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As filed with the Securities and Exchange Commission on May 11, 1998.
UNITED STATES
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
May 1, 1998
Date of Report (Date of earliest event reported)
CORNELL CORRECTIONS, INC.
Exact Name of Registrant as Specified in its Charter
DELAWARE 1-14472 76-0433642
State of Incorporation or Commission File Number I.R.S. Employer
Organization Identification No.
4801 WOODWAY, SUITE 100E
HOUSTON, TEXAS 77056
Address of Principal Executive Offices (Zip Code)
(713) 623-0790
Registrant's telephone number,
including area code
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
On April 22, 1998, the Board of Directors of Cornell Corrections, Inc.
(the "COMPANY"), authorized the issuance of one preferred share purchase right
(a "RIGHT") with respect to each outstanding share of common stock, par value
$0.001 per share (the "COMMON SHARES"), of the Company to shareholders of record
at the close of business on May 11, 1998. Each Right entitles the registered
holder to purchase from the Company one Unit (as such term is defined in the
Rights Agreement, initially being one one-thousandth (1/1000th)) of a Preferred
Share at a price of $120.00 per Unit of a Preferred 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 as of May 1, 1998,
between the Company and American Securities Transfer & Trust, Inc., as Rights
Agent (the "RIGHTS AGENT").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate will be distributed. The Rights will separate from the Common Shares
and a Distribution Date (as defined in the Rights Agreement) will occur upon the
earlier of (i) the public announcement that a Person or group of affiliated or
associated Persons (an "ACQUIRING PERSON") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company, or (ii) 10 business days following the commencement
or announcement of an intention to commence a tender offer or exchange offer,
the consummation of which would result in the beneficial ownership by a Person
or group of 15% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced by the certificates representing Common
Shares, (ii) the Rights will be transferred with and only with the Common
Shares, (iii) new Common Share certificates issued after May 11,
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1998, upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for Common Shares outstanding as of May 11, 1998,
even without such notation, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "RIGHT CERTIFICATES") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on May 1, 2008 (the "FINAL EXPIRATION DATE"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If an Acquiring Person acquires 15% or more of the Voting Shares of the
Company, each Right then outstanding (other than Rights beneficially owned by
the Acquiring Person which would become null and void) will become a right to
buy that number of Common Shares that at the time of such acquisition would have
a market value of two times the Purchase Price of the Right. If, however, the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an Acquiring Person, has become such inadvertently, and such
Person divests a sufficient number of Voting Shares by such deadline as the
Board of Directors shall set, then such Person shall not be deemed to be an
Acquiring Person for any purposes of the Rights Agreement.
If, after any Person has become an Acquiring Person, the Company is
acquired in a merger or other business combination transaction or more than 50%
of its consolidated assets or earning power are sold, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price of the Right, 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 Purchase Price of
the Right.
REGISTRATION AND LISTING OF SECURITIES. The offer and sale of the
Preferred Shares or other securities issuable upon exercise of the Rights will
be registered with the Securities and Exchange Commission but such registration
will not be effective until the Rights become exercisable. As described above,
however, the Rights will not be transferable separately from the Common Shares
until the Distribution Date.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of Preferred Shares or
other securities or property issuable upon exercise of the Rights, and the
Purchase Price payable, are subject to customary adjustments from time to time
to prevent dilution.
The number of outstanding Rights and the number of Preferred Shares or
other securities issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
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EXCHANGE OPTION. At any time after the acquisition by a Person or group of
affiliated or associated Persons of beneficial ownership of 15% or more of the
outstanding Voting Shares of the Company and before the acquisition by a Person
or group of 50% or more of the outstanding Voting Shares of the Company, the
Board of Directors may, at its option, issue Common or Preferred Shares of the
Company in mandatory redemption of, and in exchange for, all or part of the then
outstanding exercisable Rights (other than Rights owned by such Acquiring Person
or group which would become null and void) at an exchange ratio of one Common
Share or one Unit of a Preferred Share for each Right which is then exercisable,
subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public announcement
that a Person or group has become the beneficial owner of 15% or more of the
outstanding Voting Shares, the Board of Directors of the Company may redeem all,
but not less than all, of the then outstanding Rights at a price of $0.01 per
Right (the "REDEMPTION PRICE"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
NO RIGHTS AS SHAREHOLDER. 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.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders of the Rights,
including amendment to extend the Final Expiration Date, except that after the
Distribution Date no such amendment may materially and adversely affect the
interests of holders 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 A thereto the form
of Right Certificate, is attached as Exhibit 1 to the Form 8-A filed by the
Company on May 11, 1998, and is incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement and the exhibits thereto.
