Summary
Motorola, Inc. (MSI) announced on July 27, 2006, a significant change regarding its shareholder rights plan. The company's Board of Directors approved an amendment to its existing shareholder rights agreement, accelerating the termination of preferred stock purchase rights (the 'Rights') from November 20, 2008, to August 1, 2006. This effectively winds down the current shareholder rights plan earlier than previously scheduled. Furthermore, Motorola has adopted a new governance policy that will guide the implementation of any future shareholder rights plans. Under this new policy, any future rights plan must be approved by a majority vote of independent directors and subsequently submitted for shareholder approval within twelve months of its adoption. This move signals a shift towards greater shareholder oversight and participation in corporate governance decisions related to anti-takeover measures. The company will also file a Certificate of Elimination to remove the preferred stock designation associated with the rights plan upon its expiration.
Key Highlights
- 1Motorola's shareholder rights plan will terminate on August 1, 2006, significantly earlier than its original November 20, 2008 expiration date.
- 2The company's Board of Directors has approved an amendment to the existing Amended and Restated Rights Agreement, facilitating the early termination.
- 3A new governance policy has been adopted for future shareholder rights plans.
- 4Any future rights plan adopted by the Board will require approval from a majority of independent directors.
- 5Future shareholder rights plans will need to be approved by shareholders within 12 months of adoption.
- 6The Certificate of Designations for Series B Junior Participating Preferred Stock will be eliminated upon the expiration of the rights agreement.
- 7This action indicates a move towards enhanced shareholder oversight of corporate governance mechanisms.