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): May 5, 1998
WILD OATS MARKETS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21577 84-1100630
(State or other jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
1645 Broadway
Boulder, Colorado 80302
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 440-5220
Item 5. Other Events.
Rights. On May 5, 1998, the Board of Directors of Wild Oats Markets, Inc.
(the "Company"), declared a dividend distribution of one Right for each
outstanding share of the Company's Common Stock to stockholders of record at the
close of business on May 22, 1998 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-thousandth of a share (a "Unit") of Series A Junior Participating Preferred
Stock, par value $.001 per share (the "Preferred Stock"), at a Purchase Price of
$145.00 per Unit, subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and Norwest Bank Minneapolis, N.A., as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. In general, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons,
subject to certain exceptions (an "Acquiring Person"), has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days
following the commencement of a tender offer or exchange offer that would result
in such a person or group beneficially owning 15% or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any certificates for Common
Stock will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on May 5, 2008, unless earlier redeemed by the Company
as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Shares of Common Stock issued
after the Distribution Date will be issued with Rights only upon exercise or
conversion of securities issued prior thereto unless the Board of Directors
determines otherwise.
If, at any time after the Distribution Date, any person becomes an
Acquiring Person each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right.
Notwithstanding any of the foregoing, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable in
any event until such time as the Rights are no longer redeemable by the Company
as set forth below.
For example, at an exercise price of $145 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the immediately preceding paragraph would entitle its holder to
purchase $290 worth of Common Stock (or other consideration, as noted above) for
$145. Assuming that the Common Stock had a per share value of $72.50 at such
time, the holder of each valid Right would be entitled to purchase four shares
of Common Stock for $145.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in which the
Common Stock is changed or exchanged or in which the Company is not the
surviving corporation, or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except those Rights owned
by an Acquiring Person and voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
value equal to two times the exercise price of the Right. The events set forth
in this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
The Purchase Price payable, and the number of Units 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) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the 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 quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by the Acquiring Person of 50% or more of the outstanding
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by the Acquiring Person, which will have become void),
in whole or in part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right. Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the Continuing
Directors. Immediately upon the action of the Board of Directors ordering
redemption of the Rights or at such other time as may be specified by the Board
when it orders redemption, with, where required, the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.001 redemption price.
The term "Continuing Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock Acquisition
Date, and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
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. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income if the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in order to
cure any ambiguity, to make other changes that do not adversely affect the basic
economic terms of the Rights, or to shorten or lengthen any time period under
the Rights Agreement; provided, however, that no amendment to adjust the time
period governing redemption shall be made at a time when the Rights are not
redeemable.
Preferred Stock. The Preferred Stock will have a liquidation preference of
$1.00 per hundredth of a share. Dividends on the Preferred Stock will be payable
quarterly in an amount for each one-hundredth of a share of Preferred Stock
equal to the greater of $.01 or the amount per share of any dividend paid on the
Company's Common Stock for such quarter. Unpaid dividends will cumulate. The
Preferred Stock will not be redeemable. Each one-hundredth share of Preferred
Stock will have the same voting rights as one share of Common Stock.
Pursuant to the Rights Agreement, the purchase price payable, and the
number of Units of Preferred Stock or other securities or property issuable,
upon the 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) if holders of the
Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution
to the holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends), assets or subscription rights or
warrants (other than those referred to above).
The Preferred Stock may be issued in fractions that are integral multiples
of one one-hundredth of a share. No fractional Units will be issued upon any
exercise of Rights, and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the then-current market
price of such shares.
Rights Agreement. The terms of the Rights are set forth in the Rights
Agreement. The form of Rights Agreement, which includes, as Exhibit A, the form
of Certificate of Designations of the Preferred Stock and, as Exhibit B, the
form of Rights Certificate, is included as Exhibit 1 to this Current Report on
Form 8-K and is incorporated herein by reference. The foregoing description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
Item 7. Financial Statements and Exhibits.
Exhibit 1. Rights Agreement dated as of May 22, 1998 between the
Company and Norwest Bank Minneapolis, N.A., as Rights Agent.
(incorporated by reference from the Company's Registration
Statement on Form 8-A dated May 21, 1998).
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, thereto duly authorized.
WILD OATS MARKETS, INC.
By: /s/ Mary Beth Lewis
Mary Beth Lewis
Vice President of Finance, Treasurer
and Chief Financial Officer
Date: May 21, 1998