EGL Adopts Shareholder Rights Plan

Freight forwarder EGL Inc. has adopted a shareholder rights plan designed to protect EGL shareholders from coercive or unfair takeover techniques. The move comes after a string of quarterly losses, which could make the company more susceptible to takeover efforts. Terms of the rights plan provide for a dividend distribution of one right for each outstanding share of common stock to holders of record

Freight forwarder EGL Inc. has adopted a shareholder rights plan designed to protect EGL shareholders from coercive or unfair takeover techniques. The move comes after a string of quarterly losses, which could make the company more susceptible to takeover efforts.

Terms of the rights plan provide for a dividend distribution of one right for each outstanding share of common stock to holders of record at the close of business on June 4, 2001. The rights plan would be triggered if an acquiring party accumulates 15% or more of the company's common stock and would entitle holders of the rights to purchase either the company's stock or shares in an acquiring entity at half of market value.

EGL said it would generally be entitled to redeem the rights at $0.01 per right at any time until the 10th day following the time that an acquirer has crossed the ownership threshold that triggers the plan.

The plan, which expires June 4, does contain an exception for James R. Crane, the company’s chairman CEO, who currently holds approximately 24% of EGL’s outstanding shares.

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