SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K/A
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 19, 1996
ISOLYSER COMPANY, INC.
(Exact name of registrant as specified in charter)
Georgia 0-24866 58-1746149
(State or other (Commission (IRS Employer
jurisdiction of File Number) (Identification No.)
incorporation)
650 Engineering Drive, Norcross, Georgia 30092
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (770) 582-6363
(Former name or former address, if changed since last report)
479978.1
EXPLANATORY NOTE: This amendment to the Company's Current Report on Form 8-K
filed by Isolyser Company, Inc. with the Securities and Exchange Commission on
December 20, 1996 is for purposes of adding to such Current Report a description
of that certain First Amendment to the Shareholder Protection Rights Agreement
dated as of October 14, 1997.
ITEM 5. OTHER EVENTS.
On December 19, 1996, the Board of Directors of Isolyser Company, Inc.
(the "Registrant") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.001 per share
(the "Common Shares"), of the Registrant. The dividend is payable on December
31, 1996 (the "Record Time") to the shareholders of record on that date. Each
Right entitles the registered holder to purchase from the Registrant one
one-hundredth of a share of Participating Preferred Stock, no par value per
share (the "Preferred Shares"), of the Registrant at a price of $60.00 per one
one-hundredth of a Preferred Share (the "Exercise Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Shareholder Protection Rights Agreement between the Registrant and SunTrust Bank
as Rights Agent (the "Rights Agent"). The Shareholder Protection Rights
Agreement was amended by the parties thereto (as amended, the "Rights
Agreement") on October 14, 1997 pursuant to a First Amendment to the Shareholder
Protection Rights Agreement (the "Amendment").
Until the earlier to occur of (i) a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") have
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 group of affiliated
persons 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 the outstanding Common Shares (the earlier of such dates
being called the "Separation Time"), the Rights will be evidenced by the Common
Stock certificates with a copy of a summary of the rights attached thereto.
The Rights Agreement provides that, until the Separation Time (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Separation Time (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Time upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Separation Time (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Time, even without such notation or a copy of a 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 Separation Time, separate certificates evidencing the
Rights ("Rights Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Separation Time and such separate
Rights Certificates alone will evidence the Rights.
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The Rights will not be exercisable until the Business Day (as defined
in the Rights Agreement) following the Separation Time. The Rights will expire
on the earliest of (i) the Exchange Time (as defined below), (ii) the close of
business on December 31, 2006, (iii) the date on which the Rights are redeemed
as described below and (iv) upon the merger of the Registrant into another
corporation pursuant to an agreement entered into when there is no Acquiring
Person (in any such case, the "Expiration Time").
The Exercise 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 in the event of (i) a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, or (ii) a distribution of securities or assets in respect of, in lieu of
or in exchange for Common Shares (excluding regular periodic cash dividends or
dividends payable in Common Shares).
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable without the consent of the holders of such shares. Each Preferred
Share will be entitled to an aggregate dividend of 100 times the dividend
declared per Common Share (other than dividends or distributions paid in Common
Shares). In the event of liquidation, the holders of the Preferred Shares will
be entitled to be paid an amount per share equal to the aggregate amount
distributable upon such event to a holder of 100 shares of Common Stock (each as
adjusted for any stock dividend, stock split or combination into a smaller
number of shares). Each Preferred Share shall have 100 votes (as adjusted for
any stock dividend, stock split or combination into a smaller number of shares)
and shall vote as a class with the Common Shares voting on such matter. 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 received per Common Share. Because of the nature of the Preferred
Shares, dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, the Registrant shall take such action as
shall be necessary to ensure and provide that each Right (other than Rights
beneficially owned by the Acquiring Person, which Rights shall become void)
shall constitute the right to purchase from the Registrant, upon the exercise
thereof in accordance with the terms of the Rights Agreement, that number of
shares of Common Stock or Preferred Shares having an aggregate Market Price (as
defined in the Rights Agreement) equal to twice the Exercise Price for an amount
in cash equal to the then current Exercise Price.
At any time after any person or group becomes an Acquiring Person 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 Registrant may exchange
all (but not less than all) of the then outstanding Rights (other than Rights
owned by such person or group which will have become void) at an exchange ratio
of one Common Share, or one one-hundredth of a Preferred Share, per Right,
appropriately adjusted to reflect any stock split, stock dividend
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or similar transaction occurring after the date of the Separation Time (the
"Exchange Ratio"). Immediately upon such action by the Board of Directors (the
"Exchange Time"), the right to exercise the Rights will terminate and each Right
will thereafter represent only the right to receive a number of shares of Common
Stock or one one-hundredths of a Preferred Share equal to the Exchange Ratio.
