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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): March 27, 1997
CRITICARE SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction or incorporation)
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0-16061 39-1501563
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(Commission File Number) (I.R.S. Employer I.D. Number)
20925 Crossroads Circle
Waukesha, Wisconsin 53186
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(Address of Principal Executive (Zip Code)
Offices)
414-798-8282
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(Registrant's telephone number; including area code)
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Item 5. Other Events.
On March 27, 1997, the Board of Directors of Criticare Systems, Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.04 per share
(the "Common Shares"), of the Company. The dividend is payable on April 24,
1997 (the "Record Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of one Preferred Share of the Company at a price of $25 per one
one-hundredth share (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 Firstar Trust Company, as Rights
Agent (the "Rights Agent").
Initially, the Rights are attached to all certificates representing Common
Shares then outstanding and no separate certificates representing the Rights
will be distributed. The Rights will separate from the Common Shares upon the
earlier to occur of (i) 10 days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the outstanding Common Shares
or (ii) 10 business days (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
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 30% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date").
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), (i) the Rights will be
transferred with and only with the Common Shares; (ii) new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference; and (iii) the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such notation, will also
constitute the transfer of the Rights associated with the Common Shares
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 Shares 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 at the close of business on April 1, 2007 (the "Final Expiration
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Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of one one-hundredths Preferred
Shares 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 Shares, (ii) upon the grant to holders of the Preferred
Shares of certain rights or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred Shares with a
conversion price, less than the then-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
paid out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price would be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. The Company is not required to issue any fractional
Preferred Shares and in lieu thereof, an adjustment in cash may be made based
on the market price of the Preferred Shares on the last trading day prior to
the date of exercise.
If, without the prior approval of a majority of the Disinterested
Directors, (i) the Company is the surviving corporation in a merger with an
Acquiring Person and the Common Shares are not changed or exchanged (a
"Surviving Merger"), (ii) a Person becomes the beneficial owner of more than
30% of the then outstanding Common Shares, (iii) an Acquiring Person engages in
one or more "self-dealing" transactions as set forth in the Rights Agreement,
or (iv) during such time as there is an Acquiring Person, an event occurs which
results in such Acquiring Person's ownership interest being increased by more
than 1% (e.g., a reverse stock split), at any time following the Distribution
Date (but no earlier than the expiration of the redemption period of the
Rights), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence
of any of the events set forth in this paragraph, all Rights that are or (under
certain circumstances specified in the Rights Agreement) were beneficially
owned by any Acquiring Person would be null and void.
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For example, at an exercise price of $25 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $50 worth
of Common Shares (or other consideration, as noted above) for $25. Assuming
that the Common Shares had a per share value of $10 at such time, the holder of
each valid Right would be entitled to purchase five Common Shares for $25.
If, at any time following the Stock Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction (other than a
Surviving Merger) or (ii) 50% or more of the Company's assets or earning power
is sold or transferred, each holder of a Right shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right.
At any time prior to the twentieth day after the acquisition by a person
or group of affiliated or associated persons of beneficial ownership of 20% or
more of the outstanding Common Shares, 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"). The redemption of the Rights may be made effective
at such time on such basis with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Other than those provisions relating to the principal economic terms of
the Rights and an amendment lengthening the redemption period 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. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to lengthen the time period
governing redemption shall be made.
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.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
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Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits
99.1 -- Form of Rights Agreement dated as of March 27, 1997 between
Criticare Systems, Inc. and Firstar Trust Company, which includes as Exhibit A
thereto the Form of Rights Certificate.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Criticare Systems, Inc. has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CRITICARE SYSTEMS, INC.
Date: April 17, 1997
BY /s/ Richard J. Osowski
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Richard J. Osowski,
Senior Vice President-Finance,
Assistant Secretary
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EXHIBIT INDEX
Exhibit Page No.
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99.1 -- Form of 8
Rights Agreement
dated as of March
27, 1997 between
Criticare Systems,
Inc. and Firstar
Trust Company,
which includes as
Exhibit A thereto
the Form of Rights
Certificate.
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