HP Adopts 'Poison Pill' Policy To Ward Off Unwanted Suitors

The board of directors of the nation's top computer maker said they would submit any poison pill provision to shareholders for approval--unless the board determined that it "would not be in the interests of shareowners under the circumstances." Investors approved a poison pill provision during the Palo Alto, Calif.-based company's shareholder meeting in April.

HP does not already have a poison pill, and the board did not announce precisely how HP's provision would work or when it would take effect. Most poison pills fend off unwelcome suitors by issuing new shares to boost the cost of a potential acquisition.

HP also announced Monday a new severance policy for senior executives. Shareholders must approve executive severance packages if payments are at least three times the sum of the executive's base salary and bonus.

The board also declared a dividend of 8 cents per share on the company's common stock, payable Oct. 8.

HP shares fell 72 cents to close at $21.83 Monday on the New York Stock Exchange.