EXHIBIT 3
March 24, 1999
To Our Stockholders:
Your Board of Directors today declared a dividend of Preferred Share
Purchase Rights. The Rights will be issued to stockholders of record as of the
close of business on April 5, 1999 and will expire in ten years. This letter,
along with the enclosed Summary of Stockholder Rights Agreement, describes the
Rights Agreement and explains the Board's reasons for adopting it.
Many other companies have issued Rights similar to the kind we approved
today. We consider these Rights to be the best means currently available of
protecting the full value of your investment in the Company. The Rights
Agreement contains provisions designed to protect stockholders from the unfair
and coercive tactics that have been used in takeovers and open market stock
accumulations. The Board determined that the adoption of the Rights Agreement
would be beneficial to the Company and its stockholders because it helps assure
that the Board has adequate time to evaluate inquiries from third parties
regarding possible transactions involving the Company, and if the Board
determines that pursuing any such inquiry is in the best interests of the
Company's stockholders, to negotiate favorable terms on behalf of the
stockholders.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights has no dilutive effect, will not affect reported earnings per share,
is not taxable to the Company or to you, and will not change the way in which
you can trade the Company's Common Stock. While the Rights dividend will not be
taxable to you or the Company, stockholders may, depending upon their individual
circumstances, recognize taxable income when the Rights become exercisable.
In addition to authorizing the purchase rights, your Board today
authorized a new series of junior participating preferred stock which could be
issued in the event that the Rights become exercisable. The dividend,
liquidation and voting rights, as well as the non-redemption feature, of the
junior participating preferred shares are designed so that the value of a one
one-hundredth interest in a preferred share will approximate the economic value
of one share of the Company's Common Stock.
These actions are more fully described in the enclosed Summary of
Stockholder Rights Agreement. As the Summary indicates, the Rights will
initially trade together with the Company's Common Stock, will be represented by
Company Common Stock certificates, do not have any voting power, are not
currently exercisable and do not become exercisable unless certain acquisition
events occur.
- 11 -
In declaring the Rights dividend, we have expressed our confidence in
the Company's future and our commitment to giving you, our stockholders, every
opportunity to participate fully in that future.
On behalf of the Board of Directors,
Xxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
- 12 -
