Broadway Financial announces adoption of stockholder rights plan
Broadway Financial announced that its board of directors approved a stockholder rights plan on September 10, 2019. The board's purpose in adopting the Rights Plan is to protect the company's stockholders against the possibility of attempts to acquire control of or influence over the company through open market or privately negotiated purchases of the company's common stock without payment of a fair price to all of the company's stockholders or through other tactics that do not provide fair treatment to all stockholders. The Rights Plan, which was approved by the board of directors after consultation with the company's legal and financial advisors, is similar to rights plans that have been adopted by many public companies. The Rights Plan will not interfere with any merger, acquisition or business combination, or capital financing opportunity, that the company's board of directors believes to be in the best interest of the company's stockholders. In connection with the Rights Plan, the Board has declared a dividend distribution of one preferred stock purchase right for each outstanding share of the company's common stock and nonvoting common stock held by stockholders of record on September 23, 2019. Each Right will initially entitle a holder, upon the occurrence of certain events, to purchase, for an exercise price of $3.60 per Right, one one-thousandth of a share of Series B Junior Participating Preferred Stock of the company, which would have voting and economic rights equivalent to one share of common stock of the company. The Rights Plan excludes from its 10% ownership trigger level any investor who, alone or together with the investor's affiliates and associates, currently owns 10% or more of the company's Common Shares, but such investors would lose their exempted status if they acquire additional Common Shares, or if their ownership of Common Shares falls below the 10% trigger level, after the date the Rights Plan was adopted.