IParty Corp. Adopts New Shareholder Rights Agreement
iParty Corp. (NYSE Amex: IPT - news), a leading party goods retailer, today announced that its Board of Directors adopted a new shareholder rights agreement that will take effect when the current plan, adopted in 2001, expires on November 9, 2011. The new plan is similar in rights as to the current plan. In connection with the adoption of the rights agreement, the Board declared a dividend of one right on each outstanding share of iParty common stock and each share of outstanding preferred stock on an as converted basis to holders of record at the close of business on November 9, 2011.
As with the current plan, the rights under the new plan are designed to enable all iParty shareholders to realize the full long-term value of their investment and to provide for fair and equal treatment of all shareholders if an unsolicited attempt is made to acquire iParty and are intended to help protect shareholders against abusive takeover tactics that may be used to gain control of the company without paying a price that is in the best interest of all shareholders. The rights agreement was not adopted in response to any known offers for iParty.
The rights will be exercisable only if a person or group acquires 10% or more of iParty’s voting stock or announces a tender offer, consummation of which would result in ownership by a person or group of 15% or more of the voting stock, subject to certain exceptions. Each right will initially entitle shareholders to buy one one-hundredth of a share of a new series of preferred stock at an initial exercise price of $2.00 per one one-hundredth of a share, subject to adjustment. In addition, upon the occurrence of certain events, holders of the rights will be entitled to purchase either iParty Corp. stock or shares in an "acquiring entity" at half of market value.
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