In the event (a "Flip-over Transaction or Event") that prior to the
Expiration Time the Registrant enters into a transaction after the time when an
Acquiring Person has become such in which, directly or indirectly, (i) the
Registrant shall consolidate or merge or participate in a share exchange with
any other Person if, at the time of the consolidation, merger or share exchange
or at the time the Registrant enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person controls the Board
of Directors of the Registrant and any term of or arrangement concerning the
treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (ii) the
Registrant shall sell or otherwise transfer assets (A) aggregating more than 50%
of the assets or (B) generating more than 50% of the operating income or cash
flow of the Registrant to any Person if, at the time of the entry by the
Registrant into an agreement with respect to such sale or transfer of assets,
the Acquiring Person controls the Board of Directors of the Registrant, the
Registrant will take such action as shall be necessary to ensure that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), 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 an aggregate Market Price equal to twice the Exercise
Price of the Right for an amount in cash equal to the then current Exercise
Price.
If the Registrant elects not to issue certificates representing
fractional shares upon exercise or redemption of Rights, the Registrant shall,
in lieu thereof, in the sole discretion of the Board of Directors, either (i)
evidence such fractional shares by depository receipts, or (ii) pay to the
holder of such Rights an amount in cash equal to the same fraction of the Market
Price of such share.
The Registrant may at its option, at any time prior to the date (the
"Flip-in Date") of public announcement by the Registrant that an Acquiring
Person has become such (other than as a result of a Flip-over Transaction or
Event), redeem all (but not less than all) of the then outstanding Rights at a
price of $.001 per Right (the "Redemption Price"). Immediately upon any
redemption of the Rights, without any further action and without notice, the
right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash for each Right
so held. Notwithstanding the foregoing, the Amendment provides that in the event
that a majority of the Board of Directors of the Registrant is comprised of
Persons (or their respective successors) elected by the shareholders of the
Registrant who are not nominated by the Board of Directors in office immediately
prior to such election (such persons, the "Unnominated Directors") and who were
elected to the Board of Directors for the purpose of either facilitating a
Transaction (as
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defined in the Rights Agreement) with a Proxy Contestant (as defined in the
Rights Agreement) or circumventing directly or indirectly the redemption
provisions of the Rights Agreement, then (i) the Rights may not be redeemed for
a period of 365 days following the effectiveness of such election if such
redemption is reasonably likely to have the purpose or effect of facilitating
such a Transaction with a Proxy Contestant and (ii) the Rights may not be
redeemed following such 365 day period if such redemption is reasonably likely
to have the purpose of facilitating such Transaction with a Proxy Contestant and
during such 365 day period, the Registrant entered into any agreement,
arrangement or understanding with a Proxy Contestant which is reasonably likely
to have the purpose or effect of facilitating such Transaction with a Proxy
Contestant.
The Registrant and the Rights Agent may from time to time supplement or
amend the Rights Agreement without the approval of any holders of Rights (i)
prior to the Flip-in Date, in any respect and (ii) after the close of business
on the Flip-in Date, to make any changes that the Registrant may deem necessary
or desirable and which shall not materially adversely affect the interests of
the holders of Rights generally or in order to cure any ambiguity or to correct
or supplement any provision contained therein which may be inconsistent with any
other provisions therein or otherwise defective. Notwithstanding the foregoing,
the Amendment provides that in the event that a majority of the Board of
Directors of the Registrant is comprised of Unnominated Directors who were
elected to the Board of Directors for the purpose of either facilitating a
Transaction with a Proxy Contestant or circumventing directly or indirectly the
amendment or redemption provisions of the Rights Agreement, then (i) for a
period of 365 days following the effectiveness of such action, the Rights
Agreement shall not be amended or supplemented, and the Board of Directors may
not approve any action taken to exclude a Person from the definition of
"Acquiring Person" contained in the Rights Agreement, in any manner reasonably
likely to have the purpose or effect of facilitating a Transaction with a Proxy
Contestant and (ii) no such amendments, supplements or approvals may be made
following such 365 day period if (x) such amendment, supplement or approval is
reasonably likely to have the purpose or effect of facilitating a Transaction
with a Proxy Contestant and (y) during such 365 day period, the Registrant
enters into any agreement, arrangement or understanding with such Proxy
Contestant which is reasonably likely to have the purpose or effect of
facilitating such a Transaction with such Proxy Contestant.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Registrant, including, without limitation, the
right to vote or to receive dividends.
