Avici Protects Shareholders

Adopts a shareholder rights plan to help protect investors against potential unsolicited takeover attempts that are coercive or unfair

December 6, 2001

1 Min Read

NORTH BILLERICA, Mass. -- Avici Systems (Nasdaq: AVCI), a leading provider of scalable and reliable core routing solutions for the Internet, today announced that its Board of Directors has adopted a shareholder rights plan to help protect investors against potential unsolicited takeover attempts that are coercive or unfair. The plan was not adopted in response to any specific effort to acquire control of the Company. "The implementation of a shareholder rights plan will enable the Board of Directors, on behalf of its shareholders, to maximize long-term shareholder value by providing a vehicle in which the Board is actively involved in negotiating potential takeover situations" explained Steve Kaufman, the Company's president and CEO. "The time and flexibility provided by a rights plan is essential to obtaining the best potential return for shareholders." Under the plan, Series A Junior Participating Preferred Stock purchase rights will be distributed as of close of business on December 17, 2001. Each right will initially entitle shareholders to purchase a fractional share of the Company's preferred stock for $40.00. However, the rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events. Upon occurrence of these events, unless redeemed, the rights will become immediately exercisable by holders other than the unsolicited third party acquirer for common shares of the Company or of the third party acquirer having a value of twice the rights' then current exercise price. Avici Systems Inc.

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