Citi Trends adopts limited duration stockholder rights plan

Citi Trends announced that its Board of Directors has unanimously adopted a limited duration stockholder rights plan. The Rights Plan is intended to enable all stockholders to realize the full value of their investment in Citi Trends and will reduce the likelihood that any entity, person or group gains control of the company through open-market accumulation without paying all stockholders an appropriate control premium. The Rights Plan is also intended to provide the Board sufficient time to make informed judgments and take actions that are in the best interests of Citi Trends and all of its stockholders. The Board adopted the Rights Plan in response to one of its stockholders quickly accumulating a significant number of shares in the open market. The Rights Plan has not been adopted in response to any specific takeover bid or other proposal to acquire control of the company and is not intended to deter offers that are fair and otherwise in the best interests of the company and its stockholders. The Rights Plan is similar to stockholder rights plans adopted by other publicly held companies. Under the Rights Plan, the Rights generally would become exercisable only if any person (or group) acquires 16% (or 20% for certain passive investors) or more of Citi Trends’ outstanding common stock, except that any person or group who currently owns the triggering percentage or more may continue to own such shares of common stock. However, any owner of the relevant triggering percentage or more may not, subject to the terms of the Rights Plan, acquire any additional shares without triggering the Rights Plan. The Rights Plan does not aggregate the ownership of stockholders “acting in concert” unless they have formed a group, or the shares would otherwise be aggregated, under applicable securities laws. The Rights Plan expires on December 4, 2024, unless earlier redeemed, exchanged or amended. The Board intends to submit the Rights Plan to stockholders for ratification at the company’s upcoming Annual Meeting of Stockholders and to terminate the Rights Plan if the proposal to ratify the Rights Plan is not approved at that meeting.