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 28, 1997
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(Date of Report; Date of Earliest Event Reported)
EIS International, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-20329 06-1017599
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(Commission File Number) (I.R.S. Employer
Identification No.)
555 Herndon Parkway, Herndon, Virginia 22070
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(Address of Principal Executive Offices) (Zip Code)
(703) 478-9808
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(Registrant's Telephone Number, Including Area Code)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
On May 16, 1997, the Board of Directors of EIS International, Inc. (the
"Company" or the "Registrant"), declared a dividend of one preferred stock
purchase right (a "Right") for each outstanding share of the Company's common
stock, $.01 par value per share (the "Common Stock"), to stockholders of record
at the close of business on May 27, 1997 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one one-thousandth of a share (a "Unit") of Series A Junior Participating
Preferred Stock, $.01 par value (the "Preferred Stock"), at a purchase price of
$20.00 in cash per Unit (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of May 16, 1997 (the "Rights Agreement") between the Company and BankBoston,
N.A., 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 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of such outstanding shares of Common Stock.
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 earlier of the close of business on May 16, 2007 (the "Final
Expiration Date") or the redemption or exchange of the Rights as described
below.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights ("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, such separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the Board of Directors
and except in connection with shares of
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Common Stock issued upon the exercise of employee stock options, issuances under
other employee stock benefit plans or the conversion of convertible securities
issued hereafter, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
In the event that any stockholder becomes an Acquiring Person, unless
the event causing the 20% threshold to be crossed is a Permitted Offer (as
defined in the Rights Agreement) or is otherwise exempted under the terms of the
Rights Agreement, then, promptly following the first occurrence of such event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) of the Rights Agreement) shall thereafter
have the right to receive, upon exercise thereof at the then current Purchase
Price, in lieu of a number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company that equals the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right is then
exercisable, and (y) dividing that product) by 50% of the current market price
per share of Common Stock on the date of such first occurrence. Notwithstanding
any of the foregoing, following the occurrence of the event set forth 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 event set forth in this paragraph is referred to as "Section
11(a)(ii) Event."
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or its Common
Stock is changed or exchanged (other than a merger which follows a Permitted
Offer), 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 one-half of the current market
price of such common stock at the date of the occurrence of the event. The
events set forth in this paragraph are referred to as "Section 13 Events."
Section 11(a)(ii) Events 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).
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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 payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $10 per share and will be entitled to
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. Finally, in the event of any merger,
consolidation or other transaction in which Common Stock is 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.
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 Units 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.
At any time prior to the earlier of (i) the close of business on the
tenth day following the Stock Acquisition Date, (ii) the occurrence of a Section
13 Event or (iii) the Final Expiration Date, the Company may redeem the Rights
in whole, but not
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in part, at a price of $.01 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.
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 of Directors of the Company prior to such
time as the Rights are no longer redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to this Current Report on Form 8-K. A copy of
the Rights Agreement is available free of charge from the Company. This summary
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
See Exhibit Index attached hereto which is incorporated by reference
herein.
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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.
Date: May 27, 1997 EIS INTERNATIONAL, INC.
By: /s/ James E. McGowan
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James E. McGowan
President and
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
Number Exhibit
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4.1* Rights Agreement, dated as of May 16, 1997, between the
Registrant and BankBoston, N.A., as Rights Agent, which includes
as Exhibit A the Form of Certificate of Designations, as Exhibit
B the Form of Rights Certificate, and as Exhibit C the Summary of
Rights to Purchase Preferred Stock
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* Incorporated by reference to Exhibit 1 to the Registrant's Registration
Statement on Form 8-A, as filed with the Securities and Exchange Commission on
May 28, 1997.
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