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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 ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 3, 1997
SCPIE HOLDINGS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
Delaware 1-12449 95-4557980
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
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9441 WEST OLYMPIC BOULEVARD, BEVERLY HILLS, CALIFORNIA 92013
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 551-5900
Page 1 of 6 Pages
Exhibit Index on Page 6
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This Current Report on Form 8-K is filed by SCPIE Holdings
Inc., a Delaware corporation (the "Company") in connection with the transactions
described herein.
ITEM 5 - OTHER EVENTS
The Board of Directors of SCPIE Holdings Inc. (the "Company")
as of May 13, 1997, declared a dividend of one right (the "Rights") on each
outstanding share of Company common stock, $.0001 par value per share (the
"Common Stock"), payable to stockholders of record on June 3, 1997. Each Right
represents the right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock, $.0001 par value per share (the "Preferred
Stock"). Each Right will entitle the holder thereof after the Rights become
exercisable and until May 12, 2007 (or the earlier redemption, exchange or
termination of the Rights), to buy one one-hundredth of a share of Preferred
Stock at an exercise price of $80.00, subject to certain antidilution
adjustments (the "Purchase Price"). The Rights will be represented by the Common
Stock certificates and will not be exercisable or transferable apart from the
Common Stock until the earlier of (i) the tenth day after the public
announcement that a Person or group has become an Acquiring Person (a Person who
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the Common Stock), or (ii) the tenth day after a Person or group
commences, or announces an intention to commence, a tender or exchange offer,
the consummation of which would result in the beneficial ownership by a Person
or group of 20% or more of the Common Stock (the earlier of (i) and (ii) being
called herein the "Distribution Date"). The Board of Directors has the power,
under certain circumstances, to postpone the Distribution Date. Separate
certificates representing the Rights will be mailed to holders of the Common
Stock as of the Distribution Date. The Rights will first become exercisable on
the Distribution Date, unless earlier redeemed or exchanged, and may then begin
trading separately from the Common Stock. The Rights will at no time have any
voting rights.
In the event that a Person were to become an Acquiring Person
or if the Company were the surviving corporation in a merger and its Common
Stock were not changed or exchanged, each holder of a Right, other than Rights
that are or were acquired or beneficially owned by the Acquiring Person (which
Rights will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of Common Stock having a market value of two
times the exercise price of one Right. In the event that the Company were
acquired in a merger or other business combination transaction or more than 50%
of its assets or earning power were sold, proper provision shall be made so that
each holder of a Right shall thereafter have the right to receive, upon exercise
thereof, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value of two times the exercise
price of one Right.
At any time after a Person has become an Acquiring Person and
prior to the acquisition of 50% or more of the then-outstanding Common Stock by
such Acquiring Person, the Board of Directors may cause the Company to acquire
the Rights (other than Rights owned by an Acquiring Person which have become
void), in whole or in part, in exchange for that number of shares of Common
Stock having an aggregate value equal to the excess of the value of the Common
Stock issuable upon exercise of a Right after a Person becomes an Acquiring
Person over the Purchase Price.
The Rights are redeemable at $0.01 per Right prior to the
close of business on the tenth day following the public announcement that a
Person or group has become an Acquiring Person. The Board of Directors has the
power, under certain circumstances, to extend the ten-day redemption period. The
Rights will expire on May 12, 2007 (unless earlier redeemed or exchanged).
ChaseMellon Shareholder Services, LLC is the Rights Agent. Under certain
circumstances set forth
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in the Rights Agreement, the decision to redeem or to lengthen or shorten the
redemption period shall require the concurrence of a majority of the Continuing
Directors (as defined in the Rights Agreement).
The Purchase Price payable, and the number of shares 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 Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights, options or warrants to subscribe for or
purchase the Preferred Shares or convertible securities at less than the current
market price of the Preferred Shares, or (iii) upon the distribution to holders
of the Preferred Shares of evidences of indebtedness, securities or assets
(excluding regular periodic cash dividends at a rate not in excess of 125% of
the last regular periodic cash dividend theretofore paid or, in case regular
periodic dividends have not theretofore been paid, at a rate not in excess of
50% of the average net income per share of the Company for the four quarters
ended immediately prior to the payment of such dividend, or dividends payable in
the Preferred Shares (which dividends shall be subject to adjustment pursuant to
(i) above) or convertible securities, or of subscription rights or warrants
(other than those referred to above). No adjustments in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
As of May 8, 1997, there were 12,794,652 shares of Common
Stock outstanding. One Right will be distributed to stockholders of the Company
for each share of Common Stock owned of record by them on June 3, 1997. As long
as the Rights are attached to the Common Stock, the Company will issue one Right
with each new share of Common Stock so that all such shares will have attached
Rights. Two Hundred Fifty Thousand (250,000) shares of Preferred Stock have been
reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors prior to ten days after the time
that a Person or group has become an Acquiring Person as the Rights may be
redeemed by the Company at $0.01 per Right prior to such time.
