13.
Stock Repurchase Programs
The Company completed a repurchase program for one million shares of its common stock in
September 1998, for a total cost of $15,228,000. On October 7, 1998, the Board of Directors
authorized the Company to repurchase up to one million additional shares of its common stock
in the open market from time to time, subject to market conditions. On September 28, 1999 the
Board of Directors authorized the Company to repurchase an additional 500,000 shares of its
common stock. As of February 23, 2002, the Company had repurchased 1,178,042 shares of its
common stock under the current 1.5 million share repurchase program at a total cost of
$11,435,000.
14.
Shareholder Rights Plan
On April 15, 1999, the Company's Board of Directors unanimously adopted a shareholder rights
plan (the "Plan"), commonly referred to as a poison pill. Under the Plan, shareholders of record
on April 30, 1999, and shareholders who acquire the Company's common stock after that date
(unless as excepted under the terms of the Plan) will receive rights to purchase a unit consisting
of one one-thousandth of a Series A Preferred Share of the Company at $70.00 per unit. The
rights are not exercisable until the Board of Directors declares a distribution date.
The Board of Directors may declare a distribution date within 10 days following (i) the
acquisition of or right to acquire by a person or group, 20% or more of the outstanding common
shares of the Company or (ii) the commencement of a tender offer or exchange offer that
would, if completed, result in a person or group beneficially owning 20% or more of the
Company's common shares. A distribution date will not be declared if a person or group owns
more than 20% but less than 25% on April 30, 1999, and that person or group does not become
the beneficial owner of any additional shares of common stock. Upon the declaration of a
distribution date, each holder of the right will have the right to receive, upon exercise, common
shares having a value equal to two times the exercise price of the right. In the alternative, the
Board of Directors at its option may exchange all outstanding and exercisable rights for common
shares at an exchange ratio of one common share per each right. The Board may redeem the
rights prior to an event triggering a distribution date at $.001 per right.
F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
L I L L I A N V E R N O N
