Commercial Vehicle Group, Inc. (the “Company” or “CVG”) today announced that its Board of Directors (the “Board”) has unanimously adopted a limited duration stockholder rights plan (the “Rights Plan”) and declared a dividend of one right (“Right”) for each outstanding share of Company common stock as of the record date. The record date for such dividend is July 5, 2020. The Rights Plan expires, without any further action being required to be taken by the Board, on June 24, 2021.
In adopting the Rights Plan, the Board has taken note of the substantial increase in market volatility and uncertainty as a result of the COVID-19 pandemic, as well as its impact on the Company’s stock price. In light of the impact of the COVID-19 pandemic on CVG’s end markets, CVG’s operations and financial affairs, the Board believes that adopting the Rights Plan will help promote the fair and equal treatment of all CVG stockholders and will contribute to the preservation of the Company’s long-term value for its stockholders.
The Rights Plan is similar to plans adopted by other public companies, and is intended to allow stockholders to realize the long-term value of their investment in CVG by guarding against opportunistic efforts to capitalize on recent macroeconomic conditions, including open market accumulations or other tactics, aimed at gaining control of the Company without paying an appropriate control premium or providing the Board sufficient time to make informed judgments. The Rights Plan will not prevent a takeover of the Company on terms that the Board determines are favorable and fair to all shareholders. The Rights Plan applies equally to all current and future stockholders.
Under the Rights Plan, the Rights will become exercisable only if a person or persons acquires beneficial ownership of 10% or more of the Company’s outstanding common stock (including in the form of synthetic ownership through derivative positions), or 15% in the case of certain passive investors. In the event that the Rights become exercisable, each holder of Rights (other than the person or group triggering the Rights Plan) will be entitled to purchase, at the Right’s exercise price, a number of shares of common stock having a market value of twice the Right’s exercise price. The Board may, rather than permitting the exercise of the Rights, exchange each Right (other than Rights held by the triggering person) for one share of the Company’s common stock, subject to adjustment as provided in the Rights Plan. The Board will, prior to the Rights becoming exercisable, in general be entitled to amend the Rights Plan or to redeem the rights for $0.01 per Right.
Additional information regarding the Rights Plan will be contained in a current report on Form 8-K to be filed by CVG with the U.S. Securities and Exchange Commission.
SOURCE: Commercial Vehicle Group
