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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): JULY 28, 1999
COMMERCIAL METALS COMPANY
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DELAWARE 1-4304 75-0725338
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.)
7800 STEMMONS FREEWAY, 10TH FLOOR, DALLAS, TEXAS 75247
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 689-4300
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ITEM 5. OTHER EVENTS
Rights Agreement
On July 28, 1999, the Board of Directors of Commercial Metals Company
(the "Company") declared a dividend distribution of one Right for each
outstanding share of the Company's common stock, $5.00 par value (the "Common
Stock"), to stockholders of record at the close of business on August 9, 1999.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth (1/1,000) of a share of Series A Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), at a Purchase Price of $150.00 per one
one-thousandth (1/1,000) of a share, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and ChaseMellon Shareholder Services, LLC, as
Rights Agent (the "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 upon the earlier of (i) ten (10) business days following a public
announcement that a person (other than Daniel E. Feldman, Moses Feldman, Robert
L. Feldman or Sara B. Feldman or any of their affiliates, so long as they do
not acquire beneficial ownership of an aggregate of twenty five percent (25%)
or more of the outstanding shares of Common Stock) or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) ten
(10) business days (or such later date as the Board of Directors shall
determine) following the commencement of a tender or exchange offer that would
result in a person or group beneficially owning fifteen percent (15%) or more
of such outstanding shares of Common Stock. The date the Rights separate is
referred to as the "Distribution Date."
Until the Distribution Date, (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
August 9, 1999 will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the occurrence of
a Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 28, 2009, unless earlier redeemed by
the Company as described below.
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As soon as practicable after the Distribution Date, 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 will represent the Rights. Except in connection with shares of
Common Stock issued or sold pursuant to the exercise of stock options under any
employee plan or arrangements, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, or as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger or other business combination with an Acquiring Person (or any associate
or affiliate thereof) and its Common Stock remains outstanding and unchanged,
(ii) any person shall acquire beneficial ownership of more than fifteen percent
(15%) of the outstanding shares of Common Stock (except pursuant to (A) certain
consolidations or mergers involving the Company or sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries
or (B) an offer for all outstanding shares of Common Stock at a price and upon
terms and conditions which the Board of Directors determines to be in the best
interests of the Company and its stockholders), or (iii) there occurs a
reclassification of securities, a recapitalization of the Company or any of
certain business combinations or other transactions (other than certain
consolidations and mergers involving the Company and sales or transfers of the
combined assets, cash flow or earning power of the Company and its
subsidiaries) involving the Company or any of its subsidiaries which has the
effect of increasing by more than one percent (1%) the proportionate share of
any class of the outstanding equity securities of the Company or any of its
subsidiaries beneficially owned by an Acquiring Person (or any associate or
affiliate thereof), each holder of a Right (other than the Acquiring Person and
certain related parties) will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
any of the events described in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void. The events described in
this paragraph are referred to as "Flip-in Events."
For example, at a Purchase Price of $150.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties or transferees)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $300.00 worth of Common Stock (or other consideration, as
noted above) for $150.00. Assuming that the Common Stock had a per share market
price of $30.00 at such time, the holder of each valid Right would be entitled
to purchase 10 shares of Common Stock for $150.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company shall enter into a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation, merger or similar
transaction pursuant to which all or
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part of the outstanding shares of Common Stock are changed into or exchanged
for stock or other securities of any other person or cash or any other property
or (iii) more than 50% of the combined assets, cash flow or earning power of
the Company and its subsidiaries is sold or transferred (in each case other
than certain consolidations with, mergers with and into, or sales of assets,
cash flow or earning power by or to subsidiaries of the Company as specified in
the Rights Agreement), 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, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events described in
this paragraph are referred to as "Flip-over Events." Flip-in Events and
Flip-over Events are referred to collectively as "Triggering Events."
The Purchase Price payable, the number and kind of shares 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 stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights, options or warrants
to subscribe for Preferred Stock or securities convertible into Preferred Stock
at less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness,
cash (excluding regular quarterly cash dividends), assets (other than dividends
payable in Preferred Stock) or subscription rights or warrants (other than
those referred to in (ii) immediately above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least one percent (1%) of
the Purchase Price. No fractional shares of Preferred Stock are required to be
issued (other than fractions which are integral multiples of one one-thousandth
(1/1,000) of a share of Preferred Stock) and, in lieu thereof, the Company may
make an adjustment in cash based on the market price of the Preferred Stock on
the trading date immediately prior to the date of exercise.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstanding shares of Common Stock, the Board of Directors of the
Company may, without payment of the Purchase Price by the holder, exchange the
Rights (other than Rights owned by such person or group, which will become
void), in whole or in part, for shares of Common Stock at an exchange ratio of
one-half (1/2) the number of shares of Common Stock (or in certain
circumstances Preferred Stock) for which a Right is exercisable immediately
prior to the time of the Company's decision to exchange the Rights (subject to
adjustment).
At any time until the Stock Acquisition Date, the Company may redeem
the Rights in whole, but not in part, at a price of $0.001 per Right (payable
in cash, shares of Common Stock or other consideration deemed appropriate by
the Board of Directors). Immediately upon the action of the Board of Directors
ordering redemption of the
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Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.001 redemption price.
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 an acquiring company as set forth above or in
the event that the Rights are redeemed.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company at any time during the period in which
the Rights are redeemable. At any time when the Rights are no longer
redeemable, the provisions of the Rights Agreement may be amended by the Board
only if such amendment does not adversely affect the interest of holders of
Rights (excluding the interest of any Acquiring Person); provided, however,
that no amendment may cause the Rights again to become redeemable.
A copy of the Rights Agreement specifying the terms of the Rights, the
Certificate of Designation, Preferences and Rights of Series A Preferred Stock,
form of Certificate of Designation, Preferences and Rights of Series A
Preferred Stock and the form of Rights Certificate are filed herewith as
Exhibits and are incorporated herein by reference. Copies of the Rights
Agreement are also available free of charge from the Rights Agent. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
4 Rights Agreement, dated as of July 28, 1999, by and between Commercial
Metals Company and ChaseMellon Shareholder Services, LLC, as Rights
Agent, including exhibits thereto, filed as an exhibit to the
Company's Registration Statement on Form 8-A filed on the same date
this Current Report on Form 8-K is being filed, which exhibit is
hereby incorporated herein by reference.
99 Press Release dated July 28, 1999 (attached as Exhibit 4 to the
Rights Agreement incorporated herein by reference).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
COMMERCIAL METALS COMPANY
August 3, 1999 By: /s/ BERT ROMBERG
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Name: Bert Romberg
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Title: Senior Vice President
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INDEX TO EXHIBITS
4 Rights Agreement, dated as of July 28, 1999, by and between Commercial
Metals Company and ChaseMellon Shareholder Services, LLC, as Rights
Agent, including exhibits thereto, filed as an exhibit to the
Company's Registration Statement on Form 8-A filed on the same date
this Current Report on Form 8-K is being filed, which exhibit is
hereby incorporated herein by reference.
99 Press Release dated July 28, 1999 (attached as Exhibit 4 to the
Rights Agreement incorporated herein by reference).
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