TUXIS CORPORATION ADOPTS SHAREHOLDER RIGHTS PLAN
New York October 24, 2005 - Tuxis Corporation (AMEX: TUX) today announced that its
Board of Directors has adopted a shareholder rights plan. The rights plan is designed to ensure that
all Tuxis shareholders receive fair and equal treatment in the event of an
unsolicited attempt to acquire Tuxis.
The adoption of the rights plan is intended to deter partial and "two
step" tender offers or other coercive takeover tactics, and to prevent an
acquirer from gaining control of Tuxis without offering a fair price to all of
Tuxis' shareholders. The rights plan was
not adopted in response to any known offers for Tuxis and is similar to
shareholder rights plans adopted by many other companies.
To implement the rights plan, the Board of Directors
declared a dividend distribution of one right for each outstanding share of
Tuxis common stock, par value $.01 per share, to holders of record of the
shares of common stock at the close of business on November 3, 2005. Each right entitles the registered holder to
purchase from Tuxis one one-thousandth of a share of preferred stock, par value
$.01 per share. The rights will be
distributed as a non-taxable dividend and will expire on November 3, 2015. The rights will be evidenced by the
underlying Tuxis common stock, and no separate preferred stock purchase rights
certificates will presently be distributed.
The rights to acquire preferred stock are not immediately exercisable
and will become exercisable only if a person or group acquires or commences a
tender offer for 25% or more of Tuxis' common stock.
If a person or group acquires or commences a tender offer for 25% or more of Tuxis' common stock, each holder of a right,
except the acquirer, will be entitled, subject to Tuxis' right to redeem or
exchange the right, to exercise, at an exercise price of $40.50, the right for
one one-thousandth of a share of Tuxis' newly-created Series A Participating
Preferred Stock, or the number of shares of Tuxis common stock equal to the
holder's number of rights multiplied by the exercise price and divided by 50% of the market price of Tuxis' common stock on the date of the occurrence
of such an event. Tuxis' Board of
Directors may terminate the rights plan at any time or redeem the rights, for
$0.01 per right, at any time before a person acquires 25% or more of
Tuxis' common stock.
For a summary of the rights plan, visit the company's website at http://www.tuxis.com. A copy of the rights agreement will be filed
with the Securities and Exchange Commission as an exhibit to a current report
on Form 8-K.
More information about Tuxis may be found at its web site http://www.tuxis.com.
This press release may contain forward-looking statements and similar expressions that reflect Tuxis' current expectations
about its future performance, and are subject to risks, uncertainties and other
factors that could cause Tuxis' actual performance to differ materially from
those expressed in, or implied by, these forward-looking statements.