Exhibit 99.1
September 18, 2002
To Our Stockholders:
On August 5, 2002, your Board of Directors adopted an Amended and Restated
Shareholder Rights Agreement ("Rights Agreement").
The amendment and restatement of the Rights Agreement is not in response to
any action by a third party. If your Board of Directors had not amended the
Rights Agreement, it would have expired on August 14, 2002. Rather than allow
it to expire, the Board extended it for another ten (10) year term and amended
it to make it a state-of-the-art, updated Rights Agreement. The primary change
was redefining "acquiring person" causing the rights to be exercisable if a
person or group acquires 15% or more of Concurrent's common stock.
The Rights Agreement is designed to protect your interests, particularly in
the event of an unsolicited attempt to acquire the Company. The Rights Agreement
will enhance your Board of Directors' ability when considering strategic options
to ensure you realize the long-term value of your investment.
The Rights Agreement may cause substantial dilution to a person or group
that acquires 15% or more of our Common Stock, subject to certain exceptions,
unless the Rights are first redeemed by the Company. Since the Company can
redeem the Rights at $0.0025 per Right, in cash, on or prior to the public
announcement that a person or group has acquired 15% or more of our Common
Stock, the Rights Agreement should not interfere with any merger or other
business combination that is in the best interests of the Company and its
stockholders.
There is no action for you to take or decision for you to make at this
time. Rights under this Plan apply to all shares of the Company's Common Stock,
but these Rights do not become exercisable or separately tradeble unless and
until the events occur that are specified in the Rights Agreement. Separate
certificates for the Rights will be issued only if one or more of these events
occur.
A summary of the terms of the Rights Agreement is attached. The summary is
not complete and is qualified in its entirety by the Amended and Restated Rights
Agreement relating thereto, a copy of which can be obtained free of charge from
the Company, 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxx, XX 00000, Attention: General
Counsel.
Sincerely,
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
General Counsel
Concurrent Computer Corporation
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Concurrent Computer Corporation
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On July 31, 1992, the Board of Directors of Concurrent Computer Corporation
(the "Company") declared a dividend distribution of one Preferred Stock Purchase
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Right (a "Right") for each outstanding share of common stock of the Company
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payable on August 14, 1992 to stockholders of record at the close of business on
August 14, 1992. Each Right entitles the holder of record to purchase from the
Company at any time after the Distribution Date (as defined below) one
one-hundredth of a share of Series A Participating Cumulative Preferred Stock,
par value $0.01 per share, (the "Junior Preferred Stock"), at a price of $30 per
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one one-hundredth of one share, subject to adjustment (the "Purchase Price").
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On August 7, 2002, the Company (i) removed BankBoston, N.A. (f/k/a First
National Bank of Boston) as Rights Agent pursuant to the Rights Agreement dated
July 31, 1992, (ii) appointed American Stock Transfer & Trust Company as
successor Rights Agent and (iii) entered into an Amended and Restated Rights
Agreement ("Rights Agreement") with American Stock Transfer & Trust Company.
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The amendments to the Rights Agreement include the resetting of the threshold to
become an Acquiring Person (as defined in the Rights Agreement) from 20% to 15%
and the extension of the final expiration date from August 14, 2002 to August
14, 2012.
Initially, the Rights will be attached to all certificates representing
Common Stock then outstanding, and no separate Rights Certificates (as
hereinafter defined) will be distributed. The Rights will become exercisable
and separate from the Common Stock upon the earlier to occur of (i) ten days
following the earlier of (x) the first public announcement or (y) the first
public disclosure that a Person or group of affiliated or associated Persons,
subject to certain exceptions, has acquired beneficial ownership of 15% or more
of the outstanding Voting Power of the Common Shares (as such terms are defined
in the Rights Agreement) (such person or group, subject to certain exceptions,
being hereinafter referred to as an "Acquiring Person" and such earlier date in
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clause (x) or (y) being hereinafter referred to as the "Shares Acquisition
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Date"); or (ii) ten business days (or such later date as the Board of Directors
of the Company may determine) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer, the consummation of
which would result in a Person or group, subject to certain exceptions, becoming
the beneficial owner of 15% or more of the outstanding Voting Power of the
Common Shares (the earlier of such dates in clauses (i) and (ii) being called
the "Distribution Date"). Common Stock beneficially owned by the Company or any
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subsidiary of the Company will not be considered outstanding for purposes of
calculating the percentage ownership of any Person.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with,
and only with, the Common Stock. Until the Distribution Date (or earlier
redemption or expiration), new Common Stock certificates issued after August 14,
1992 (the "Record Date"), upon transfer or new issuance, will contain a notation
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incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates of Common Stock outstanding as of the Record Date, even
without such notation, also will constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to holders of record of the
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Common Stock as of the close of business on the Distribution Date, and such
separate Rights Certificates alone will evidence the Rights. The Rights are not
exercisable until the Distribution Date. The Rights will expire at the close on
business on August 14, 2012, unless earlier redeemed by the Company as described
below.
