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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): August 26, 1998
UNIFIED FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22629 35-1797759
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
431 North Pennsylvania Street
Indianapolis, Indiana 46204-1873
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 634-3301
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Item 5. Other Events
On August 26, 1998, the Board of Directors of Unified Financial
Services, Inc. (the "Company") declared a dividend distribution of one
Preferred Stock Purchase Right (collectively, the "Rights") for each
outstanding share of Common Stock, $.01 par value (the "Common Stock"), of
the Company (other than shares held in the Company's treasury). The dividend
distribution is payable to the stockholders of record at the close of
business on August 26, 1998 (the "Record Date"). Except as set forth below,
each Right, when exercisable, entitles the registered holder to purchase from
the Company one one-hundredth of a share of a new series of voting preferred
stock, designated as Series D Junior Participating Preferred Stock, $.01 par
value (the "Preferred Stock"), at a price of $200.00 per one one-hundredth of
a share (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Unified Fund Services, Inc., as Rights
Agent (the "Rights Agent").
As of the Record Date, the Rights will be attached to all Common Stock
certificates representing shares then outstanding. No separate Right
Certificate will be distributed until the earlier of:
(i) the close of business on the date which is ten days following the
first to occur of: (a) a public announcement that, without the prior written
approval of a majority of the Board of Directors of the Company, a person or
group of affiliated or associated persons (other than (1) the Company, (2)
any subsidiary of the Company, (3) any employee benefit plan of the Company
or a subsidiary of the Company or entity holding securities of the Company
for or pursuant to the terms of such a plan, (4) Dr. Gregory W. Kasten or (5)
the voting trustee of that certain Voting Trust dated October 10, 1997)
(each, an "Acquiring Person") has acquired, or obtained the right to acquire,
a number of shares of the Company representing 20% of the voting power (the
"Voting Power") of all the securities of the Company entitled to vote for the
election of directors; provided, however, that a person will not be deemed to
be an Acquiring Person if such person: (x) becomes the beneficial owner of
20% or more of the Voting Power of the Company as a result of: (A) an
acquisition of Common Stock by means of shares issued directly by the Company
which increased the proportionate Voting Power of such securities
beneficially owned by such person to 20% or more of the Voting Power, if such
transaction is approved by a majority of the members of the Board of
Directors of the Company, unless such person was an Acquiring Person prior to
such acquisition of shares from the Company; or (B) an acquisition by the
Company of the Company's voting securities, unless such person thereafter
acquires additional voting securities of the Company (other than pursuant to
a stock dividend, stock split, recapitalization or similar transaction); or
(y) has become the beneficial owner of 20% or more of the Voting Power of the
Company inadvertently (as determined by a majority of the Board of Directors)
and divests as promptly as practicable such number of voting securities so as
to no longer be an Acquiring Person; or (b) the Company's first notice of or
other determination that a person has become an Acquiring Person (the first to
occur of the events in clause (a) or (b) above being called the "Stock
Acquisition Date"); or
(ii) the close of business on the date (or such other date as
determined by the Board of Directors prior to the time any person becomes an
Acquiring Person) which is ten days following the commencement or first
public announcement of the intention of any person (other than (a) the
Company, (b) any subsidiary of the Company, (c) any employee benefit plan of
the Company or a subsidiary of the Company or entity holding securities of
the Company for or pursuant to the terms of such a plan, (d) Dr. Gregory W.
Kasten or (e) the voting trustee of that certain Voting Trust dated October
10, 1997) to make a tender offer or exchange offer (if such intention to
commence remains in effect for five business days after such commencement or
announcement), without the prior written approval of a majority of the
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Board of Directors, for 20% or more of the Voting Power of the Company (the
earlier of the dates in clause (i) or (ii) above being called the
"Distribution Date").
Until the Distribution Date (or earlier redemption, exchange,
expiration or termination of the Rights), new Common Stock certificates
issued after the Record Date, upon transfer, new issuance or issuance from
the Company's treasury, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange, expiration or termination of the Rights), the Rights may only be
transferred with the Company's Common Stock and surrender for transfer of any
of the Company's Common Stock certificates outstanding in respect of which
Rights have been issued will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. As soon
as practicable following the Company's notice to the Rights Agent that the
Distribution Date has occurred, separate certificates evidencing the Rights
(collectively, "Right Certificates") will be mailed to holders of record of
the Company's Common Stock as of the close of business on the Distribution
Date and such Right Certificates alone will then evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on August 25, 2008, unless earlier redeemed or exchanged by the
Company, as described below.
