Towerstream Corporation Adopts Shareholder Rights Plan
MIDDLETOWN, R.I., Nov. 10, 2010 (GLOBE NEWSWIRE) -- Towerstream (Nasdaq:TWER), a leading 4G service provider, announced today that pursuant to its shareholder rights plan the Company has issued one preferred share purchase right for each of the Company's common stock held by shareholders of record as of the close of business on November 24, 2010. Each Right will entitle the holder to purchase one one-hundredth of a share of Series A Preferred Stock that will be established by the Company, at an exercise price of $18.00. The preferred shares will be structured so that the value of one one-hundredth of a preferred share will approximate the value of one share of the Company's common stock.
The Company stated that the purpose of the plan is to protect the long-term value of the Company for its shareholders and to protect shareholders from various abusive takeover tactics, including attempts to acquire control of the Company at an inadequate price. The plan is designed to give the Company's Board of Directors sufficient time to study and respond to an unsolicited takeover attempt. Adoption of the plan was unanimously approved by the Company's directors and was not in response to any specific attempt to acquire the Company or its shares, and the Company is not aware of any current efforts to do so.
The terms of the Rights Agreement provide for the Company's shareholders of record at the close of business on November 24, 2010 to receive one right for each outstanding common share held. In general, the rights will become exercisable if a person or group acquires 15% or more of the Company's common stock or announces a tender offer or exchange offer for 15% or more of the Company's common stock.Depending on the circumstances, the effect of the exercise of rights will vary. When the rights initially become exercisable, as described above, each holder of a Right will be allowed to purchase one one-hundredth of a share of a newly created series of the Company's preferred shares at an exercise price of $18.00. However, if a person acquires 15% or more of the Company's common stock in a transaction that was not approved by the Board of Directors, each right would instead entitle the holder (other than such an acquiring person) to purchase common stock at 50% of the market price of the Company's common stock at that time.
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