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
February 5, 1998
----------------------------
Date of Report (Date of earliest event reported)
Claremont Technology Group, Inc.
--------------------------------------------
(Exact name of registrant as specified in its charter)
Oregon 0-28654 93-1004490
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1600 N.W. Compton Drive, Suite 210, Beaverton, Oregon 97006
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 690-4000
Not applicable
----------------------------------------------------------
(Former name or former address, if changed since last report)
Exhibit Index on Page 7
Item 5. OTHER EVENTS
(a) On February 5, 1998, the Board of Directors of Claremont Technology
Group, Inc. (the "Company") declared a dividend distribution of one Right for
each outstanding share of common stock, no par value (the "Common Stock"), of
the Company. The distribution is payable to shareholders of record on February
20, 1998. Each Right, when exercisable, entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock ("Preferred Stock") at a price of $82.50 per
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") dated February 5, 1998, between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate certificates evidencing
the Rights will be distributed. The Rights will separate from the Common Stock
and a distribution of Rights Certificates will occur 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, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) 10
business days (or such later date as the Board of Directors may determine)
following the commencement of a tender offer or exchange offer the consummation
of which would result in the beneficial ownership by a person of 15% or more of
the outstanding shares of Common Stock (the earlier of such dates being called
the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates, and will be transferred with and only with the Common Stock
certificates, (ii) new Common Stock certificates issued after February 20, 1998,
upon transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding 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
at the close of business on February 5, 2008, unless earlier redeemed or
exchanged by the Company as described below. The Rights will not be exercisable
by a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights has not
been obtained or is not obtainable.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("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
evidence the Rights. Except as otherwise determined
- 2 -
by the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more of
the then outstanding shares of Common Stock, each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock (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 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 will be null
and void. However, Rights are not exercisable following the occurrence of the
events set forth above until such time as the Rights are no longer redeemable by
the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is acquired in a merger or other business combination transaction in
which the Company is the surviving corporation and, in connection with such
transaction all or part of the outstanding Common Stock shall be changed into or
exchanged for securities of another company or cash or other property, or
(iii) 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, common stock of the acquiring company having a value equal to 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, but before any person becomes the beneficial owner
of 50% or more of the outstanding Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or group
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 one one-hundredths of a share
of Preferred 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 Preferred Stock (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the Preferred
Stock or (iii) upon the distribution to holders of the 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 require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof,
an adjustment in cash will be made based
- 3 -
on the market price of the Preferred Stock on the last trading date prior to the
date of exercise.
In general, the Company may redeem the Rights in whole, but not in part, at
any time until ten days following the Stock Acquisition Date, at a price of $.01
per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). After the redemption period has
expired, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company and there are no other Acquiring Persons. Immediately upon the action of
the Board of Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
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. While the distribution of the Rights will not
be subject to federal taxation to shareholders or to the Company, shareholders
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.
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, defect or inconsistency or 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, no amendment to adjust the time period
governing redemption may be made at such time as the Rights are not redeemable.
As of January 30, 1998 there were 8,521,221 shares of Common Stock issued
and outstanding. Each share of Common Stock outstanding on February 20, 1998
will receive one Right. As long as the Rights are attached to the Common Stock,
the Company will issue one Right for each share of Common Stock issued between
February 20, 1998 and the Distribution Date. A total of 200,000 shares of
Preferred Stock are reserved for issuance upon exercise of the Rights.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit C the form of
Rights Certificate, is attached hereto as Exhibit 99.1. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
(b) On February 9, 1998, the Company announced that Paul Cosgrave,
Chairman and Chief Executive Officer, and Dennis Goett, Chief Financial Officer,
had resigned from
- 4 -
the Company to pursue other career interests. Jerry Stone, who previously
served as Vice Chairman of the Company's Board of Directors, was elected
Chairman of the Board. Stephen Carson, President of the Company, was elected to
the additional position of Chief Financial Officer. John Torrell, III, former
President of Manufacturers Hanover Trust Company, was also elected to the Board
of Directors.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
99.1 Form of Rights Agreement dated as of February 5, 1998, between the
Company and ChaseMellon Shareholder Services, L.L.C. as Rights Agent.
99.2 Press Release dated February 9, 1998.
- 5 -
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.
CLAREMONT TECHNOLOGY GROUP, INC.
Date: February 18, 1998 By: /s/ Stephen M. Carson
-----------------------------------------------
Stephen M. Carson, President
- 6 -
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
99.1 Form of Rights Agreement dated
as of February 5, 1998 between
the Company and ChaseMellon Shareholder
Services, L.L.C. as Rights Agent.
99.2 Press Release dated as of
February 9, 1998
- 7 -