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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 28, 2000
SAFEGUARD SCIENTIFICS, INC.
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(Exact name of registrant specified in Charter)
PENNSYLVANIA 001-5620 23-1609753
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(State or other (Commission (IRS Employee
jurisdiction of File Number) Identification No.)
incorporation)
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435 DEVON PARK DRIVE
BUILDING 800 19087
WAYNE, PENNSYLVANIA
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(Address of principal executive offices) Zip Code
REGISTRANT'S TELEPHONE, INCLUDING AREA CODE: (610) 293-0600
Not Applicable
(Former name and former address, if changed since last report)
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Item 5. Other Events.
(a) On February 28, 2000, the Board of Directors of Safeguard
Scientifics, Inc. (the "Company") approved a three-for-one split (the "Stock
Split") of the outstanding shares of Common Stock of the Company, effected in
the form of a dividend of two shares of Common Stock of the Company for each
share of Common Stock of the Company outstanding at the close of business on
March 13, 2000.
(b) On February 28, 2000 the Board of Directors of the Company
also declared a dividend distribution of one right (a "Right") for each
outstanding share of Common Stock, $.10 par value (each, a "Common Share"), of
the Company to stockholders of record at the close of business on March 24,
2000, after completion of the Stock Split. All amounts in this Item 5(b) assume
the completion of the Stock Split. Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-thousandth of a share (a
"Unit") of the Series A Junior Participating Preferred Shares, par value $10.00
per share, of the Company (the "Preferred Shares"), or a combination of
securities and assets of equivalent value, at a Purchase Price of $300 per Unit,
subject to adjustment. The Rights are being issued in accordance with the Rights
Agreement (the "Rights Agreement") dated as of February 28, 2000 between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. The
description and terms of the Rights are set forth in the Rights Agreement. The
record date for the dividend distribution of Rights is subject to change
depending on the listing process of the New York Stock Exchange.
Initially, ownership of the Rights will be evidenced by the
Common Share certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) ten
(10) Business Days following a determination by the Board of Directors that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Shares (the "Stock Acquisition Date"), or (ii) ten
(10) Business Days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 15% or more of
the outstanding Common Shares. Until the Distribution Date, (i) the Rights will
be evidenced by the Common Share certificates, (ii) new Common Share
certificates issued after March 24, 2000 will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Shares outstanding will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on February 28, 2010, unless earlier
redeemed by the Company as described below or unless a transaction under Section
13(d) of the Rights Agreement has occurred.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution
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Date and thereafter, the separate Rights Certificates alone will represent the
Rights. Except as otherwise determined by the Board of Directors, and except in
connection with the exercise of employee stock options or stock appreciation
rights or under any other benefit plan for employees or directors or in
connection with the exercise of warrants or conversion of convertible
securities, only Common Shares issued after March 24, 2000 and prior to the
Distribution Date will be issued with Rights.
Except in the circumstances described below, after the
Distribution Date each Right will be exercisable for one one-thousandth of a
Preferred Share (a "Preferred Share Fraction"). Each Preferred Share Fraction
carries voting and dividend rights that are intended to produce the equivalent
of one Common Share. The voting and dividend rights of the Preferred Shares are
subject to adjustment in the event of dividends, subdivisions and combinations
with respect to the Common Shares of the Company. In lieu of issuing
certificates for Preferred Share Fractions which are less than an integral
multiple of one Preferred Share (i.e., 1000 Preferred Share Fractions), the
Company may pay cash representing the current market value of the Preferred
Share Fractions.
