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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
September 5, 2001
Date of Report
(Earliest Reported Event)
DEL GLOBAL TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
Commission File No. 0-3319
New York 13-1784308
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or jurisdiction)
1 Commerce Park
Valhalla, New York 10595
(Address of principal (Zip Code)
executive offices)
(914) 686-3600
Registrant's telephone number, including area code:
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(Former names or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On September 5, 2001, pursuant to a Rights Agreement (the "Rights
Agreement") between Del Global Technologies Corp. (the "Company") and Mellon
Investor Services LLC, as Rights Agent (the "Rights Agent"), the Company's Board
of Directors declared a dividend of one right (a "Right") to purchase one share
of the Company's common stock, $.10 par value per share, (the "Common Stock")
for each outstanding share of Common Stock of the Company. The dividend is
payable on September 17, 2001 (the "Record Date"), to shareholders of record as
of the close of business on that date.
In addition, at the September 5, 2001 Board of Directors meeting,
the Board authorized the adoption of certain amendments to the By-Laws of the
Company. The amendments include, among other things: (i) the deletion of the
right of shareholders to call a special meeting of shareholders, (ii) the
addition of a provision which delineates the procedure for advance notice of
shareholder nominations and shareholder proposals, (iii) the addition of a
provision which authorizes the Board to postpone or cancel a scheduled meeting
of the shareholders, (iv) the addition of a provision which authorizes the
Chairman of the Board to adjourn any meeting of shareholders and establish the
procedures for conducting the shareholders meetings and (vii) the elimination of
the right of shareholders to remove directors without cause. The foregoing
summary of such amendments to the Company's By-Laws is qualified in its entirety
by the Company's Amended and Restated By-Laws, a copy of which is attached
hereto as Exhibit 3.1 and is incorporated herein by reference.
Summary of Rights Agreement
The following summary of the principal terms of the Rights Agreement
is a general description only and is subject to, and qualified by, the detailed
terms and conditions of the Rights Agreement. A copy of the Rights Agreement is
attached as Exhibit 4.1 to the Company's Registration Statement on Form 8-A
filed on the date hereof and is incorporated herein by reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date
(defined below). Until the Distribution Date, Certificates for the Rights
("Rights Certificates") will not be sent to shareholders and the Rights will
attach to and trade only together with the Common Stock. Accordingly, Common
Stock certificates outstanding on the Record Date will evidence the Rights
related thereto, and Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender or transfer of any certificates for Common Stock, outstanding as of
the Record Date, even without notation or a copy of the Summary of Rights being
attached thereto, also will constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
Distribution Date
The Rights will separate from the Common Stock, Rights Certificates
will be issued and the Rights will become exercisable upon the earlier of (i)
the tenth business day (or such later date as may be determined by the Company's
Board of Directors) after a person or group of affiliated or associated persons
(other than those exempted in the Rights Agreement) has acquired beneficial
ownership of 20% or more of the Common Stock then outstanding ("Acquiring
Person"), or (ii) the tenth business day (or such later date as may be
determined by the Company's Board of Directors) after a person or group
announces a tender or exchange offer, the consummation of which would result in
ownership by a person or group of 20% or more of the Common Stock then
outstanding. The earlier of such dates is referred to as the "Distribution
Date".
Summary of Rights; Expiration of Rights
As soon as practicable following the Record Date, a summary of the
Rights will be mailed to holders of record of the Common Stock as of the close
of business on the Record Date and this summary alone will evidence the Rights
from and after the Record Date. All Common Stock issued after the Record Date
will be issued with Rights. The Rights will expire on the earliest of (i)
September 17, 2011 (the "Final Expiration Date") or (ii) redemption or exchange
of the Rights as described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive, upon
exercise of each Right and the payment of the exercise price of $25.00 (the
"Exercise Price"), one share of Common Stock for each exercised Right. In the
event that the Company does not have sufficient Common Stock available for all
Rights to be exercised, or the Board decides that such action is necessary and
not contrary to the interests of Rights holders, the Company may instead
substitute cash, assets or other securities for the shares of Common Stock for
which the Rights would have been exercisable under this provision or as
described below.
Right to Buy Company Common Stock
Unless the Rights are earlier redeemed, in the event that a person
becomes the beneficial owner of 20% or more of the Company's Common Stock then
outstanding ("Acquiring Person"), each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by the
Acquiring Person or certain related parties, which will thereafter be void) will
thereafter have the right to receive, upon exercise of each Right and the
payment of the Exercise Price, shares of Common Stock having a value equal to
two times the Exercise Price. Rights are not exercisable following the
occurrence of an event as described above until such time as the Rights are no
longer redeemable by the Company as set forth below.
