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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CORVEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 33-0282651
(State of incorporation or organization) (IRS Employer Identification No.)
1920 Main Street, Suite 1090
Irvine, California 92614
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
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(Title of Class)
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Effective as of February 11, 1997, pursuant to a Preferred Shares
Rights Agreement (the "Rights Agreement") between CorVel Corporation, a
Delaware corporation (the "Company") and U.S. Stock Transfer Corporation, a
California corporation, as Rights Agent (the "Rights Agent"), the Company's
Board of Directors (the "Board") declared a dividend of one right (a "Right")
to purchase one one-hundredth of a share of the Company's Series A Junior
Participating Preferred Stock (the "Series A Preferred") for each outstanding
share of Common Stock, par value $0.0001 per share ("Common Shares"), of the
Company. The dividend is payable on February 28, 1997 (the "Record Date") to
stockholders of record as of the close of business on that date. Each Right
entitles the registered holder to purchase from the Company, upon the occurrence
of a certain event or events as described below, one one-hundredth of a share
of Series A Preferred at an exercise price of $125.00 (the "Purchase Price"),
subject to adjustment. In addition, under certain circumstances described more
fully herein, the Rights may become exercisable for a number of Common Shares
having a value equal to two times the Purchase Price and/or common stock of
certain acquiring companies having a value equal to two times the Purchase
Price. Moreover, under certain circumstances described more fully herein, each
Right may be exchanged by the Board at an exchange rate of one share of Common
Stock (or a fraction of a share of the Preferred Stock having equivalent
market value) per Right. Under certain circumstances described more fully
herein, the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right.
CERTAIN ANTI-TAKEOVER EFFECTS
The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company in a manner or on
terms not approved by the Board. Unsolicited takeover attempts frequently
include coercive tactics designed to deprive the Board and the Company's
stockholders of any real opportunity to determine the destiny of the Company.
The Rights have been declared by the Board in order to deter such
tactics, including a gradual accumulation in the open market of a 15% or
greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all stockholders equally. These tactics can operate
to unfairly pressure stockholders, force them out of their investment and
deprive them of the full value of their shares in the Company.
The Rights are not intended to prevent a takeover of the Company and
will not do so. The Rights may be redeemed by the Company at $.01 per Right
within ten days (or on such later date as may be determined by a majority of
the Continuing Directors (as defined in the Rights Agreement)) after the
accumulation of 15% or more of the Company's Common Shares by a single
acquiror or
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group. Accordingly, the Rights should not interfere with any merger or
business combination approved by the Board.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board.
The Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the Board, except
pursuant to an offer conditioned upon the negation, purchase or redemption of
the Rights. As a result, while the Rights may provide the Board with leverage
to obtain a higher price from a potential acquiror, they may also prevent or
deter offers not approved by the Board, and therefore deprive stockholders,
without providing them with the opportunity to vote thereon, of the benefits of
offers which may be at a higher price than the current market price of the
Company's Common Shares. In addition, assuming an active trading market in the
Rights themselves does not develop, stockholders with lesser financial means
might not be able to take full economic advantage of the Rights. Further, the
implementation of a rights plan may heighten the susceptibility of the Company
to greenmail by stockholders who threaten to acquire a sufficient equity
position to pass the Rights' triggering threshold, although the Board can
respond to any such action by redeeming the Rights at $.01 per Right.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its stockholders, and
will not change the way in which the Company's Common Shares are presently
traded. The Company's Board believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created
by the current takeover environment.
RIGHTS EVIDENCED BY COMMON SHARE CERTIFICATES
The Rights will not be exercisable until the Distribution Date
(defined below). Prior to the Distribution Date, certificates for the Rights
("Rights Certificates") will not be sent to stockholders and the Rights will
attach to and trade only together with the Common Shares. Accordingly, Common
Share certificates outstanding on the Record Date will evidence the Rights
related thereto, and Common Share certificates issued after the Record Date but
prior to the Distribution Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender or transfer of any certificates for
Common Shares, even without notation or a copy of the Summary of Rights being
attached thereto (but as to certificates representing Common Shares issued
after the Record Date, only if they bear the legend required by the Rights
Agreement), will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
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DISTRIBUTION DATE
Until the earlier to occur of (i) 10 days (or such later date as may be
determined by action of the Continuing Directors prior to such time as any
person becomes an Acquiring Person, as such term is defined below) following the
date of public announcement by the Company or an Acquiring Person that any
person or group of affiliated or associated persons have become an Acquiring
Person, (ii) 10 business days (or such later date as may be determined by action
of the Continuing Directors prior to such time as any person becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of associated persons of 15% or
more of the Company's outstanding Common Shares, or (iii) 10 days following the
date on which a majority of the Continuing Directors, in good faith, informs the
Company by written notice of the existence of an Acquiring Person (the earliest
of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of the Summary
of Rights, as set forth in Exhibit C to the Rights Agreement, attached thereto.