In the event that at any time following the Stock Acquisition
Date, (i) the Company is the surviving corporation in a merger with an Acquiring
Person and its Common Shares remain outstanding, (ii) a Person becomes the
beneficial owner of more than 15% of the then outstanding Common Shares other
than pursuant to a tender offer that provides fair value to all shareholders,
(iii) an Acquiring Person engages in one or more "self-dealing" transactions as
set forth in the Rights Agreement, or (iv) during such time as there is an
Acquiring Person an event occurs that results in such Acquiring Person's
ownership interest being increased by more than 1% (e.g., a reverse stock
split), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. In lieu of requiring payment of the Purchase Price upon exercise
of the Rights following any such event, the Company may permit the holders
simply to surrender the Rights, in which event they will be entitled to receive
Common Shares (and other property, as the case may be) with a value of 50% of
what could be purchased by payment of the full Purchase Price. Notwithstanding
any of the foregoing, following the occurrence of any of the events set forth in
clauses (i), (ii), (iii) or (iv) of this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person who was involved in the transaction
giving rise to any such event will be null and void. However, Rights are not
exercisable following the occurrence of any of the events set forth above until
such time as the Rights are no longer redeemable by the Company as set forth
below.
For example, at an exercise price of $300 per Right, each
Right not otherwise voided following an event set forth in the preceding
paragraph would entitle its holder to purchase $600 worth of Common Shares (or
other consideration, as noted above) for $300. Alternatively, the Company could
permit the holder to surrender each Right in exchange for Common Shares having a
value of $300 without the payment of any consideration other than the surrender
of the Right.
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In the event that, at any time following the Stock Acquisition
Date, (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 that is described in, or that follows a tender offer or exchange offer
described in, the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights that previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the exercise price of the
Right. Again, provision is made to permit surrender of the Rights in exchange
for one-half of the value otherwise purchasable. The events set forth in this
paragraph and in the second preceding paragraph are referred to as the
Triggering Events.
The Purchase Price payable, and the number of Units of
Preferred Shares 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 Shares, (ii) if holders of the Preferred
Shares are granted certain rights or warrants to subscribe for Preferred Shares
or convertible securities at less than the current market price of the Preferred
Shares, or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular quarterly dividends) or
of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading date prior to the date of the exercise.
At any time until ten (10) days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $ .001 per Right. That ten (10) day redemption period may be
extended by the Board of Directors so long as the Rights are still redeemable.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $ .001 redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Preferred Shares (or other consideration) of the
Company or for common shares of the acquiring company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes that 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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provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, the form of
which is filed as Exhibit 4 hereto.
(c) On February 28, 2000, the Company and Textron Inc. entered
into a Transaction Agreement, dated February 28, 2000, providing for the
purchase by Textron Inc. of 727,273 Common Shares (or 2,181,819 Common Shares
after giving effect to the Stock Split) for an aggregate purchase price of $100
million. The Transaction Agreement is filed as Exhibit 10 hereto.
(d) On February 10, 2000, the Board of Directors of the
Company amended and restated the Bylaws of the Company. The amended and restated
Bylaws are filed as Exhibit 3 hereto.
(e) On February 24, the Company issued a press release
summarizing its financial results for the fourth quarter of 1999. The press
release is filed as Exhibit 99 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Exhibit
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3 Amended and Restated Bylaws of Safeguard
Scientifics, Inc.
4 Form of Rights Agreement, dated as of March 1,
2000, between Safeguard Scientifics, Inc. and
ChaseMellon Shareholder Services LLC, as Rights
Agent
10 Transaction Agreement, dated February 28,
2000, between Safeguard Scientifics, Inc. and
Textron Inc.
99-1 Press Release dated February 24, 2000.
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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 thereunto duly authorized.
SAFEGUARD SCIENTIFICS, INC.
By: /s/ JAMES A. OUNSWORTH
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Name: James A. Ounsworth
Title: Senior Vice President
Dated: February 28, 2000
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EXHIBIT INDEX
Exhibit No. Exhibit
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3 Amended and Restated Bylaws of Safeguard
Scientifics, Inc.
4 Form of Shareholder Rights Agreement, dated as of
February 28, 2000, between Safeguard Scientifics, Inc.
and ChaseMellon Shareholder Services LLC, as Rights
Agent
10 Transaction Agreement, dated February 28,
2000, between Safeguard Scientifics, Inc. and
Textron Inc.
99-1 Press Release dated February 24, 2000.