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
Date of Report (Date of earliest event reported): October 3, 1994
MAGMA POWER COMPANY
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(Exact name of registrant as specified in its charter)
Nevada 0-10533 95-3694478
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
4365 Executive Drive, Suite 900, San Diego, CA 92121
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(Address of principal executive offices) (Zip Code)
Registrants telephone number,
including area code: (619) 622-7800
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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On October 3, 1994, the Board of Directors of Magma Power Company (the
"Company") declared a distribution of one Right for each outstanding share of
Common Stock, par value $.10 per share (the "Company Common Stock"), to
stockholders of record at the close of business on October 14, 1994 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, to purchase from the Company one one-thousandth of a share (a "Unit")
of Series A Preferred Stock, par value $.10 per share (the "Preferred Stock"),
at a Purchase Price of $125 per Unit, subject to adjustment. 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 Chemical Trust Company of California
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 the earlier of (i) 10 business days
following 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 10%
or more of the then outstanding shares of Company Common Stock (or if certain
current holders of 10% or more of the outstanding shares of Company Common Stock
have acquired, obtained the right to acquire or otherwise obtained beneficial
ownership of an additional 4% of the Company Common Stock), and (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 becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 20% or more of the then outstanding
shares of Company Common Stock. Until the Distribution Date, (i) the Rights will
be evidenced by Company Common Stock certificates and will be transferred with
and only with such Company Common Stock certificates, (ii) new Company Common
Stock certificates issued after October 14, 1994 (also including shares
distributed from Treasury) will contain a notation incorporating the Rights
Agreement by reference and (iii) 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.
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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 10% or more of the
then outstanding shares of Company Common Stock (or an additional 4% in the case
certain current 10% holders), (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, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% 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 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 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 or assets (excluding
regular
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quarterly cash dividends) 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.
At any time until ten business days following the Stock Acquisition
Date, a majority of the Independent Directors may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (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
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 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 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 at any
time prior to the Distribution Date. After the Distribution 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.
A total of 50,000 shares of Preferred Stock will be reserved for
issuance upon exercise of the Rights. 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 have a minimum preferential
quarterly dividend rate of $.01 per Unit but will, in any event, be entitled to
a dividend equal to the per share dividend declared on the Company Common Stock.
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In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $125 per
Unit and the per share amount paid in respect of a share of Company Common
Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the 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.
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 antidilution 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 Company Common Stock.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by a majority of the Independent Directors unless
the offer is conditioned on a substantial number of Rights being acquired.
However, the Rights should not interfere with any merger or other business
combination approved by a majority of the Independent Directors because the
Rights may be redeemed by the Company at $.01 per Right at any time on or prior
to the tenth business day following the Stock Acquisition Date (subject to
extension by a majority of the Independent Directors). Thus, the Rights are
intended to encourage persons who may seek to acquire control of the Company to
initiate such an acquisition through negotiations with the Board of Directors.
However, the effect of the Rights may be to discourage a third party from making
a partial tender offer or otherwise attempting to obtain a substantial equity
position in the equity securities of, or seeking to obtain control of, the
Company. To the extent any potential acquirors are deterred by the Rights, the
Rights may have the effect of preserving incumbent management in office.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Rights Certificate, 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 4.
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Item 7. Financial Statements and Exhibits
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Exhibit 4 Rights Agreement dated as of October 6, 1994, between
Magma Power Company and Chemical Trust Company of
California, including Form of Rights Certificate as
Exhibit A, Summary of Rights to Purchase Preferred Stock
as Exhibit B and the Certificate of Designation for the
Preferred Stock as Exhibit C.
Exhibit 99 Press Release dated October 3, 1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registration has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
MAGMA POWER COMPANY
/s/ Jon R. Peele
By ------------------------------------
Name: Jon R. Peele
Title: Executive Vice President
Date: October 4, 1994
EXHIBIT INDEX
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Exhibit
No. Description
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4 Rights Agreement dated as of October 6, 1994, between Magma
Power Company and Chemical Trust Company of California,
including Form of Rights Certificate as Exhibit A, Summary
ofRights to Purchase Preferred Stock as Exhibit B and
Certificate of Designation for the Preferred Stock as Exhibit C.
99 Press Release
dated October 3, 1994.