Each of the following Persons (as defined in the Rights Agreement) will not
be deemed to be an Acquiring Person even if they have acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the voting power of the
outstanding Common Shares of the Company: (i) the Company, (ii) any subsidiary
of the Company, (iii) any employee benefit plan of the Company or any subsidiary
of the Company, and (iv) any Person who would otherwise have become an Acquiring
Person solely by virtue of a reduction in the number of shares of
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outstanding Common Stock unless and until such Person shall become the
beneficial owner of any additional shares of Common Stock.
If any Person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive, in lieu of shares of
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Junior Preferred Stock and upon payment of the Purchase Price, Common Stock (or
in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, all Rights that are, or were, beneficially owned
by an Acquiring Person or any affiliate or associate thereof will be null and
void and not exercisable.
If, at any time on or after a Person becomes an Acquiring Person, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding Common Stock immediately prior to
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the Company's assets, cash
flow or earning power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of Junior Preferred Stock and upon
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exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In Right as well as a
Flip-Over Right, then only the Flip-Over Right will be exercisable. If a
transaction results in a holder's having a Flip-Over Right subsequent to a
transaction resulting in a holder's having a Flip-In Right, a holder will have
Flip-Over Rights only to the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of shares of Junior Preferred
Stock, or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Junior Preferred Stock, (ii) upon the grant to holders of the Junior Preferred
Stock of certain rights or warrants to subscribe for Junior Preferred Stock or
convertible securities at less than the current market price of the Junior
Preferred Stock, or (iii) upon the distribution to holders of the Junior
Preferred Stock of evidences of indebtedness or assets (excluding dividends
payable in Junior Preferred Stock) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1%.
The number of outstanding Rights and the number of one one-hundredths of a
share of a Junior Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Junior Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Junior Preferred Stock will be entitled to an
aggregate quarterly dividend of 100 times the dividend declared per share of
Common Stock. In the event of liquidation, the holders of shares of Junior
Preferred Stock will be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock. Each share of Junior Preferred Stock
will have 100 votes, in each case voting together with each class or series of
stock entitled to vote thereon. Finally, in the event of any merger,
consolidation or other transaction in which the shares of Common Stock are
exchanged, each share of Junior Preferred Stock will be entitled to receive 100
times the amount received per share of Common Stock. These rights are protected
by customary dilution provisions.
Because of the nature of the dividend, liquidation and voting rights of the
Junior Preferred Stock, the value of the one one-hundredth interest in a share
of Junior Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
If, after the triggering of Flip-In Rights, insufficient shares of Common
Stock are available for the exercise in full of the Rights, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise in full of the Rights. If, after the
expiration of 120 days after the triggering of Flip-In Rights, insufficient
shares of Common Stock are available for the exercise in full of the Rights,
holders of Rights will receive upon exercise Common Stock or to the extent
available cash, property or other securities of the Company, in proportions
determined by the Company, so that the aggregate value received is equal to
twice the Purchase Price.
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The Company is not required to issue fractional shares of Junior Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Junior Preferred Stock, which may, at the election of the Company be
evidenced by depositary receipts), and in lieu thereof, a payment in cash will
be made to the holder of such Rights equal to the same fraction of the current
value of one one-hundredth of a share of Junior Preferred Stock. Following the
triggering of the Flip-In Rights, the Company will not be required to issue
fractional shares of Common Stock upon exercise of the Rights and, in lieu
thereof, a payment in cash will be made to the holder of such Rights equal to
the same fraction of the current market value of a share of Common Stock.
In general, the Company may redeem the Rights at a price of $0.0025 per
Right (subject to adjustment), at any time prior to the existence of an
Acquiring Person.
At any time after any Person becomes an Acquiring Person and prior to the
acquisition by any Person of 50% or more of the outstanding shares of Common
Stock, the Board of Directors of the Company may exchange the then outstanding
and exercisable Rights (other than Rights owned by an Acquiring Person, which
will have become null and void), in whole or in part, for shares of Common
Stock, each Right being exchangeable for one share of Common Stock or common
share equivalents equal to one share of Common Stock, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to stockholders
under presently existing federal income tax law, and will not change the way in
which stockholders can presently trade the Company's Common Stock. If the
Rights should become exercisable, stockholders, depending on then existing
circumstances, may recognize taxable income.
Prior to the existence of an Acquiring Person, the Rights Agreement
generally may be amended by the Board of Directors of the Company. From and
after the existence of an Acquiring Person, the Company may amend the Rights
Agreement only to (i) cure any ambiguity, (ii) correct or supplement any
provision which may be defective or inconsistent with the other provisions of
the Rights Agreement, or (iii) change or supplement the Rights Agreement in any
other manner which the Company may deem necessary or desirable, provided that no
amendment shall adversely affect the interests of the holders of Rights (other
than any interest of an Acquiring Person or an affiliate or associate of an
Acquiring Person). However, no amendment may be made at any time when the
Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a Person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the rights plan helps ensure that
the Company's stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The amendment and restatement of the plan is
not in response to any specific takeover threat or proposal.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's amendment to its Registration
Statement on Form 8-A/A with respect to the Rights filed with the Securities and
Exchange Commission (Commission File No. 0-13150). A copy of the Rights
Agreement is available free of charge from the Company, 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: General Counsel. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.
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