Sonus Networks has added a news release to its Investor Relations website.
Title: Sonus Networks Adopts Limited Duration Stockholder Rights Plan
Date: 6/26/2008 5:33:00 PM
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WESTFORD, Mass., June 26 /PRNewswire-FirstCall/ -- Sonus Networks, Inc.
(Nasdaq: SONS), a market leader in IP communications infrastructure, today announced that the Company's Board of Directors has adopted a limited duration stockholder rights plan.
The three-year stockholder rights plan is designed to protect stockholders, to the extent possible, from a creeping acquisition and other tactics to gain control of the Company without offering all stockholders an adequate price and control premium. The rights plan is intended to protect the
interests of all Sonus stockholders and it provides the Board of Directors with the environment to maximize long-term stockholder value.
The Board of Directors has adopted this plan in response to recent heavy trading volumes in the Company's common stock and the absence of an agreement with the Company's largest stockholder, Legatum Capital Limited, with respect to Legatum's involvement with the Company. The Company stated that, despite its best efforts to engage Legatum Capital Limited in meaningful discussions concerning the business and future prospects of the Company and Legatum's investment in the Company, it has been unsuccessful in bringing those
discussions to a satisfactory conclusion.
"We continue to remain open to discussions with Legatum about the Company, its business and prospects, as well as Legatum's investment in Sonus," commented Richard Nottenburg, CEO of Sonus Networks. "Regrettably, we have not received the necessary assurances from Legatum under the securities laws, to
allow us to have the confidential and full discussion we believe is needed to resolve Legatum's issues."
Under the stockholder rights plan, preferred stock purchase rights will be distributed as a dividend at the rate of one right for each share of common stock of the Company held by stockholders of record as of the close of business on July 7, 2008. The rights will expire on June 26, 2011.
The rights generally will be exercisable only if a person or group acquires beneficial ownership of 15% or more of the Company's common stock (which includes for this purpose shares of common stock referenced in derivative transactions or securities), or commences or publicly announces a tender or exchange offer upon consummation of which they would beneficially own 15% or more of the Company's common stock. A person or group who beneficially owns 15% or more of the outstanding shares of the Company's common stock prior to the adoption of the rights plan will not cause the rights to become exercisable upon adoption of the rights plan. As a result, the rights will not be triggered even though Legatum Capital and its affiliates have reported that they beneficially owned approximately 24.8% of the outstanding shares of the Company's common stock prior to the adoption of
the rights plan based on Legatum's public filings. However, Legatum Capital and its affiliates will cause the rights to become exercisable if they (subject to certain limited exceptions) become the beneficial owner of
additional shares of the Company's common stock or their beneficial ownership decreases below 15% and subsequently increases to 15% or more.
The rights will be issued as a non-taxable dividend and will expire 3 years from the date of the adoption of the rights plan, unless earlier redeemed or exchanged. Stockholders may recognize taxable income if and when the rights become exercisable or if the rights should ever be redeemed.
A copy of the rights plan will be filed with the Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K. |
