SECURITIES EXCHANGE AND COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): April 22, 1996
ADAC Laboratories
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(Exact name of registrant as specified in its charter)
California
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
540 Alder Drive, Milpitas, CA 95035
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(Address of principal executive offices) (Zip Code)
(408) 321-9100
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(Registrant's telephone number, including area code)
Item 5. Other Events.
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On April 22, 1996, the Board of Directors of ADAC Laboratories (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of common stock, without par value (the "Common
Shares"), of the Company. The dividend is payable to the shareholders of record
on May 8, 1996 ("the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Stock"), at a
price of seventy dollars ($70.00) per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. Each one one-hundredth of a share
of Preferred Stock has designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions which make its value
approximately equal to the value of a Common Share. The description and terms of
the Rights are set forth in a Rights Agreement dated as of April 22, 1996 (the
"Rights Agreement"), between the Company and Chemical Mellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent").
Initially, the Rights will be evidenced by the stock certificates
representing the Common Shares then outstanding, and no separate Right
Certificates, as defined below, will be distributed. Until the earlier to occur
of (i) 10 days following a public announcement that a person, entity or group of
affiliated or associated persons, with certain limited exceptions for the
Company's existing corporate partners (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Common Shares 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 entity 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 such outstanding
Common Shares (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share certificate
with or without a copy of the Summary of Rights, which is included in the Rights
Agreement as Exhibit C (the "Summary of Rights"), attached.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, 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 such notation or a
copy of the Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares 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 Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 21, 2006 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company as described below.
The Purchase Price payable, and the number 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) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then 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 periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above). The exercise of Rights
for Preferred Shares is at all times subject to the availability of a sufficient
number of authorized but unissued Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share 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,
consolidation or combinations of the Common Shares occurring, in any case, prior
to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, voting together with the Common Shares. Finally, in the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, each Preferred Share will be entitled to receive 100 times the
amount of consideration received per Common Share. These rights are protected
by customary anti-dilution provisions. Because of the nature of the Preferred
Shares' dividend and liquidation rights, the value of one one-hundredth of a
Preferred Share should approximate the value of one Common Share.
In the event that any person becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will for a 60-day
period have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right (or, if such
number of shares is not and cannot be authorized, the Company may issue
Preferred Stock, cash, debt, stock or a combination thereof in exchange for the
Rights). This right will terminate 60 days after the date on which the Rights
become nonredeemable (as described below), unless there is an injunction or
similar obstacle to exercise of the Rights, in
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which event this right will terminate 60 days after the date on which the Rights
again become exercisable.
In the event that 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
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common 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 the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-hundredth of a Preferred Share, per Right (or, if the number of shares
is not and cannot be authorized, the Company may issue cash, debt, stock or a
combination thereof in exchange for the Rights), 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 Preferred Shares will be issued (other than
fractions which are integral multiples of the number of one one-hundredths of a
Preferred Share issuable upon the exercise of one Right, which may, at the
option 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 Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the day of
the first public announcement that a person has become an Acquiring Person or
(ii) the Final Expiration Date, 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"). Following the expiration of the above periods, the Rights
become nonredeemable. 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.
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 threshold for exercisability of the Rights from 15% to any
percentage which is (i) greater than the largest percentage of the outstanding
Common Shares then known to the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary, or any entity holding Common Shares
pursuant to the terms of any such plan and (ii) not less than 10%, except that
from and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interest of the holders of the Rights.
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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. 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 $.01 per
Right prior to the earliest of (i) the twentieth day following the time that a
person or group has acquired beneficial ownership of 15% or more of the Common
Shares (unless extended for one or more 10 day periods by the Board of
Directors), (ii) a Change of Control, or (iii) the final expiration date of the
rights.
Item 7. Exhibits.
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1. Rights Agreement, dated as of April 22, 1996, between ADAC
Laboratories and Chemical Mellon Shareholder Services, L.L.C.,
with exhibits.
2. Form of letter to be sent to ADAC Laboratories stockholders,
dated May ___, 1996.
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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.
ADAC LABORATORIES
Dated: April 25, 1996 By: /s/ Andre Simone
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Secretary
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INDEX TO EXHIBITS
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Page number in
sequentially
numbered version
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1. Rights Agreement, dated as of
April 22, 1996, between
ADAC Laboratories and
Chemical Mellon Shareholder
Services, L.L.C., with exhibits.
2. Form of letter to be sent to
ADAC Laboratories shareholders,
dated May ___, 1996.
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