The Purchase Price, the number of shares of Preferred Stock covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time to prevent dilution (i) in the event of a reclassification
of the Preferred Stock, (ii) upon the determination of a record date for the
distribution to holders of Preferred Stock of rights or warrants to subscribe
for shares of Preferred Stock or securities convertible into Preferred Stock
at less than the then current market price of the Preferred Stock, or (iii)
upon the determination of a record date for the distribution to holders of
Preferred Stock of evidences of indebtedness, cash or assets (excluding
regular periodic cash dividends out of earnings or retained earnings or
dividends payable in Preferred Stock) or of convertible securities,
subscription rights or warrants (other than those referred to in (ii) above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
In the event that any person shall become an Acquiring Person, proper
provision shall be made so that each holder of a Right (other than the
Acquiring Person) will thereafter have the right to receive, in lieu of
shares of Preferred Stock, upon the later of such event and the effectiveness
of a registration statement with respect to such shares, upon exercise, that
number of shares (or fractional shares) of Common Stock of the Company having
a then current market value of two times the Purchase Price of the Right,
subject to the availability of a sufficient number of treasury shares or
authorized but unissued shares of Common Stock (such right being called the
"Subscription Right").
In the event that, following the Distribution Date, (i) the Company
consolidates with or merges into another person, or (ii) such person
consolidates with or merges into the surviving corporation in which all or
part of the Common Stock of the Company is exchanged for securities of
another person, cash or other property, or (iii) the Company or one of its
subsidiaries sells or otherwise transfers, in one or more transactions, 50%
or more of the Company and its subsidiaries' (taken as a whole) assets or
earning power, proper provision shall be made so that each holder of a Right
(other than the Acquiring Person) shall thereafter have the right to receive,
in lieu of shares of Preferred Stock, upon the exercise of the Right and
payment of the Purchase Price, that number of shares of common stock of the
surviving or purchasing company (or, in certain cases, one of its affiliates)
which at the time of such transaction would have a then current market value
of two times the Purchase Price (such right being called the "Merger Right").
The holder of a Right will continue to have the Subscription Right until such
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holder becomes entitled to the Merger Right; provided, however, that if such
holder has previously exercised the Subscription Right, such holder shall not
be entitled to the Merger Right.
At any time after a person becomes an Acquiring Person but prior to
such time as any person becomes the beneficial owner of 50% or more of the
outstanding shares of the Company's Common Stock, the Company may elect to
effect a full or partial exchange of Rights (an "Exchange") for the Company's
Common Stock at an exchange ratio of one share of Common Stock for each Right
owned. Alternatively, the Company may elect to effect an Exchange using
Preferred Stock at an exchange ratio of one one-hundredth of a share of
Preferred Stock for each Right owned.
Any Rights that are beneficially owned by an Acquiring Person or an
affiliate or an associate of an Acquiring Person will become null and void
upon the occurrence of any of the events giving rise to the exercisability of
the Merger Right or the Subscription Right. Any holder of such Rights will
have no right to exercise such Rights from and after the occurrence of such
an event insofar as they relate to the Merger Right or the Subscription
Right. Rights that are beneficially owned by an Acquiring Person will also
be null and void for purposes of an Exchange.
No fractional shares of Common Stock or other securities issuable upon
exercise of the Rights (other than, in the case of an Exchange, fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock) will be issued in connection with the exercise of a Merger Right or
Subscription Right or an Exchange. In lieu of fractional shares, an
adjustment in cash will be made based on the market price of such securities
on the last trading date prior to the date of exercise or exchange of such
Right.
At any time prior to a person becoming an Acquiring Person or August
25, 2008, a majority of the Board of Directors of the Company may elect to
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"). In addition, prior to an event giving rise to the
Merger Right, a majority of the Board of Directors may elect to redeem the
Rights in whole, but not in part, at the Redemption Price if: (i) following
the occurrence of a Stock Acquisition Date, either (a) an Acquiring Person
shall have disposed of a number of shares of voting securities of the Company
in a manner satisfactory to the Board of Directors such that such person is
no longer the beneficial owner of more than 20% of the Company's Voting Power
and no other Acquiring Person exists immediately thereafter or (b) the
redemption is in connection with a transaction not involving an Acquiring
Person; or (ii) following a change (resulting from a proxy or consent
solicitation) in a majority of the Board of Directors of the Company in
office at the commencement of such solicitation, if any person who is a
participant in such solicitation has stated (or, if upon the commencement of
such solicitation, a majority of the Board of Directors has determined in
good faith) that such person intends to take, or may consider taking, any
action which would result in such person becoming an Acquiring Person.
