute" is for the forced "bailing out" of the company.

Greenmail: This is for takeovers attempted through a gradual accumulation of target stock rather than a direct buyout. The targeted company may pay a price that's above the market price for their own stock that had been acquired by the corporation taking over. The target company tries to force the acquiring company to buy back the accumulated shares at a premium price. This concept is similar to blackmail.

Lobster Trap: This is to catch the "big lobsters," but let the smaller ones get away. Holders of convertible securities (bonds or stock that are convertible to common shares) would be prohibited from converting the securities into common shares if the shareholders already own, or would own after the conversion, 10% or more of the voting shares of stock.

Pac-Man: This is like when Pac-Man eats that power pill and chases after the ghosts that were originally after him. The target company tries its own takeover of the acquiring company.

Poison Pill: This is where the target corporation allows its stockholders the right to buy additional shares at lower-than-market prices when there is a takeover attempt. This, in effect, makes the takeover an undesirable and expensive venture for the acquiring company.

Scorched Earth: The target company sells off assets or divisions, or it takes out loans that ir will agree to repay if there is a takeover attempt. This makes the target company less financially attractive to the acquiring corporation.

Shark Repellant: The target company will change its articles of incorporation or bylaws to make the takeover particularly difficult, sometimes by making the requirement for the number of shareholders approving the firm's combination rather large.

White Knight: This is a tactic where the target company solicits a merger with a third party, thereby making a better tender offer to the target's shareholders. The third party is the "white knight."

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