This excerpt taken from the WYN 8-K filed Jul 19, 2006.
Stockholder Rights Plan
On July 13, 2006, Wyndham adopted a stockholder rights plan (the Rights Plan) and entered into a rights agreement (the Rights Agreement), dated as of July 13, 2006, between Wyndham and Mellon Investor Services LLC as Rights Agent. Pursuant to the Rights Agreement, one preferred stock purchase right (a Right) will be issued for each outstanding share of Wyndham common stock. In connection with the adoption of the Rights Plan, Wyndham filed with the Delaware Secretary of State a Certificate of Designation authorizing 600,000 shares of Series A Junior Participating Preferred Stock (the Certificate of Designation). Each Right issued will be subject to the terms of the Rights Agreement. A summary description of the Rights Agreement is provided below.
The Rights will initially trade with, and be inseparable from, Wyndham common stock. The Rights are not represented by certificates. New Rights will accompany any new shares of common stock that Wyndham issues after the date the separation is completed until the date on which the Rights are separated from Wyndham common stock and became exercisable as described below.
Exercise Price. Each Right allows its holder to purchase from Wyndham one one-thousandth of a share of Wyndhams Series A junior participating preferred stock (Preferred Stock) for $150, once the Rights are separated from Wyndham common stock and become exercisable. Prior to its exercise, a Right does not give its holder any dividend, voting or liquidation rights.
Exercisability. Each Right will not be separated from Wyndham common stock and will not be exercisable until the earlier of:
Until the date the Rights become exercisable, book-entry ownership of Wyndham common stock will evidence the Rights, and any transfer of shares of Wyndham common stock will constitute a transfer of the Rights associated with the shares of common stock. After the date the Rights separate from Wyndham common stock, the Rights will be evidenced by book-entry credits. Any of the Rights held by an acquiring person will be void and may not be exercised.
Consequences of a Person or Group Becoming an Acquiring Person.
Expiration. The Rights Plan contains a so-called sunset provision, pursuant to which the Rights Plan will expire following the date of Wyndhams 2008 annual meeting of stockholders unless the continuation of the Rights Plan is approved by a majority of the shares present and entitled to vote at such 2008 annual meeting of stockholders. If Wyndhams stockholders do not approve the continuation of the Rights Plan, these Rights will expire. If Wyndhams stockholders approve the continuation of the Rights Plan, these Rights will expire on July 13, 2016.
Redemption. Wyndhams Board may redeem the Rights for $0.001 per Right at any time before a person or group becomes an acquiring person. If Wyndhams Board redeems any of the Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.001 per Right. The redemption price will be adjusted if Wyndham has a stock split or issues stock dividends on Wyndham common stock.
Exchanges. After a person or group becomes an acquiring person, but before an acquiring person owns 50% or more of Wyndhams outstanding common stock, Wyndhams Board may extinguish the Rights by exchanging one share of Wyndham common stock or an equivalent security for each Right, other than Rights held by the acquiring person.
Anti-Dilution Provisions. The purchase price for one one-thousandth of a share of Wyndhams Preferred Stock, the number of shares of Preferred Stock issuable upon the exercise of a Right and the number of the outstanding Rights may be subject to adjustment in order to prevent dilution that may occur from a stock dividend, a stock split or a reclassification of Wyndhams preferred stock. No adjustments to the purchase price of Wyndhams Preferred Stock will be required until the cumulative adjustments would amount to at least 1% of the purchase price.
Amendments. The terms of the Rights Agreement may be amended by Wyndham without the consent of the holders of Wyndham common stock. After the Rights separate from Wyndham common stock and become exercisable, Wyndham may not amend the agreement in a way that adversely affects the interests of the holders of the Rights.
The Certificate of Designation and the Rights Agreement are attached as Exhibits 3.3 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated by reference into this item. This summary description of the Rights Agreement, the Rights and Preferred Stock does not purport to be complete and is qualified in its entirety by reference to such exhibits.