| Item 1.01. | Entry into a Material Definitive Agreement. |
Item 3.03 below is incorporated herein by reference.
| Item 3.03. | Material Modification to Rights of Security Holders. |
On March 21, 2022, the Board of Directors of Rayonier Advanced Materials Inc., a Delaware corporation (the “Company”), declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock of the Company, par value $0.01 per share (“Company Common Stock”), and adopted a shareholder rights plan, as set forth in the Rights Agreement dated as of March 21, 2022 (the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent. The dividend is payable on March 31, 2022 to Company stockholders of record as of the close of business on March 31, 2022.
The Board of Directors (the “Board”) has adopted the rights plan in response to recent stock activity and the accumulation of a substantial amount of stock of the Company. In general terms, the Rights Agreement works by imposing a significant penalty upon any person or group which acquires beneficial ownership of 10% or more (or, in the case of certain passive institutional investors entitled to file statements on Schedule 13G, 20% or more) (subject to the grandfathering provisions discussed below) of the Company Common Stock without the approval of the Board. The Rights Agreement should not interfere with any merger or other business combination approved by the Board.
A summary of the terms of the Rights Agreement follows. All capitalized terms used but not defined herein have the meanings assigned to them in the Rights Agreement.
General.
The Rights. The Rights will initially trade with, and will be inseparable from, shares of the Company Common Stock. The Rights are evidenced only by certificates (or, in the case of uncertificated shares, by notations in the book entry account system) that represent shares of the Company Common Stock. New Rights will accompany any new shares of Company Common Stock issued after March 31, 2022 until the Distribution Date (as defined below) or the earlier expiration, exchange or redemption of the Rights.
Exercise Price. Each Right will allow its holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (a “Preferred Share”) for $35.00 (the “Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of Company Common Stock.
Exercisability. The Rights will not be exercisable until 10 days after the public announcement or public disclosure that a person or group has become an “Acquiring Person” (as defined in the Rights Agreement) by obtaining beneficial ownership of 10% or more of the outstanding Company Common Stock (including certain derivative positions), subject to certain exceptions. In the case of certain passive institutional investors entitled to file statements on Schedule 13G, the rights will be exercisable only if such persons acquire beneficial ownership of 20% or more of the outstanding Company Common Stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights. If a stockholder’s beneficial ownership as of the time of this announcement is at or above 10% (or at or above 20% in the case of certain passive institutional investors entitled to file statements on Schedule 13G), that shareholder’s existing ownership percentage is grandfathered, but the Rights would become exercisable if at any time after this announcement, the shareholder increases its ownership percentage by 0.001% or more. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
The date when the Rights become exercisable is the “Distribution Date.” Until that date, the Company Common Stock certificates, or, in the case of uncertificated shares, notations in the book-entry account system, will also evidence the Rights, and any transfer of shares of Company Common Stock will constitute a transfer of Rights. After the Distribution Date, the Rights will separate from the Company Common Stock and be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of Company Common Stock. Any Rights held by an Acquiring Person are null and void and may not be exercised.
