RCM Technologies, Inc. (NASDAQ:RCMT) today announced that its Board of Directors has approved the adoption of a Stockholder Rights Plan (the “Rights Plan”) under which stockholders will receive rights to purchase shares of a new series of preferred stock in certain circumstances.
The Board adopted the Rights Plan in response to the recent announcement by CDI Corp. that it has made a proposal to acquire all the outstanding shares of RCM common stock for $5.20 per share, which proposal RCM’s Board has determined would not be, as structured, in the best interests of RCM to pursue. The Rights Plan is intended to protect RCM and its stockholders from efforts to obtain control of RCM that are inconsistent with the best interests of RCM.
Consistent with RCM’s commitment to good corporate governance, the rights will expire on June 21, 2011. The rights will be exercisable if a person or group, without approval of RCM’s Board, acquires 15% or more of RCM’s common stock or announces a tender offer which results in the ownership of 15% or more of RCM’s common stock. The rights also will be exercisable if a person or group that already owns 15% or more of RCM’s common stock, without Board approval, acquires any additional shares (other than pursuant to RCM’s compensation or benefit plans). If the rights become exercisable, all rights holders (other than the person triggering the rights) will be entitled to acquire RCM’s common stock at a 50% discount.
The rights will trade with RCM’s common stock, unless and until they are separated upon the occurrence of certain future events. RCM’s Board may terminate the Rights Plan or redeem the rights prior to the time the rights are triggered. Further details of the Rights Plan will be contained in a Form 8-K to be filed with the Securities and Exchange Commission.