Capitalized terms in this description are defined in the Rights Agreement.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1 Rights Agreement dated as of May 1, 1998 between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent, which
includes as EXHIBIT A the Form of Right Certificate, as EXHIBIT B
the Form of Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock, and as EXHIBIT C the
Summary of Rights to Purchase Preferred Stock. (Incorporated by
reference to Form 8-A filed by the Company on May 11, 1998, which
includes as Exhibit 1 the Rights Agreement.)
2 Press release dated May 1, 1998.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
ITEM 9. SALE OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Not Applicable.
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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.
Dated: May 7, 1998 CORNELL CORRECTIONS, INC.
By: /s/ BRIAN BERGERON
Brian Bergeron
Treasurer and Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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1 Rights Agreement dated as of May 1, 1998 between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent, which
includes as EXHIBIT A the Form of Right Certificate, as EXHIBIT B
the Form of Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock, and as EXHIBIT C the
Summary of Rights to Purchase Preferred Stock. (Incorporated by
reference to Form 8-A filed by the Company on May 11, 1998, which
includes as Exhibit 1 the Rights Agreement.)
2 Press release dated May 1, 1998.
EXHIBIT 2
[Cornell Corrections, Inc. Letterhead]
FOR IMMEDIATE RELEASE
CORNELL CORRECTIONS, INC.
ADOPTS SHAREHOLDER RIGHTS PLAN
Houston, Texas--May 1, 1998--Cornell Corrections, Inc. (AMEX: CRN) today
announced that its Board of Directors has adopted a shareholder rights plan.
The newly adopted shareholder rights plan is designed to protect shareholders
against efforts to acquire the Company for less than its full value. The plan
does not prevent a takeover, nor has it been adopted in response to any specific
effort to acquire control of the Company.
"This plan is an important tool to enable shareholders to realize the long-term
value of their investments and to enable the Board of Directors to serve the
interest of all shareholders," said David M. Cornell, Chairman of the Board,
President and Chief Executive Officer.
Under the plan, each shareholder of record at the close of business on May 11,
1998 will receive one Preferred Share Purchase Right ("Right") for each share of
common stock held. Initially, the rights will accompany the common stock of the
Company, and will not trade separately. The Rights expire on May 1, 2008.
Each Right initially entitles the shareholder to purchase one one-thousandth of
a Series A Junior Participating Preferred Share for $120.00. Each Preferred
Share has terms designed to make it economically equivalent to one thousand
common shares. The Rights will become exercisable only in the event a person or
group acquires 15% or more of the Company's common stock or commences a tender
or exchange offer which, if consummated, would result in that person or group
owning 15% or more of the Company's common stock.
If a person or group acquires a 15% or more position in the Company, each Right
(except those held by the acquiring party) will then entitle its holder to
purchase, at the exercise price, common stock of the Company having a value of
twice the exercise price. The effect will be to entitle the holder to buy the
common stock at 50% of the market price.
Also, if, following an acquisition of 15% or more of the Company's common stock,
the Company is acquired by that person or group in a merger or other business
combination transaction, each Right would then entitle its holder to purchase
common stock of the acquiring company having a value of twice the exercise. The
effect will be to entitle the Cornell Corrections, Inc. shareholder to buy stock
in the acquiring company at 50% of the market price.
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The Company may redeem the Rights at $0.01 per Right at any time prior to the
acquisition of 15% or more of its common stock by a person or group.
Details of the Shareholder Rights Plan are outlined in a letter that will be
mailed to all shareholders.
Cornell Corrections, a Houston, Texas based firm, is one of the leading
providers of privatized correctional, detention and pre-release services in the
United States. The company provides integrated facility development, design,
construction and operational services to governmental agencies within three
areas of operational focus: (i) secure institutional correctional and detention
facilities, (ii) junvenile correctional and detention services, and (iii)
pre-release correctional services.
THIS PRESS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS ARE BASED
ON CURRENT PLANS AND EXPECTATIONS OF CORNELL CORRECTIONS, INC. AND INVOLVE RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL FUTURE ACTIVITIES AND RESULTS OF
OPERATIONS TO BE MATERIALLY DIFFERENT FROM THOSE SET FORTH IN THE FORWARD-
LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
INCLUDE, AMONG OTHERS, RISKS ASSOCIATED WITH ACQUISITION, FLUCTUATIONS IN
OPERATING RESULTS BECAUSE OF OCCUPANCY, COMPETITION, AND RISKS OF OPERATIONS AND
INTEGRATION OF ANY NEWLY ACQUIRED BUSINESSES.