The Rights Agreement, dated as of May 13, 1997, between the
Company and the Rights Agent specifying the terms of the Rights, the text of the
press release announcing the declaration of the Rights, and the letter sent to
the holders of the Company's Common Stock, dated June 3, 1997, explaining the
Rights, are attached hereto as exhibits and are incorporated herein by
reference. The foregoing description of the Rights is qualified by reference to
such exhibits.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
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10.1 Rights Agreement dated as of May 13, 1997 between SCPIE
Holdings Inc. and ChaseMellon Shareholder Services, LLC, which
includes Certificate of Designations of Series A Junior
Participating Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase
Preferred Shares as Exhibit C.*
10.2 Letter to Stockholders, dated June 3, 1997.
28.1 Press release dated May 14, 1997.*
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*Previously filed as exhibits to the Company's registration statement on Form
8-A, declared effective by the SEC on June 3, 1997, and incorporated herein by
this reference.
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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: May 30, 1997 SCPIE Holdings Inc.
By: PATRICK T. LO
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Patrick T. Lo
Vice President and
Chief Financial Officer
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Exhibit Index
Exhibit No.
Title
10.1 Rights Agreement dated as of May 13, 1997
between SCPIE Holdings Inc. and ChaseMellon
Shareholder Services, LLC, which includes
Certificate of Designations of Series A
Junior Participating Preferred Stock as
Exhibit A, the form of Right Certificate as
Exhibit B and the Summary of Rights to
Purchase Preferred Shares as Exhibit C.*
10.2 Letter to Stockholders, dated June 3, 1997.
28.1 Press release dated May 14, 1997.*
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*Previously filed as exhibits to the Company's registration statement on Form
8-A, declared effective by the SEC on June 3, 1997, and incorporated herein by
this reference.
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[Company Letterhead]
June 3, 1997
Dear Stockholder:
The Board of Directors of SCPIE Holdings Inc. (the "Company"),
as of May 13, 1997, adopted a Stockholder Rights Plan (the "Plan") that is
intended to protect your interests in the event you and SCPIE Holdings Inc. are
confronted with coercive takeover tactics.
The Plan provides for a dividend distribution of Rights to
purchase shares of SCPIE Holdings Inc. Series A Junior Participating Preferred
Stock. Under certain circumstances, the Rights could become exercisable to
purchase SCPIE Holdings Inc. Common Stock, or securities of an acquiring
entity, at one half market value. The Rights may be exercised only if certain
events occur. You are now the owner of one right for each share of SCPIE
Holdings Inc. Common Stock you own. The plan has been adopted in order to
strengthen the ability of the Board to protect your interests.
We are attaching a summary description that outlines the
principal features of the Plan, and we urge you to read the summary carefully.
This letter reviews our reasons for issuing the Rights.
NO ACTION BY STOCKHOLDERS IS REQUIRED OR PERMITTED AT THIS
TIME, AND NO MONEY SHOULD BE SENT TO THE COMPANY. THE RIGHTS WILL
AUTOMATICALLY ATTACH TO THE COMMON SHARES YOU HOLD AND WILL TRADE WITH THEM.
SEPARATE RIGHTS CERTIFICATES WILL BE SENT TO STOCKHOLDERS ONLY IF A PERSON OR
GROUP ACQUIRES 20% OR MORE OF SCPIE HOLDINGS INC.'S OUTSTANDING COMMON STOCK OR
MAKES A TENDER OFFER FOR 20% OR MORE OF THE COMMON STOCK. SCPIE HOLDINGS INC.
COMMON STOCK CERTIFICATES ISSUED AFTER JUNE 3, 1997 WILL CONTAIN A REFERENCE TO
THE RIGHTS PLAN, BUT THERE IS NO NEED TO SEND IN YOUR CERTIFICATES TO HAVE THIS
REFERENCE ADDED.
The Rights are not being distributed in response to any
specific effort to acquire control of the Company. The Rights are designed to
protect stockholders in the event of an unsolicited attempt to acquire the
Company, including through an accumulation of Common Stock in the open market,
a partial, two-tier or inadequate tender offer that does not treat all
stockholders equally and other abusive takeover tactics which are prevalent
these days and which the Board of Directors believes are not in the best
interests of stockholders. These tactics unfairly pressure stockholders,
squeeze
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them out of their investment without giving them any real choice and deprive
them of the full value of their Common Stock. We consider these Rights to be a
valuable means of protecting both your right to retain your equity investment
in the Company and the full value of that investment, while not foreclosing a
fair acquisition bid for the Company.
The Rights are not intended to prevent a takeover of SCPIE
Holdings Inc. and will not do so. They are designed to deal with the
possibility of unilateral actions by hostile acquirers that could deprive the
Board of Directors and stockholders of the Company of their ability to
determine the Company's destiny and obtain the highest price for their Common
Stock.
Adoption of the Plan should not by itself affect any
prospective acquirer who is willing to negotiate with the Company's Board of
Directors. The Plan certainly will not interfere with a merger or other
business combination transaction approved by the Board of Directors.
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 has no dilutive effect, will not affect reported earnings per share
and is not taxable to the Company or to you. Stockholders may, under certain
circumstances, recognize taxable income if the Rights become exercisable.
Our overriding objective is to continue building value for
SCPIE Holdings Inc.'s stockholders, and we feel that the Plan will assist in
that effort.
Sincerely,
/s/ DONALD J. ZUK
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Donald J. Zuk
President and Chief Executive Officer
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