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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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JUNE 24, 1998
(Date of Report)
NCI BUILDING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19885 76-0127701
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
7301 FAIRVIEW
HOUSTON, TEXAS 77041
(Address of principal executive offices)
(713) 466-7788
(Registrant's telephone number,
including area code)
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ITEM 5: OTHER EVENTS
On June 24, 1998, the Board of Directors (the
"Board") of NCI Building Systems, Inc. (the "Company") declared a dividend of
one preferred stock purchase right ("Right") for each outstanding share of
common stock, $0.01 par value ("Common Stock"), of the Company. The dividend
is payable on July 22, 1998 to stockholders of record at the close of business
on July 8, 1998 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one one-hundredth (1/100th) of a share of the
Company's Series A Junior Participating Preferred Stock ("Series A Preferred
Stock") at a purchase price of $125.00, in each case after giving effect to and
taking into account a concurrent 2 for 1 split of the Common Stock of the
Company. The terms and conditions of the Rights are set forth in that certain
Rights Agreement, dated June 24, 1998 by and between the Company and Harris
Trust and Savings Bank.
Initially the Rights will not be exercisable,
certificates for the Rights will not be issued and the Rights will automatically
trade with the Common Stock. Until the Distribution Date (as hereinafter
defined) or the earlier redemption, exchange or expiration of the Rights, the
Rights will be represented by the Common Stock certificates and will be
transferred with, and only with, the Common Stock. Until the Distribution Date
(or the earlier redemption, exchange or expiration of the Rights), all new
Common Stock certificates issued by the Company will contain a legend
incorporating the Rights Agreement by reference and the surrender for transfer
of any of the Company's Common Stock certificates, with or without the aforesaid
legend, will also constitute the simultaneous transfer of the Rights associated
with the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate Right Certificates ("Rights
Certificates") will be mailed to holders of record of Common Stock at the close
of business on the Distribution Date, and, thereafter, the Right Certificates
alone will evidence the Rights, and the Rights will be transferable separate and
apart from the Common Stock.
The Distribution Date will occur on the (i)
fifteenth day following a public announcement that a person or group of
affiliated or associated persons, other than the Company, any subsidiary of the
Company or any employee benefit plan or employee stock plan of the Company
(each, an "Exempt Person"), has acquired, or has obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding Common Stock other than
by reason of an original issuance from the Company or as a result of
repurchases of shares by the Company (each, an "Acquiring Person") (the "Stock
Acquisition Date") or (ii) fifteenth business day following the commencement of
or public announcement of the intent by any Person other than an Exempt Person
to commence a tender or exchange offer which, if consummated, would result in
the ownership by such Person of 20% or more of the outstanding Common Stock,
irrespective of whether any shares of Common Stock are acquired pursuant to such
offer (such dates referenced in clauses (i) or (ii) above being called the
"Distribution Date"). The Rights Agreement provides that the Distribution Date
may be extended by the Continuing Directors (as hereinafter defined) prior to
the expiration of the time periods referenced in the preceding sentence.
A "Continuing Director" is a member of the Board who
either (i) is not an Acquiring Person or a person who is at the time engaged in
a tender or exchange offer that could result in that person's becoming the
beneficial owner of 20% or more of the outstanding Common Stock (or an affiliate
or an associate of either of the foregoing) and who was a member of the Board
before the time the Acquiring Person became an Acquiring Person or the tender or
exchange offer began or (ii) is not an Acquiring Person or a person who is at
the time engaged in a tender or exchange offer that could result in that
person's becoming the beneficial owner of 20% or more of the outstanding Common
Stock (or an affiliate or an associate of either of the foregoing) and was
recommended to serve on the Board by a majority of Continuing Directors.
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The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on June 24, 2008, unless
redeemed or exchanged earlier as described below.
The Series A Preferred Stock will be nonredeemable
and, unless otherwise provided in connection with the creation of a subsequent
series of preferred stock, will be subordinate to all other series of the
Company's preferred stock. The Series A Preferred Stock will not be issued
except upon exercise of Rights. Each share of Series A Preferred Stock will be
entitled to receive, when, as and if declared, a quarterly dividend in an
amount equal to 100 times the quarterly cash dividend declared on the Company's
Common Stock. In addition, the Series A Preferred Stock is entitled to 100
times any noncash dividends declared on the Common Stock, in like kind. In the
event of dissolution, liquidation or winding-up of the Company, the holders of
Series A Preferred Stock will be entitled to receive a liquidation payment in
an amount equal to $100 per share, plus 100 times the liquidation payment made
per share of Common Stock. Each share of Series A Preferred Stock will have
100 votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which common shares are exchanged, each
share of Series A Preferred Stock will be entitled to receive 100 times the
amount received per share of Common Stock. The rights of the Series A
Preferred Stock as to dividends, liquidation payments and voting rights are
protected by antidilution provisions.
