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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): JULY 26, 2000
ECLIPSYS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
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Delaware 000-24539 65-0632092
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(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
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777 East Atlantic Avenue
Suite 200
Delray Beach, Florida 33483
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (561) 243-1440
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ITEM 5. OTHER EVENTS. On July 26, 2000, the Board of Directors of Eclipsys
Corporation (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 August 9, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $.01 par value per share (the
"Preferred Stock"), at a Purchase Price of $65.00 in cash, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of July 26, 2000 (the "Rights Agreement") between the Company
and Fleet National Bank, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates
will be distributed. The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 10 business days
(or such later date as may be determined by the Board of Directors of the
Company) following the later of (a) the first date of a public announcement that
a person or group of affiliated or associated persons (other than exempt
persons) (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% 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 (or such later date as may be determined by the
Board of Directors of the Company) following the commencement of a tender offer
or exchange offer that would result in a person or group (other than an exempt
person) beneficially owning 15% or more of such outstanding shares of Common
Stock. Exempt persons are General Atlantic Partners, LLC, its officers and
directors, and any person directly or indirectly controlled by General Atlantic
Partners, LLC. Until the Distribution Date (or earlier redemption or expiration
of the Rights), (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding, even without 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 July 26, 2010 (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, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
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In the event that any Person becomes an Acquiring Person, other than pursuant to
a Permitted Offer (as defined in the Rights Agreement), then, proper provision
shall be made so that each holder of a Right 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. This event is referred to as
a "Section 11(a)(ii) Event." However, Rights are not exercisable until such time
as the Rights are no longer redeemable by the Company as described below. In
addition, Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
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) 50% or more 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 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."
At any time after the occurrence of a Section 11(a)(ii) Event, subject to
certain conditions, 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-thousandth 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 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
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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 $10 per share or, if greater, an aggregate dividend of 1,000 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 $1,000 per share and will be entitled to an aggregate
payment of 1,000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1,000 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 1,000 times the amount received per share of Common Stock. These rights
are protected by customary antidilution 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 (i) 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, or (ii) the Final Expiration Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"), payable in cash or stock. Immediately upon the action of
the Board of Directors ordering 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. While the distribution of the Rights will 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.
Subject to certain exceptions, any of the provisions of the Rights Agreement may
be amended by the Board prior to such time as the Rights are no longer
redeemable.
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As of August 3, 2000 there were 36,737,108 shares of Common Stock issued
and outstanding, and 12,000,000 shares reserved for issuance pursuant to
employee benefit plans. As long as the Rights are attached to the Common Stock,
the Corporation will issue one Right with each new share of Common Stock so that
all such shares will have Rights attached. The Corporation's Board of Directors
has reserved 100,000 shares of Preferred Stock for issuance upon exercise of the
Rights.
The Rights have certain anti-takeover effects. The Rights may cause substantial
dilution to a person or group that attempts to acquire the Company in a manner
or on terms not approved by the Board of Directors. The Rights, however, should
not deter any prospective offeror willing to negotiate in good faith with the
Board of Directors nor should the Rights interfere with any merger or business
combination approved by the Board.
A copy of the Rights Agreement is attached hereto as Exhibit 1 and is
incorporated herein by reference. A copy of the Rights Agreement is available
free of charge from the Company. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
text of the Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
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Exhibit
No. Description
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1 Rights Agreement dated July 26, 2000 by and between Eclipsys
Corporation and Fleet National Bank, as Rights Agent, which includes as
Exhibit A, the form of Certificate of Designation, as Exhibit B, the
form of Rights Certificate, and as Exhibit C, the Summary of Rights to
Purchase Preferred Stock.
2 Press Release, dated July 26, 2000.
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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, thereunto duly authorized.
ECLIPSYS CORPORATON
Date: August 8, 2000 /s/ T. JACK RISENHOOVER, II
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T. Jack Risenhoover, II
Senior Vice President,
Secretary and General Counsel
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EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
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1 Rights Agreement dated July 26, 2000 by and between Eclipsys
Corporation and Fleet National Bank, as Rights Agent, which includes as
Exhibit A, the Form of Certificate of Designation, as Exhibit B, the
form of Rights Certificate, and as Exhibit C, the Summary of Rights to
Purchase Preferred Stock.
2 Press Release, dated July 26, 2000.
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