Tuesday, April 21, 2020 2:57:09 PM
8:00 am ET April 21, 2020 (BusinessWire) Print
Entercom Communications Corp. (NYSE: ETM) ("Entercom" or the "Company") announced today that its Board of Directors (the "Board") has adopted a limited duration shareholder rights plan (the "Plan") to protect the long-term interests of its shareholders. The Plan has a one-year duration, expiring April 20, 2021.
The Board adopted the Plan at this time due to the unprecedented impact of the COVID-19 pandemic on equity market valuations which has led to substantial volatility in the trading of the Company's stock and a dislocation in Entercom's share price. The Plan is similar to those adopted by other publicly held companies and is intended to promote the fair and equal treatment of all shareholders and ensure that the Board remains in the best position to uphold its fiduciary duties to the Company and its shareholders. The Plan is designed to allow shareholders to realize the long-term value of their investment by guarding against opportunistic efforts to capitalize on recent macroeconomic conditions, including open market accumulations and other strategies, aimed at gaining control of the Company without paying all shareholders a full control premium for their shares.
The Plan provides for the issuance of one preferred stock purchase right for each share of Class A Common Stock and each share of Class B Common Stock held by shareholders of record on May 5, 2020, exercisable for Series A Preferred Stock and Series B Preferred Stock, respectively. Generally, the rights will become exercisable or exchangeable only if a person or group (with the exception of certain existing holders in certain circumstances) acquires 10% or more of the Company's outstanding Class A Common Stock, or 15% in the case of certain passive investors (including shares synthetically owned pursuant to derivative positions or deemed owned due to specified actions in concert) or announces a tender offer and the consummation of that offer would result in ownership above such percentage-levels. If the rights become exercisable, the rights will entitle its holder to purchase one one-thousandth of a share of the newly-created Series A and Series B Preferred Stock, as applicable, which, in each case, at the Board's election, may be converted into shares of Class A and Class B Common Stock, respectively, of the Company.
The Company intends to engage with shareholders regarding the Plan. If the Board determines it is appropriate to extend the Plan, it intends to submit such an extension to a vote of the shareholders at the 2021 annual meeting of the shareholders.
Further details about the Plan are contained in a Form 8-K filed today by the Company with the U.S. Securities and Exchange
https://entercom.com/press/investors/entercom-communications-adopts-limited-duration-shareholder-rights-plan/Commission.
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