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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): December 15, 1999
MAXXAM INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-3924
(Commission File Number)
95-2078752
(I.R.S. Employer Identification Number)
5847 SAN FELIPE, SUITE 2600
HOUSTON, TEXAS
(Address of Principal Executive Offices)
77057
(Zip Code)
Registrant's telephone number, including area code: (713) 975-7600
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ITEM 5. OTHER EVENTS
On December 15, 1999, the Board of Directors of MAXXAM Inc. ("MAXXAM")
declared a distribution to its stockholders consisting of (i) one Series A
Preferred Stock Purchase Right (a "Series A Right") for each outstanding share
of MAXXAM Class A $.05 Non-Cumulative Participating Convertible Preferred Stock
("Class A Preferred Stock") and (ii) one Series B Preferred Stock Purchase Right
(a "Series B Right") for each outstanding share of MAXXAM Common Stock (the
Common Stock and the Class A Preferred Stock being herein referred to
collectively as the "Stock," and the Series A Rights and Series B Rights being
herein referred to collectively as the "Rights"). The Rights are being
distributed to stockholders of record at the close of business on December 29,
1999, and are designed to encourage potential bidders to negotiate with the
MAXXAM Board of Directors prior to attempting a takeover of the company, and to
discourage coercive takeover tactics that may not be in the best interests of
MAXXAM and its stockholders.
Each Series A Right entitles the registered holder to purchase from
MAXXAM, after the Distribution Date (as defined below) one share of Class A
Preferred Stock at a Purchase Price of $165, subject to adjustment, and each
Series B Right entitles the registered holder to purchase from MAXXAM, after the
Distribution Date, one one-hundredth of a share of MAXXAM's Class B Junior
Participating Preferred Stock, par value $.50 per share (the "Junior Preferred
Stock"), at a Purchase Price of $165, subject to adjustment. The Junior
Preferred Stock has a variety of rights and preferences, including 100 votes per
share. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between MAXXAM and American Stock Transfer &
Trust Company, as Rights Agent. Capitalized terms used in this summary without
definition have the meanings assigned in the Rights Agreement.
Initially, the Rights will be attached to all Class A Preferred Stock and
Common Stock certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Stock, and a "Distribution Date" will occur, upon the earlier of (i) 10 days
following the date (the "Stock Acquisition Date") of a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, 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 the MAXXAM Board of Directors) following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% or more of the outstanding shares of Common
Stock. Notwithstanding the foregoing, any person or group of affiliated or
associated persons who is presently the beneficial owner of at least 15% of the
outstanding Common Stock will not be deemed to be an Acquiring Person unless
such person or group shall become the beneficial owner of additional shares of
Common Stock (other than (x) through the exercise of any outstanding options, or
the issuance by the Company of any options, stock appreciation rights or other
securities exercisable for or convertible into stock (or the exercise of any
such options, rights or other securities), (y) as a result of any dividend of
the Company payable in stock or securities convertible into or exercisable for
stock or (z) as a result of certain acquisitions of beneficial ownership of no
more than 10,000 shares of Common Stock in any single calendar year, provided
that none of such shares are owned directly by such person or nominees for such
person). In addition, no person who is a member of a group whose members
presently beneficially own an aggregate of 15% or more of the outstanding Common
Stock, nor any person who shall hereafter become a member of such group, shall
be deemed to be an Acquiring Person unless (x) the aggregate number of shares of
outstanding Common Stock beneficially owned by such group shall hereafter
increase (other than (A) through the exercise of any outstanding options, or the
issuance by the Company of any options, stock appreciation rights or other
securities exercisable for or convertible into stock (or the exercise of any
such options, rights or other securities), (B) as a result of any dividend of
the Company payable in stock or securities convertible into or exercisable for
stock, or (C) as a result of certain acquisitions of beneficial ownership of no
more than 10,000 shares of Common Stock in any single calendar year, provided
that none of such shares are owned directly by any member of such group or
nominees for any such member), or (y) there shall no longer be at least one
member of such group who was a member of such group on the date hereof. In
addition, persons will not become Acquiring Persons if they have obtained the
authorization of the Board of Directors to an acquisition.
