UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 17, 2004
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POINT.360
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-21917 95-4272619
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(Commission File Number) (IRS Employer Identification No.)
7083 Hollywood Boulevard, Suite 200, Hollywood, CA 90028
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(Address of principal executive offices) (Zip Code)
(323) 957-7990
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
__ Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 17, 2004, the Board of Directors of Point.360 (the
"Company"), declared a dividend of one Right for each outstanding share of the
Company's Common Stock to stockholders of record at the close of business on
November 17, 2004 (the "Record 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, without par value (the "Preferred Stock"), at a
Purchase Price of $10.00 in cash, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement dated November 17, 2004
(the "Rights Agreement") between the Company and American Stock Transfer and
Trust Company, as Rights Agent.
Initially, the Rights are not exercisable and will be attached to all
certificates representing outstanding shares of Common Stock, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Stock, and the Distribution Date will occur, upon the earlier of (i) 10
business days following the later of (a) the first date of 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
20% or more of the outstanding shares of Common Stock or (b) the first date on
which an executive officer of the Company has actual knowledge that an Acquiring
Person has become such (the "Stock Acquisition Date"), or (ii) 10 business days
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 20% or more of the outstanding shares
of Common Stock. The Distribution Date may be deferred in circumstances
determined by the Board of Directors. In addition, certain inadvertent
acquisitions will not trigger the occurrence of the Distribution Date. Until the
Distribution Date (or earlier redemption or expiration of the Rights), (i) the
Rights will be evidenced by the Common Stock certificates outstanding on the
Record Date, together with this Summary of Rights, or by new Common Stock
certificates issued after the Record Date which contain a notation incorporating
the Rights Agreement by reference, (ii) the Rights will be transferred with and
only with such Common Stock certificates; and (iii) the surrender for transfer
of any certificates for Common Stock outstanding (with or without a copy of this
Summary of Rights or such notation) 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 upon the close of business on November 16, 2014 (the "Final Expiration
Date") unless earlier redeemed or exchanged as described below. As soon as
practicable after the Distribution Date, separate 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 of
Directors, and except for shares of Common Stock issued upon exercise,
conversion or exchange of then outstanding options, convertible or exchangeable
securities or other contingent obligations to issue shares or pursuant to any
employee benefit plan or arrangement, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
In the event that any Person becomes an Acquiring Person, unless the
event causing the 20% threshold to be crossed is a Permitted Offer (as defined
in the Rights Agreement), then, promptly following the first occurrence of such
event, each holder of a Right (except as provided below and in Section 7(e) of
the Rights Agreement) shall thereafter have the right to receive, upon exercise,
that number of shares of Common Stock of the Company (or, in certain
circumstances, cash, property or other securities of the Company) which equals
the exercise price of the Right divided by 50% of the current market price (as
defined in the Rights Agreement) per share of Common Stock at the date of the
occurrence of such event. However, Rights are not exercisable following such
event until such time as the Rights are no longer redeemable by the Company as
described below. Notwithstanding any of the foregoing, following the occurrence
of such event, 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. The event summarized in this paragraph is referred to as a
"Section 11(a)(ii) Event." For example, at an exercise price of $10 per Right,
each Right not owned by an Acquiring Person (or by certain related parties)
following a Section 11(a)(ii) Event would entitle its holder to purchase for $10
such number of shares of Common Stock (or other consideration, as noted above)
as equals $10 divided by one-half of the current market price (as defined in the
Rights Agreement) of the Common Stock. Assuming that the Common Stock had a
market price of $5.00 per share at such time, the holder of each valid Right
would be entitled to purchase four shares of Common Stock, having a market value
of 4 x $5.00, or $20, for $10.
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger (other than a consolidation or merger which follows a Permitted Offer) or
if the Company is the surviving entity, but shares of its outstanding Common
Stock are changed or exchanged for stock or securities (of any other person) or
cash or any other property, or (ii) more than 50% 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, that number of shares of common stock of the
acquiring company which equals the exercise price of the Right divided by 50% of
the current market price (as defined in the Rights Agreement) of such common
stock at the date of the occurrence of the event. The events summarized in this
paragraph are referred to as "Section 13 Events." A Section 11(a)(ii) Event and
Section 13 Events are collectively referred to as "Triggering Events."
For example, at an exercise price of $10 per Right, each valid Right
following a Section 13 Event would entitle its holder to purchase for $10 such
number of shares of common stock of the acquiring company as equals $10 divided
by one-half of the current market price (as defined in the Rights Agreement) of
such common stock. Assuming that such common stock had a market price of $5.00
per share at such time, the holder of each valid Right would be entitled to
purchase four shares of common stock of the acquiring company, having a market
value of 4 x $5.00, or $20, for $10.
