The Anti-Hostile Takeover Mini-Howto

[Karl O. Pinc]

(thm, want to forward this to somebody at RH?)

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Copyright 2006, Karl O. Pinc <kop at meme.com>

Permission is granted to copy, distribute and/or modify this document
under the terms of the GNU Free Documentation License, Version 1.1 or
any later version published by the Free Software Foundation; with no
Invariant Sections, with no Front-Cover Texts, and with no Back-Cover
Texts.

The Anti-Hostile Takeover Mini-Howto:
The "Fork" Defense for Pure-Play FOSS Companies
Version 0.1

Introduction

It's a harsh, cold, business-suited reality out there for those
pure-play FOSS companies that are publicly traded.  What can be done
should competitors manage to depress stock prices and it looks like a
hostile takeover is in the wind?  Download a solution from the
Internet of course!  Preferably one like this document that's written
by somebody with absolutely no experience in corporate takeovers.

Concept

A pure FOSS company has, in a very real sense, no acquire-able
copyright assets.  It's assets consist of trademarks, possibly some
patents, employees, and a bunch of office furniture.  The goal is to
ensure that as few assets as possible are available for takeover.
There's nothing to be done about the trademarks and the office
furniture, and the patents may or may not be able to be freed, but
there's no reason why a hostile takeover should force the transfer of
employees.

If the threatened company specifies that a hostile takeover triggers
the immediate vesting of all stock options and retirement benefits,
and the termination of all employment contracts, then there's no
overriding reason why an employee of the acquired company need
continue on as an employee of the acquiring company.  The acquired
company's employees can simply quit en-masse and start a new company.
It might be a good idea if stock, and retirement benefits, in the new
company vested and are otherwise distributed in a fashion
corresponding directly with the allocation of the stock and retirement
benefits of the acquired company.  This can be facilitated by
previously preparing the appropriate documents and distributing them
to all employees.  Of course, having a good publicly available
repository to hold all ongoing work is also essential.

I'm calling this the "Fork" hostile takeover defense.

All the employees need is enough cash to come up with some office
space, and voila!  A new company picks right back up where the old one
left off.  The employees can then get even richer by taking the new
company public.  Of course, there will be some disruption and it might
take a few weeks before the paychecks are printed again so they'll
probably be a need for a provision in the corporate documents that
transfer some of the company's cash assets directly to the employees
upon hostile takeover, a sort of golden parachute for employees, and
there may need to be some provision for health insurance, further
stock incentivies to encourage employees to continue on with the
forked company, etc., but the general idea might be workable.

Conclusion

This document being all about business, the only possible conclusion
is that anybody who has success with the "Fork" hostile takeover
defense should generously contribute to the financial well being of
the author.


Regards,
Karl O. Pinc <kop at meme.com>