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 Stock (or other consideration, as noted above) for $25. Assuming
that the Common Stock had a per share value of $5 at such time, the holder of
each valid Right would be entitled to purchase 10 shares of Common Stock with a
cumulative value of $50.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed, in the event
that, after a person becomes an Acquiring Person, (i) the Company is acquired in
a merger or other business combination transaction, or (ii) 50% or more of the
Company's consolidated assets or earning power are sold (other than in
transactions in the ordinary course of business), proper provision must be made
so that each holder of a Right which has not theretofore been exercised (other
than Rights beneficially owned by the Acquiring Person or certain related
parties, which will thereafter be void) will thereafter have the right to
receive, upon exercise, shares of common stock of the acquiring company (or in
certain circumstances an affiliated company whose equity interests are publicly
traded) having a value equal to two times the Exercise Price.
Exchange Provision
At any time after an Acquiring Person obtains 20% or more of the
Company's outstanding Common Stock and prior to the acquisition by such
Acquiring Person of 50% or more of the Company's outstanding Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by the Acquiring Person), in whole or in part, at an exchange ratio of one
share of Common Stock per Right.
Redemption
At any time on or prior to the Close of Business on the earlier of
(i) the tenth day following an event that causes a person to become an Acquiring
Person (or such later date as may be determined by action of the Company's Board
of Directors and publicly announced by the Company prior to the tenth day
following the Shares Acquisition Date), or (ii) the Final Expiration Date, the
Company may redeem the Rights in whole, but not in part, at a price of $0.01 per
Right.
Adjustments to Prevent Dilution
The Exercise Price payable, the number of Rights, and the number of
shares of Common Stock or other securities or property issuable upon exercise of
the Rights are subject to adjustment from time to time in connection with the
dilutive issuances by the Company as set forth in the Rights Agreement. With
certain exceptions, no adjustment in the Exercise Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Exercise
Price.
Cash Paid Instead of Issuing Fractional Shares
No fractional shares of Common Stock will be issued upon exercise of
a Right and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Stock on the last trading date prior to the date of
exercise.
No Shareholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company (other than any rights resulting from
such holder's ownership of Common Stock), including, without limitation, the
right to vote or to receive dividends.
Amendment of Rights Agreement
The terms of the Rights and the Rights Agreement may be amended in
any respect without the consent of the Rights holders on or prior to the
Distribution Date; thereafter, the terms of the Rights and the Rights Agreement
may be amended without the consent of the Rights holders in order to cure any
ambiguities or to make changes which do not adversely affect the interests of
Rights holders (other than the Acquiring Person).
No Voting Rights
Rights will not have any voting rights.
Certain Anti-Takeover Effects
The Rights approved by the Board are designed to protect and
maximize the value of the outstanding equity interests in the Company in the
event of an unsolicited attempt by an acquiror to take over the Company in a
manner or on terms not approved by the Board of Directors. Takeover attempts
frequently include coercive tactics to deprive the Company's Board of Directors
and its shareholders of any real opportunity to determine the destiny of the
Company. The Rights have been declared by the Board in order to deter such
tactics, including a gradual accumulation of shares in the open market of 20% or
greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all shareholders equally. These tactics unfairly
pressure shareholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and
will not do so. Subject to the restrictions described above, the Rights may be
redeemed by the Company at $0.01 per Right at any time prior to the Distribution
Date. Accordingly, the Rights should not interfere with any merger or business
combination approved by the Board of Directors.
However, the Rights may have the effect of rendering more difficult
or discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights may cause substantial dilution to a person or group that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
nullification, purchase or redemption of the Rights.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its shareholders, and will
not change the way in which the Company's shares are presently traded. The
Company's Board of Directors believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created by
the current takeover environment.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit No. Description
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3.1 Amended and Restated By-Laws of Del Global
Technologies Corp.
*4.1 Rights Agreement, dated as of September 10, 2001,
between Del Global Technologies Corp. and Mellon
Investor Services LLC
99.1 Press Release issued by the Company dated
September 17, 2001
* Filed as Exhibit 4.1 to the Company's Registration Statement on Form 8-A,
dated as of the date hereof, and incorporated herein by reference.
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.
Date: September 17, 2001 DEL GLOBAL TECHNOLOGIES CORP.
BY: /s/Samuel E. Park
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Name: Samuel E. Park
Title: President and Chief Executive Officer