At any time after the occurrence of a Section 11(a)(ii) Event, when no
person owns a majority of the Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring
Person which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-hundredth of a share of Preferred Stock (or of
a share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of units 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) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the then-current market price (as defined in the Rights Agreement) of
the Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings) or of subscription rights
or warrants (other than those referred to above). The number of Rights
associated with each share of Common Stock is also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
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 Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) will be
issued and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors, a minimum preferential quarterly
dividend payment of $1 per share or, if greater, an aggregate dividend of 100
times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share, plus an amount equal to
accrued and unpaid dividends, and will be entitled to an aggregate payment of
100 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common Stock is
changed or exchanged, each share of Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock. These rights are
protected by customary anti-dilution provisions. Because of the nature of the
Preferred Stock's dividend, liquidation and voting rights, the value of one
one-thousandth of a share of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
At any time prior to the earlier of the tenth Business Day (or such
later date as may be determined by the Board of Directors of the Company) after
the Stock Acquisition Date, the Company may redeem the Rights in whole, but not
in part, at a price of $0.0001 per Right (the "Redemption Price"), payable in
cash or stock. Immediately upon the redemption of the Rights or such earlier
time as established by the Board in the resolution ordering the redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price. The Rights may also be
redeemable following certain other circumstances specified in the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. Although the distribution of the Rights should
not be taxable to stockholders or to the Company, stockholders 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.
Any provision of the Rights Agreement, other than the redemption price,
may be amended by the Board prior to such time as the Rights are no longer
redeemable. Once the Rights are no longer redeemable, the Board's authority to
amend the Rights is limited to correcting ambiguities or defective or
inconsistent provisions in a manner that does not adversely affect the interest
of holders of Rights.
The Rights are intended to protect the stockholders of the Company in
the event of an unfair or coercive offer to acquire the Company and to provide
the Board with adequate time to evaluate unsolicited offers. The Rights may have
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 a
substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its stockholders, as
determined by a majority of the Board. The Rights should not interfere with any
merger or other business combination approved by the Board.
A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
attached as Exhibit 4.1 and incorporated herein by reference.
ITEM 3.03. MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS
See description under "Item 1.01 Entry into a Material Definitive
Agreement".
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR
Effective November 17, 2004, the Company filed a Certificate of
Determination of Point.360 with the Secretary of the State of California. The
Company's Board of Directors authorized the filing of this certificate at the
November 17, 2004 board meeting pursuant to the reservation and designation of
400,000 shares of the Company's preferred stock as Series A Junior Participating
Preferred Stock in connection with the Rights Agreement dated as of November 17,
2004, between the Company and American Stock Transfer and Trust Company, as
Rights Agent. See the description set out under "Item 1.01 Entry into a Material
Definitive Agreement" for a more complete description of the rights and
preferences of the Series A Junior Participating Preferred Stock. The
description of the Certificate of Determination of Point.360 is qualified in its
entirety by reference to the Certificate of Determination of Point.360, a copy
of which is attached as Exhibit 3.1 to this Current Report on Form 8-K and
incorporated herein by reference.
ITEM 8.01. OTHER EVENTS
On November 17, 2004, the Company issued a press release announcing the
declaration of the dividend of Rights. The description of the press release set
forth under this "Item 8.01. Other Events" is qualified in its entirety by
reference to the press release, a copy of which is attached to this Current
Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit 3.1 Certificate of Determination of Point.360.
Exhibit 4.1 Rights Agreement, dated as of November 17, 2004, between
Point.360 and American Stock Transfer and Trust Company,
which includes as Exhibit A the form of Certificate of
Determination of Point.360, as Exhibit B the Form of Right
Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Shares.
Exhibit 99.1 Press Release, dated November 17, 2004.
SIGNATURE
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.
Point.360
Date: November 17, 2004 By: /s/ Alan R. Steel
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Name: Alan R. Steel
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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3.1 Certificate of Determination of Point.360.
4.1 Rights Agreement, dated as of November 17, 2004, between Point.360
and American Stock Transfer and Trust Company, which includes as
Exhibit A the form of Certificate of Determination of Point.360, as
Exhibit B the Form of Right Certificate and as Exhibit C the
Summary of Rights to Purchase Preferred Shares.
99.1 Press Release, dated November 17, 2004.