Corporate governance is designed to protect shareholders and allow poor management to be replaced; however, there can be barriers to this mechanism that protect existing management and make changes of control harder. Some of these may be contained in the corporate charter (making them hard to change). These provisions can take many forms, including a poison pill provision.

Which of the following best describes this element in a firms charter?

a. This provision grants compensation to employees at the management level in the event that they are let go or the firm is acquired.

b. This provision allows a firms shareholders to purchase additional shares of the firms stock once a potential acquirer purchases a certain percentage of the firms outstanding shares.

c. This provision requires approval from at least two-thirds of the voting shareholders before the firm can be acquired.

d. This provision prevents the original owners of a firm from selling their shares for a certain amount of time.