Page 368 - מיזוגים ורכישות - פרופ' אהוד קמר תשפב

(including options of up to 19.9 percent of shares outstanding without caps on the upside
value of the option).

On top of these procedural and structural issues, there is an overriding substantive
concern that the target board properly understands the structure it is proposing and the
choices it is presenting to the shareholders. There is no one correct structure, and
directors will be fully protected under the business judgment rule as long as they make
fully informed decisions while acting in good faith.

Full and complete disclosure is also important — starting with the initial press
release announcing the transaction — to protect the target company and the acquiror
from subsequent shareholder challenge or confusion. In the effort to stay focused on
business themes in the press release, merger partners sometimes fail to fully explain the
intricacies of sophisticated pricing formulas and often find they need to spend the next
several days clarifying to the market the precise terms of the transaction. An annex or
set of summary bullet points and, in some cases, even illustrative examples, may be useful
to avoid such confusion when dealing with such complex deal structures.

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