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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 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): JULY 9, 1998
THOMAS GROUP, INC.
DELAWARE 0-22010 72-0843540
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER
IDENTIFICATION NO.)
5215 N. O'CONNOR BLVD., SUITE 2500, DALLAS, TEXAS 75039
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 869-3400
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ITEM 5. OTHER EVENTS
On July 9, 1998, the Board of Directors of Thomas Group, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of the Company's common stock, $0.01 par value (the "Common Stock"), to
stockholders of record at the close of business on July 20, 1998. Each Right
entitles the registered holder to purchase from the Company one share of Common
Stock, par value $0.01 per share (the "Common Stock"), at a Purchase Price of
$100.00 per share, subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights Agreement") between
the Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agent").
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock upon the earlier
of (i) ten (10) business days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of fifteen percent (15%)
or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) ten (10) business days (or such later date as the Board of
Directors shall determine) following the commencement of a tender or exchange
offer that would result in a person or group beneficially owning fifteen percent
(15%) or more of such outstanding shares of Common Stock. The date the Rights
separate is referred to as the "Distribution Date."
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after July 9, 1998
will contain a notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise of Rights, a number
of Rights be exercised so that only whole shares of Common Stock will be issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 9, 2008, 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 the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except in connection with shares
of Common Stock issued or sold pursuant to the exercise of stock options under
any employee plan or arrangements, or upon the exercise, conversion or exchange
of securities hereafter issued by the Company, or as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger or other business combination with an Acquiring Person (or any associate
or affiliate thereof) and its Common Stock remains outstanding and unchanged,
(ii) any person shall acquire beneficial
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ownership of more than fifteen percent (15%) of the outstanding shares of Common
Stock (except pursuant to (A) certain consolidations or mergers involving the
Company or sales or transfers of the combined assets, cash flow or earning power
of the Company and its subsidiaries or (B) an offer for all outstanding shares
of Common Stock at a price and upon terms and conditions which a majority of the
Disinterested Directors (as defined below) determines to be in the best
interests of the Company and its stockholders) (a "Qualified Offer"), or (iii)
there occurs a reclassification of securities, a recapitalization of the Company
or any of certain business combinations or other transactions (other than
certain consolidations and mergers involving the Company and sales or transfers
of the combined assets, cash flow or earning power of the Company and its
subsidiaries) involving the Company or any of its subsidiaries which has the
effect of increasing by more than one percent (1%) the proportionate share of
any class of the outstanding equity securities of the Company or any of its
subsidiaries beneficially owned by an Acquiring Person (or any associate or
affiliate thereof), each holder of a Right (other than the Acquiring Person and
certain related parties) will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right. However, Rights are not exercisable following the occurrence of
either of the events described above until such time as the Rights are no longer
redeemable by the Company as described below. Notwithstanding any of the
foregoing, following the occurrence of any of the events described 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.
For example, at a Purchase Price of $100 per Right, each Right not
owned by an Acquiring Person (or by certain related parties or transferees)
following an event set forth in the preceding paragraph would entitle its holder
to purchase $200 worth of Common Stock (or other consideration, as noted above)
for $100. Assuming that the Common Stock had a per share market price of $10 at
such time, the holder of each valid Right would be entitled to purchase twenty
shares of Common Stock for $100.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company shall enter into a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation, merger or similar
transaction pursuant to which all or part of the outstanding shares of Common
Stock are changed into or exchanged for stock or other securities of any other
person or cash or any other property or (iii) more than 50% of the combined
assets, cash flow or earning power of the Company and its subsidiaries is sold
or transferred (in each case other than certain consolidations with, mergers
with and into, or sales of assets, cash flow or earning power by or to
subsidiaries of the Company as specified in the Rights Agreement), each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right. The events described in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, the number and kind of shares covered by
each Right and the number of Rights outstanding 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
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Common Stock, (ii) if holders of the Common Stock are granted certain rights,
options or warrants to subscribe for Common Stock or securities convertible into
Common Stock at less than the current market price of the Common Stock, or (iii)
upon the distribution to holders of the Common Stock of evidences of
indebtedness, cash (excluding regular quarterly cash dividends), assets (other
than dividends payable in Common Stock) or subscription rights or warrants
(other than those referred to in (ii) immediately above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least one percent (1%) of the
Purchase Price. No fractional shares of Common Stock are required to be issued
and, in lieu thereof, the Company may make an adjustment in cash based on the
market price of the Common Stock on the trading date immediately 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 fifty percent (50%) or more
of the outstanding shares of Common Stock, the Board of Directors of the Company
may, without payment of the Purchase Price by the holder, exchange the Rights
(other than Rights owned by such person or group, which will become void), in
whole or in part, for shares of Common Stock at an exchange ratio of one-half
(1/2) the number of shares of Common Stock for which a Right is exercisable
immediately prior to the time of the Company's decision to exchange the Rights
(subject to adjustment).
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.001 redemption price.
The term "Disinterested Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Disinterested
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
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 Common Stock (or other consideration) of the Company or for
common stock of an acquiring company as set forth above or in the event that the
Rights are redeemed.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date; provided, that
any amendments after the Stock Acquisition Date must be approved by a majority
of the Disinterested Directors. After the
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Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, inconsistency or defect, to make changes
which do not adversely affect the interest of holders of Rights (excluding the
interest 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; and, provided, that any amendments after the Stock Acquisition
Date must be approved by a majority of the Disinterested Directors.
A copy of the Rights Agreement specifying the terms of the Rights,
including as Exhibit 2 thereto the form of Rights Certificate and the Company's
press release announcing the declaration of the Rights are filed herewith as
Exhibits and are incorporated herein by reference. Copies of the Rights
Agreement are also available free of charge from the Rights Agent. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
4 Rights Agreement, dated as of July 9, 1998, by and between Thomas
Group, Inc. and Harris Trust and Savings Bank, as Rights Agent,
including exhibits thereto.
99 Press Release dated July 9, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
THOMAS GROUP, INC.
July 9, 1998 By: /s/ J. THOMAS WILLIAMS
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J. Thomas Williams, President
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EXHIBITS
4 Rights Agreement, dated as of July 9, 1998, by and between Thomas
Group, Inc. and Harris Trust and Savings Bank, as Rights Agent,
including exhibits thereto.
99 Press Release dated July 9, 1998.