The Rights will have substantial anti-takeover effects, but do not
prevent a takeover of the Registrant. The Rights may cause substantial dilution
to a person or group that acquires 15% or more of the outstanding shares of
Common Stock unless (i) the Rights are first redeemed by the Registrant or (ii)
the acquisition is approved by the Board of Directors. Nevertheless, the Rights
should not interfere with a transaction that is in the best interests of the
Registrant and its shareholders because the Rights can be redeemed on or prior
to the Flip-in Date or rendered unexercisable by Board approval of the
transaction.
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Concurrently with approving the Rights Agreement, the Board of
Directors of the Registrant also amended the shareholder notice procedures of
its Bylaws to increase from between 30 and 50 days to between 60 and 90 days the
window period within which shareholders must give notice to make nominations for
candidates for election as directors or bring other business before shareholder
meetings of the Registrant (except to the extent such matters are governed by
Rule 14a-8 under the Securities Exchange Act of 1934), and requiring the
approval of at least a majority of the Registrant's outstanding shares for
shareholders to call a special meeting of shareholders of the Registrant. The
purpose of the provisions is to ensure that the Board of Directors has a
meaningful opportunity to consider the qualifications of proposed nominees or
the advisability of other proposed business and, where appropriate in the
discretion of the Board of Directors, inform shareholders about such
qualifications of nominees or advisability of other business, as well as to
provide a more orderly procedure for conducting meetings of shareholders.
Although the Bylaws do not give the Board of Directors power to disapprove
shareholder nominations or proposals properly proffered, the Bylaws may have the
effect of precluding or delaying a contest for the election of directors or the
consideration of other proposed business and of discouraging or deterring a
third party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal.
The Amendment addresses the Registrant's vulnerability to takeover by
an Acquiring Person through a proxy contest by providing generally that, in the
event a majority of the members of the Board are not Board approved nominees,
the Rights Agreement may not be amended and the Rights may not be redeemed by
the Board for a period of one year (and longer in the event of certain
self-dealing transactions during the first year after the director elections)
following the election of the replacement directors if such amendment or
redemption is likely to have the purpose or effect of facilitating a business
combination with the proxy contestant. The purpose of this provision is to add
an additional layer of protection preventing a proposed acquiring person
(namely, the Proxy Contestant) from circumventing the Rights Agreement by
obtaining control of the Board through a proxy solicitation in advance of
becoming an Acquiring Person and thereafter amend the Rights Agreement or redeem
the Rights. The Amendment does not interfere with the shareholders' ability to
replace the Board of Directors. The provision only limits the power of a new
Board in those situations where an Acquiring Person is attempting to use a proxy
solicitation to evade the protections afforded by the Rights Agreement. The
replacement Board members, even with this provision, retain the ability to
review and act upon competing acquisition proposals. The replacement Board could
also effect an acquisition transaction with an Acquiring Person if prepared to
wait 365 days.
The description of the Rights contained herein is qualified in its
entirety by reference to the Shareholder Protection Rights Agreement, dated as
of December 20, 1996, by and among the Registrant and the Rights Agent, attached
to the Registrant's Form 8-K dated December 19, 1996 as Exhibit 4.1 and
incorporated herein by reference, as amended by the First Amendment to the
Shareholder Protection Rights Agreement, dated as of October 14, 1997 attached
hereto as Exhibit 4.2 and incorporated herein by reference. In addition, the
Registrant hereby incorporates by reference herein the amendment to the
Registrant's Bylaws
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attached to the Registrant's Form 8-K dated December 19, 1996 as Exhibit 3.1,
the Press Release attached to the Registrant's Form 8-K dated December 19, 1996
as Exhibit 20.1 and the Press Release attached hereto as Exhibit 20.2.
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ITEM 7. EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1* Second Amendment of the Amended and Restated Bylaws of
Registrant.
4.1* Shareholder Protection Rights Agreement, dated as of
December 20, 1996 between Registrant and Rights Agent.
4.2 First Amendment to Shareholder Protection Rights Agreement,
dated as of October 14, 1997 between Registrant and Rights
Agent.
20.1* Press Release.
20.2 Press Release.
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*Incorporated herein by reference to the Exhibit with the same number
contained in the Registrant's Current Report on Form 8-K filed December 20,
1996.
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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.
ISOLYSER COMPANY, INC.
Date: October 14, 1997 By: /s/ Peter A. Schmitt
---------------------------
Peter A. Schmitt
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
3.1* Second Amendment of the Amended and Restated Bylaws of
Registrant.
4.1* Rights Agreement, dated as of December 20, 1996 between
Registrant and Rights Agent.
4.2 First Amendment to Shareholder Protection Rights Agreement,
dated as of October 14, 1997 between Registrant and Rights Agent.
20.1* Press Release.
20.2 Press Release.
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*Incorporated herein by reference to the Exhibit with the same number
contained in the Registrant's Current Report on Form 8-K filed December 20,
1996.
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