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 - June 10, 1998
(Date of Earliest Event Reported)
NAC RE CORP.
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(Exact name of registrant as specified in its charter)
Commission File No. 0-13891
Delaware 13-3297840
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(State of Incorporation) (I.R.S. Employer
Identification No.)
One Greenwich Plaza, Greenwich, CT 06836-2568
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (203) 622-5200
Item 5. Other Events
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Adoption of Stockholder Rights Plan
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On June 10, 1998, the Board of Directors of the Company
declared a dividend of one Preferred Stock Purchase Right (the "Right(s)") for
each outstanding share of Common Stock, par value $0.10 per share (the "Common
Stock"), of the Company. The dividend is payable as of June 22, 1998 to
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth (1/100) of a share of a new
series of preferred shares of the Company, designated as Series A Junior
Preferred Stock ("Preferred Stock"), at a price of $150.00 per one one-hundredth
(1/100) of a share (the "Exercise Price"), subject to certain adjustments. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock Transfer & Trust Co.,
as Rights Agent ("Rights Agent"), dated as of June 18, 1998.
Initially the Rights will not be exercisable, certificates
will not be sent to stockholders, and the Rights will automatically trade with
the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of
(i) the tenth day following a public announcement that a person or group of
affiliated or associated persons, with certain exceptions set forth below, has
acquired beneficial ownership of 15% or more of the outstanding voting stock of
the Company (an "Acquiring Person") and (ii) the tenth business day (or such
later date as may be determined by the Board of Directors prior to such time as
any person or group of affiliated or associated persons becomes an Acquiring
Person) after the date of the commencement or announcement of a person's or
group's intention to commence a tender or exchange offer the consummation of
which would result in the ownership of 15% or more of the Company's outstanding
voting stock (even if no shares are actually purchased pursuant to such offer);
prior thereto, the Rights would not be exercisable, would not be represented by
a separate certificate, and would not be transferable apart from the Company's
Common Stock, but will instead be evidenced, with respect to any of the Common
Stock certificates outstanding as of June 22, 1998, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto. An Acquiring
Person does not include (A) the Company, (B) any subsidiary of the Company, (C)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, or any trust or other entity organized,
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appointed, established or holding voting stock for or pursuant to the terms of
any such plan, (D) any person or group whose ownership of 15% or more of the
shares of voting stock of the Company then outstanding results solely from (i)
any action or transaction or transactions approved by the Board of Directors
before such person or group became an Acquiring Person or (ii) a reduction in
the number of issued and outstanding shares of voting stock of the Company
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% of the Company's voting stock unless such
acquisition of additional voting stock would not result in such person or group
becoming an Acquiring Person by reason of such clause (i) or (ii)) or (E) and
person who, as of June 22, 1998, together with all affiliates and associates of
such person, was the beneficial owner of 15% or more of the voting stock of the
Company outstanding as of such date; provided, however, that any person
described in this clause (E) shall no longer be an exempt person and shall
become an Acquiring Person if (i) such person, together with all affiliates and
associates of such person, after June 22, 1998, acquires beneficial
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ownership of an additional 1% or more of the voting stock (unless such
acquisition is pursuant to a transaction described in clause (D)(i) or (D)(ii)
above) or (ii) such person, together will all affiliates and associates of such
person, after June 22, 1998, reduces its beneficial ownership of the voting
stock to less than 15% of the outstanding voting stock and thereafter acquires
beneficial ownership of 15% or more of the outstanding voting stock (unless such
acquisition is pursuant to a transaction described in clause (D)(i) or (D)(ii)
above).
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after June 22,
1998 will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any of the Company's Common Stock certificates
outstanding as of June 22, 1998 with or without a copy of the Summary of Rights
attached, will also constitute the transfer of the Rights associated with the
Common Stock 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 Company's Common Stock
as of the close of
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business on the Distribution Date and such separate certificates alone will
evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on June 10, 2008, unless earlier
redeemed or exchanged by the Company as described below.
