UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 14, 1998
TRANSFINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12321
(State or jurisdiction (Commission File Number)
other of incorporation)
46-0278762
(IRS Employer Identification No.)
8245 Nieman Rd., Suite 100, Lenexa, Kansas 66214
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 859-0055
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
Declaration of Rights Dividend
On July 14, 1998, the Board of Directors of TransFinancial Holdings, Inc.
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, $.01 par value per share, of the Company
("Common Stock"). The dividend is payable on July 27, 1998 to stockholders of
record at the close of business on that date. Each Right entitles the
registered holder to purchase from the Company at any time following the
Distribution Date (as defined below) a unit consisting of one one-hundredth of a
share (a "Unit") of Series A Preferred Stock, $.01 par value per share (the
"Preferred Stock"), at a purchase price of $50 per Unit (the "Purchase Price"),
subject to adjustment as described below. The description and terms of the
Rights are set forth in a Rights Agreement dated July 14, 1998, (the "Rights
Agreement") between the Company and UMB Bank, N.A., as Rights Agent.
Rights will also be issued with respect to shares of Common Stock issued or
transferred by the Company after July 27, 1998 and prior to the Distribution
Date, and, under certain circumstances, Rights will be issued with respect to
shares of Common Stock issued or transferred by the Company after the
Distribution Date.
Rights Initially Attached to and Trade with Common Stock
Until the earlier of the Distribution Date or the date the Rights are
redeemed or expire, (a) the Rights will be evidenced by Common Stock
certificates and no separate Rights Certificates will be distributed, (b) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock, (c) the surrender for transfer of any Common
Stock certificate (with or without a copy of this Summary of Rights attached
thereto) will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate and (d) new Common Stock
certificates issued after July 27, 1998 will contain a notation incorporating
the Rights Agreement by reference. Stockholders will not be required to take
any action in connection with the initial distribution of Rights on July 27,
1998.
When Rights Separate from Common Stock and Become Exercisable
The Rights will separate from the Common Stock and become exercisable on
the Distribution Date, which will occur upon the earlier of (i) the date of a
public announcement or a public disclosure of facts by the Company or any Person
(as defined in the Rights Agreement) that such Person has become an "Acquiring
Person" (as defined below) and (ii) 10 business days (or such later date as the
Board shall determine prior to such time as there is an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
or exchange offer, the consummation of which would result in a Person becoming
an Acquiring Person, with certain exceptions specified in the Rights Agreement.
As soon as practicable after the Distribution Date, Rights Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date, and thereafter the separate Rights Certificates alone
will represent the Rights. The Rights are not exercisable until the Distribution
Date.
Under the Rights Agreement, an Acquiring Person is a Person who, together
with all affiliates and associates of such Person, and without the prior written
approval of the Company, is the Beneficial Owner (as defined in the Rights
Agreement) of 15% or more of the outstanding shares of Common Stock of the
Company, subject to a number of exceptions set forth in the Rights Agreement.
The Rights Agreement exempts certain persons from the definition of "Acquiring
Person," including the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any subsidiary, and certain persons or entities
organized, appointed or established for pursuant to the terms of any such plan.
The Rights Agreement contains an exception for members of the Crouse family,
provided that such members do not become the beneficial owners of additional
shares of Common Stock. Under the Rights Agreement, a Person shall not be an
Acquiring Person if such Person acquires beneficial ownership of 15% or more of
the outstanding shares of Common Stock pursuant to Qualifying Offer, which is a
cash tender offer for all of the outstanding shares of Common Stock which meets
certain conditions specified in the Rights Agreement. The Rights Agreement
contains exceptions for Persons who inadvertently become Acquiring Persons or
who become Beneficial Owners of 15% or more of the outstanding Common Stock as a
result of repurchases of stock by the Company, if certain conditions are
satisfied.
