SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): April 22, 1998
Davel Communications Group, Inc.
(Exact name of registrant as specified in its charter)
Illinois 0-22610 37-1064777
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identifcation No.)
1429 Massaro Boulevard, Tampa, Florida 33619
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(Address of principal executive offices)
(813) 623-3545
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
Adoption of Stockholder Rights Plan
On April 22, 1998, the Board of Directors of Davel Communications
Group, Inc. (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, without
par value (the"Common Stock"), of the Company. The distribution is payable to
the stockholders of record at the close of business on May 4, 1998 (the "Record
Date"), which is also the payment date, and with respect to all shares of Common
Stock that become outstanding after the Record Date and prior to the earliest of
the Distribution Date (as defined below), the redemption of the Rights, the
exchange of the Rights, and the expiration of the Rights (and, in certain cases,
following the Distribution Date). Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of a Junior
Participating Preferred Stock, Series A, par value $0.01 per share, of the
Company (the "Preferred Shares") at a price of $100.00 per one one-thousandth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights, and certain defined terms used herein, are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"), dated as of
April 22, 1998.
Until the earlier to occur of (i) the expiration of the Company's
redemption rights following the date of public disclosure that a person or group
other than certain Exempt Persons (an "Acquiring Person"), together with persons
affiliated or associated with such Acquiring Person (other than those that are
Exempt Persons), has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock (the "Stock Acquisition
Date") or (ii) the tenth business day after the date of commencement or public
disclosure of an intention to commence a tender offer or exchange offer by a
person other than an Exempt Person if, upon consummation of the offer, such
person could acquire beneficial ownership of 15% or more of the outstanding
Common Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced by Common Stock certificates and not by separate
certificates. The Rights Agreement provides that, until the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), the Rights will
be transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption, exchange or expiration of the Rights), new Common Stock
certificates issued after May 4, 1998, upon transfer or new issuance of the
Common Stock, will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any certificate for
Common Stock, with or without such notation or a copy of a summary of the Rights
being attached thereto, 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
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights.
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The Rights will first become exercisable after the Distribution Date
(unless sooner redeemed or exchanged). The Rights will expire at the close of
business on May 4, 2008 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities, cash or other 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 or distribution on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights, options or warrants to subscribe for
Preferred Shares or securities convertible into Preferred Shares at less than
the current market price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends out of earnings or retained earnings)
or of subscription rights or warrants (other than those referred to above). In
addition, the Purchase Price payable and the number of Preferred Shares
purchasable on exercise of a Right is subject to adjustment in the event that
the Company should (i) declare or pay any dividend on the Common Stock payable
in Common Stock or (ii) effect a subdivision or combination of the Common Stock
into a different number of Common Stock.
In the event that, at any time following public disclosure that an
Acquiring Person has become such, the Company is involved in a merger or other
business combination transaction where the Company is not the surviving
corporation or where Common Stock are changed or exchanged or in a transaction
or transactions wherein 50% or more of its consolidated assets or earning power
are sold, proper provision would be made so that each holder of a Right (other
than such Acquiring Person and certain related persons or transferees) shall
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 or the Company, as the case may be, which at the time of
such transaction would have a market value of two times the exercise price of
the Right. In the event that there is public disclosure that an Acquiring
Person has become such, proper provision would be made so that each holder of a
Right, other than Rights that are or were beneficially owned by the Acquiring
Person and certain related persons and transferees (which will thereafter be
void), on or after the earlier of the Distribution Date and the first public
disclosure that an Acquiring Person has become such, will thereafter have the
right to receive upon exercise that number of shares of Common Stock (or other
securities) having at the time of such transaction a market value of two times
the exercise price of the Right. In addition, the Company's Board of Directors
has the option of exchanging all or part of the Rights (excluding void Rights)
for an equal number of shares of Common Stock in the manner described in the
Rights Agreement.
No fractional Preferred Shares will be issued (other than fractions
which are integral multiples of one one-thousandth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts) and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading date prior to the date of exercise.
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At any time prior to public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable in cash, shares (including fractional shares) of Common Stock or any
other form of consideration deemed appropriate by the Board of Directors.
At any time prior to public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may amend or supplement the
Rights Agreement without the approval of the Rights Agent or any holder of the
Rights. Thereafter, the Board of Directors of the Company may amend or
supplement the Rights Agreement without such approval only to cure ambiguity,
correct or supplement any defective or inconsistent provision or change or
supplement the Rights Agreement in any manner which shall not adversely affect
the interests of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate thereof). Immediately upon the action of the Board of
Directors providing for any amendment or supplement, such amendment or
supplement will be deemed effective.
The Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $25 per share and 1,000 times
the dividend declared per share of Common Stock. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment equal to the greater of $100 per share and 1,000 times the
payment made per Common Stock. Each Preferred Share will have 1,000 votes per
share, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per share of Common Stock.
Exempt Persons include (i) the Company, (ii) any Subsidiary of the
Company, (iii) Mr. David R. Hill, the principal shareholder of the Company ("Mr.
Hill"), (iv) any employee benefit plan of the Company or of any Subsidiary of
the Company, and (v) any Person holding Common Stock for any such employee
benefit plan or for employees of the Company or of any Subsidiary of the Company
pursuant to the terms of any such employee benefit plan.
Subject to certain exceptions and Permitted Acquisitions, Mr. Hill is
allowed to acquire additional Common Stock in an amount not to exceed the sum of
(i) 1% and (ii) his beneficial ownership of Common Stock on the date of the
Rights Agreement, as such beneficial ownership of Common Stock may be increased
as a result of certain subsequent events such as an acquisition of Common Stock
by the Company or any Subsidiary or as a result of acquiring Common Stock as a
result of the operation of the Rights Agreement.
"Permitted Acquisition" means, with respect to Mr. Hill, (i) any
acquisition by way of any stock dividend, stock split, reorganization,
recapitalization, merger, consolidation, rights offering or other like
distribution made available to holders of Common Stock generally or under this
Agreement (as the same may be amended, restated or supplemented from time to
time) or any other shareholder rights agreement, and (ii) any acquisition
pursuant to any employee benefit plan,
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executive compensation plan, management agreement, director, executive,
management or employee stock option plan, or any other officer or employee
incentive award, benefit, bonus or similar plan, agreement, system or
arrangement.
The Rights may have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group (except as described above with
respect to an Exempt Person) that attempts to acquire the Company on terms not
approved by the Board, except pursuant to an offer conditioned on a substantial
number of Rights being acquired. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors prior to
the time a person or group other than an Exempt Person has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time the Rights
may generally be redeemed by the Company at $.01 per Right.
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.
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 by reference as Exhibit 4.1 to this Current Report on Form 8-K.
The Company announced the adoption of the Rights Plan in a press release, dated
April 23, 1998, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
4.1 Rights Agreement, dated as of April 22, 1998, between Davel
Communications Group, Inc. and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (incorporated by reference
to Exhibit 1.1 to the Company's Registration Statement on
Form 8-A, filed with the Commission on April 30, 1998).
99.1 Press Release, dated April 23, 1998, issued by the Company.
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SIGNATURE
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.
Davel Communications Group, Inc.
By: /s/ Michael E. Hayes
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Michael E. Hayes
Senior Vice President and Chief Financial Officer
Dated: April 30, 1998
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