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UNITED STATES
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: December 10, 1998
(Date of earliest event reported)
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ALTERNATIVE LIVING SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-11999 39-1771281
(State or other jurisdiction of (Commission file number) (I.R.S. Employer Identification No.)
incorporation or organization)
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450 N. SUNNYSLOPE ROAD, SUITE 300
BROOKFIELD, WISCONSIN 53005
(Address of principal executive offices)
(414) 789-9565
(Registrant's telephone number, including area code)
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Item 5. Other Events
On December 10, 1998, the Board of Directors of Alternative Living
Services, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par
value $0.01 per share (the "Common Shares"), of the Company. The dividend is
payable on December 22, 1998 (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 a share of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Shares"), of the Company at a
price of $130.00 per one one-hundredth of a Preferred 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 American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agent").
Until 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") have acquired beneficial ownership of 15% 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 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this 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 Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), 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. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date 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 on December 22, 2008 (the "Final Expiration 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 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
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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).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100.00 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights
of the Preferred Shares, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the right to
receive upon exercise that number of Common Shares having a market value of two
times the exercise price of the Right. In the event that the Company is
acquired in a merger or other business combination transaction or 50% or more
of its consolidated 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
will have a market value of two times the exercise price of the Right.
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 Common Shares, 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 Common Share, or
one one-hundredth of a Preferred Share (or of a share of a class or series
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of the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
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 Preferred Shares will be issued (other than fractions
which are integral multiples of one one- hundredth of a Preferred Share, 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 Shares on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% 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 $0.001 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.
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 of affiliated or associated persons
becomes an Acquiring Person, no such amendment may adversely effect 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 the right to vote or to
receive dividends.
As of December 10, 1998 there were 22,006,243 shares of Common Stock
outstanding and a total of 100,000,000 shares of Common Stock authorized. Each
outstanding share of Common Stock on December 22, 1998 (other than shares held
in the Company's treasury) will receive one Right. As long as the Rights are
attached to the Common Stock, the Company will issue one Right with each new
share of Common Stock and each share of Common Stock issued from the Company's
treasury so that all such shares will have attached Rights. There have been
reserved for issuance 500,000 shares of Series A Junior Participating Preferred
Stock of the Company.
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 redemption of the Rights or on substantially
all of the Rights also 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 as described above. The Rights
are not being distributed in response to any specific attempt to acquire
control of the Company.
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A conformed copy of the Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights (which includes as Exhibit B
the form of Right Certificate) and the form of press release announcing the
declaration of the Rights are attached hereto as exhibits and are incorporated
herein by reference. The foregoing description of the Rights does not purport
to be complete and is qualified in its entirety by reference to such exhibits.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 4.1 Rights Agreement dated as of December 10,
1998 between Alternative Living Services,
Inc. and American Stock Transfer & Trust
Company, including the Form of Certificate of
Designations of Series A Junior Participating
Preferred Stock of Alternative Living
Services, Inc. (Exhibit A), Form of Right
Certificate (Exhibit B) and Form of Summary
of Rights to Purchase Preferred Shares
(Exhibit C)*
Exhibit 99.1 Press Release issued December 10, 1998
* Previously filed by the Company as part of Exhibit 4.1 to the
Company's Form 8-A filed on December 17, 1998, which Exhibit is
incorporated herein by reference.
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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.
Dated: December 16, 1998
ALTERNATIVE LIVING SERVICES, INC.
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(Registrant)
By: /s/ Thomas E. Komula
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Thomas E. Komula, Senior Vice President,
Treasurer and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Exhibit Description
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Exhibit 4.1 Rights Agreement dated as of December 10, 1998 between Alternative Living Services, Inc. and American
Stock Transfer & Trust Company, including the Form of Certificate of Designations of Series A Junior
Participating Preferred Stock of Alternative Living Services, Inc. (Exhibit A), Form of Right
Certificate (Exhibit B) and Form of Summary of Rights to Purchase Preferred Shares (Exhibit C)(*)
Exhibit 99.1 Press Release issued December 10, 1998
* Previously filed by the Company as part of Exhibit 4.1 to the Company's Form
8-A filed on December 17, 1998, which Exhibit is incorporated herein by
reference thereto.
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