"Acquiring Person" shall mean any person who or which, together with
all affiliates and associates of such person is the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding, but shall not include
(i) the Company, any subsidiary of the Company, any employee benefit plan of the
Company or any subsidiary of the Company, or any person holding Common Shares
for or pursuant to the terms of any such plan, (ii) Americable, Inc., a
Minnesota corporation ("Americable") and wholly-owned subsidiary of ENStar Inc.,
a Minnesota corporation ("ENStar"), or any affiliate and associate of Americable
including ENStar (but only to the extent that Americable and its associates and
affiliates beneficially own less than 33% of the Common Shares of the Company);
or (iii) any person, together with all affiliates and associates of such person,
who or which would be an Acquiring Person solely by reason of (A) being the
beneficial owner of Common Shares, the beneficial ownership of which was
acquired by such person (and the affiliates and associates of such person)
pursuant to any action or transaction, or series of related actions or
transactions, approved by the Board, upon the affirmative vote of a majority of
the Continuing Directors, prior to the earlier to occur of (1) the Distribution
Date or (2) any exchange made pursuant to the Rights Agreement, or (B), a
reduction in the number of issued and outstanding Common Shares pursuant to a
transaction or series of related transactions approved by the Board, upon the
affirmative vote of a majority of the Continuing Directors; provided further
that in the event that such person described in clause (iii) above does not
become an Acquiring Person by reason of clause (A) or (B), such person
nonetheless shall become an Acquiring Person in the event such person, together
with all affiliates and associates of such person, thereafter acquires
beneficial ownership of any additional Common Shares unless the acquisition of
such beneficial ownership would not result in such person becoming an Acquiring
Person by reason of subclause (A) or (B) of clause (iii) above. Notwithstanding
the foregoing, if the Board determines (upon the affirmative vote of a majority
of the Continuing Directors) in good faith that a person who would otherwise be
an
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Acquiring Person is eligible to file and did file a Schedule 13G and such
person divests (and/or causes such person's affiliates and/or associates to
divest) as promptly as practicable a sufficient number of Common Shares so that
such person would no longer be an Acquiring Person as defined pursuant to the
foregoing provisions, then such person shall not be deemed to be an "Acquiring
Person" for purposes of the Rights Agreement.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation or
a copy of the Summary of Rights (as set forth in Exhibit C to the Rights
Agreement) being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
ISSUANCE OF RIGHTS CERTIFICATES; EXPIRATION OF RIGHTS
As soon as practicable following the Distribution Date, separate
Rights Certificates will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights from and after the Distribution
Date. All Common Shares issued prior to the Distribution Date will be issued
with Rights. Common Shares issued after the Distribution Date (i) shall be
issued with Rights if such shares are issued pursuant to the exercise of stock
options or under employee benefit plans or arrangements unless such issuance
would result in (or create a risk that) such options, plans or arrangements
would not qualify for otherwise available special tax treatment and (ii) may be
issued in any other case, if deemed necessary and appropriate by the
affirmative vote of a majority of the Continuing Directors; however (A) no such
Right Certificate shall be issued if, and to the extent that, such issuance
would create a significant risk of or result in material adverse consequences
to the Company or the person being issued the Right Certificate, and (B) no
such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of issuance thereof. Except
as otherwise determined by the Board, no other Common Shares issued after the
Distribution Date will be issued with Rights. The Rights will expire on the
earliest of (i) February 10, 2007 (the "Final Expiration Date"), (ii)
redemption or exchange of the Rights as described below, or (iii) consummation
of an acquisition of the Company satisfying certain conditions by a person who
acquired shares pursuant to an agreement approved by the Board upon the
affirmative vote of the Continuing Directors, prior to there being an Acquiring
Person.
INITIAL EXERCISE OF THE RIGHTS
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive, upon
exercise and the payment of $125.00 per Right, one one-hundredth of a share of
Series A Preferred, subject to adjustment as described in the Rights
Agreement. In addition, under certain circumstances described more fully
herein, the Rights may become exercisable for Common Shares having
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a value equal to two times the Purchase Price and/or common stock of certain
acquiring companies having a value equal to two times the Purchase Price.
