Shark Repellant Law and Legal Definition
Shark repellent is a measure taken by a corporation to discourage unwanted takeover attempts. Such measures can include issuing new shares of stock or making a significant acquisition. It is also known as takeover defense. Some of the common shark repellant measures include: (1) "blank check" preferred stock; (2) "fair price/supermajority" charter provisions; (3) golden parachutes for all executive officers; (4) director removal only for cause; (5) staggered terms on its Board; (6) advance notice of stockholder proposals and nominations for election of directors; (7) a prohibition of action by written consent; and (8) a requirement of a supermajority stockholder vote to amend the charter or by-laws.
