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 April 5, 2001
SPARTECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5911 43-0761773
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
120 S. Central Avenue, Suite 1700, Clayton, Missouri 63105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (314) 721-4242
Item 5. Other Events
On April 2, 2001, a Special Committee of the Company's Board of Directors
declared a dividend of one Preferred Share Purchase Right (a "Right") for
each outstanding share of our common stock, par value $.75 per share. The
dividend is payable on April 13, 2001 to our stockholders of record at the
close of business on April 13, 2001. The Rights are subject to the terms of
a Rights Agreement dated April 2, 2001 between the Company and Mellon
Investor Services LLC, as the Rights Agent.
The Special Committee adopted the Rights Agreement to assist the Company in
pursuing its long-term business strategies and enhancing stockholder value,
by protecting our stockholders against unsolicited takeover efforts on
unfavorable terms. In general terms, the Rights Agreement works by imposing
a significant penalty upon any person or group which acquires 15% or more of
the Company's outstanding common stock after April 2, 2001 without the
approval of the Board of Directors. Any current stockholder which
beneficially owned more than 15% of our outstanding common stock as of April
2, 2001 may acquire up to an additional 1% of our outstanding common stock
without penalty.
For those interested in the specific terms of the Rights Agreement, we
provide the following summary of the principal features of the Rights.
However, this description is only a summary and does not purport to be a
complete description of the terms of the Rights. For more information, you
should refer to the complete Rights Agreement, which has been filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement for the Rights on Form 8-A. A copy of the Rights Agreement is
available from the Company on request, without charge.
The Rights.
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One Right will be issued for each share of the Company's common stock
outstanding on April 13, 2001. The Rights will initially trade with, and
will be inseparable from, the common stock. Identical Rights will also
accompany any new shares of common stock the Company issues from April 13,
2001 until the Distribution Date described below or the redemption of the
Rights, whichever occurs first. Until the Distribution Date, the Rights will
be evidenced only by the certificates that represent shares of common stock.
Exercise Price of the Rights.
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If and when the Rights become exercisable, each Right will allow its holder
to purchase from the Company one one-thousandth of a share of Series Z
Preferred Stock for $70.00. One one-thousandth of a share of Series Z
Preferred Stock will give the holder approximately the same dividend, voting,
and liquidation rights as would one share of common stock.
Prior to exercise, a Right does not give its holder any dividend, voting, or
liquidation rights.
When the Rights Become Exercisable.
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The Rights will not be exercisable until:
10 days after the public announcement that a person or group has
become an "Acquiring Person" by obtaining beneficial ownership of 15%
or more of our outstanding common stock, or, if earlier,
10 business days (or a later date determined by our Board of Directors
before any person or group becomes an Acquiring Person) after a person
or group begins, or announces an intention to make, a tender offer or
exchange offer, if the completion of the offer would result in that
person or group becoming an Acquiring Person.
Any current stockholder which beneficially owned more than 15% of our
outstanding common stock as of April 2, 2001 will not be an Acquiring Person
so long as it does not purchase or acquire beneficial ownership of additional
Spartech shares amounting to more than 1% of our outstanding common stock.
The Rights Agreement refers to the date when the Rights become exercisable as
the "Distribution Date." Until the Distribution Date, the Company's common
stock certificates will also evidence the Rights, and any transfer of shares
of common stock will also constitute a transfer of the associated Rights.
After the Distribution Date, the Rights will separate from the common stock
and be evidenced by book-entry credits or by Rights certificates that we will
mail to all eligible holders of common stock.
Any Rights held by an Acquiring Person become void and may not be exercised.
Other Consequences Of A Person Or Group Becoming An Acquiring Person.
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Flip In. If a person or group becomes an Acquiring Person, all
holders of Rights except the Acquiring Person may, for $70.00 per
Right, purchase shares of the Company's common stock with a market
value of $140.00, based on the market price of the Company's common
stock prior to the acquisition.
Flip Over. If the Company is acquired in a merger or similar
transaction after the Distribution Date, all holders of Rights except
the Acquiring Person may, for $70 per Right, purchase shares of the
acquiring corporation with a market value of $140, based on the market
price of the acquiring corporation's stock prior to the merger.
Provisions of Series Z Preferred Stock.
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If the Rights are exercised and Series Z Preferred Stock is issued, each one
one-thousandth of a share:
. Will not be redeemable;
. Will have the same voting power as one share of the Company's common
stock;
. Will entitle its holder to quarterly dividend payments of $.001 per
share, or an amount equal to the dividend paid on one share of common
stock, whichever is greater;
. Will entitle its holder, if the Company is liquidated, to receive
either $1 per share or an amount equal to the payment made on one
share of common stock, whichever is greater; and
. If shares of the Company's common stock are exchanged in a merger,
consolidation or similar transaction, will entitle the holder to a
payment equal to the payment made on one share of common stock.
Redemption.
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The Company's Board of Directors may redeem the Rights for $.01 per Right at
any time before any person or group becomes an Acquiring Person. If the
Board redeems any Rights, it must redeem all of the Rights. Once the Rights
are redeemed, the holders will have only the right to receive the redemption
price. The redemption price will be adjusted if there is a stock split or
stock dividend with respect to our common stock.
Exchange.
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After a person or group becomes an Acquiring Person, but before an Acquiring
Person owns 50% or more of our outstanding common stock, the Company's Board
of Directors may extinguish the Rights by exchanging one share of common
stock or an equivalent security for each Right not held by the Acquiring
Person. Rights held by the Acquiring Person will be void and will not be
exchanged.
Expiration.
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The Rights will expire on April 2, 2011. The holders of the Rights will not
become entitled to any payment or other consideration on account of the
expiration of the Rights.
Anti-Dilution Provisions.
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The Board of Directors may adjust the purchase price of the Preferred Stock,
the number of shares of Preferred Stock issuable and the number of
outstanding Rights, in order to prevent dilution that may occur from a stock
dividend, a stock split or a reclassification of the Preferred Stock or
common stock. No adjustments to the purchase price of the Preferred Stock of
less than 1% will be made.
Amendments to the Rights Agreement.
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The Board of Directors may amend the terms of the Rights Agreement without
the consent of the holders of the Rights. However, after a person or group
becomes an Acquiring Person, the Board may not amend the Rights Agreement in
a way that adversely affects the holders of the Rights.
Item 7. Exhibits.
99.1 Rights Agreement, dated as of April 2, 2001, between the Company and
Mellon Investor Services LLC, as Rights Agent, which includes the form of
Certificate of Designations with respect to the Series Z Preferred Stock as
Exhibit A, the form of Right Certificate as Exhibit B and the Summary of
Rights to Purchase Shares of Preferred Stock as Exhibit C.
99.2 Press Release dated April 3, 2001.
SIGNATURES
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 hereunto duly authorized.
SPARTECH CORPORATION
Date April 5, 2001 By: /S/Randy C. Martin
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Randy C. Martin
Executive Vice President-Acrylics
and Chief Financial Officer