From that letter: oh oh! Poison Pill time. Ramius is gonna be pissed!
Stockholders Rights Agreement
Cypress also announced today that its Board of Directors has adopted a Rights Agreement to maintain the status quo while Cypress explores strategic alternatives to maximize stockholder value. The Ramius offer is subject to a condition that sufficient shares be tendered that would, together with the shares Ramius and its affiliates already own, constitute 90% of the then outstanding shares of common stock on a fully diluted basis. Under the Rights Agreement the purchase of that number of shares pursuant to the Ramius offer at a price of not less than $4.25 per share will not trigger the Rights Agreement, if prior to such acquisition, Ramius has irrevocably committed to a prompt merger of the Company where the remaining common shares receive the same value.
However, the Board of Directors urges stockholders, for the reasons expressed above and more fully in the Company's Solicitation/Recommendation Statement on Schedule 14D-9, not to tender shares into the Ramius offer. In addition, the Rights Agreement is intended to deter Ramius or any other stockholder from buying large amounts of shares outside of the context of the Ramius offer, which could adversely affect the ability of a third party to propose a superior alternative to the Ramius offer. The Rights Agreement is also intended to deter Ramius from amending its offer to provide terms which are worse to Cypress' stockholders than the current terms of the Ramius offer.
Under the Stockholders Rights Agreement, the rights will become separate from the common stock and become exercisable if a person becomes an "Acquiring Person" by acquiring 15% or more of the common stock of Cypress, if a person commences on or after September 27, 2010, a tender offer that could result in that person owning 15% or more of the common stock of Cypress, or if Ramius were to amend the Ramius offer in certain respects. Under the Rights Agreement, until there is an Acquiring Person, each Right entitles the registered holder to purchase from Cypress one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share (the "Preferred Shares"), at a price of $15 per one one-hundredth of a Preferred Share, subject to adjustment. Each one one-hundredth of a Preferred Share has designations and powers, preferences and rights, and qualifications, limitations and restrictions, designed to make it the economic equivalent of a share of Common Stock. The Rights become exercisable on more advantageous terms, and the Rights of the Acquiring Person and related parties are voided, only in the event that 15% or more of the common stock is acquired, creating an Acquiring Person. However, as described above, if Ramius acquires sufficient shares based on the current terms and conditions of the Ramius offer so that, together with the shares it and related parties already own, it owns 90% of the then outstanding shares of Cypress on a fully diluted basis, Ramius, provided it commits irrevocably to a prompt second-step merger on the same terms as the Ramius offer, would not become an Acquiring Person. The Rights Agreement will expire in one year. The description and terms of the rights are set forth in the Rights Agreement, which have been filed with the SEC.
Mr. Petree commented, "We have adopted this short-term Rights Agreement in order to maintain the status quo while we are pursuing strategic alternatives. We believe the Rights Agreement should help ensure that the Board of Directors has adequate time to consider all strategic alternatives for maximizing value for Cypress stockholders and prevent third parties from attempting to disrupt this process. However, if Cypress stockholders tender the requisite number of shares, the Rights Agreement will not prevent the consummation of the Ramius offer."
Jefferies & Company, Inc. and Perella Weinberg Partners are serving as financial advisors to Cypress. Cooley LLP, Sullivan & Cromwell LLP, and Potter Anderson & Corroon LLP are serving as Cypress' legal advisors.
A mind troubled by doubt cannot focus on the course to victory.
