Cirrus Logic Adopts Shareholder Rights Plan
05/04/1998
18:26
Business Wire
(Copyright (c) 1998, Business Wire)
FREMONT, Calif.--(BUSINESS WIRE)--May 4, 1998--The Board of Directors of
Cirrus Logic Inc. (NASDAQ:CRUS) today announced that it has adopted a
shareholder rights plan in that it has declared a dividend distribution of one
Preferred Share Purchase Right on each outstanding share of the company's
Common Stock. Each right will entitle shareholders to buy one share of the
company's Series A Participating Preferred Stock at an exercise price of
$60.00.
The Rights will become exercisable following the tenth day after a person or
group announces acquisition of 15 percent or more of the company's Common
Stock or announces commencement of a tender offer the consummation of which
would result in ownership by the person or group of 15 percent or more of the
Common Stock. The company will be entitled to redeem the Rights at $0.01 per
Right at any time on or before the tenth day following acquisition by a person
or group of 15 percent or more of the company's Common Stock.
If, prior to redemption of the Rights, a person or group acquires 15 percent
or more of the company's Common Stock, each Right not owned by a holder of 15
percent or more of the Common Stock will entitle its holder to purchase, at
the Right's then current exercise price, that number of shares of Common Stock
of the company (or, in certain circumstances as determined by the Board, cash,
other property or other securities) having a market value at that time of
twice the Right's exercise price. If, after the tenth day following
acquisition by a person or group of 15 percent or more of the company's Common
Stock, Cirrus Logic sells more than 50 percent of its assets or earning power
or is acquired in a merger or other business combination transaction, the
acquiring person must assume the obligations under the Rights and the Rights
will become exercisable to acquire Common Stock of the acquiring person at the
discounted price.
At any time after an event triggering exercisability of the Rights at a
discounted price and prior to the acquisition by the acquiring person of 50
percent or more of the outstanding Common Stock, the Board of Directors of the
company may exchange the Rights (other than those owned by the acquiring
person or its affiliates) for Common Stock of the company at an exchange ratio
of one share of Common Stock per Right.
The Rights are designed to assure that the company's shareholders receive
fair and equal treatment in the event of any proposed takeover of the company
and to guard against partial tender offers and other abusive tactics to gain
control of Cirrus Logic without paying all shareholders the fair value of
their shares, including a "control premium."
The dividend distribution will be made on May 15, 1998, payable to
shareholders of record on May 15, 1998. The Rights will expire on May 15,
2008. Further details of the Rights are contained in a letter that will be
mailed to all Cirrus Logic shareholders.
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