IR therefore I AM

The boards of companies contemplating instituting or renewing shareholder rights plans (aka
“poison pills”) without seeking shareholder approval need to tread carefully in 2010. The
highly influential proxy advisory firm RiskMetrics Group has released an update to its proxy
voting recommendation guidelines for 2010 increasing the frequency with which RiskMetrics
will recommend a vote against directors for adopting or renewing most non-shareholder approved
rights plans.

Under the new guidelines, RiskMetrics will recommend that its clients vote against director
nominees at companies that adopt a shareholder rights plan with a term greater than one year,
or that renew any shareholder rights plan (including with a term of one year or less), without
seeking shareholder approval.

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Kraft launches a bid for Cadbury. Microsoft took a run at Yahoo! Disney
moves to acquire Marvel… Once again, mergers are making news.

While many recent mergers have been friendly transactions, a number of market
watchers believe that hostile takeover deals are set to rebound as stronger
companies start looking to expand and capitalize on what could be “bargain”
prices. A number of reasons are fueling this speculation. First, over
the recent years the decline of defensive measures such as shareholder rights
plans and staggered boards has left many companies more vulnerable to unsolicited
takeover attempts. Second, the decline in the U.S. stock market last
year and earlier this year has left many public companies with market capitalizations
that have been widely perceived as undervalued.

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