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Payment Data Systems Announces Common Stock Purchase Rights Dividend 09:47 a.m. 05/09/2005 Provided By Market Wire
SAN ANTONIO, TX, May 09, 2005 (MARKET WIRE via COMTEX) -- Payment Data Systems, Inc. (PYDS) an integrated electronic payments solutions provider, announced today that its Board of Directors has declared a dividend distribution of one common stock purchase right on each outstanding share of its common stock.
The action taken by the Board of Directors is designed to protect the long-term value of shareholders' and employees' investment in Payment Data Systems, Inc., to assure that all shareholders receive fair and equal treatment in the event of any proposed takeover and to guard against partial tender offers, squeeze-outs, open market accumulations and other coercive tactics to gain control of Payment Data Systems, Inc. without paying all shareholders a fair control premium. The Company is not aware of any current attempt to acquire control of Payment Data Systems, Inc.
Until the rights become exercisable, the rights will trade automatically with the common stock of Payment Data Systems, Inc. and separate rights certificates will not be issued. The rights will be exercisable only if a person or group acquires 15% or more of Payment Data Systems, Inc.'s common stock, whether through open market or private purchases or consummation of a tender or exchange offer, or announces an offer the consummation of which would result in such person or group owning 15% or more of Payment Data Systems, Inc.'s common stock. When the rights first become exercisable, each right will entitle the holder to purchase one share of common stock for $0.23, subject to adjustment. If Payment Data Systems, Inc. is involved in a merger or other business combination after a person or group has acquired 15% or more of Payment Data Systems, Inc.'s common stock, each right will entitle its holder to purchase, at the right's then-current exercise price, a number of the acquiring company's shares having a market value of twice the exercise price of each right. If a person or group acquires 15% or more of Payment Data Systems, Inc.'s common stock, each right will entitle its holder to purchase a number of additional shares of common stock having a market value of twice the exercise price of each right.
The rights are intended to enable all shareholders to realize the long-term value of their investment in Payment Data Systems, Inc. They will not prevent a takeover, but should encourage anyone seeking to acquire Payment Data Systems, Inc. to negotiate with the Board prior to attempting a takeover. The Board may redeem the rights for $.001 per right prior to the acquisition of 15% or more of our common stock by a single acquirer or group.
The rights were issued to shareholders of record on April 29, 2005 and will expire on April 29, 2009. The rights distribution is not taxable to shareholders.
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