DG (DGIT) Adopts Poison Pill Provision
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DG (Nasdaq: DGIT), has adopted a limited Shareholder Rights Plan (the "Rights Plan") and declared a dividend of one stock purchase right for each share of common stock held by stockholders of record as of the close of business on September 19, 2012.
The Board of Directors adopted the short-term Rights Plan for the purpose of protecting the strategic alternatives process previously announced on July 16, 2012. As announced on August 10, 2012, the strategic alternatives process is being conducted by a special committee of independent members of the Board (the "Special Committee").
Consistent with its purpose, the term of the Rights Plan is only six months, ending on March 5, 2013. The Rights Plan is intended to enhance the ability of the Special Committee to conduct a thorough, deliberative process of exploring DG's strategic alternatives, which include sale of the Company and sale of one or more of its divisions.
Subject to limited exceptions, if a person or group acquires 10% or more of the outstanding common stock of DG or announces a tender offer for 10% or more of the common stock, such a person or group constituting an "acquiring person," each right will entitle the right holder to purchase, at the right's then-current exercise price, a number of shares of common stock having a market value at that time of twice the right's exercise price. Rights held by the acquiring person will become void and will not be exercisable.
The rights distribution is not taxable to stockholders. DG will file the Rights Plan on a Current Report on Form 8-K with the Securities and Exchange Commission. The foregoing description of the Rights Plan is only a summary and is qualified in its entirety by reference to the full text of the Rights Plan. Interested persons are urged to read the full Rights Plan as filed with the Securities and Exchange Commission.
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The Board of Directors adopted the short-term Rights Plan for the purpose of protecting the strategic alternatives process previously announced on July 16, 2012. As announced on August 10, 2012, the strategic alternatives process is being conducted by a special committee of independent members of the Board (the "Special Committee").
Consistent with its purpose, the term of the Rights Plan is only six months, ending on March 5, 2013. The Rights Plan is intended to enhance the ability of the Special Committee to conduct a thorough, deliberative process of exploring DG's strategic alternatives, which include sale of the Company and sale of one or more of its divisions.
Subject to limited exceptions, if a person or group acquires 10% or more of the outstanding common stock of DG or announces a tender offer for 10% or more of the common stock, such a person or group constituting an "acquiring person," each right will entitle the right holder to purchase, at the right's then-current exercise price, a number of shares of common stock having a market value at that time of twice the right's exercise price. Rights held by the acquiring person will become void and will not be exercisable.
The rights distribution is not taxable to stockholders. DG will file the Rights Plan on a Current Report on Form 8-K with the Securities and Exchange Commission. The foregoing description of the Rights Plan is only a summary and is qualified in its entirety by reference to the full text of the Rights Plan. Interested persons are urged to read the full Rights Plan as filed with the Securities and Exchange Commission.
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