Under the Rights Agreement, none of Thomas J. Salvatore, TJS Partners,
L.P., TJS Management, L.P. and TJS Corporation shall be an Acquiring Person
solely as a result of the execution and delivery of a Stock Purchase Agreement
(the "Stock Agreement") dated June 30, 1998 by and among TJS Partners, L.P. and
certain members of the Crouse family. The Stock Agreement provides for the
purchase by TJS Partners, L.P. of certain shares of Common Stock held by certain
members of the Crouse family. There is no exception in the Rights Agreement for
the actual purchase of shares by TJS Partners, L.P. from the Crouse family
members pursuant to the Stock Agreement, for any amendment or modification of
the Stock Agreement entered into by any one or more of such Persons or for any
other agreement entered into by any one or more of such Persons..
Adjustment of Rights upon Occurrence of a Triggering Event
In the event that a Person becomes an Acquiring Person, each holder of a
Right (except the Acquiring Person and certain other persons as described below)
will no longer have the right to purchase Units of Preferred Stock, but instead
will thereafter have the right to receive, upon exercise of the Right, shares of
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a Current Market Value (as defined in the Rights
Agreement) equal to two times the then current exercise price of the Right. For
example, at a Purchase Price of $50 per Right, each Right not owned by an
Acquiring Person (except as provided below) would entitle its holder to purchase
$100 worth of Common Stock (or other consideration, as noted above) for $50.
Assuming that the Common Stock has a per share value of $10 at such time, the
holder of each valid Right would be entitled to purchase ten shares of Common
Stock for $50. Once a Person becomes an Acquiring Person, all Rights that are,
or under certain circumstances were, beneficially owned by such Acquiring Person
(or certain related parties) will be null and void.
In the event that, at any time after a Person becomes an Acquiring Person,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger which follows a Qualifying Offer and satisfies certain other
requirements), or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the then current Purchase Price of the Right.
The events set forth in this paragraph and in the preceding paragraph which
allow Rights to be exercised are referred to as "Triggering Events."
Exchange of Rights
At any time after any Person becomes an Acquiring Person, the Board of
Directors of the Company may, at its option, exchange the Rights (except Rights
which previously have been voided as set forth above), in whole or in part, at
an exchange ratio of one share of Common Stock for each Right, subject to
adjustment for any stock split, stock dividend or similar transaction occurring
after July 14, 1998. The Board of Directors may not cause the exchange unless
at the time such exchange is approved a majority of the members of the Board of
Directors are Continuing Directors (as defined below) and the exchange is
approved by a majority of such Continuing Directors.
Redemption of Rights
At any time prior to any Person becoming an Acquiring Person, the Company
may order that all Rights be redeemed at a price of $.01 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board of
Directors), subject to adjustment for any stock split, stock dividend or similar
transaction occurring after July 14, 1998 (the "Redemption Price"). Immediately
upon the effectiveness of the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the holders of the Rights will only be entitled to receive the Redemption Price
for each Right so held.
Amendment of Rights
For so long as the Rights are redeemable and Continuing Directors
constitute a majority of the Board of Directors, the Company may amend the
Rights in any manner. After the Rights are no longer redeemable and at any time
at which Continuing Directors do not constitute a majority of the Board of
Directors, neither the Redemption Price nor the Final Expiration Date may be
changed, and the Agreement may not otherwise be amended or supplemented in any
manner which would change the terms of the Rights so as to affect them adversely
and/or adversely affect the interests of the holders of the Rights.
Approval by Continuing Directors
For a period of one-hundred eighty (180) days from and after July 14, 1998
and for a period of one-hundred eighty (180) days from and after the time at
which any Person becomes an Acquiring Person, the Board of Directors may not
take or approve any action or exercise any rights or powers under the Rights
Agreement, including without limitation causing the Company to redeem Rights,
unless at the time such action is approved or taken or such rights or powers are
exercised by the Board of Directors a majority of the members of the Board of
Directors are Continuing Directors and the action or exercise is approved by a
majority of such Continuing Directors. "Continuing Director" is defined as any
member of the Board of Directors of the Company who (a) is a member of the Board
of Directors at the close of business on July 14, 1998 or (b) subsequently
becomes a member of the Board of Directors, if such Person's nomination for
election or election to the Board of Directors is recommended or approved by a
majority of the then Continuing Directors provided, however, that no person or
entity who has on July 14, 1998, or had at any time within a period of ninety
(90) days immediately preceding July 14, 1998, any agreement, arrangement or
understanding with any member of the Salvatore Group (as defined in the
Agreement) to remain on the Board of Directors or to serve on the Board of
Directors, shall be a Continuing Director for purposes of the Agreement.
