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Exhibit 20.2
Letterhead of
Nobel Learning Communities, Inc.
May 30, 2000
Dear Stockholder:
On May 16, 2000, your Board of Directors adopted a Stockholder Rights
Plan. We are enclosing a summary of the Stockholder Rights Plan, which we
encourage you to keep with your Nobel Learning Communities stock certificates.
The adoption of the Stockholder Rights Plan requires no action on your part.
We consider these Rights to be one of the best available means of
protecting your right to retain your equity investment in Nobel Learning
Communities and your right to obtain the full value of that investment, while
not foreclosing a fair acquisition bid for the Company. Indeed, the Rights are
not intended to prevent a takeover of the Company nor is this being done in
response to any takeover bid. The Rights should, however, help deter any
attempt to acquire the Company in a manner or on terms that are not in the best
interests of all the stockholders. More than 1,700 other companies have issued
rights similar to the kind we have approved.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. 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
may currently trade the Company's Common Stock.
Initially, the Rights will be represented by the certificates for our
Common Stock, and they will trade with the Common Stock. Stockholders need not
take any action to receive the Rights nor should you send in your stock
certificates. As explained in the enclosed summary, the Rights will not be
exercisable unless certain future events occur. The Rights will expire on May
31, 2010, approximately ten years after the Board's action declaring this
distribution, unless they are earlier redeemed by the Company.
By declaring the Rights dividend, we have expressed our confidence in
the future of Nobel Learning Communities and our determination that all of our
stockholders be given every opportunity to participate fully in that future.
Daryl A. Dixon A.J. Clegg
President Chairman of the Board
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SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
The Board of Directors of Nobel Learning Communities, Inc. (the
"Company" has declared a dividend distribution of one preferred stock purchase
right (the "Rights") for each outstanding share of common stock (the "Common
Stock") of the Company, par value $.001 per share, to stockholders of record at
the close of business on June 1, 2000 (the "Record Date"). Each Right entitles
the registered holder to purchase from the Company one one-hundredth of a share
of Series A Junior Participating Preferred Stock ("Preferred Stock") of the
Company at a purchase price of $18.00, 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 Stocktrans, Inc., the
Rights Agent. Capitalized terms used but not otherwise defined herein shall have
the meaning given such terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Stock then outstanding, no separate Right Certificates will
be distributed and the Rights will not be tradeable separately from the Common
Stock. The Rights will become exercisable and will separate from the Common
Stock upon the earlier of (A) ten calendar days after a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired beneficial ownership of (i) thirteen percent (13%) or more of the
shares of Common Stock then outstanding, in the case of a person or group that
currently is a beneficial owner of ten percent (10%) or less of the Common Stock
then outstanding, (ii) an additional three percent (3%) of the Common Stock then
outstanding, in the case of a person or group that currently is a beneficial
owner of greater than ten percent (10%), but less than seventeen percent (17%),
of the Common Stock then outstanding, (iii) twenty percent (20%) or more of the
Common Stock then outstanding, in the case of a person or group that currently
is a beneficial owner of at least seventeen percent (17%), but no greater than
twenty percent (20%), of the Common Stock then outstanding or (iv) a greater
percentage of the Common Stock then outstanding than is currently owned by such
person or group, in the case of a person or group that currently is a beneficial
owner of twenty percent (20%) or more of the Common Stock then outstanding (the
"Stock Acquisition Date"), or (B) ten business days after the commencement of,
or first public announcement of an intention to commence, a tender offer or
exchange offer that would result in a person or becoming an Acquiring Person
(the earlier of such dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after the Record
Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 31, 2010, unless earlier redeemed or
exchanged by the Company as described below.
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As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Stock
(or in certain circumstances, cash, property or other securities of the Company)
having a market value equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
In the event that, following the Stock Acquisition Date, directly or
indirectly (i) the Company consolidates, or merges with, any other person, and
the Company is not the surviving corporation, (ii) any person engages in a stock
exchange, consolidation or merger with the Company where the outstanding Common
Stock of the Company are exchanged for securities, cash or property of the other
person and the Company is the surviving corporation, or (iii) 50% or more of the
Company's assets, cash flow or earning power is sold or transferred, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
market value equal to two times the Purchase Price of the Right. The events set
forth in this paragraph and the preceding paragraph are referred to as the
"Triggering Events."
The Purchase Price payable, and the number of Common Stock or other
securities, cash or property issuable, upon exercise of the Rights are subject
to customary adjustments from time to time to prevent dilution in the event of
certain changes in the stock of the Company. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to an increase or decrease of at least 1% in the Purchase Price. The
Company may determine not to issue fractional Rights or stock, and in lieu
thereof, an adjustment in cash will be made based on the market value of the
Rights or stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right, at any time before the earlier of the close
of business on the tenth calendar day following the Stock Acquisition Date or
the close of business on the Final Expiration Date. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
redemption price.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by such person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the then
outstanding and exercisable Rights (other than Rights owned by such person,
which will have become void), in whole or in part, for
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Common Stock, each Right being exchangeable for one share of Common Stock,
subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Other than those provisions relating to the Redemption Price, the
Final Expiration Date, the Purchase Price, or the number of one one-hundredths
of a share of Preferred Stock for which a Right may be exercisable, any of the
provisions of the Rights Agreement may be amended by the Board of Directors of
the Company prior to the Distribution Date. From and after the Distribution
Date, subject to the previous sentence, the Company and the Rights Agent shall,
if the Company so directs, supplement and amend the Rights Agreement, without
the approval of any of the holders of Rights Certificates in order: (x) to make
changes that do not adversely affect the interests of holders of the Rights
(other than the interests of any Acquiring Person), (y) to cure any ambiguity or
correct or supplement any provision which may be defective or inconsistent with
other provisions contained in the Rights Agreement, or (z) to shorten or
lengthen any time period under the Rights Agreement, but no time period relating
to redemption of the Rights may be lengthened so as to make the Rights
redeemable at a time at which the Rights had not then been redeemable and no
other time period may be lengthened unless for the purpose of protecting,
enhancing or clarifying the rights or benefits of holders of the Rights.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. Once
the Rights are issued, a copy of the Rights Agreement will be available to
registered holders of the Rights upon written request free of charge from the
Rights Agent. 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 incorporated herein by reference.
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