Immediately upon the action of the Board of Directors electing to redeem the
Rights, the Company shall make announcement thereof, and the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Preferred Stock purchasable upon exercise of the Rights or issuable
upon an Exchange will be nonredeemable and junior to any other series of
preferred stock the Company may issue (unless otherwise provided in the terms
of such stock). Each share of Preferred Stock will have a preferential
dividend in an amount equal to the greater of $1.00 per share or 100 times
any dividend (other than a dividend payable in shares of Common Stock or due
to a subdivision of the outstanding shares of Common Stock) declared on each
share of Common Stock. In the event of liquidation, the holders of Preferred
Stock will receive a preferred liquidation payment equal to the greater of
$100.00
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per share or 100 times the payment made per each share of Common Stock. Each
one one-hundredth of a share of Preferred Stock will have one vote on all
matters submitted to the vote of stockholders of the Company and vote
together as one class with the holders of shares of Common Stock and the
holders of any other capital stock of the Company having general voting
rights. In the event of any merger, consolidation or other transaction in
which shares of the Company's Common Stock are exchanged for or changed into
stock or securities of another person, cash or other property, each share of
Preferred Stock will be entitled to receive 100 times the amount and type of
consideration received per share of Common Stock. The rights of the
Preferred Stock as to dividends, liquidation and voting, and in the event of
mergers and consolidations, are protected by customary anti-dilution
provisions. Fractional shares of Preferred Stock in integral multiples of
one one-hundredth of a share of Preferred Stock will be issuable; however,
the Company may elect to distribute depositary receipts in lieu of such
fractional shares. In lieu of fractional shares other than fractions that
are multiples of one one-hundredth of a share, 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 of such Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, no
rights to vote, to receive dividends or distributions, to give or withhold
consent to any corporate action or to receive notice of meetings or other
actions affecting stockholders (except for notice with respect to certain
actions affecting the holders of Preferred Stock, as more fully described in
the Rights Agreement).
As of July 31, 1998, the Company had a total of 10,000,000 shares of
Common Stock authorized, of which 1,460,714 shares of Common Stock were
outstanding. Each outstanding share of Common Stock on August 26, 1998
(other than shares held in the Company's treasury) will receive one Right.
As long as the Rights are attached to the Common Stock, the Company will
issue one Right with each new share of Common Stock and each share of Common
Stock issued from the Company's treasury so that all such shares will also
have attached Rights. As of July 31, 1998, the Company had a total of
1,000,000 shares of Preferred Stock authorized of which 2,100 shares of
Series C 6.75% Cumulative Convertible Preferred Stock were outstanding.
There have been reserved for issuance 100,000 shares of Series D Junior
Participating Preferred Stock of the Company issuable upon exercise of the
Rights.
The Rights may have the effect of discouraging a change in control of
the Company without the prior consent of the Company's Board of Directors
because the Rights will cause substantial dilution to a person that attempts
to acquire the Company without obtaining such consent. The Rights should not
interfere with any merger, consolidation or other business combination
approved by the Board of Directors.
The Board of Directors of the Company will periodically review the
Rights Agreement and the Rights to determine that they continue to be in the
interests of the Company and its stockholders, with such review to occur at
such times as the Board deems appropriate. In the course of such review, the
Board will consider any factors it deems relevant.
The foregoing description of the Rights is qualified in its entirety by
reference to the Rights Agreement, a copy of which is filed as Exhibit 4.1 to
this Current Report on Form 8-K and incorporated by reference herein.
Item 7. Financial Statements and Exhibits
See Exhibit Index hereto.
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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: September 3, 1998
UNIFIED FINANCIAL SERVICES, INC.
By: /s/ Timothy L. Ashburn
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Timothy L. Ashburn
Chairman, President and Chief Executive Officer
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<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit
Number Description
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<C> <S>
4.1 Rights Agreement, dated as of August 26, 1998, between Unified
Financial Services, Inc. and Unified Fund Services, Inc.,
filed as Exhibit 1 to the Company's Registration Statement on
Form 8-A, dated September 3, 1998, is incorporated herein by
reference.
</TABLE>
