Preferred

Under Canaan’s shareholder rights plan, preferred stock purchase rights will be distributed to shareholders of record as of the close of business on March 25. The shareholder rights plan actually was under consideration before the tender offer by Chesapeake. The rights plan is designed to assure that Canaan’s shareholders receive fair and equal treatment in the event of any proposed takeover of the company and to deter potential abusive tactics to gain control of the company without paying a fair price to shareholders. The plan won’t prevent a takeover, but should encourage anyone seeking to acquire the company to negotiate with the board. The rights will be exercisable only if a person or group acquires 15% or more of the company’s common stock.