Hutchinson Technology Adopts Replacement Share Rights Plan
HUTCHINSON, Minn., July 29, 2010 (GLOBE NEWSWIRE) -- The Board of Directors of Hutchinson Technology Incorporated (Nasdaq:HTCH) approved a share rights plan today that will replace an existing plan when it expires on August 10, 2010. Like the existing plan, the new share rights plan is intended to increase the likelihood that shareholders of Hutchinson Technology will realize the long-term value of their investment and that all shareholders will receive fair and equal treatment for all of their shares in the event of a takeover of the company. The new share rights plan was not adopted in response to any current takeover approach.
Under the plan, the Board of Directors has declared a dividend distribution of one common share purchase right on each outstanding share of common stock of Hutchinson Technology held by shareholders of record as of the close of business on August 10, 2010. The rights will expire on August 10, 2020.
Each right will entitle shareholders of Hutchinson Technology to buy one-tenth of a share of common stock of the company at an exercise price of $3.00 (subject to adjustment). Under both the expiring plan and the new plan, the rights generally will become exercisable after any person or group acquires beneficial ownership of 15 percent or more of the company's common stock. In that event, each right will entitle its holder (other than the 15-percent shareholder or group and related persons) to purchase, at an adjusted exercise price equal to ten times the previous exercise price, shares of the company's common stock having a value of twice the right's adjusted exercise price.In addition, if Hutchinson Technology is acquired in a merger or other business-combination transaction, or sells 50 percent or more of its assets or earning power, each right generally will entitle its holder to purchase, at the right's adjusted exercise price, common shares of the acquiring company having a market value of twice the right's adjusted exercise price.
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