1
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) - October 30, 1998
AMERICAN SUPERCONDUCTOR CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19672 04-2959321
- ------------------------- ----------- -------------------
(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
Two Technology Drive, Westborough, Massachusetts 01581
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 836-4200
--------------
Not applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
2
ITEM 5. OTHER EVENTS
On October 30, 1998, the Board of Directors of American Superconductor
Corporation (the "Company"), declared a dividend of one Right for each
outstanding share of the Company's Common Stock to stockholders of record at the
close of business on November 12, 1998 (the "Record Date"). Each Right entitles
the registered holder to purchase from the Company one share of Common Stock,
$.01 par value per share (the "Common Stock"), at a Purchase Price of $60.00 in
cash, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of October 30, 1998 (the "Rights
Agreement") between the Company and American Stock Transfer & Trust Company, as
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 and a
Distribution Date will occur upon the earlier of (i) 10 business days (or such
later date as may be determined by the Board of Directors of the Company)
following the later of (a) the first date of 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 15% or more
of the outstanding shares of Common Stock or (b) the first date on which an
executive officer of the Company has actual knowledge that an Acquiring Person
has become such (the "Stock Acquisition Date"), or (ii) 10 business days (or
such later date as may be determined by the Board of Directors of the Company)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of such outstanding shares
of Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the rights), (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 the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding, even without such notation, will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire upon the earliest of the close of business on October 30, 2008 (the
"Final Expiration Date") unless earlier redeemed or exchanged as described
below. As soon as practicable after the Distribution Date, separate 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 as otherwise determined by
the Board of Directors, and except for shares of Common Stock issued upon the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities issued by the
-2-
3
Company prior to the Distribution Date, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
In the event that any Person becomes an Acquiring Person, unless the
event causing the 15% threshold to be crossed is a Permitted Offer (as defined
in the Rights Agreement), then, promptly following the first occurrence of such
event, each holder of a Right (except as provided below and in Section 7(e) of
the Rights Agreement) shall thereafter have the right to receive, upon exercise,
that number of shares of Common Stock of the Company (or, in certain
circumstances, cash, property or other securities of the Company) which equals
the exercise price of the Right divided by 50% of the current market price (as
defined in the Rights Agreement) per share of Common Stock at the date of the
occurrence of such event. However, Rights are not exercisable following such
event 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 such event, 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. The event summarized in this paragraph is referred to as a
"Section 11(a)(ii) Event."
For example, at an exercise price of $60.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following a Section
11(a)(ii) Event would entitle its holder to purchase for $60.00 such number of
shares of Common Stock (or other consideration, as noted above) as equals $60.00
divided by one-half of the current market price (as defined in the Rights
Agreement) of the Common Stock. Assuming that the Common Stock had a per share
value of $30.00 at such time, the holder of each valid Right would be entitled
to purchase four shares of Common Stock for $60.00.
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger (other than a consolidation or merger which follows a Permitted Offer) or
if the Company is the surviving entity, but shares of its outstanding Common
Stock are changed or exchanged for stock or securities (of any other person) or
cash or any other property, or (ii) 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 set forth above) shall thereafter have the
right to receive, upon exercise, that number of shares of common stock of the
acquiring company which equals the exercise price of the Right divided by 50% of
the current market price of such common stock at the date of the occurrence of
the event. The events summarized in this paragraph are referred to as "Section
13 Events." A Section 11(a)(ii) Event and Section 13 Events are collectively
referred to as "Triggering Events."
-3-
4
For example, at an exercise price of $60.00 per Right, each valid Right
following a Section 13 Event would entitle its holder to purchase for $60.00
such number of shares of common stock of the acquiring company as equals $60.00
divided by one-half of the current market price (as defined in the Rights
Agreement) of such common stock. Assuming that such common stock had a per share
value of $20.00 at such time, the holder of each valid Right would be entitled
to purchase six shares of common stock of the acquiring company for $60.00.
At any time after the occurrence of a Section 11(a)(ii) Event, subject
to certain conditions, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock
per Right (subject to adjustment).
The Purchase Price payable, and the number of shares of Common 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 Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the then-current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings) or of subscription rights or warrants (other than those
referred to above). The number of Rights associated with each share of Common
Stock is 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 Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise.
At any time prior to the earlier of (i) the tenth Business Day (or such
later date as may be determined by the Board of Directors of the Company) after
the Stock Acquisition Date, or (ii) the Final Expiration Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"), payable in cash or stock, provided, however, that if a
majority of the Board of Directors of the Company is comprised of persons
elected at a meeting of stockholders who were not nominated by the Board of
Directors in office immediately prior to such meeting, then the Rights may not
be redeemed for a period of 90 days after such election if such redemption is
reasonably likely to have
-4-
5
the purpose or effect of allowing any person to become an Acquiring Person or
otherwise facilitating the occurrence of a Triggering Event or a transaction
with an Acquiring Person. 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 Redemption Price. The Rights may
also be redeemable following certain other circumstances specified in the Rights
Agreement.
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 the acquiring company as set forth above.
Subject to certain exceptions, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company prior to such
time as the Rights are no longer redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Current Report on Form 8-K
dated October 30, 1998. A copy of the Rights Agreement is available free of
charge from the Company. 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 herein by reference.
-5-
6
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The exhibits listed in the Exhibit Index filed as part of this
report are filed as part of or are included in this report.
-6-
7
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.
Date: October 30, 1998
AMERICAN SUPERCONDUCTOR CORPORATION
/s/ Stanley Piekos
--------------------------------------------
Stanley Piekos
Vice President, Corporate Development and
Chief Financial Officer
-7-
8
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Form of Rights Agreement, dated as of October 30, 1998,
between American Superconductor Corporation and American Stock
Transfer & Trust Company, which includes as Exhibit A the Form
of Rights Certificate and as Exhibit B the Summary of Rights
to Purchase Common Stock.(1)
- ----------------
(1)Incorporated by reference to the Registrant's Registration Statement
on Form 8-A, dated October 30, 1998 and filed by the Registrant with the
Commission.