3e SRD:Improved Grab
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If the creature hits with a melee weapon (usually a claw or bite attack), it deals normal damage and attempts to start a grapple as a free action without provoking an attack of opportunity. No initial touch attack is required, and Tiny and Small creatures do not suffer a special size penalty. Unless otherwise stated, improved grab works only against opponents at least one size category smaller than the creature. The creature has the option to conduct the grapple normally, or simply use the part of its body it used in the improved grab to hold the opponent. If it chooses to do the latter, it suffers a -20 penalty to grapple checks, and can use its remaining attacks against other opponents.
A successful hold does not deal any additional damage unless the creature also has the constrict ability. If the creature does not constrict, each successful grapple check it makes during successive rounds automatically deals the damage listed for the attack that established the hold. Otherwise, it deals constriction damage as well (the amount is listed in the creature’s descriptive text).
When a creature gets a hold after an improved grab attack, it pulls the opponent into its space. This act does not provoke attacks of opportunity. The creature is not considered grappled while it holds the opponent, so it still threatens adjacent squares and retains its Dexterity bonus. It can even move (possibly carrying away the opponent), provided it can drag the opponent’s weight.