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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
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) DECEMBER 13, 1996
SOFTWARE SPECTRUM, INC.
(Exact name of registrant as specified in its charter)
Texas 0-19349 75-1878002
(State of incorporation (Commission File Number) (I.R.S. Employer
or organization) Identification No.)
2140 Merritt Drive
Garland, Texas 75041
(Address of principal executive offices) (Zip Code)
(972) 840-6600
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On December 13, 1996, the Board of Directors of SOFTWARE SPECTRUM,
INC. (the "Company") declared a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of Common Stock, $.01 par
value (the "Common Stock"), of the Company. The distribution is payable on
December 31, 1996 to the shareholders of record on December 16, 1996. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of the Company's Series A Junior Participating
Preferred Stock (the "Preferred Stock") at a price of $ 150.00 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and KeyCorp Shareholder
Services, Inc., as Rights Agent (the "Rights Agent"). A Summary of Right to
Purchase Preferred Stock will be sent to each recordholder of Common Stock as
soon as practicable on or after December 16, 1996 (the "Summary of Rights").
Until the earlier to occur of (i) the tenth day following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired beneficial ownership of 20% or more of the
outstanding shares of the Common Stock (the "Share Acquisition Date") or (ii)
the tenth business day (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
or associated persons becomes an Acquiring Person) after the commencement of,
or announcement of an intention to commence, a tender offer or exchange offer
the consummation which would result in any person becoming an Acquiring Person
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of December 16, 1996, by such Common Stock certificate with a
copy of a Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after December 16, 1996, 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 or expiration of the Rights), the
surrender for transfer of any of the Common Stock certificates outstanding as
of December 16, 1996, even without a copy of the Summary of Rights 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.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 31, 2006, (the "Final Expiration Date") unless
the Final Expiration Date is extended or unless earlier redeemed or exchanged
by the Company, in each case, as described below.
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The Purchase Price payable, and the number of shares of the Preferred
Stock or other securities or 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 on, or a subdivision, combination or reclassification of the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for shares of the Preferred Stock or
convertible securities at less than the then-current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings at a rate not in excess of 125%
of the rate of the last cash dividend theretofore paid or dividends payable in
the Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations as of the Common Stock occurring,
in any such case, prior to the Distribution Date.
In the event that the Company is acquired in a merger or other
business combination transaction or that 50% or more of its assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right 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 would have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated person becomes an Acquiring Person, proper provision
will be made so that each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of shares
of the Common Stock having a market value of two times the exercise price of
the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, 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 Stock on the last
trading date prior to the date of exercise.
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 shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which will
have become void) in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth of a Preferred Share per Right (subject to
adjustment).
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At any time prior to 5:00 P.M. Dallas, Texas time on the earliest of
(i) the Share Acquisition Date, (ii) the tenth business day (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 or associated persons becomes an Acquiring
Person) after the commencement of, or announcement of an intention to commence,
a tender offer or exchange offer the consummation of which would result in any
person becoming an Acquiring Person, or (iii) the Final Expiration Date, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company
electing to redeem or exchange the Rights, the Company shall make announcement
thereof, and upon such election, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price, or the shares of Common Stock or Preferred Stock exchangeable
for the Rights, as applicable.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that from
and after such time as any person or group becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the Rights.
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.
The Rights 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 the Company's Board of Directors, 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 since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a person or group has
acquired beneficial ownership of 20% or more of the shares of Common Stock.
A copy of the Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights, which includes the Form of Rights
Certificate and a description of the Preferred Stock is included as an exhibit
to this Report and is incorporated herein by reference. The foregoing summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired:
None.
(b) Pro forma financial information:
None.
(c) Exhibits:
(4) Form of Rights Agreement dated as of December 13,
1996 between Software Spectrum, Inc. and KeyCorp
Shareholder Services, Inc., as Rights Agent, which
includes the form of Statement of Designation setting
forth the terms of the Series A Preferred Stock of
Software Spectrum, Inc. as Exhibit A, the form of
Right Certificate as Exhibit B, and a Summary of
Rights to Purchase Preferred Stock as Exhibit C.
(99) Press Release dated December 13, 1996.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration to be signed on
its behalf by the undersigned, thereto duly authorized.
SOFTWARE SPECTRUM, INC.
By: /s/ DEBORAH A. NUGENT
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Name: DEBORAH A. NUGENT
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Title: VICE PRESIDENT OF FINANCE
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Date: December 20, 1996
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INDEX TO EXHIBITS
EXHIBIT. DESCRIPTION.
(4) Form of Rights Agreement dated as of December 13, 1996 between
Software Spectrum, Inc. and KeyCorp Shareholder Services,
Inc., as Rights Agent, which includes the form of Statement of
Designation setting forth the terms of the Series A Preferred
Stock of Software Spectrum, Inc. as Exhibit A, the form of
Right Certificate as Exhibit B, and a Summary of Rights to
Purchase Preferred Stock as Exhibit C.
(99) Press Release dated December 13, 1996.
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