Until the Distribution Date, (i) the Rights will be evidenced by the
certificates for Stock and will be transferred with and only with such
certificates, (ii) new certificates issued after December 29, 1999 will contain
a notation incorporating the Rights Agreement by reference, and (iii) the
transfer of any certificates for outstanding Stock will also constitute the
transfer of the Rights associated with the Stock represented by such
certificates. Pursuant to the Rights Agreement, MAXXAM reserves the right to
require prior to the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so that only whole
shares of Class A Preferred Stock or Junior Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on December 11, 2009 (the "Final Expiration Date"),
unless earlier redeemed by MAXXAM as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Stock as of the close of business on
the Distribution Date and, following the Distribution Date, the separate Rights
Certificates alone will represent the Rights. Except in certain circumstances
specified in the Rights Agreement or as otherwise determined by the Board of
Directors, only shares of Stock issued prior to the Distribution Date will be
issued with Rights.
In the event that, among other things, (i) a person becomes an Acquiring
Person (except pursuant to (x) to an offer for all outstanding shares of Common
Stock which at least a majority of the members of the Board of Directors
determines to be fair to and otherwise in the best interests of MAXXAM and its
stockholders or (y) an all-cash tender offer for all outstanding shares pursuant
to which such person acquires shares which, together with the shares then owned
by such person, represent at least 85% of the total voting power of the
Company), (ii) MAXXAM is the surviving corporation in a merger with an Acquiring
Person (or an Affiliate or Associate of an Acquiring Person) and its capital
stock is not changed or exchanged, (iii) an Acquiring Person engages in one or
more "self-dealing" transactions as set forth in the Rights Agreement, or (iv)
during such time as there is an Acquiring Person, there shall be a
reclassification (including any reverse stock split) of securities or a
recapitalization or reorganization of MAXXAM or other transaction or series of
transactions involving MAXXAM which results in such Acquiring Person's ownership
interest being increased by more than 1%, each holder of a Right will following
the first occurrence of any such events have the right (in lieu of the right
described in the first sentence of the second paragraph of this Item 5) to
receive, upon exercise, (i) in the case of the Series A Rights, Class A
Preferred Stock (or, in certain circumstances cash, property or other securities
of MAXXAM) having a value equal to two times the exercise price of the Series A
Rights, and (ii) in the case of the Series B Rights, Common Stock (or, in
certain circumstances, cash, property or other securities of MAXXAM) having a
value equal to two times the exercise price of the Series B Rights.
Notwithstanding any of the foregoing, from and after the first occurrence of any
of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person
will be null and void. However, Rights are not exercisable following the
occurrence of the events set forth above until such time as the Rights are no
longer redeemable by MAXXAM as set forth below.
For example, at an exercise price of $165 per Series A Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$330 worth of Class A Preferred Stock (or other consideration, as noted above)
for $165. Assuming that the Class A Preferred Stock had a per share value of $55
at such time, the holder of each valid Series A Right would be entitled to
purchase 6 shares of Class A Preferred Stock for $165. Similarly, at an exercise
price of $165 per Series B Right, each Series B Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the
preceding paragraph would entitle its holder to purchase $330 worth of Common
Stock (or other consideration, as noted above) for $165. Assuming that the
Common Stock had a per share value of $55 at such time, the holder of each valid
Series B Right would be entitled to purchase 6 shares of Common Stock for $165.
The Board of Directors, in its discretion, may determine that part or all of the
Purchase Price may be paid in consideration other than cash. In addition, under
certain circumstances, the Board of Directors is authorized to exchange all
outstanding and exercisable Rights for Stock, at an exchange ratio of one share
of Class A Preferred Stock per Series A Right and one share of Common Stock per
Series B Right (in each case subject to adjustment).