The Preferred Stock is non-redeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock, subordinate to any other series of the Company's preferred stock. The
Preferred Stock may not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $0.10 per share and 100
times the cash dividends declared on the Company's Common Stock. In addition,
the Preferred Stock is entitled to 100 times any non-cash dividends (other than
dividends payable in equity securities) declared on the Common Stock, in like
kind. In the event of liquidation, the holders of Preferred Stock will be
entitled to receive for each share, a liquidation payment in an amount equal to
the greater of $1,500.00 or 100 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 100 votes,
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voting together with the Common Stock. In the event of any merger, consolidation
or other transaction in which Common Stock is exchanged, each share of Preferred
Stock will be entitled to receive 100 times the amount received per share of
Common Stock. The rights of Preferred Stock as to dividends, liquidation and
voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise
of the Rights and Exercise Price for the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed, in the event that,
after the time that a person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of the
Company's Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement
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provides that proper provision will be made so that each holder of record of a
Right will from and after such date have the right to receive, upon payment of
the Exercise Price, that number of shares of common stock of the acquiring
company having a market value at the time of such transaction equal to two times
the Exercise Price. In addition, unless the Rights are earlier redeemed, if a
person becomes an Acquiring Person, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right, other than the
Acquiring Person (whose Rights will thereupon become null and void), will
thereafter have the right to receive, upon payment of the Exercise Price, that
number of shares of the Company's Preferred Stock having a market value at the
time of the transaction equal to two times the Exercise Price (such market value
to be determined with reference to the market value of the Company's Common
Stock as provided in the Rights Agreement). The Rights Agreement also grants the
Board of Directors the option, after any person or group acquires beneficial
ownership of 15% or more of the voting stock but before there has been a 50%
acquisition, to exchange one share of common stock for each then valid right
(which would exclude rights held by the Acquiring Person that have become void).
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Fractions of shares of Preferred Stock (other than fractions
that are integral multiples of one one-hundredth (1/100) of a share) may, at the
election of the Company, be evidenced by depositary receipts. The Company may
also issue cash in lieu of fractional shares which are not integral multiples of
one one-hundredth (1/100) of a share.
At any time on or prior to the close of business on the tenth
day after the time that a person has become an Acquiring Person, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
("Redemption Price"). Immediately upon the effective time of the action of the
Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
the Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the redemption price or date of expiration of the
Rights, amend the Rights in any manner, including an amendment to extend the
time period in which the Rights may be redeemed. At any time when the Rights are
not then redeemable, the Company may amend the Rights in any manner that does
not materially adversely affect the interests of holders of the Rights as such.
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Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
As of June 17, 1998, there were 18,175,716 shares of Common
Stock issued and outstanding, 3,610,398 treasury shares issued (and 3,928,239
shares reserved for issuance under the Company's existing stock plans).
277,500 shares of Preferred Stock have been reserved for issuance upon
exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group who 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 since they may be redeemed by the Company at $.01 per Right at any
time until the close of business on the tenth day after a person or group has
obtained beneficial ownership of 15% or more of the voting stock.
The form of Rights Agreement between the Company and the
Rights Agent, specifying the terms of the Rights, which includes as Exhibit A
the form of Summary of Rights to Purchase Series A Junior Preferred Stock, as
Exhibit B the
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form of Right Certificate and as Exhibit C the form of Certificate of
Designations of the Company setting forth the terms of the Preferred Stock are
attached hereto as exhibits and incorporated herein by reference. The foregoing
description of the Rights is qualified by reference to such exhibits.
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Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(c) Exhibits.
1. Rights Agreement dated as of June 18, 1998 between
NAC Re Corp. and American Stock Transfer & Trust Co.,
as Rights Agent. The Rights Agreement includes as
Exhibit B the form of Right Certificate and as
Exhibit C the form of Certificate of Designations.
2. Press Release, dated June 10, 1998.
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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.
By: /s/Celia R. Brown
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Name: Celia R. Brown
Title: Secretary
June 19, 1998
EXHIBIT INDEX
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Exhibit No. Description
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1. Rights Agreement dated as of June 18,
1998 between NAC Re Corp. and American
Stock Transfer & Trust Co., as Rights
Agent. The Rights Agreement includes as
Exhibit B the form of Right Certificate
and as Exhibit C the form of Certificate
of Designations.
2. Press Release, dated June 10, 1998.
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