MEDFORD, Mass. - Medford Savings Bank said its board adopted a shareholder rights plan designed to ensure that the board has time to consider alternatives in the event of a proposed takeover.
A company spokesman said the move is not in response to any pending takeover attempt.
Medford said the board declared a dividend distribution of one preferred stock purchase right for each outstanding common share to stockholders of record at the close of business Oct. 8.
These rights won't be exercisable and will trade with the shares of Medford common stock.
The rights become exercisable if a person acquires 15% or more of Medford's common stock; if a person who owns 10% or more is determined by the board to be an "adverse person;" or if a person begins a tender offer that would result in that person owning 15% or more of the common.
In such events, each holder of a right would be entitled to acquire preferred shares equivalent to Medford Savings Bank's common stock and having a value of twice the then-current exercise price.
If the company is acquired in a business combination after any such event, each holder of a right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company's common stock having a value of twice the exercise price of a right.