FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Sonic Innovations, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 87-0494518
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(State of incorporation or organization) (IRS Employer I.D. No.)
2795 East Cottonwood Parkway, Suite 660, Salt Lake City, UT 84121-7036
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(Address of principal executive offices)
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box.
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box.
Securities Act registration statement file number to which this form relates (if
applicable): Not applicable.
Securities to be registered pursuant to Section 12(b) of the Act:
N/A
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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Item 1. Description of Securities to be Registered.
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On March 27, 2001, pursuant to a Preferred Stock Rights Agreement
(the "Rights Agreement") between Sonic Innovations, Inc. (the "Company")
and American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agent"), the Company's Board of Directors declared a dividend of one right
(a "Right") to purchase one one-thousandth share of the Company's Series A
Participating Preferred Stock ("Series A Preferred") for each outstanding
share of Common Stock, par value $0.001 per share ("Common Shares"), of the
Company. The dividend is payable on April 27, 2001 (the "Record Date"), to
shareholders of record as of the close of business on that date. Each Right
entitles the registered holder to purchase from the Company one one-
thousandth of a share of Series A Preferred at an exercise price of $50.00
(the "Purchase Price"), subject to adjustment.
The following summary of the principal terms of the Rights Agreement
is a general description only and is subject to the detailed terms and
conditions of the Rights Agreement. A copy of the Rights Agreement is
attached as Exhibit 1 to this Registration Statement and is incorporated
herein by reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date
(defined below). Certificates for the Rights ("Rights Certificates") will
not be sent to shareholders 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 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, outstanding as
of the Record Date, even without notation or a copy of the Summary of
Rights being attached thereto, also will constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
Distribution Date
The Rights will be separate from the Common Shares, Rights
Certificates will be issued and the Rights will become exercisable upon the
earlier of: (a) the tenth day (or such later date as may be determined by
the Company's Board of Directors) after a person or group of affiliated or
associated persons ("Acquiring Person") has acquired, or obtained the right
to acquire, acquires beneficial ownership of 15% of the Company's Common
Shares then outstanding or (b) the tenth business day (or such later date
as may be determined by the Company's Board of Directors) after a person or
group announces a tender or exchange offer, the consummation of which would
result in ownership by a person or group of a 15% of the Company's Common
Shares then outstanding. The earlier of such dates is referred to as the
"Distribution Date."
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, a summary of
the Rights 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 after the Distribution Date will be issued
with
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Rights. The Rights will expire on the earliest of (i) April 27, 2011 the
("Final Expiration Date"), or (ii) redemption or exchange of the Rights as
described below.
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 the Purchase Price, one one-thousandth share of
the Series A Preferred. In the event that the Company does not have
sufficient Series A Preferred available for all Rights to be exercised, or
the Board decides that such action is necessary and not contrary to the
interests of Rights holders, the Company may instead substitute cash,
assets or other securities for the Series A Preferred for which the Rights
would have been exercisable under this provision or as described below.
Right to Buy Company Common Shares
Unless the Rights are earlier redeemed, in the event that an
Acquiring Person obtains a Threshold Amount of the Company's Common Shares
then outstanding of the Company's Common Shares then outstanding, then 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, Common
Shares having a value equal to two times the Purchase Price. 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.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed, in the event that,
after an Acquiring Person obtains 15% of the Company's Common Shares then
outstanding, (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 (other than in transactions in the
ordinary course of business), proper provision must 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, shares of
common stock of the acquiring company having a value equal to two times the
Purchase Price.
Exchange Provision
At any time after the acquisition by an Acquiring Person obtains 15%
of the Company's Common Shares then outstanding and prior to the
acquisition by such Acquiring Person of 50% or more of the Company's
outstanding Common Shares, the Board of Directors of the Company 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 fifth day following the Shares Acquisition (or such later date as
may be determined by action of the Company's Board of Directors and
publicly announced by the company), or (ii) the Final Expiration Date, the
Company may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right.
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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 Common
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 Shareholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder 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 terms of the Rights and the Rights Agreement may be amended in
any respect without the consent of the Rights holders on or prior to the
Distribution Date; thereafter, the terms of the Rights and the Rights
Agreement may be amended without the consent of the Rights holders in order
to cure any ambiguities or to make changes which do not adversely affect
the interests of Rights holders (other than the Acquiring Person).
Rights and Preferences of the Series A Preferred
Each one one-thousandth of a share of Series A Preferred has rights
and preferences substantially equivalent to those of one Common Share.
No Voting Rights
Rights will not have any voting rights.
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 acquirer to take over the Company in a
manner or on terms not approved by the Board of Directors. Takeover
attempts frequently include coercive tactics to deprive the Company's Board
of Directors and its shareholders 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 of shares in the
open market of 15% or greater position to be followed by a merger or a
partial or two-tier tender offer that does not treat all shareholders
equally. These tactics unfairly pressure shareholders, squeeze them out of
their investment without giving them any real choice and deprive them of
the full value of their shares.
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The Rights are not intended to prevent a takeover of the Company and
will not do so. Subject to the restrictions described above, the Rights may
be redeemed by the Company at $0.001 per Right at any time prior to the
Distribution Date. Accordingly, the Rights should not interfere with any
merger or business combination approved by the Board of Directors.
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
shareholders, and will not change the way in which the Company's shares are
presently traded. The Company's Board of Directors believes that the Rights
represent a sound and reasonable means of addressing the complex issues of
corporate policy created by the current takeover environment.
However, the Rights may have the effect of rendering more difficult
or discouraging an acquisition of the Company deemed undesirable by the
Board of Directors. 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 Company's Board of Directors, except pursuant to an offer
conditioned upon the negation, purchase or redemption of the Rights.
Item 2. Exhibits
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1. Preferred Stock Rights Agreement, dated as of March 27, 2001, between
Sonic Innovations, Inc. and American Stock Transfer & Trust Company,
including the Certificate of Designation, the form of Rights
Certificate and the Summary of Rights attached thereto as Exhibits A,
B, and C, respectively.
3.1 Amended and Restated Certificate of Incorporation of Sonic
Innovations, Inc./1/
3.2 Amended and Restated By-laws of Sonic Innovations, Inc./1/
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.
Date: April 16, 2001 SONIC INNOVATIONS, INC.
By: /s/ Stephen L. Wilson
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Stephen L. Wilson
Vice President and Chief Financial Officer
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/1/ Incorporated by reference to Exhibits to Sonic Innovations, Inc's Form S-1
filed February 16, 2000.
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