Here are the pertinent sections of the Shareholder Rights Agreement if anyone is interested:
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.
(a) Except as otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-thousandths (1/1000th) of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised, at any time which is both after the Distribution Date and prior to the time (the “Expiration Date”) that is the earliest of (i) the Close of Business on March 16, 2016 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), (iii) the time at which such Rights are exchanged as provided in Section 24 hereof, or (iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Section 13(f) at which time the Rights are terminated.
(b) The Purchase Price shall be initially $11.00 for each one one-thousandth (1/1000th) of a share of Preferred Stock purchasable upon the exercise of a Right. The Purchase Price and the number of one one-thousandths (1/1000th) of a share of Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) of this Section 7.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights
(ii) Subject to Section 24 of this Agreement, if any Person becomes an Acquiring Person (the first occurrence of such event being referred to hereinafter as the “Flip-In Event”), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by the number of one one-thousandths (1/1000th) of a share of Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such Right was then exercisable, and (B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by dividing the then current Purchase Price (as so adjusted) by 50% of the then current per share market price of the Common Stock (determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall, following the Flip-In Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof.
Pursuant to the Rights Agreement (the “Rights Agreement”), dated as of March 16, 2006 between the Company and Integrity Stock Transfer Inc. (the “Rights Agent”), following the Reverse Split, the number of rights (“Rights”) associated with each share of our common stock issued and outstanding shall be proportionately increased by the factor of the Reverse Split. For example, if the Reverse Split is one-for-five, then each share of common stock following the Reverse Split will have 5 Rights. In accordance with Section 12 of the Rights Agreement, this Proxy Statement shall also serve as the certificate relating to an adjustment of Rights that is required to be filed with the Rights Agent and mailed to each stockholder."
In effect, this has changed the original $11 price to $55 post-split.
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The "Poison Pill" provision is commonly misunderstood. This provision does not mean that a entity can buy out the company for $11 (or $55) per share. The "poison pill" number refers to the price per 1/1000 share of preferred stock that each common stockholder may buy for each share of common stock owned, upon a person or group acquiring 15% or more of the outstanding common stock or announcing a tender offer. The holder shall then receive common stock equal to twice the value of the purchase price of the preferred stock. What this means is that a common stockholder will receive $110 worth of PPHM common shares at current market price for each $55 of preferred stock purchased.
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