poison pill

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“The third statute at issue, the Poison Pill Statute, Va.Code Ann. § 13.1-646, allows a corporation to give shareholders certain rights or options to purchase, on favorable terms, shares in the corporation. The rights take effect upon the occurrence of a specified event, such as the acquisition by one shareholder of a certain percentage of the company’s stock. Such rights take effect upon the occurrence of a specified event, such as the acquisition by one shareholder of a certain percentage of the company’s stock. Such rights may be issued discriminatorily, i.e., may be withheld from designated shareholders or groups of shareholders. The directors of the corporation are required to exercise their good faith business judgment when granting such rights.” J. Murnaghan, WLR Foods, Inc. v. Tyson Foods, Inc., 65 F.3d 1172, 1178 (4th Cir. 1995).