News Release - July 21, 1998
DYNAMIC OIL ADOPTS SHAREHOLDER RIGHTS PLAN
The Board of Directors of Dynamic Oil Limited (the "Company") today announced the adoption of a Permitted Bid Shareholder Protection Rights Plan (the "Plan") which is to be submitted for ratification to shareholders at Dynamics Annual General Meeting on August 27, 1998.
To implement the Plan, the Board authorized the distribution of one share purchase right for each outstanding common share of the Company held of record at the close of business today. The Rights Plan is not intended to prevent a takeover or to deter fair offers for the Company common shares. Rather, it is designed to give the Board of Directors the opportunity to act in the best interests of the Company by encouraging bidders for the Company common shares to proceed on a negotiated rather than a hostile basis.
The Plan is designed to ensure that all of the Company's shareholders are treated equally if a takeover bid is made for the Company's shares, and that sufficient time is available for the directors of the Company and all shareholders to evaluate fully any offer and pursue alternatives to maximize shareholder value. The Plan is similar to many plans adopted by other Canadian companies.
The rights issued to shareholders under the Plan will entitle the holder to acquire common shares of the Company at a 50% discount to the market upon a person or group acquiring 20 percent or more of the common shares of the Company. However, the rights are not exercisable in the event of a Permitted Bid.
A Permitted Bid is a takeover bid remaining open for at least 60 days that is made to all shareholders for all shares of the Company in accordance with the provisions of the takeover bid circular requirements of the British Columbia Securities Act. A bidder under a Permitted Bid may acquire shares tendered under the bid if at least 50% of the shares held independent of the bidder are deposited and the bid is then extended for a further period of 10 business days. A Permitted Bid must also satisfy certain other conditions provided for in the Plan.
The Rights will not be exercisable and will not trade separate and apart from the common shares at any time prior to a person or group acquiring, or announcing an intention to acquire (in a manner that does not constitute a Permitted Bid), securities to which are attached 20 percent or more of the votes attaching to all securities of the Corporation.
The Plan is valid until the first shareholders meeting held after July 20, 2001, subject to shareholder confirmation at the Annual General Meeting. The required approval level at the Annual General Meeting is 50% of the votes cast.
On Behalf of the Board of Directors
Wayne J. Babcock
President
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