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Symantec adds stockholder plan

The plan is designed to protect the long-term value of the firm and is not in reaction to any specific attempt to acquire Symantec, the company says.

Utility software maker Symantec announced that its board of directors has a stockholder rights plan designed to protect the long-term value of the company during any unsolicited acquisition attempts.

The company quickly added that the plan was not in reaction to any specific attempt to acquire Symantec or its shares, and that the software maker is not aware of any current acquisition efforts.

"Symantec's stock has backed off from where it was," said Andrew Brosseau, an analyst with the investment banking firm of Cowen & Company. "Typically people put this [kind of plan] in because they are looking at their stock price and worrying that maybe someone might come after them."

Shares of Symantec closed down a quarter percent yesterday at 24.06. The stock is trading well below its 52-week high of 32.63. The company has traded as low as 17.88 during the past 52 weeks.

The plan is designed to give Symantec's board time to study and respond to an unsolicited tender offer or attempted acquisition. According to the stockholder rights plan, for each share of the company's common stock outstanding on August 21, 1998, the board declared a dividend of one preferred share purchase right.

"[Their share value being down] doesn't necessarily mean that someone will come after them or that they are seeing an overt acquisition attempt," said Brosseau. "But [this plan] gives them more time to consider a potential offer." The rights, to expire on August 12, 2008, will initially be attached to the company's common stock and will not trade separately.

If a person or group acquires 20 percent or more of the company's common stock, or announces plans to make an offer for 20 percent or more of the common stock, the rights will be distributed and will trade separately from the common stock.

At this time, holders of the rights, other than the acquiring person or group, will have the right to buy shares of the company's common stock at substantially discounted prices.

If a person tries to acquire the company, the board has the option to require the exchange of outstanding rights for common stock at an exchange ratio of one share of common stock per right.

The rights plan also requires that the board be given prior notice of a stockholder proposal by written notice so that a record date can be established for the action. The plan also requires advance notice to the board of stockholder-sponsored proposals for consideration at annual meetings.