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 - AUGUST 23, 1996
(Date of Earliest Event Reported)
BIG ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 0-22908
FLORIDA 65-0385636
(State of Incorporation) (I.R.S. Employer
Identification No.)
2255 GLADES ROAD, SUITE 237W, BOCA RATON, FLORIDA 33431
- ------------------------------------------------- -----
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (407) 998-8000
ITEM 5. OTHER EVENTS
ADOPTION OF STOCKHOLDER RIGHTS PLAN
On August 23, 1996, the Board of Directors of the Company declared
a dividend of one Common Stock Purchase Right (the "Right(s)") for each
outstanding share of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company. The dividend is payable as of September 4, 1996 to
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one share of Common Stock at a per share price of
$25.00 (the "Exercise Price"), subject to certain adjustments. 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 ("Rights Agent"), dated as of August 23, 1996.
Initially the Rights will not be exercisable, certificates will
not be sent to stockholders, and the Rights will automatically trade with the
Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring Person") and (ii) the
tenth business day (or such later date as may be determined by the
Board of Directors and the Continuing Directors (as defined in the Rights
Agreement) prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 30% or more of
the Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of September 4, 1996, by such Common Stock certificate with a copy of this
Summary of Rights attached thereto. An Acquiring Person does not include (A) the
Company, (B) any subsidiary of the Company, (C) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan, or (D) any person or group whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of
voting stock of the Company pursuant to a transaction or transactions approved
by the Board of Directors (provided that any person or group that does not
become an Acquiring Person by reason of clause (i) or (ii) above shall become an
Acquiring Person upon acquisition of an additional 1% of the Company's voting
stock unless such acquisition of additional voting stock will not result in such
person or group becoming an Acquiring Person by reason of such clause (i) or
(ii)) or (E) any Person who, as of March 16, 1996, together with all Affiliates
and Associates of such Person, was the Beneficial Owner of 15% or more of the
Voting Stock of the Company outstanding as of such date; PROVIDED, HOWEVER, that
any Person described in this clause (E) shall no longer be an exempt person and
shall become an Acquiring Person if such Person, together with all Affiliates
and Associates of such Person, from May 16, 1996 acquires Beneficial Ownership
of an additional 5% or more of the Voting Stock (unless such acquisition is
pursuant to a transaction described in clause (D)(i) or (D)(ii) above).
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after September 4, 1996
will contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Company's Common Stock certificates
outstanding as of September 4, 1996 with or without a copy of the Summary of
Rights attached, will also constitute the transfer of the Rights associated with
the Common Stock 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 Company's
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on September 4, 2006, unless earlier
redeemed by the Company as described below.
The number of shares of Common Stock issuable upon exercise of the
Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after
the time that the Rights become exercisable, the Company were to be acquired in
a merger or other business combination (in which any shares of the Company's
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken
as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price. In addition, unless the
Rights are earlier redeemed, if a person or group becomes an Acquiring Person,
the Rights Agreement provides that proper provision will be made so that each
holder of record of a Right, other than the Acquiring Person (whose Rights will
thereupon become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of the Company's Common
Stock having a market value at the time of the transaction equal to two times
the Exercise Price.
Fractions of shares of Common Stock may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash in
lieu of fractional shares.
At any time on or prior to the close of business on the tenth day
after the time that a person has become an Acquiring Person (or such later date
as a majority of the Board of Directors and a majority of the Continuing
Directors may determine), the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right
("Redemption Price"). The Rights may be redeemed after the time that any Person
has become an Acquiring Person only if approved by a majority of the Continuing
Directors. Immediately upon the effective time of the action of the Board of
Directors of the Company authorizing redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of the
Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may,
except with respect to the redemption price or date of expiration of the Rights,
amend the Rights in any manner, including an amendment to extend the time period
in which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Amendments to the Rights Agreement from and after the time that any Person
becomes an Acquiring Person requires the approval of a majority of the
Continuing Directors (as provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group who attempts to acquire the
Company on terms not
approved by the Company's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by the Board since they
may be redeemed by the Company at $.01 per Right at any time until the close of
business on the tenth day (or such later date as described above) after a person
or group has obtained beneficial ownership of 15% or more of the voting stock.
The form of Rights Agreement between the Company and American
Stock Transfer & Trust Company, as rights agent, specifying the terms of the
Rights, which includes as Exhibit A the form of Summary of Rights to Purchase
Common Stock and as Exhibit B the form of Rights Certificate are attached hereto
as exhibits and incorporated herein by reference. The foregoing description of
the Rights is qualified by reference to such exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(c) Exhibits.
1. Rights Agreement dated as of August 23, 1996 between Big
Entertainment, Inc. and American Stock Transfer & Trust Company as
Rights Agent.
2. Press Release, dated August 29, 1996.
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 hereunto duly authorized.
BIG ENTERTAINMENT, INC.
By: /s/ MITCHELL RUBENSTEIN
------------------------
Mitchell Rubenstein
Chairman of the Board and Chief
Executive Officer
September 4, 1996
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1. Rights Agreement dated as of August 23,
1996 between Big Entertainment, Inc.
and American Stock Transfer & Trust
Company as Rights Agent.
2. Press Release, dated August 29, 1996.