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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
Date of Report (date of earliest event reported) January 26, 1999
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EXODUS COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-23795 77-0403076
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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2650 San Tomas Expressway
Santa Clara, California 95051
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 346-2200
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Item 5: Other Events
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Adoption of Stockholder Rights Plan.
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On January 26, 1999, the Board of Directors of Exodus Communications,
Inc. (the "Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $0.001 per
share (the "Common Shares"), of the Company. The dividend is payable to
stockholders of record on February 11, 1999 (the "Record Date"). In addition,
one Right shall be issued with each Common Share that becomes outstanding (i)
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are defined in
the Rights Agreement) and (ii) following the Distribution Date and prior to
the Redemption Date or Final Expiration Date, pursuant to the exercise of
stock options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company, which options or
securities were outstanding prior to the Distribution 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, par value $0.001
per share (the "Preferred Shares"), of the Company, at a price of $350.00,
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agent"). A summary of the
Rights and Rights Agreement is included as Exhibit C to the Rights Agreement,
which is included as Exhibit 4.04 hereto.
Item 7: Financial Statements and Exhibits.
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(c) Exhibits
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4.04 Rights Agreement dated January 27, 1999, between the
Registrant and BankBoston, N.A., as Rights Agent, which
includes as Exhibit A the form of Certificate of
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Designations of Series A Junior Participating Preferred
Stock, as Exhibit B the Form of Right Certificate and as
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Exhibit C the Summary of Rights to Purchase Preferred
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Shares. (Incorporated by reference to the exhibit bearing
the same number in the Company's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission
on January 29, 1999.)
99.01 Press release of the Company dated January 27, 1999.
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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.
Dated: January 27, 1999
EXODUS COMMUNICATIONS, INC.
By: /s/ Richard S. Stoltz
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Richard S. Stoltz
Chief Financial Officer and
Chief Operating Officer
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EXHIBIT INDEX
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Exhibit
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4.04 Rights Agreement dated January 27, 1999, between the Registrant and
BankBoston, N.A., as Rights Agent, which includes as Exhibit A the
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form of Certificate of Designations of Series A Junior
Participating Preferred Stock, as Exhibit B the Form of Right
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Certificate and as Exhibit C the Summary of Rights to Purchase
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Preferred Shares. (Incorporated by reference to the exhibit bearing
the same number in the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on January 29,
1999.)
99.01 Press release of the Company dated January 27, 1999.
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Exhibit 99.01
For Immediate Release
Contact: Jane Whaley
Investor Relations
(408) 346-2191
[email protected]
Maureen O'Connell
Corporate Communications
(408) 346-2218
[email protected]
Exodus Adopts Stockholder Rights Plan
SANTA CLARA, Calif., January 27, 1999--Exodus Communications, Inc. (NASDAQ:
EXDS), a leading provider of Internet system and network management solutions
for enterprises with mission-critical Internet operations, today announced its
board of directors has adopted a stockholder rights plan. The plan is designed
to protect the long-term value of the company for its stockholders during any
future unsolicited acquisition attempt.
The stockholder rights plan has been designed to give Exodus' board of
directors sufficient time to study and respond to an unsolicited tender offer
or other attempted acquisition. Adoption of the plan was not made in response
to any specific attempt to acquire Exodus or its shares, and Exodus is not
aware of any current efforts to do so.
In connection with the plan, the board declared a dividend of one preferred
share purchase right for each share of the company's common stock outstanding
on February 11, 1999 (the "Record Date") and further directed the issuance of
one such right with respect to each share of the company's common stock that
is issued after the Record Date, except in certain circumstances. The rights
will expire on January 27, 2009.
The rights are initially attached to the company's common stock and will not
trade separately. If a person or a group acquires 15 percent or more of the
company's common stock (an "Acquiring Person"), or announces an intention to
make a tender offer for the company's common stock the consummation of which
would result in a person or group becoming an Acquiring Person, then the
rights will be distributed (the "Distribution Date") and will thereafter trade
separately from the common stock.
Upon the Distribution Date, each right may be exercised for 1/100th of a share
of a newly designated Series A Junior Participating Preferred Stock at an
exercise price of $350. The preferred stock has been structured so that the
value of 1/100th of a share of such preferred stock will approximate the value
of one share of common stock.
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Upon a person becoming an Acquiring Person, holders of the rights (other than
the Acquiring Person) will have the right to acquire shares of the company's
common stock at a substantially discounted price, in lieu of the preferred
stock.
Additionally, if after the Distribution Date, the company is acquired in a
merger or other business combination, or 50 percent or more of its assets are
sold in a transaction with an Acquiring Person, the holders of rights (other
than the Acquiring Person) will have the right to receive shares of common
stock of the acquiring corporation at a substantially discounted price.
After a person has become an Acquiring Person, the company's board of
directors may, at its option, require the exchange of outstanding rights
(other than those held by the Acquiring Person) for common stock at an
exchange ratio of one share of the company's common stock per right.
The board also has the right to redeem outstanding rights at any time prior to
the Distribution Date (or later in certain circumstances) at a price of $0.001
per right. The terms of the rights, including the period to redeem the rights,
may be amended by the board in certain circumstances.
About Exodus Communications
Exodus Communications is a leading provider of Internet system and network
management solutions for enterprises with mission-critical Internet
operations. The company manages Internet Web sites and its network
infrastructure from eight Internet Data Centers in the San Francisco (3), Los
Angeles, New York, Boston, Washington, D.C. and Seattle metropolitan areas and
a server hosting facility in London. Exodus has announced the planned addition
of new Internet Data Centers in Chicago and London and second Internet Data
Centers in Seattle and Washington, D.C. Exodus' wholly-owned subsidiary, Arca
Systems(TM), is a premier provider of advanced network and system security
consulting services. Arca designs and develops state-of-the-art security
technology solutions for complex and sensitive information networks and
systems.
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Exodus, Exodus Communications, Arca Systems and Arca are trademarks of Exodus
Communications, Inc., and may be registered in certain jurisdictions. All
other trademarks mentioned in this document are the property of their
respective owners.
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