Extract to table

The board must demonstrate that it had reasonable grounds for believing that a danger to corporate policy and effectiveness existed

To satisfy this prong, the directors must show that they acted in good faith and after reasonable investigation

Even if the board satisfies the first prong by demonstrating a reasonable perception of threat, the defensive measure adopted must be reasonable in relation to the threat posed

The measure must not be coercive or preclusive of the shareholder franchise, and it must fall within a "range of reasonableness

1988), the Delaware Court of Chancery held that when a board acts "for the primary purpose of impeding the exercise of stockholder voting power," the board must demonstrate a "compelling justification" for its action