The Purchase Price payable and the number of shares
of Series A 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 Series A Preferred Stock, (ii) upon the grant to
holders of the Series A Preferred Stock of certain rights or warrants to
subscribe for the purchase of Series A Preferred Stock or convertible
securities at less than the current market price of the Series A Preferred
Stock or (iii) upon the distribution to holders of the Series A Preferred Stock
of evidences of indebtedness or assets (excluding regular cash dividends and
dividends payable in Series A Preferred Stock) or of subscription rights or
warrants.
If any person (other than an Exempt Person) becomes
an Acquiring Person, each holder of a Right, other than the Acquiring Person,
will have the right to receive, upon payment of the Purchase Price, in lieu of
Series A Preferred Stock, a number of shares of Common Stock having a market
value equal to twice the Purchase Price. In lieu of issuing shares of Common
Stock upon exercise of Rights, the Company may, and to the extent that
insufficient shares of Common Stock are available for the exercise in full of
the Rights, the Company shall, issue cash, property or other securities of the
Company, or any combination thereof (which may be accompanied by a reduction in
the Purchase Price) in proportion determined by the Company, so that the
aggregate value received is equal to twice the Purchase Price. Although the
Rights Agreement contains an exemption from the definition of an Acquiring
Person for any person to whom or which the Company directly issues shares of
Common Stock (for example, in a private placement or an acquisition by the
Company in which Common Stock is used as consideration), even if that person
thereby would become the beneficial owner of 20% or more of the Common Stock,
such person may nonetheless become an Acquiring Person thereafter if such
person acquires any additional shares of Common Stock. Notwithstanding the
foregoing, after the acquisition of shares of Common Stock as described in this
paragraph, Rights that are (or, under certain circumstances, Rights that were)
beneficially owned by an Acquiring Person will be null and void.
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The Board may, at its option, at any time after a
person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right; provided, however, the Board may
not effect such exchange after the time that any Person becomes the beneficial
owner of 50% or more of the Common Stock then outstanding.
If, after the Stock Acquisition Date, the Company is
acquired in a merger or other business combination (in which any shares of the
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earnings power of the Company and its
subsidiaries (taken as a whole) are sold or transferred in one or a series of
related transactions, the Rights Agreement provides that proper provision shall
be made so that each holder of record of a Right (unless the Rights have been
earlier redeemed) will from and after that time have the right to receive, upon
payment of the Purchase Price, that number of shares of common stock of the
acquiring company which has a market value at the time of such transaction equal
to twice the Purchase Price.
At any time after the date of the Rights Agreement
until the time that a person becomes an Acquiring Person, the Continuing
Directors may redeem the Rights in whole, but not in part, at a price of $0.01
per Right (the "Redemption Price"), which may (at the option of the Company) be
paid in cash, shares of Common Stock or other consideration deemed appropriate
by the Continuing Directors. Upon the effectiveness of any action of the Board
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
The provisions of the Rights Agreement may be amended
by the Company, except that any amendment adopted after the time that a person
becomes an Acquiring Person may not adversely affect the interests of holders
of Rights.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group that attempts to
acquire the Company without conditioning the offer on the Rights being redeemed
or a substantial number of Rights being acquired, and under certain
circumstances the Rights beneficially owned by such a person or group may
become void. The Rights should not interfere with any merger or other business
combination approved by the Board because, if the Rights would become
exercisable as a result of such merger or business combination, the Board at
its option (and with the concurrence of a majority of the Continuing Directors)
may at any time prior to the time that any Person becomes an Acquiring Person
redeem all (but not less than all) of the then outstanding Rights at the
Redemption Price.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) Exhibits. The following exhibits are filed herewith:
10.1 Rights Agreement, dated June 24, 1998, by and between
the Company and Harris Trust and Savings Bank
99 Press Release issued by the Company
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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, thereunto duly authorized.
NCI BUILDING SYSTEMS, INC.
(Registrant)
By: /s/ ROBERT J. MEDLOCK
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Robert J. Medlock, Vice President and
Chief Financial Officer
Dated: July 9, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
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10.1 Rights Agreement, dated June 24, 1998.
99 Press Release