As part of the plan, the Transcept Board of Directors declared a dividend of one preferred stock purchase right, which are referred to as "rights," for each outstanding share of Transcept common stock. The dividend will be payable to holders of record as of the close of business on September 27, 2013. Any shares of Transcept common stock issued after the record date will be issued together with the rights.The rights will be exercisable if a person or group, without the approval of the Transcept Board, acquires, or obtains the right to acquire, beneficial ownership of 4.99 percent or more of the Transcept common stock. The rights also will be exercisable if a person or group that already beneficially owns 4.99 percent or more of the Transcept common stock, without Board approval, acquires additional shares (other than as a result of a dividend or a stock split). Existing Transcept stockholders that, as of September 13, 2013, beneficially own in excess of 4.99 percent of the common stock will be "grandfathered in" at their current ownership level. If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Transcept common stock at a 50 percent discount. Rights held by the person or group triggering the rights will become void and will not be exercisable. Beneficial ownership of shares is calculated under the plan in accordance with the applicable rules of Section 382 of the Internal Revenue Code. The calculations are complex, and stockholders should contact Transcept if they have any questions regarding their ownership, the 4.99 percent trigger amount or any other matters related to the plan. The Board of Directors has established procedures by which it will consider requests by stockholders to exempt certain acquisitions of Transcept common stock from the plan if the Board determines that doing so would not limit or impair the availability of the tax benefits or is otherwise in the best interests of Transcept.