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):
November 4, 1998
INGERSOLL-RAND COMPANY
(Exact name of registrant as specified in its charter)
New Jersey 1-985 13-5156640
(State of (Commission File Number) IRS Employer
Incorporation) Identification No.
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices) (Zip Code)
(201) 573-0123
(Registrant's telephone number)
Item 5. Other Events.
On November 4, 1998, the Board of Directors of Ingersoll-
Rand Company (the "Company") declared a dividend of one right to purchase one
one-thousandth of a share of Series A Preference Stock (the "Rights") on each
outstanding share of Company common stock, $2.00 par value (the "Common
Stock"), to stockholders of record as of December 22, 1998.
The Rights are substantially similar to the preferred share
purchase rights issued by the Company in 1988 (which rights expire on
December 22, 1998), with the following material differences: (i) the
exercise price of the Rights has been increased to $200 to reflect the Board
of Directors' view of the long-term value of the Common Stock; (ii) the
"Adverse Person" provision which allowed the Board to lower the 15% Rights
trigger to beneficial ownership of 10% of the Company's outstanding common
shares in the event that the Board determined that an "adverse person" was
accumulating stock has been replaced with a broader amendment provision that
expressly allows the Board at any time to reduce the Rights trigger from 15%
to as low as 10%; and (iii) the "second-look" or "window" redemption
provision, permitting the Board of Directors to redeem the Rights after
someone has accumulated more than the triggering percentage, has been
replaced with a provision that permits the Board of Directors to redeem the
Rights at any time prior to a person accumulating more than the triggering
percentage.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons 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 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any
of the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a summary of the Rights.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuances of
Common Stock 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 shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of the summary of Rights, will also coith the shares of Common Stock
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represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on December 22, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below.
The Purchase Price payable, and the number of shares 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, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights 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
subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock wilidend payment
of $1 per share but will be entitled to an aggregate dividend of 1000 times
the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of Preferred Stock
will have 1000 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest
in a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
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In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right at the then current exercise price of the Right, that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
mber of shares of common stock of the person with whom the Company has
engaged in the foregoing transaction (or its parent), which number of shares
at the time of such transaction will have a market value of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event
described in the prior paragraph, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of Preferred Stock
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
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. No fractional shares of Preferred Stock will
be issued (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
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The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower the 15% threshold for an Acquiring Person
described above to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known to
the Company to be beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be
redeemed by the Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or more of the
shares of Common Stock.
The Rights Agreement, dated as of November 9, 1998, between the
Company and The Bank of New York, as Rights Agent, specifying the terms of
the Rights is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified by reference
to such exhibit. Details of the Rights are contained in a summary, the form
of which is attached as Exhibit C to the Rights Agreement, which will be
mailed to the Company's stockholders of record as of December 22, 1998.
Item 7. Exhibits.
1. Rights Agreement, dated as of November 9, 1998, between the
Company and The Bank of New York which includes the form of
Certificate of Amendment to the Restated Certificate of
Incorporation for the Series A Preference Stock as Exhibit
A, the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as Exhibit C.
2. Press Release dated November 4, 1998.
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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.
INGERSOLL-RAND COMPANY
(Registrant)
Dated: November 9, 1998 By /S/ Patricia Nachtigal
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Name: Patricia Nachtigal
Title: Vice President and General Counsel
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