EXHIBIT 20
April 3, 2000
Dear Chorus Shareholder:
The Board of Directors has announced the adoption of a Shareholder Rights
Plan. We are enclosing a summary description that outlines the principal
features of the plan, and we urge you to read it carefully.
The Plan is designed to protect your interests in the event that you and the
Company are confronted with coercive and unfair takeover tactics, including
an unsolicited offer to acquire the Company, offers that do not treat all
shareholders equally, a creeping acquisition of shares in the open market and
other takeover tactics that could impair your Board's ability to represent
your interests fully.
The Plan's adoption by the Board is not in response to any effort to acquire
control of the Company, nor is the Board aware of any accumulation of the
Company's stock by any potential acquiror. The Plan is designed to deal with
the very serious problem of unilateral actions by hostile acquirors that are
calculated to deprive the Board and the shareholders of their ability to
determine the destiny of the Company. However, the Plan does not preclude
your Board from considering an offer to acquire all or part of the Company if
it believes the offer to be in the best interest of the shareholders.
Issuance of the rights does not weaken the financial strength of the Company
or interfere with its business plan. The issuance of the rights has no
dilutive effect, will not affect reported earnings per share, is not taxable
to the Company or to you, and will not change the way in which you can
presently trade the Company's stock. As explained in greater detail in the
enclosed summary of the Plan, the rights will only be exercisable if and when
a problem arises.
Our overriding objective is to preserve the Company's long-term value for all
shareholders. The Shareholder Rights Plan was adopted to ensure that all
shareholders have the opportunity to realize full value from these
investments as well as from the Company's continuing growth.
If you have any questions regarding the Plan, please feel free to contact me
to discuss them.
Sincerely,
/s/Dean W. Voeks
Dean W. Voeks
President and CEO.
CHORUS COMMUNICATIONS GROUP LTD.
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On March 22, 2000, the Board of Directors of Chorus Communications
Group Ltd. (the "Company") declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, no par value
(the "Common Shares"), of the Company. The dividend is payable upon the close
of business on March 31, 2000 to the shareowners of record on that date (the
"Record Date"). Each Right entitles the registered holder to purchase from
the Company one-half of one Common Share, at a price of $120 per Common Share
(equivalent to $60 for each one-half of a Common Share), subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and [Norwest Bank Minnesota, N.A.], as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(other than the Company, a subsidiary of the Company or an employee benefit
plan of the Company or a subsidiary) (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Common Shares (the
"Shares Acquisition Date") or (ii) 10 business days (or such later date as
may be determined by action of the Company's Board of Directors prior to such
time as any person becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a
person or group (other than the Company, a subsidiary of the Company or an
employee benefit plan of the Company or a subsidiary) of 15% or more of such
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. No less than
two Rights, and only integral multiples of two Rights, may be exercised at
any one time by any holder of Rights. The Rights will expire on March 22,
2010 (the "Final Expiration Date"), unless the Rights are earlier redeemed or
exchanged by the Company, or the Rights Agreement is amended, in each case as
described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Common Shares) or of subscription rights or warrants (other than those
referred to above).
In the event that any person becomes an Acquiring Person (a "Flip-In
Event"), holders of Rights (except as otherwise provided in the Rights
Agreement) will thereafter have the right to receive upon exercise that
number of Common Shares (or, in certain circumstances cash, property or other
securities of the Company or a reduction in the Purchase Price) having a
market value of two times the then current Purchase Price. Notwithstanding
any of the foregoing, following the occurrence of a Flip-In Event all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, or subsequently become beneficially owned by an Acquiring Person,
related persons and transferees will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of its consolidated assets or earning power
are sold (the events described in clauses (i) and (ii) are herein referred to
as "Flip-Over Events"), proper provision will be made so that holders of
Rights (except as otherwise provided in the Rights Agreement) will thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market value of two
times the then current Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued. In lieu of
fractional Common Shares equal to one-half of a Common Share or less, an
adjustment in cash will be made based on the market price of the Common
Shares on the last trading day prior to the date of exercise. No Rights may
be exercised that would entitle the holder thereof to any fractional Common
Share greater than one-half of a Common Share unless concurrently therewith
such holder purchases an additional fraction of a Common Share which when
added to the number of Common Shares to be received upon such exercise,
equals an integral number of Common Shares.
The Purchase Price is payable by certified check, cashier's check, bank
draft or money order or, if so provided by the Company, the Purchase Price
following the occurrence of a Flip-In Event and until the first occurrence of
a Flip-Over Event may be paid in Common Shares having an equivalent value.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by any Acquiring Person which have become void), in whole
or in part, at an exchange ratio of one Common Share (or of a share of a
class or series of the Company's preferred stock, if any, having equivalent
rights, preferences and privileges) per Right (subject to adjustment).
At any time prior to a person becoming an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.001 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Other than provisions relating to certain principal economic terms of
the Rights, the terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 15% to
not less than 10%, with appropriate exceptions for any person then
beneficially owning a percentage of the number of Common Shares then
outstanding equal to or in excess of the new threshold, except that from and
after the Distribution Date no such amendment may adversely affect the
interests of the holders of the Rights. The Rights may also be amended to
extend the expiration date thereof.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareowner of the Company, including, without limitation, the
right to vote or to receive dividends.
The Company has filed a copy of the Rights Agreement with the Securities
and Exchange Commission as an Exhibit to a report on Form 8-K filed with
respect to the Rights. A copy of the Rights Agreement is also available free
of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.