CALGARY, Dec. 23 /CNW/ - Contact Exploration Inc. ("Contact" or the "Company") (TSX-V: CEX) announces that it has adopted a Shareholder Protection Rights Plan (the "Rights Plan"). The Rights Plan is similar to existing shareholder rights plans adopted by other Canadian public companies. The Rights Plan has not been adopted in response to, or in anticipation of, any known take-over bid.
The Rights Plan's objectives are to ensure, to the extent possible, that all shareholders of the Company are treated equally and equitably in connection with any takeover bid for the Company. The Rights Plan discourages discriminatory, coercive or unfair takeovers of the Company and gives the Board of Directors (the "Board") time, if, in the circumstances, it is appropriate to take such time, to evaluate the proposed transaction and to conduct an orderly process to maximize shareholder value. Such process may include the solicitation of superior proposals, consideration of alternative structures, identification of other potential bidders or the conducting of an orderly auction.
The Rights Plan requires approval by Contact's shareholders within six months of the Rights Plan's effective date. The Rights Plan will be put to shareholders for their consideration at the next annual and special meeting of shareholders of the Company, to be held before June 23, 2011. If the Rights Plan is not confirmed by Contact's shareholders, it will terminate and be void and of no further force and effect.
The Board has implemented the Rights Plan by authorizing the issuance of one right (a "Right") in respect of each common share (the "Common Shares") of the Company outstanding at the close of business on December 23, 2010 (the "Record Time"). In addition, the Board authorized the issuance of one Right in respect of each additional Common Share issued from treasury after the Record Time. The Rights trade with and are represented by Contact's Common Shares. Until such time as the Rights separate from the Common Shares, when they become exercisable, Rights certificates will not be distributed to shareholders.
If a person, or a group acting jointly or in concert, acquires (other than pursuant to an exemption available under the Rights Plan) beneficial ownership of 20 percent or more of the Common Shares, Rights (other than those held by such acquiring person which will become void) will separate from the Common Shares with each Right then permitting the holder thereof to purchase from the Company that number of Common Shares having an aggregate market price (as determined in accordance with the Rights Plan) on the date of consummation or occurrence of such acquisition of Common Shares equal to twice the exercise price of the Rights for an amount in cash equal to the exercise price. The exercise price of the Rights pursuant to the Rights Plan is $100.00 per Right. At any time prior to the Rights becoming exercisable, the Board may waive the operation of the Rights Plan with respect to certain events before they occur.
The issuance of the Rights is not dilutive and will not affect reported earnings or cash flow per share until the Rights separate from the underlying Common Shares and become exercisable or until the exercise of the Rights. The issuance of the Rights will not change the manner in which shareholders currently trade their Common Shares.
A copy of the Rights Plan will be available under the Company's profile on SEDAR at www.sedar.com.
About Contact Exploration Inc.
Contact Exploration Inc. is a public company with a focus on Canadian East Coast onshore oil and gas production and exploration. Our philosophy is to operate production and exploration in our core area of Atlantic Canada and to participate through overrides and carried interests in certain regional unconventional plays, such as coalbed methane in the Cumberland Basin, shale gas in the Windsor area, and exploration on the west coast of Newfoundland. Contact has onshore interests in Nova Scotia, Newfoundland and New Brunswick which includes the Stoney Creek Field. In addition to the Atlantic Canadian properties, Contact has producing oil assets in south eastern Saskatchewan.
ADVISORY: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this press release contains statements concerning the approval by Contact's shareholders of the Rights Plan. Although Contact believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Contact can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. In particular, no assurances can be given that Contact's shareholders will approve the Rights Plan. Further, events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. Additional information regarding some of these risk factors may be found under "Risk Factors" in the Company's Management Discussion and Analysis prepared for the year ended March 31, 2010. The reader is cautioned not to place undue reliance on this forward-looking information. The forward looking statements contained in this press release are made as of the date hereof and Contact undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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