8-KMaterial AgreementsShareholder MattersCorporate Changes

AMETEK INC/ 8-K Report, Material Agreement (Jun 5, 2007)

Filed June 5, 2007For Securities:AME

Summary

AMETEK, Inc. (AME) filed an 8-K on June 5, 2007, to announce the adoption of a new shareholder rights plan, effective June 2, 2007. This plan replaces the company's previous rights plan, which expired on the same date. The new plan involves the declaration of one "Right" for each outstanding share of Common Stock. Each Right allows the holder to purchase a fraction of a share of Series B Junior Participating Preferred Stock at a specified price, subject to adjustments. The primary purpose of this rights plan is to act as an anti-takeover measure, deterring hostile acquisitions by creating significant dilution for any party attempting to acquire 20% or more of the company's stock without the board's approval. The Rights will become exercisable upon a "Distribution Date," which is triggered by a person acquiring 20% or more of the outstanding Common Stock or the commencement of a tender offer for 20% or more. The plan includes "Flip-in" and "Flip-Over" provisions designed to protect existing shareholders in the event of an unsolicited takeover attempt. The company retains the right to redeem these Rights under certain conditions prior to a triggering event.

Key Highlights

  • 1AMETEK adopted a new shareholder rights plan effective June 2, 2007, replacing the prior expired plan.
  • 2Each common share will receive one 'Right' to purchase fractional shares of Series B Junior Participating Preferred Stock.
  • 3The new plan is designed as an anti-takeover defense mechanism.
  • 4The Rights become exercisable if an 'Acquiring Person' obtains 20% or more of the company's outstanding common stock or commences a tender offer for such an amount.
  • 5The plan includes "Flip-in" and "Flip-Over" provisions to protect shareholders from hostile takeovers.
  • 6The company has the right to redeem the Rights at $0.01 per Right before a triggering event.
  • 7The adoption of the Rights Plan also involved authorizing Series B Junior Participating Preferred Stock and eliminating the Series A Preferred Stock designation.

Frequently Asked Questions

The primary purpose of the new shareholder rights plan is to serve as an anti-takeover measure. It aims to deter hostile acquisitions by making it significantly more expensive and dilutive for any individual or group to acquire a substantial stake (20% or more) in AMETEK without the approval of the Board of Directors.

The Rights become exercisable on a 'Distribution Date,' which is triggered if a person or affiliated group acquires beneficial ownership of 20% or more of AMETEK's outstanding common stock, or if a tender offer or exchange offer for 20% or more of the outstanding common stock commences. This date is typically 10 days after a public announcement of such an acquisition or commencement of an offer.

In the event of a hostile takeover attempt (a "Triggering Event"), the Rights plan is designed to protect existing shareholders. If a "Flip-in Event" occurs (an acquirer obtains 20% stake), holders of Rights (excluding the acquirer) can purchase AMETEK stock at a 50% discount. If a "Flip-over Event" occurs (merger or sale of assets), holders of Rights can purchase the stock of the acquiring company at a 50% discount.

Yes, AMETEK's Board of Directors has the right to redeem all of the outstanding Rights, in whole but not in part, at any time before a triggering event occurs (specifically, up to ten days after the 'Stock Acquisition Date'). The redemption price is set at a nominal $0.01 per Right.