Terms of Preferred Stock
Each Unit of Preferred Stock (consisting of one one-hundredth of a share of
Preferred Stock) that is issuable upon exercise of the Rights after the
Distribution Date and prior to the occurrence of a Triggering Event is intended
to have approximately the same economic rights and voting power as a share of
Common Stock, and the value of a Unit of Preferred Stock should approximate the
value of one share of Common Stock. Each share of Preferred Stock will be
entitled to dividend payments equal to 100 times the aggregate per share amount
of all dividends (other than a dividend payable in Common Stock) declared per
share of Common Stock. In the event of liquidation, the holders of shares of
Preferred Stock will be entitled to the greater of (a) a minimum preferential
liquidation payment of $100 per share, plus accrued dividends, or (b) 100 times
the aggregate amount to be distributed per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with, and on the same
matters as, the Common Stock. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged for or changed
into other stock, securities, cash and/or other property, each share of
Preferred Stock will be entitled to receive 100 times the amount received per
share of Common Stock. These rights are protected by customary anti-dilution
provisions. Shares of Preferred Stock are not redeemable. Pursuant to the
Rights Agreement, the Company reserves the right to require, prior to the
occurrence of a Triggering Event, that upon any exercise of Rights a number of
Rights be exercised so that only whole shares of Preferred Stock will be issued.
Adjustment of Rights and Securities Upon Certain Events
The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, or (ii) upon the distribution to holders of the Preferred Stock of
certain rights, options, warrants, evidences of indebtedness or assets
(excluding regular quarterly cash dividends). No adjustment in the Purchase
Price will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional Units; in lieu
thereof, the Company may pay cash for such fractional Units based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
The number of outstanding Rights attached to each share of Common Stock and
the number of Units of Preferred Stock purchasable upon exercise of a Right are
also subject to adjustment in the event of a stock split of the Common Stock or
a stock dividend on the Common Stock payable in shares of Common Stock or a
subdivision or combination of the shares of Common Stock, occurring prior to the
Distribution Date.
Rights Holder Not a Stockholder
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitations, the
right to vote or to receive dividends. The holders of Rights will be able to
vote and receive dividends on the Common Stock that they hold.
Tax Consequences
While the current distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders might, depending upon the
circumstances, realize taxable income in the event that the Rights become
severable from the Common Stock and will likely realize taxable income in the
event such Rights become exercisable for common stock of the acquiring company
as set forth above or are exchanged as provided above.
Expiration of Rights
The Rights will expire at the close of business on July 14, 2008, unless
the Company redeems or exchanges the Rights prior to such date, in each case as
described above.
Number of Rights to be Outstanding
As of July 14, 1998, there were 13,000,000 shares of Common Stock
authorized and approximately 6,031,657 shares issued and outstanding.
Additional shares have been reserved for issuance pursuant to employee benefit
plans. Each share of Common Stock outstanding at the close of business July 27,
1998 will receive one Right. Rights will also be issued with respect to shares
of Common Stock issued or transferred by the Company after July 27, 1998 and
prior to the Distribution Date, and, under certain circumstances, Rights will be
issued with respect to shares of Common Stock issued or transferred by the
Company after the Distribution Date.
Rights Agreement
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement and the
exhibits thereto, filed herewith as Exhibit 1, which is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
1. Rights Agreement dated as of July 14, 1998, between TransFinancial
Holdings, Inc. and UMB Bank, N.A., as Rights Agent, which includes as Exhibit A,
the Certificate of Designations Preferences and Rights of Series A Preferred
Stock, as Exhibit B, the Form of Rights Certificate, and as Exhibit C, the
Summary of Rights to Purchase Preferred Stock.
2. Press Release of TransFinancial Holdings, Inc. dated July 15, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
TRANSFINANCIAL HOLDINGS, INC.
Date: July 15, 1998 By:
Timothy P. O'Neil
President