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PLEASANTON, Calif. — Safeway on Tuesday announced that it has adopted a one-year stockholder rights plan.
The company has become aware of an accumulation of a significant amount of the common stock of the company, Safeway stated. The board of directors believes that the rights plan will help promote the fair and equal treatment of all stockholders of the company and ensure that the board remains in the best position to discharge its fiduciary duties to the company and its stockholders.
Safeway has recently undertaken a number of strategic initiatives including the initial public offering of Blackhawk Network and the pending sale of its Canadian assets. The board believes that the rights plan will help ensure that Safeway can continue to implement its strategic plan. The rights plan, which was adopted following evaluation and consultation with the company's outside advisors, is similar to plans adopted by numerous publicly traded companies.
Under the plan, one preferred stock purchase right will be distributed for each share of common stock held by stockholders of record on Sept. 30, 2013. Under certain circumstances, each right will entitle stockholders to buy one one-thousandth of a share of newly-created Series A Junior Participating Preferred Stock of the company at an exercise price of $100. The company's board of directors will be entitled to redeem the rights at $0.01 per right at any time before a person or group has acquired 10% or more (15% or more in the case of a passive institutional investor) of the outstanding common stock. The rights will expire on Sept. 15, 2014, subject to Safeway's right to extend such date, unless earlier redeemed or exchanged by the company or terminated.
For administrative convenience, the rights will automatically attach to the shares of common stock, trade together with those shares and will be represented by certificates representing the common stock.
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