RIGHT TO BUY COMPANY COMMON SHARES
Unless the Rights are earlier redeemed, in the event that an Acquiring
Person becomes the beneficial owner of 15% or more of the Company's Common
Shares then outstanding, then proper provision will be made so that each holder
of a Right which has not theretofore been exercised (other than Rights
beneficially owned by the Acquiring Person, which will thereafter be void) will
thereafter have the right to receive, upon exercise and payment of the Purchase
Price, Common Shares having a value equal to two times the Purchase Price. For
example, if the market price of Common Shares on the Share Acquisition Date (as
defined below) was $50.00, a person holding one Right could purchase five Common
Shares upon exercise of such Right ($125.00/$25.00). Rights are not exercisable
following the occurrence of an event as described above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that the Company does not have sufficient Common Shares
available for all Rights to be exercised, or the Board decides that it is
necessary and not contrary to the interests of Rights holders to do so, the
Company may instead substitute cash, assets or other securities for the Common
Shares for which the Rights would have been exercisable under this provision.
RIGHT TO BUY ACQUIRING COMPANY STOCK
Similarly, unless the Rights are earlier redeemed, in the event that,
after the Share Acquisition Date and without the affirmative vote of a majority
of the Continuing Directors, (i) the Company is acquired in a merger or other
business combination transaction, or (ii) 50% or more of the Company's
consolidated assets or earning power are sold (either of which event is referred
to herein as an "Acquisition"), proper provision must be made so that each
holder of a Right which has not theretofore been exercised will thereafter have
the right to receive, upon exercise, shares of common stock of the acquiring
company having a value equal to two times the Purchase Price. So (assuming no
satisfaction of such conditions) if for example the market price of the
acquiror's stock on the date of the Acquisition were $25.00, a person holding
one Right could purchase 10 shares of the acquiror's Common Stock upon exercise
of such Right ($125.00/$12.50).
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EXCHANGE PROVISION
At any time after the acquisition by an Acquiring Person of 15% or
more of the Company's outstanding Common Shares and prior to the acquisition by
such Acquiring Person of 50% or more of the Company's outstanding Common
Shares, the Board, following the approval of a majority of Continuing
Directors, may exchange the Rights (other than Rights owned by the Acquiring
Person), in whole or in part, at an exchange ratio of one Common Share per
Right.
REDEMPTION
At any time on or prior to the close of business on the earlier of (i)
the 10th day following the acquisition by an Acquiring Person (the "Share
Acquisition Date") or such later date as may be determined by a majority of the
Continuing Directors and publicly announced by the Company, or (ii) the Final
Expiration Date of the Rights, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right.
ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price payable, the number of Rights and the number of
Series A Preferred or Common Shares or other securities or property issuable
upon exercise of the Rights are subject to adjustment from time to time in
connection with the dilutive issuances by the Company as set forth in the
Rights Agreement. With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price.
CASH PAID INSTEAD OF ISSUING FRACTIONAL SHARES
No fractional portion less than integral multiples of one
one-hundredth of a Preferred Share will be issued upon exercise of a Right and
in lieu thereof, an adjustment in cash will be made based on the market price
of the Common Shares on the last trading date prior to the date of exercise.
NO STOCKHOLDERS' RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
AMENDMENT OF RIGHTS AGREEMENT
The provisions of the Rights Agreement may be supplemented or amended
by action of the Board upon approval by a majority of the Continuing Directors
in any manner prior to the close of business on the Distribution Date without
the approval of Rights holders. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement.
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RIGHTS AND PREFERENCES OF THE SERIES A PREFERRED
Series A Preferred purchasable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred will be entitled to an aggregate
dividend of the greater of (i) $1.00 in cash or (ii) 100 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Series A Preferred will be entitled to a minimum preferential liquidation
payment equal to the greater of (i) $100.00 per share, plus an amount equal to
the accrued and unpaid dividends and distributions thereon, whether or not
declared, or (ii) an aggregate amount per share equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, plus an amount equal to the accrued and unpaid dividends and
distributions on the Series A Preferred whether or not declared. Each share of
Series A Preferred will have 100 votes, voting together with the Common Shares.
In the event of any merger, consolidation or other transaction in which the
Common Shares are changed or exchanged, each share of Series A Preferred will
be entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights
of the shares of Series A Preferred, the value of the one one-hundredth
interest in a share of Series A Preferred purchasable upon exercise of each
Right should approximate the value of one Common Share.
ITEM 2. EXHIBITS.
EXHIBIT
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99.1 Preferred Shares Rights Agreement, dated as of February
11, 1997, by and between Corvel Corporation and U.S. Stock
Transfer Corporation, including the Certificate of
Determination, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and C,
respectively.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CORVEL CORPORATION
Date: February 24, 1997
By: /s/ RICHARD J. SCHWEPPE
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Richard J. Schweppe
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NO. EXHIBIT PAGE NO.
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99.1 Preferred Shares Rights Agreement, dated as of
February 11, 1997, by and between Corvel Corporation
and U.S. Stock Transfer Corporation, including the
Certificate of Determination, the form of Rights
Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively.