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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
CHILDREN'S BROADCASTING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MINNESOTA 41-1663712
(State of Incorporation (IRS Employer
or Organization) Identification No.)
724 FIRST STREET NORTH
MINNEAPOLIS, MN 55401
(Address of Principal Executive Offices, including 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
NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK PURCHASE RIGHTS
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On February 14, 1998, the Board of Directors of Children's Broadcasting
Corporation (the "Company") declared a dividend of one common share purchase
right (a "Right") for each share of the Company's common stock, par value $0.02
per share (the "Common Shares"), outstanding as of the close of business on
February 27, 1998 (the "Record Date"). Each Right will entitle the registered
holder to purchase from the Company, after the Distribution Date (as defined
below), Common Shares at an initial price of $18.00 (the "Purchase Price"),
subject to adjustment. The Board of Directors of the Company further directed
the issuance of one Right, subject to adjustment, with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are defined below); PROVIDED, HOWEVER, that Rights may be issued with
respect to Common Shares that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date or the Final Expiration
Date in certain circumstances. The Rights will be issued upon the terms and
subject to the conditions set forth in a Rights Agreement dated as of February
19, 1998 (the "Rights Agreement"), between the Company and Norwest Bank
Minnesota, National Association, as Rights Agent (the "Rights Agent"), as the
same may be amended from time to time.
The Rights become exercisable at any time after the Distribution Date.
The Distribution Date is defined as the close of business on the earlier to
occur of (A) the fifteenth business day (or such later date as may be determined
by action of the Board of Directors of the Company) after the first date of
public announcement by the Company or an Acquiring Person (as defined below)
that any person or group of affiliated or associated persons (not including (i)
the Company, (ii) any subsidiary of the Company, (iii) any person holding Common
Shares acquired by that person in a transaction occurring after the Record Date
and approved in advance in writing by a majority of disinterested directors of
the Company's Board of Directors to the extent, but only to the extent, of the
Common Shares so held (a "Company-Approved Transaction"), (iv) any employee
benefit plan of the Company or of any subsidiary of the Company, (v) any person
holding Common Shares for or pursuant to the terms of any employee benefit plan
described in clause (iv) of this sentence to the extent, but only to the extent,
of the Common Shares so held, (vi) any person who or which, together with all
affiliates and associates of such person, becomes the beneficial owner of twenty
percent (20%) or more of the then outstanding Common Shares as a result of the
acquisition of Common Shares directly from the Company, or (vii) any person who
or which, together with all affiliates and associates of such person, is the
beneficial owner of twenty percent (20%) or more of the Common Shares
outstanding on the twentieth business day preceding the Record Date, PROVIDED,
HOWEVER, that such person shall be deemed to be an Acquiring Person upon
becoming the beneficial owner, together with all affiliates and associates of
such person, of any additional Common Shares representing an incremental
increase of twenty percent (20%) or more of the Common Shares then outstanding,
which were acquired at any time after the twentieth business day preceding the
Record Date) has acquired beneficial ownership of twenty percent (20%) or more
of the Common Shares (an "Acquiring Person"), or (B) the fifteenth business day
(or such later date as may be determined by action of the Board of Directors of
the Company) after the date of the commencement by any person or group of
affiliated or associated persons (other than a person referenced in clauses (i)
through (vii) of this sentence) of, or the first public announcement of the
intention (which intention shall not have been withdrawn within five business
days) of any person or group of affiliated or
associated persons (other than a person referenced in clauses (i) through (vii)
of this sentence) to commence a tender or exchange offer, the consummation of
which would result in beneficial ownership by a person or group of affiliated or
associated persons (other than a person referenced in clauses (i) through (vii)
of this sentence) of twenty percent (20%) or more of the Common Shares then
outstanding (including any such date which is after the date of the Rights
Agreement and prior to the issuance of the Rights).
The Rights will expire at the close of business on February 13, 2008
(the "Final Expiration Date"), unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such certificates
in the names of the holders thereof together with a copy of a summary of rights
attached thereto, and the registered holders of the Common Shares shall also be
the registered holders of the associated Rights. With respect to certificates
for Common Shares issued after the Record Date and before the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates, which will bear a legend incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificate for Common Shares will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable after the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the Distribution Date, and such separate Right
Certificates alone will evidence the Rights.
The Purchase Price, the number and the kind of shares covered by each
Right 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 Common Shares, (ii) upon the issuance of rights (other than the Rights),
options or warrants to holders of Common Shares entitling them to subscribe for
or purchase Common Shares at a price, or securities convertible into Common
Shares with a conversion price, less than the then current market price of the
Common Shares, or (iii) upon the distribution to holders of Common Shares of
evidences of indebtedness or assets (other than a regular periodic cash dividend
paid out of earnings or retained earnings or a dividend payable in Common
Shares) or subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common Shares issuable upon
exercise of each Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common Shares payable in
Common Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date. Common
Shares purchasable upon exercise of the Rights will not be redeemable.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right, other than the Rights that are or were
acquired or beneficially owned by the Acquiring Person (which will thereupon
become null and void), will thereafter have the right to
receive, upon exercise thereof at the then-current exercise price of the Right,
that number of Common Shares having a market value of two times the exercise
price of the Right.
If, on or after the Shares Acquisition Date (as defined below), the
Company is, in effect, acquired in a merger or other business combination
transaction, or fifty percent (50%) or more of its consolidated assets or
earning power is sold, proper provisions will be made so that each holder of a
Right (other than Rights owned by that person or group, which will have become
null and void) will thereafter have the right to receive, upon exercise thereof
at the then-current exercise price of the Right, that number of shares of
capital stock of the acquiring company which 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
before the earlier of one of the events described in the previous paragraph, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by that person or group, which will have become null and void), in whole
or in part, at an exchange ratio of one Common Share per Right, subject to
adjustment.
As described in the Rights Agreement, Rights issued to any person who
becomes an Acquiring Person shall become null and void.
With certain exceptions, no adjustment in the Purchase Price will be
required unless such cumulative adjustments require an adjustment of at least
one percent (1%) in the Purchase Price. The Company is not required to issue
fractional Common Shares. In lieu thereof, an adjustment in cash will be made
based on the market price of the Common Shares on the last trading day prior to
the date of exercise.
At any time prior to the earlier of (x) the close of business on the
tenth business day after the first date of public announcement by the Company or
an Acquiring Person that an Acquiring Person has become such (the "Shares
Acquisition Date"), or (y) the Final Expiration Date, the Board of Directors of
the Company may redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.01 (one cent) per Right, subject to adjustment (such
redemption price being hereinafter referred to as the "Redemption Price"), in
cash, with Common Shares, or other consideration deemed appropriate by the Board
of Directors of the Company (the time at which the Rights are redeemed being
referred to as the "Redemption Date"). Immediately upon the action of the Board
of Directors of the Company ordering the redemption of the Rights, the right to
exercise the Rights will terminate, the Company will promptly give public notice
of the redemption, and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company in its sole
and absolute discretion may from time to time rescind, change, supplement or
amend the Rights Agreement in any respect without the approval of any holders of
Rights Certificates. At any time when the Rights are no longer redeemable, the
Company may supplement or amend the Rights Agreement without the approval of any
holders of Rights Certificates in order to cure ambiguities, correct or
supplement defective or inconsistent provisions, shorten or lengthen time
periods, or otherwise change, delete or supplement provisions, so long as any
such change, deletion or amendment does not adversely
affect the interests of the holders of the Rights (other than an Acquiring
Person or an affiliate or associate of an Acquiring Person, in whose hands all
Rights are null and void).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company pursuant to such Right, including,
without limitation, the right to vote or to receive dividends.
As of February 19, 1998, the Company had 50,000,000 shares authorized
for issuance. As of that date, its capitalization was as follows: (i) 6,649,865
Common Shares outstanding; (ii) 1,500,000 Common Shares reserved for issuance
under the 1991 Incentive Stock Option Plan, the 1994 Stock Option Plan and the
1994 Director Stock Option Plan (1,069,901 of which were subject to outstanding
options); (iii) 304,016 Common Shares reserved for issuance pursuant to
NonQualified Stock Option Agreements; (iv) 1,500,542 Common Shares reserved for
issuance pursuant to warrants; (v) 378,083 shares of common stock without voting
rights outstanding; and (vi) no shares of preferred stock issued or outstanding.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired
or redeemed. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors of the Company since the Board of
Directors may, at its option and in its sole and absolute discretion, redeem the
Rights as provided in the Rights Agreement.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes the Form of Right Certificate
and the Form of Summary of Rights to Purchase Common Shares as exhibits, is
attached to this Registration Statement on Form 8-A as an exhibit. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
ITEM 2. EXHIBITS
4.1 Rights Agreement between Children's Broadcasting Corporation and
Norwest Bank Minnesota, National Association, as Rights Agent, dated
as of February 19, 1998, which includes, as exhibits, the Form of
Right Certificate and the Form of Summary of Rights to Purchase
Common Shares.
20.1 Form of Letter to Shareholders of Children's Broadcasting
Corporation.
99.1 Press Release dated February 19, 1998.
SIGNATURES
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.
Dated: February 20, 1998. CHILDREN'S BROADCASTING CORPORATION
By: /s/ James G. Gilbertson
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James G. Gilbertson
Chief Operating Officer
INDEX TO EXHIBITS
Exhibit
Number Description
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4.1 Rights Agreement between Children's Broadcasting Corporation and
Norwest Bank Minnesota, National Association, as Rights Agent, dated
as of February 19, 1998, which includes, as exhibits, the Form of
Right Certificate and the Form of Summary of Rights to Purchase
Common Shares.
20.1 Form of Letter to Shareholders of Children's Broadcasting
Corporation.
99.1 Press Release dated February 19, 1998.