4Kids Entertainment (KDS) Adopts Shareholder Rights Plan
4Kids Entertainment, Inc. (NYSE: KDS) adopted a shareholder rights plan. The plan is similar to "poison pill" type plans adopted by many other public companies. In order to implement the shareholder rights plan, 4Kids Entertainment amended its Certificate of Incorporation to designate the relative rights, preferences and limitations of the new Series A Preferred Stock, shares of which are issuable upon exercise of the rights.
Under the shareholder rights plan, a dividend of one Preferred Stock Purchase Right is being declared for each share of common stock outstanding at the close of business on August 27, 2007. No separate certificates evidencing the Rights will be issued unless and until they become exercisable.
The Rights generally will not become exercisable until a person or group acquires 15% or more of 4Kids Entertainment's common stock in a transaction that is not approved in advance by the Company's Board of Directors.
In addition to adopting the shareholder rights plan, the Board of Directors also amended and restated the By-laws of 4Kids Entertainment to: (i) revoke the power of shareholders holding a majority of outstanding voting shares to call special meetings of the shareholders, (ii) revoke the power of shareholders to remove directors without cause, (iii) revoke the power of shareholders to fill vacancies in the Board of Directors and (iv) increase the maximum authorized number of directors to nine. 4Kids Entertainment also adopted amendments to its employee stock option plans and other equity incentive plans to provide that upon a change of control of the Company, all awards granted under the plans immediately vest.
Under the shareholder rights plan, a dividend of one Preferred Stock Purchase Right is being declared for each share of common stock outstanding at the close of business on August 27, 2007. No separate certificates evidencing the Rights will be issued unless and until they become exercisable.
The Rights generally will not become exercisable until a person or group acquires 15% or more of 4Kids Entertainment's common stock in a transaction that is not approved in advance by the Company's Board of Directors.
In addition to adopting the shareholder rights plan, the Board of Directors also amended and restated the By-laws of 4Kids Entertainment to: (i) revoke the power of shareholders holding a majority of outstanding voting shares to call special meetings of the shareholders, (ii) revoke the power of shareholders to remove directors without cause, (iii) revoke the power of shareholders to fill vacancies in the Board of Directors and (iv) increase the maximum authorized number of directors to nine. 4Kids Entertainment also adopted amendments to its employee stock option plans and other equity incentive plans to provide that upon a change of control of the Company, all awards granted under the plans immediately vest.
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