SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 29549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 7, 1995
Date of earliest
event reported: September 7, 1995
THE TITAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2588754
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
3033 Science Park Road
San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(619) 552-9500
(Registrant's telephone number)
Item 5. Other Events
On August 17, 1995 the Board of Directors of The Titan
Corporation (the "Company") declared a dividend of one Right for each
share of common stock, $.01 par value (the "Common Shares"), of the
Company outstanding at the close of business on September 7, 1995 (the
"Record Date"). Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Shares") at a
price of $42.00 per one one-hundredth of a Preferred 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 American Stock Transfer and Trust Company as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the Common Shares or
(ii) ten (10) days following the commencement or announcement of an
intention to make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the Common Shares (the earlier of (i) or (ii) being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that the Board of Directors,
with the concurrence of a majority of the Continuing Directors (as
defined below), may postpone the Distribution Date and that, until the
Distribution Date, the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after
the close of business on the Record Date upon transfer or new issuance
of the Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares, even without a copy of this Summary
or Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on August 17, 2005 subject to the Company's right
to extend such date (the "Final Expiration Date"), unless earlier
redeemed or exchanged by the Company or terminated.
The Purchase Price payable, and the number of Preferred
Shares 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 Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price less than the
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or, in the case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the four quarters ended
immediately prior to the payment of such dividend, or dividends payable
in Preferred Shares) or of subscription rights or warrants (other than
those referred to above)
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common Shares
or subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $1 per share but will
be entitled to an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment
of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, voting together with the Common Shares. Finally,
in the event of any merger, consolidation, or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right
should approximate the value of one Common Share.
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding Common
Shares approved by the Board) or if the Company were the surviving
corporation in a merger with an Acquiring Person or any affiliate or
associate of an Acquiring Person and the Common Shares were not changed
or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the 15% stockholder (which Rights will
thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times
the exercise price of the Right. With the certain exceptions, in the
event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction would have a market value of two times the exercise price of
the Right.
At any time after a Person becomes an Acquiring Person and
prior to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company
to acquire the Rights (other than Rights owned by an Acquiring Person
which have become void), in whole or in part, in exchange for that
number of Common Shares having an aggregate value equal to the Spread
(the excess of the value of the Common Shares issuable upon exercise of
a Right after a Person becomes an Acquiring Person over the Purchase
Price) per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a
Preferred Share which may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, a payment in cash will be
made based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price") by the Board of
Directors at any time until ten (10) days following the public
announcement that a Person has become an Acquiring Person. The Board of
Directors, with the concurrence of a majority of the Continuing
Directors, may extend the period during which the Rights are redeemable
beyond the ten (10) days following the public announcement that a Person
has become an Acquiring Person. Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors (as defined
below). Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and upon such election, 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 term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board prior to
the time that any Person becomes an Acquiring Person, and any person who
is subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors. Continuing
Directors do not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the
foregoing.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company beyond those as an
existing stockholder, including, without limitation, the right to vote
or to receive dividends.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the Company and the Rights Agent may amend
or supplement the Rights Agreement without the approval of any holder of
Right Certificates to cure any ambiguity, to correct or supplement any
provision contained therein which may be defective or inconsistent with
any other provisions therein, to shorten or lengthen any time period
under the Rights Agreement relating to when the Rights may be redeemed
(so long as, under certain circumstances, a majority of Continuing
Directors approve such shortening or lengthening) or so long as the
interests of the holder of Rights Certificates (other than an Acquiring
Person or an affiliate or associate of an Acquiring Person) are not
adversely affected thereby, and to make any other provisions in regard
to matters or questions arising thereunder which the Company and the
Rights Agent may deem necessary or desirable, including but not limited
to extending the Final Expiration Date. The Company may at any time
prior to such time as any Person becomes an Acquiring Person amend the
Rights Agreement to lower the thresholds described above to not less
than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Shares then known by the Company to
beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%
Item 7. Exhibits
1. Rights Agreement, dated as of August 21, 1995, between
The Titan Corporation and American Stock Transfer and
Trust Company, attached as exhibit 1 to Titan's 8-A
filing, effective on September 5, 1995, is hereby
incorporated by this reference.
2. Press Release, dated August 17, 1995.
3. Letter to the holders of The Titan Corporation Common
Stock, dated September 7, 1995.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE TITAN CORPORATION
Dated: September 7, 1995 By: /s/ David A. Hahn
David A. Hahn
Senior Vice President
General Counsel and Secretary
EXHIBIT INDEX
1. Press Release, dated August 17, 1995.
2. Letter to the holders of The Titan Corporation Common Stock, dated
September 7, 1995.
Exhibit 1
Press Release
The Titan Corporation Board
Declares Dividend Distribution
of
Preferred Share Purchase Rights
San Diego (August 17, 1995) -- The Board of Directors of The Titan
Corporation (NYSE-TTN) today declared a rights dividend designed to
protect Titan shareholders in the event of any proposed takeover of the
Company. Each right will entitle stockholders to buy one one-hundredth
of a share of a new series of junior participating preferred stock at an
exercise price of $42. The rights will be exercisable if a person or
group acquires 15% or more of Titan common stock or announces a tender
offer for 15% or more of the outstanding common stock.
