Micrel, the San Jose chip maker that won a nasty proxy battle last year with its then-largest independent shareholder, Obrem Capital, decided it better extend its poison-pill defense against hostile takeovers by one more year. The shareholder rights plan set up a year ago was to have expired today, but will now live on until March 24, 2010, according to a regulatory filing.
On March 19, Micrel entered into a “Standstill Agreement” with Obrem that restricts the investor from taking certain actions, including any proxy solicitation “in connection with any matter,” calling a special shareholders’ meeting or introducing a shareholder proposal at a shareholders’ meeting “for any purpose”, conducting or participating in any type of referendum concerning Micrel, its management, board or business, or acquiring additional shares.
The agreement is contingent on Micrel’s “continuing efforts at improving operating margin consistent with economic conditions, repurchase of shares and paying a dividend as cash allows, staffing its board of directors with qualified board members and having a board of six members with five independent directors.”
The operative word is “efforts” as Micrel is not “obligated to take any of these actions” under the agreement, which is set to expire next year at the same time as the poison-pill, or as such time as Obrem’s ownership in Micrel falls below 5 percent.