Solectron Ends Poison Pill

It keeps the door open to reinstitute a plan.
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Solectron

(SLR)

voted to end its stockholder rights plan, or so-called poison pill, the company said late Tuesday.

"Our decision to terminate the stockholder rights plans and establish this new policy reflects the board's continuing commitment to corporate governance best practices," Solectron CEO Michael Cannon said in a statement.

The board believes the change "balances our stockholders' concerns and the protection of our stockholders' best interests," Cannon said.

The poison pill is one tactic used to avoid a hostile takeover, so a company's termination of the program potentially makes it easier to be bought out.

The board also established a new policy that any future poison pill will require shareholder approval. However, the board also has discretion to adopt a new poison pill if a majority of directors believe it is necessary. In that case, the shareholders must approve the plan within 12 months, or it would expire.

The move accelerates the expiration of the current stockholder plan to Monday. It had been set to expire in July 2011.

Shares of the struggling electronics manufacturing services firm rose 5 cents to $3.46 in extended trading.