LAMPERS v. Taub (Atmel)

Summary

This shareholder class action challenges the validity of Atmel's board of directors' extension of a poison pill that allegedly made the poison pill's triggers vague and unascertainable.

In October, 2008, ON Semiconductor Corp. (ONNN) and Microchip Technology Inc. offered to purchase Atmel (ATML) for $2.3 billion. Atmel rejected the offer and lowered the ownership percentage that would trigger its Poison Pill (shareholder rights agreement), and the takeover attempt was abandoned.

The shareholder class represented by the pension fund alleges that Amtel's board expanded the definition of "beneficial ownership" that might trigger the poison pill to include interests held pursuant to derivatives contracts, and defined "derivatives contracts" in a way that included so many potential arrangements that a potential acquirer would not be able to evaluate its own beneficial ownership and the board would not be able to determine when the poison pill had been triggered.