National Instruments’ common stockholders due to receive preferred rights

Chicago, Jan. 13 – National Instruments Corp. is distributing a dividend of one right for each outstanding share of common stock, according to an 8-K filing with the Securities and Exchange Commission.

The rights plan will expire in one year, on Jan. 12, 2024. The dividend will be paid on Jan. 23.

The rights will initially trade with and will be inseparable from the shares of the company’s common stock.

They are being distributed to protect the company from a takeover through open-market accumulation or other tactics and provide space and time to the board of the company to make informed decisions regarding a strategic review process that has been initiated. The board is looking at a full range of available strategic, business and financial alternatives, including solicitation of interest from potential acquirors and other transaction partners.

The rights are good for one preferred share purchase right under very specific conditions.

They will be exercisable only if a person or group acquires beneficial ownership of 10% (or 20% for passive institutional investors) of National Instrument’s common stock.

The holder of 10% or more of the common stock will have their rights become void and will not be exercisable.

The exercise right will allow the holder to purchase 1/1000th of a share of series B participating preferred stock for $200.

For the $200 exercise price, the holder will be able to purchase $400 of the company’s common stock, based on the market price, prior to such acquisition.

Additionally, if someone buys 10% of the company’s common stock, but before they acquire 50% or more, the board may extinguish the preferred stock rights and exchange one share of common stock or an equivalent security for each right.

The portion of a preferred share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of company common stock.

If the company is later acquired or undergoes a merger, rightsholders will be able to buy shares of the acquiring corporation essentially for half price.

The board may redeem the rights for $0.01 per right at any time before an entity owns more than 10% of the company’s common stock.

Computershare Trust Co., NA is the rights agent.

BofA Securities and Wachtell, Lipton, Rosen & Katz are acting as financial and legal adviser, respectively, in support of the strategic review.

National Instruments is an Austin, Tex.-based producer of automated test equipment and instrumentation software.

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