SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
CHS ELECTRONICS, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 65-0263022
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(State of incorporation) (I.R.S. Employer
or organization) Identification No.)
2000 N.W. 84TH AVENUE
MIAMI, FLORIDA 33122
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(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH EACH CLASS
TO BE SO REGISTERED IS TO BE REGISTERED
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PREFERRED STOCK NEW YORK STOCK EXCHANGE
PURCHASE RIGHTS
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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(Title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On January 16, 1998, the Board of Directors (the "Board") of CHS
Electronics, Inc. (the "Company") announced a dividend distribution of one right
(each "Right" and collectively the "Rights") for each outstanding share of
common stock, $.001 par value per share (the "Common Stock"), of the Company to
shareholders of record at the close of business on January 30, 1998. Each Right
entitles the registered holder to purchase from the Company one-one thousandth
of a share of a new series of preferred stock of the Company, $.001 par value
designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock") at a price of $100 per one-one thousandth of a share (the
"Purchase Price"), subject to certain adjustments. The Purchase Price shall be
paid in cash. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Interwest Transfer
Company, as Rights Agent. The material terms of the Rights Agreement are
summarized below.
Initially, the Rights will be represented by the 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 of the Rights certificates will occur upon the earlier of (i)
ten 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 15% or more of the
outstanding shares of Common Stock, (ii) ten business days after a person or
group of affiliated or associated persons has (x) become the direct or indirect
beneficial owner of at least 10% of the Company's outstanding Common Stock, and
(y) whose ownership interest is deemed by the Board to cause a material adverse
impact on the business or prospects of the Company or its shareholders (such
persons or group hereinafter called an "Adverse Person"), or (iii) ten business
days following the commencement of a tender offer or exchange offer that would
result in a person or group becoming an Acquiring Persons or an Adverse Person.
Until the date that the Rights certificates are distributed (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 the date that the Rights Plan is adopted
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding also will constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire ten years after the adoption of the Rights Agreement, unless earlier
redeemed by the Company as described below.
Upon a triggering event and 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 as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
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In the event a person or group of affiliated or associated persons
becomes an Acquiring Person or an Adverse Person (except pursuant to an offer
for all outstanding shares of Common Stock that is determined by the Board to be
fair to and otherwise in the best interest of the Company and its shareholders,
a "Qualifying Tender Offer"), each Right then outstanding would "flip-in" and
become a right to buy that number of shares of Common Stock of the Company which
at the time of such acquisition would have a market value of two times the
exercise price of the Right. The acquiror who triggered the Rights would be
excluded from the "flip-in" because his Rights would have become null and void
upon his triggering acquisition.
In the event that the "flip-in" is triggered, if there is not
sufficient authorized Common Stock available for issuance upon the exercise of
each Right, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock. In the event that the Company shall
be unable to take all such action, the Company shall substitute, for each share
of Common Stock that would be otherwise issuable upon exercise of a Right, a
number of shares of Series A Preferred Stock or fraction thereof having a
current market value equal to one share of Common Stock.
If, following a person or group of affiliated or associated persons
becoming an Acquiring Person or an Adverse Person, (i) the Company shall
consolidate with or merge into any other person or entity in which the Company
is not the surviving corporation, (ii) any other person or entity shall merge
into the Company and all or part of the outstanding Common Stock shall be
changed into or exchanged for securities of any other person or entity, or cash
or any other property, or (iii) the Company sells 50% or more of its assets or
earning power, each Right then outstanding would "flip-over" and thereby would
become a right to buy that number of shares of Common Stock of the acquiring
company which at the time of such transaction has a market value of two times
the exercise price of the Right.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person or an Adverse Person and before the acquisition by
such person or group of 50% or more of the outstanding Common Stock of the
Company, the Board may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, for Common Stock
at an exchange ratio of 1 share of the Company's Common Stock per Right, subject
to adjustment.
At any time until ten days following the public announcement that a
person or group of affiliated or associated persons has become an Acquiring
Person or an Adverse Person, the Company may redeem the Rights at a price of
$.000001 per Right, payable in cash. Under certain circumstances set forth in
the Rights Agreement, the decision to redeem shall require the concurrence of a
majority of the Continuing Directors (as hereinafter defined). After the
redemption period has expired, the Company's rights of redemption may be
reinstated if the Acquiring Person or Adverse Person reduces his or her
beneficial ownership to less than 10% of the outstanding shares of Common Stock
in a transaction or series of transactions not involving the Company.
Immediately upon the action of the Board ordering redemption of the Rights,
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with, where required, the concurrence of the Continuing Directors, the Rights
will terminate and the only right which the holders of Rights will thereafter
have will be to receive the $.000001 redemption price.
The term "Continuing Directors" 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 Continuing
Directors, but shall not include an Acquiring Person or an Adverse Person, or an
affiliate or associate of an Acquiring Person or an Adverse Person, or any
representative or designee of the foregoing.
The Purchase Price payable, and the number of shares of Series A
Preferred Stock 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 Series A Preferred
Stock, (ii) if holders of the Series A Preferred Stock are granted certain
rights or warrants to subscribe for Series A Preferred Stock or convertible
securities at less than the current market price of the Series A Preferred
Stock, or (iii) upon the distribution to holders of the Series A Preferred Stock
of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
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 Series A Preferred Stock will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market price of
the Series A Preferred Stock on the last trading date prior to the date of
exercise.
The shares of Series A Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Series A Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Series A Preferred Stock will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment of 100
times the payment made per share of Common Stock. Each share of Series A
Preferred Stock will have one vote, voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Series A Preferred Stock
will be entitled to receive 100 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
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The implementation of the Rights Agreement will not interfere with the
day-to-day operations of the Company. The Rights Agreement provides that the
Company may not enter into any transaction of the sort enumerated in the
"flip-in/flip-over" provisions if, in connection therewith, there are
outstanding securities or there are agreements or arrangements intended to
counteract the protective provisions of the Rights. For example, the Company may
not merge with an acquiring corporation if the acquiring corporation has granted
its shareholders rights to purchase its Common Stock at less than fair market
value upon the triggering of flip-over rights in one of its acquisition targets.
Any of the provisions of the Rights Agreement may be amended by the Board as
long as the Rights are then redeemable. When the Rights are not redeemable, the
provisions of the Rights Agreement may be amended by the Board only in order to
cure any ambiguity, to correct or supplement any provision which may be
inconsistent with any other provision or make changes which do not affect
adversely the interests of holders of Rights; PROVIDED, HOWEVER, that no
amendment may change the redemption price or the expiration date of the Rights,
and amendments after a person or group of affiliated or associated persons
becomes an Acquiring Person or an Adverse Person (other than pursuant to a
Qualifying Tender Offer) may be made only if approved by a majority of the
Independent Directors and at least two thirds of the Board.
ITEM 2. EXHIBITS
None.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
July 24, 1998 CHS ELECTRONICS, INC.
By: /S/ CRAIG TOLL
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Craig Toll, Vice President-Finance,
Treasurer and Chief Financial Officer
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