In the event that, at any time following the Stock Acquisition Date, (i)
MAXXAM is acquired in a merger or other business combination transaction (other
than a merger described in clause (ii) of the second preceding paragraph or a
merger which follows an offer described in clause (i) of the second preceding
paragraph), or (ii) 50% or more of MAXXAM's assets or earning power is sold or
transferred, each holder of a Series A Right (except Series A Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, preferred stock of the acquiring company having terms
substantially equivalent to the Class A Preferred Stock and having a value equal
to two times the exercise price of the Series A Right and each holder of a
Series B Right (except Series B Rights which previously have been 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 Series B 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 shares of Class A Preferred
Stock, the number of one one-hundredths of a share of Junior Preferred Stock or
the amount of 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 Class A Preferred Stock or the Junior Preferred Stock, (ii) if holders of
the Class A Preferred Stock or the Junior Preferred Stock are granted certain
rights or warrants to subscribe for Class A Preferred Stock or the Junior
Preferred Stock or convertible securities at less than the current market price
of the Class A Preferred Stock or the Junior Preferred Stock, or (iii) upon the
distribution to holders of the Class A Preferred Stock or the Junior 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). Following the occurrence of a Triggering Event, similar adjustments will
be made to reflect dividends, distributions, subdivisions, combinations,
reclassifications or the granting of certain rights or warrants with respect to
the Class A Preferred Stock, the Common Stock or the capital stock of an
acquiring company, as the case may be. In addition, prior to the Distribution
Date, certain adjustments will also be made in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Stock. With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. MAXXAM is
not required to issue fractional shares of Class A Preferred Stock, or
fractional shares of Junior Preferred Stock that are not integral multiples of
one one-hundredth of a share, and, in lieu thereof, an adjustment in cash may be
made based on the market price of the Class A Preferred Stock or the Junior
Preferred Stock on the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date (which
period may be adjusted by the Board of Directors; see below), MAXXAM may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (payable in
cash, Class A Preferred Stock, Common Stock or other consideration deemed
appropriate by the Board of Directors). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption
price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a MAXXAM stockholder, 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 MAXXAM, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Class A Preferred Stock, Common Stock (or other consideration)
of MAXXAM or for stock of an acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the MAXXAM
Board of Directors prior to the Distribution Date. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the Board in order to
cure any ambiguity or to correct or supplement any defective or inconsistent
provision, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement (including the time period governing redemption); provided, however,
that no amendment to lengthen the time period governing redemption shall be made
at such time as the Rights are not redeemable and that amendments after the
Distribution Date to lengthen any other time periods can only be made for the
benefit of the holders of Rights. Without limiting the generality of the
foregoing, the Rights Agreement may be amended to reduce the thresholds
described in the second paragraph of this summary to not less than 10%. If, at
the time of such reduction, any person beneficially owns shares of Common Stock
in excess of the lowered Acquiring Person threshold, such person will not become
an Acquiring Person until such person (or its Affiliates or Associates) acquires
additional shares of Common Stock (other than (x) through the exercise of any
outstanding options, or the issuance by the Company of any options, stock
appreciation rights or other securities exercisable for or convertible into
stock (or the exercise of any such options, rights or other securities), (y) as
a result of any dividend of the Company payable in stock or securities
convertible into or exercisable for stock or (z) as a result of certain
acquisitions of beneficial ownership of no more than 10,000 shares of Common
Stock in any single calendar year, provided that none of such shares are owned
directly by such person or nominees for such person).
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to this Form 8-K. A copy of the Rights
Agreement is available to stockholders free of charge from MAXXAM upon receipt
of a written request to MAXXAM Inc., 5847 San Felipe, Suite 2600, Houston, Texas
77057; Attention: Corporate Secretary. 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 incorporated herein by reference and prevails in
the event of any conflict between such agreement and this summary.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
*4.1 Rights Agreement ("Rights Agreement") dated as of December 15,
1999, by and between MAXXAM Inc. and American Stock Transfer &
Trust Company
*99.1 Press Release dated December 15, 1999, issued by MAXXAM Inc.
in connection with the Rights Agreement
*99.2 Letter, dated January 14, 2000, sent to MAXXAM Inc.
stockholders in connection with the Rights Agreement
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* included with this filing
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 hereunto duly authorized.
MAXXAM INC.
(Registrant)
Date: January 14, 2000 By: /s/ Bernard L. Birkel
Bernard L. Birkel
Secretary