DEAD HAND PROVISION

A stipulation on a defense mechanism (or poison pill) used by companies in order to protect against a merger or takeover by another company. The dead hand provision prevents the removal of the poison pill, a strategy used to discourage a hostile takeover, even if shareholders of the target company favor the takeover.

A dead hand provision states that only the original directors who put the provision into place can dismantle the pill, so any new directors are prevented from interfering.