President and Chief Executive Officer Gene W. Ray said, "The rights
dividend was declared to help assure that all Titan shareholders receive
fair and equal treatment in the event of any proposed takeover of the
company and to guard against tactics to gain control of The Titan
Corporation without all stockholders benefiting. The rights are not
being distributed in response to any specific effort to acquire control
of the Company."
If a person acquires 15% or more of Titan's outstanding common stock,
each right will entitle its holder to purchase, at the right's exercise
price, a number of Titan's common shares having a market value at that
time of twice the right's exercise price. Rights held by the 15% holder
will become void and will not be exercisable to purchase shares at the
bargain purchase price. If Titan is acquired in a merger or other
business combination transaction which has not been approved by the
Board of Directors, each right will entitle its holder to purchase, at
the right's then current exercise price, a number of the acquiring
company's common shares having a market value at that time of twice the
right's exercise price. The Board will be entitled to redeem the rights
at $0.01 per right at any time before the tenth day after a person has
acquired 15% or more of the outstanding common stock.
"The rights are intended to enable all Titan shareholders to realize the
long-term value of their investment in Titan. They do not prevent a
takeover, but should encourage anyone seeking to acquire the Company to
negotiate with the Board of Directors prior to attempting a takeover,"
said Gene W. Ray, President and Chief Executive Officer of The Titan
Corporation.
The dividend distribution will be payable to stockholders of record on
September 7, 1995. The rights will expire in ten years. The rights
distribution is not taxable to shareholders.
The Titan Corporation, headquartered in San Diego, California, designs,
manufactures and installs high technology information and electronic
systems and products for commercial and government clients.
Contact: Michelle Mueller, Vice President of Corporate Communications
(619) 552-9500
Exhibit 2
September 7, 1995
To Our Stockholders:
On August 17, 1995, The Titan Corporation's Board of
Directors adopted a Stockholders Rights Plan that is intended to protect
your interests in the event you and Titan are confronted with coercive
takeover tactics.
The Plan provides for a dividend distribution of Rights to
purchase shares of Titan Preferred Stock. Under certain circumstances,
the Rights could become exercisable to purchase Titan Common Stock, or
securities of an acquiring entity, at one half market value. The Rights
may be exercised only if certain events occur. You are now the owner of
one Right for each share of Titan Common Stock you own. The Plan has
been adopted in order to strengthen the ability of the Board to protect
your interests.
We are attaching a summary description that outlines the
principal features of the Plan, and we urge you to read the summary
carefully. This letter reviews our reasons for issuing the Rights.
No action by stockholders is required or permitted at this
time, and no money should be sent to Titan. The Rights will
automatically attach to the shares of Common Stock you hold and will
trade with them. Separate Rights certificates will be sent to
stockholders only if a person or group acquires 15% or more of Titan's
outstanding Common Stock or makes a tender offer for 15% or more of the
Common Stock. Titan Common Stock certificates issued after September 7,
1995 will contain a reference to the Rights Plan, but there is no need
to send in your certificates to have this reference added.
The Rights are not being distributed in response to any
specific effort to acquire control of the Company. The Rights are
designed to protect stockholders in the event of an unsolicited attempt
to acquire the Company, including through an accumulation of Common
Stock in the open market, a partial, two tier or inadequate tender offer
that does not treat all stockholders equally and other abusive takeover
tactics which the Board of Directors believes are not in the best
interests of stockholders. These tactics unfairly pressure
stockholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their Common
Stock. We consider these Rights to be a valuable means of protecting
both your right to retain your equity investment in Titan and the full
value of that investment, while not foreclosing a fair acquisition bid
for the Company.
The Rights are not intended to prevent a takeover of Titan
and will not do so. They are designed to deal with the possibility of
unilateral actions by hostile acquirors that could deprive the Board of
Directors and stockholders of Titan of their ability to determine
Titan's destiny and obtain the highest price for their Common Stock.
Adoption of the Plan should not by itself affect any
prospective acquiror who is willing to make an all cash offer at a full
and fair price or who is willing to negotiate with Titan's Board of
Directors. The Plan certainly will not interfere with a merger or other
business combination transaction approved by the Board of Directors.
Issuance of the Rights does not in any way weaken the
financial strength of the Company or interfere with its business plans.
The issuance of the Rights has no dilutive effect, will not affect
reported earnings per share and is not taxable to the Company or to you.
Stockholders may, under certain circumstances, recognize taxable income
if the Rights become exercisable.
Our overriding objective is to continue building value for
Titan's stockholders, and we feel that the Plan will assist in that
effort.
Sincerely,
/s/ Gene W. Ray
Gene W. Ray
President and Chief Executive
Officer
