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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 13, 1996
INTERDIGITAL COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
781 Third Avenue, King of Prussia, PA 19406-1409
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 878-7800
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Items 1-4. Not Applicable
Item 5. Other Events.
On December 13, 1996, the Board of Directors of InterDigital
Communications Corporation, a Pennsylvania corporation (the "Company"), declared
a distribution of one Right (as defined below) for each outstanding share of
Common Stock, par value $.01 per share (the "Company Common Stock") to
shareholders of record at the close of business on January 3, 1997 (the "Record
Date") and for each share of Company Common Stock issued (including shares
distributed from Treasury) by the Company thereafter and prior to the
Distribution Date. Each Right entitles the registered holder, subject to the
terms of the Rights Agreement (as defined below), to purchase from the Company
one one-thousandth of a share (a "Unit") of Series B Junior Participating
Preferred Stock (the "Preferred Stock"), at a Purchase Price of $45.00 per Unit,
subject to adjustment (the "Right"). The Purchase Price is payable in cash or by
certified or bank check or money order payable to the order of the Company. The
description and terms of the Rights are set forth in a Rights Agreement between
the Company and American Stock Transfer and Trust Company, as Rights Agent (the
"Rights Agreement").
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock and
the "Distribution Date" will occur upon (i) the earlier of (A) 10 business days
following the date of a public announcement (the date of such announcement being
the "Stock Acquisition Date") that a person or group of affiliated or associated
persons (other than the Company, any subsidiary of the Company or any employee
benefit plan of the Company or such subsidiary) (an "Acquiring Person") has
acquired, obtained the right to acquire, or otherwise obtained beneficial
ownership of 15% or more of the then outstanding shares of Company Common Stock,
and (B) 10 business days 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 then outstanding shares of Company Common Stock, or (ii) such later
date as may be determined by action of a majority of the Independent Directors
of the Board prior to the occurrence of either event specified in (i) above. The
determination of beneficial ownership under the Rights Agreement generally
exclude options to purchase shares and shares acquired from the Company pursuant
to stock-based plans for employees and directors. Until the Distribution Date,
(x) the Rights will be evidenced by Company Common Stock certificates and will
be transferred with and only with such Company Common Stock certificates,
(y) new Company Common Stock certificates issued after the Record Date (also
including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference, and (z) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Rights Agreement
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 Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes the beneficial owner of 15% or more of the
then outstanding shares of Company Common Stock, (iii) an
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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, an event occurs which results in such Acquiring Person's ownership
interest in the Company Common Stock being increased by more than 1% (e.g., by
means of a reverse stock split or recapitalization), then, in each such case,
each holder of a Right will thereafter have the right to receive, upon exercise,
Units of Preferred Stock (or, in certain circumstances, Company Common Stock,
cash, property or other securities of the Company) having a current market value
equal to two times the exercise price of the Right. The exercise price is the
Purchase Price multiplied by the number of Units of Preferred Stock issuable
upon exercise of a Right prior to the events described in this paragraph.
Notwithstanding any of the foregoing, following the 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 any
Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is converted
or exchanged for securities, cash or property of any other Person, or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon exercise, common stock
of the Acquiring Person having a current market value equal to two times the
exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
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 the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular cash dividends, if any) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
A majority of the Independent Directors may redeem the Rights in whole,
but not in part, until (i) ten business days following the Stock Acquisition
Date, or (ii) such later date as they shall determine, at a price of $.01 per
Right (subject to adjustment in certain events) (the "Redemption Price"),
payable, at the election of such majority of the Independent Directors, in cash
or shares of Company Common Stock. Immediately upon the action of a majority of
the Independent Directors ordering the redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder 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 shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended without
the approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution
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Date, the provisions of the Rights Agreement may be amended in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), 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 such time as the Rights are not
redeemable.
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will be entitled to dividends at the same
rate per share as dividends declared on the Company Common Stock and shall be
entitled to payment of dividends to the extent dividends are declared on the
Company Common Stock. In the event of liquidation, the holder of a Unit of
Preferred Stock will receive the per share amount paid in respect of a share of
Company Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock. Each Unit of Preferred Stock will have one vote, voting
together with the Company Common Stock. The rights of holders of the Preferred
Stock to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of the Common Stock.
The form of Rights Agreement between the Company and the Rights Agent
specifying the term of the Rights, which includes as (i) Exhibit A, Form of
Rights Certificate, (ii) Exhibit B,Form of Certificate of Designation - Series B
Junior Participating Preferred Stock, and (iii) Exhibit C, Form of Summary of
Rights, is attached hereto as Exhibit 4 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 such Exhibit.
Item 6. Not Applicable.
Item 7. Exhibits.
4. Rights Agreement, dated as of December 31, 1996, between
InterDigital Communications Corporation and American Stock
Transfer and Trust Company, including Form of Rights
Certificate (Exhibit A), Form of Certificate of Designation -
Series B Junior Participating Preferred Stock (Exhibit B), and
Form of Summary of Rights (Exhibit C).
99. Press Release, dated December 13, 1996, issued by the Company.
Item 8. Not Applicable.
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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.
INTERDIGITAL COMMUNICATIONS
CORPORATION
By: /s/ WILLIAM A. DOYLE
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William A. Doyle
President
Date: December 31, 1996
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EXHIBIT INDEX
Exhibit No. Description
4. Rights Agreement, dated as of December 31, 1996, between
InterDigital Communications Corporation and American Stock
Transfer and Trust Company, including Form of Rights
Certificate (Exhibit A), Form of Certificate of Designation -
Series B Junior Participating Preferred Stock (Exhibit B),
Form of Summary of Rights (Exhibit C).
99. Press Release, dated December 13, 1996, issued by the Company.
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