Santa Clara, Calif.--Nov. 20, 1997--Electroglas Inc. (Santa Clara) announced that its board of directors has adopted a Rights Agreement under which Electroglas stockholders will receive a dividend in the form of preferred stock purchase rights.
The rights will be distributed at the rate of one right for each share of common stock owned by stockholders of record as of December5, 1997. Each right will allow the holder to purchase one one-thousandth of a share (a unit) of Series A preferred stock at an initial exercise price of $140 under certain circumstances as morefully described in a summary of the rights agreement, which will be mailed to all stockholders of record on the record date. The purchase price, the number of units of preferred stock and the type of securities issuable upon exercise of the rights are subject to adjustment. The rights will expire at the close of business December4, 2007 unless earlier redeemed or exchanged. Until a right is exercised, the holder thereof, as such, will have no rights as a stockholder of Electroglas, including the right to vote or to receivedividends.
The rights will become exercisable only 10 days after a person orgroup acquires beneficial ownership of 15 percent or more of Electroglas' outstanding common stock or 10 business days after the commencement of a tender or exchange offer which would lead to the beneficial ownership of 15 percent or more of the outstanding common stock, subject to prior redemption or exchange.
If any person becomes the beneficial owner of 15 percent or more of Electroglas' outstanding common stock, then each right not owned by a15 percent or more stockholder or certain related parties will entitle its holder to purchase, at the right's then-current purchase price, unitsof the Series A preferred stock or, at the option of Electroglas, shares of its common stock (or, in certain circumstances, purchase orreceive, cash, property or other securities of Electroglas) having a market value equal to twice the then-current purchase price.
Additionally, if Electroglas is involved in a merger or other business combination transaction with another person in which Electroglas' common stock gets converted or exchanged, or if Electroglas sells 50 percent or more of its assets or earning power to another person, each right will entitle its holder to purchase, at the right's then-current purchase price, shares of common stock of such other person having a value equal to twice the then-current exercise price.
At any time until 10 days following the date of the first public announcement that a person has acquired 15 percent or more of Electroglas' common sock, a majority of the board of directors (including, after the date on which such person first acquires 15 percent or more of the common stock, a majority of the independent directors) may redeem therights in whole at a price of $0.01 per right, payable in cash or shares of Electroglas common stock. In addition, after the date on which a person has acquired 15 percent or more of the common stock, the board of directors (including a majority of the independent directors) may exchange all or part of the rights for units of SeriesA preferred stock or shares of common stock on the basis of a one-for-one exchange ratio, as adjusted.
Santa Clara, CA
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