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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): October 26, 2000
INTERNET PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 000-26363 52-2213841
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
1009 COMMERCE PARK DR. OAK RIDGE, TENNESSEE 37830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (865) 482-3000
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Item 5. Other Events
On October 26, 2000, the Board of Directors of Internet Pictures
Corporation (the "Company), a Delaware corporation, 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 dividend is payable on November 9, 2000
to the stockholders of record on November 9, 2000.
The Board has adopted this Rights Agreement to protect stockholders
from coercive or otherwise unfair takeover tactics. In general terms, it works
by imposing a significant penalty upon any person or group which acquires 15% or
more of the outstanding common stock without the approval of the Board. The
Rights Agreement should not interfere with any merger or other business
combination approved by the Board.
For those interested in the specific terms of the Rights Agreement as
made between the Company and EquiServe, as the Rights Agent, on October 31,
2000, the Company provides the following summary description. Please note,
however, that this description is only a summary, and is not complete, and
should be read together with the entire Rights Agreement, which has been filed
with the Securities and Exchange Commission as an exhibit to a Registration
Statement on Form 8-A dated November 1, 2000. A copy of the agreement is
available free of charge from the Company.
The Rights. The Board authorized the issuance of a Right with respect to each
outstanding share of common stock on November 9, 2000. The Rights will initially
trade with, and will be inseparable from, the common stock. The Rights are
evidenced only by certificates that represent shares of common stock. New Rights
will accompany any new shares of common stock issued after November 9, 2000
until the Distribution Date described below.
Exercise Price. Each Right will allow its holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock
("Preferred Share") for $15, once the Rights become exercisable. This portion of
a Preferred Share will give the stockholder approximately the same dividend,
voting, and liquidation rights as would one share of common stock. Prior to
exercise, the Right does not give its holder any dividend, voting, or
liquidation rights.
Exercisability. The Rights will not be exercisable until
- 10 days after the public announcement that a person or group has become
an "Acquiring Person" by obtaining beneficial ownership of 15% or more
of the outstanding common stock, or, if earlier,
- 10 business days (or a later date determined by the Board before any
person or group becomes an Acquiring Person) after a person or group
begins a tender or exchange offer which, if completed, would result in
that person or group becoming an Acquiring Person.
The date when the Rights become exercisable is referred to as the
"Distribution Date." Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock will constitute
a transfer of Rights. After that date, the Rights will separate from the common
stock and be evidenced by book-entry credits or by Rights certificates that the
Company will mail to all eligible holders of common stock. Any Rights held by an
Acquiring Person are void and may not be exercised.
The Board may reduce the threshold at which a person or group becomes
an Acquiring Person from 15% to not less than 10% of the outstanding common
stock.
Consequences of a Person or Group Becoming an Acquiring Person.
- Flip In. If a person or group becomes an Acquiring Person, all holders
of Rights except the Acquiring Person may, for $15, purchase shares of
our common stock with a market value of $30, based on the market price
of the common stock prior to such acquisition.
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- Flip Over. If the Company is later acquired in a merger or similar
transaction after the Rights Distribution Date, all holders of Rights
except the Acquiring Person may, for $15, purchase shares of the
acquiring corporation with a market value of $30 based on the market
price of the acquiring corporation's stock, prior to such merger.
Preferred Share Provisions.
Each one one-hundredth of a Preferred Share, if issued:
- will not be redeemable.
- will entitle holders to quarterly dividend payments of $.01 per share,
or an amount equal to the dividend paid on one share of common stock,
whichever is greater.
- will entitle holders upon liquidation either to receive $1 per share or
an amount equal to the payment made on one share of common stock,
whichever is greater.
- will have the same voting power as one share of common stock.
- if shares of common stock are exchanged via merger, consolidation, or a
similar transaction, will entitle holders to a per share payment equal
to the payment made on one share of common stock.
The value of one one-hundredth interest in a Preferred Share should approximate
the value of one share of common stock.
Expiration. The Rights will expire on November 9, 2010.
Redemption. The Board may redeem the Rights for $.001 per Right at any time
before any person or group becomes an Acquiring Person. If the Board redeems any
Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only
right of the holders of Rights will be to receive the redemption price of $.001
per Right. The redemption price will be adjusted to account for a stock split or
stock dividend of common stock.
Exchange. After a person or group becomes an Acquiring Person, but before an
Acquiring Person owns 50% or more of outstanding common stock, the Board may
extinguish the Rights by exchanging one share of common stock or an equivalent
security for each Right, other than Rights held by the Acquiring Person.
Anti-Dilution Provisions. The Board may adjust the purchase price of the
Preferred Shares, the number of Preferred Shares issuable and the number of
outstanding Rights to prevent dilution that may occur from a stock dividend, a
stock split, a reclassification of the Preferred Shares or common stock. No
adjustments to the Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights Agreement may be amended by the Board
without the consent of the holders of the Rights. However, the Board may not
amend the Rights Agreement to lower the threshold at which a person or group
becomes an Acquiring Person to below 10% of the outstanding common stock. In
addition, the Board may not cause a person or group to become an Acquiring
Person by lowering this threshold below the percentage interest that such person
or group already owns. After a person or group becomes an Acquiring Person, the
Board may not amend the agreement in a way that adversely affects holders of the
Rights.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements
Not applicable
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(b) Pro Forma Financial Information
Not applicable
(c) Exhibits
EXHIBIT DESCRIPTION
4.1 Rights Agreement, dated as of October 31, 2000 between
Internet Pictures Corporation and EquiServe, as Rights Agent,
is incorporated herein by reference to the exhibit to the
Company's Registration Statement on Form 8-A, dated November
1, 2000.
99.1 Press Release Issued by the Company on October 30, 2000.
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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.
Date: November 1, 2000
INTERNET PICTURES CORPORATION
By: /s/ John J. Kalec
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John J. Kalec
Chief Financial Officer
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