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): JANUARY 14, 1999
DYNAMIC MATERIALS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-8328 84-0608431
(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
551 ASPEN RIDGE DRIVE, LAFAYETTE, CO 80026
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 665-5700
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(Former name or former address, if changed since last report)
EXHIBIT INDEX APPEARS ON PAGE 4
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ITEM 5. OTHER EVENTS
On January 8, 1999, the Board of Directors of Dynamic Materials
Corporation (the "COMPANY") declared a dividend of one preferred stock purchase
right (a "RIGHT") for each outstanding share of common stock, par value $.05 per
share, of the Company (the "COMMON SHARES"). The Board of Directors of the
Company established that the dividend is payable on January 15, 1999 (the
"RECORD DATE") to the stockholders of record on that date. Prior to the
Distribution Date (as defined below), the Rights will also be attached to all
future issuances of Common Shares. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.05 per share (the "PREFERRED
SHARES"), of the Company at a price of $22.50 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 dated as of January
8, 1999 (the "RIGHTS AGREEMENT") between the Company and Harris Trust and
Savings Bank, as Rights Agent (the "RIGHTS AGENT"). The following description of
the Rights and the Rights Agreement does not purport to be complete and is
qualified in its entirety by the Rights Agreement attached as Exhibit 4.1, which
is hereby incorporated herein by reference.
The Rights will become exercisable on the date (the "DISTRIBUTION DATE")
that is the earlier of (i) 10 business days following a public announcement that
a person or group of affiliated or associated persons (an "ACQUIRING PERSON")
have acquired beneficial ownership of 15% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) 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 outstanding Common Shares. 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.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), 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 Record Date upon transfer or new issuances of 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 outstanding as of
the Record Date, even without such notation, 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
thereafter such separate Right Certificates alone will evidence the Rights. The
Rights Agreement provides that anything therein or in the Rights to the contrary
notwithstanding, Rights may be issued subsequent to the Distribution Date under
certain circumstances as set forth in the Rights Agreement.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire on January 8, 2009 (the "FINAL EXPIRATION DATE"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
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 then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidence of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights 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 preferential semi-annual
dividend payment of the greater of $1.00 per share or 100 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a preferential liquidation payment of the
greater of $1.00 per share or 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
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 any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right (other than Rights
beneficially owned by the Acquiring Person, which will become void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock (or that number of one-hundredths of a Preferred Share or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges) having a market value of two times the
exercise price of the Right.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter
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have the right to receive, upon the exercise thereof at the then current
exercise price, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right.
With certain exceptions, 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 Preferred 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, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the time any person becomes an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (the "REDEMPTION PRICE"). The redemption of
the Rights may be made effective at such time, on such basis an with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a Preferred Share (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).
For so long as Rights are then redeemable, the Company may, except with
respect to the redemption price, amend the Rights in any manner. After the
Rights are no longer redeemable the Company may amend the Rights in any manner
that does not adversely affect the interests of holders of the Rights or cause
the Rights again to become redeemable.
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.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
4.1 Rights Agreement, dated as of January 8, 1999, between the
Company and Harris Trust and Savings Bank which includes the
Certificate of Designations for the Series A Junior
Participating Preferred Stock as Exhibit A and the form of
Right Certificate as Exhibit B.
99.1 Press Release dated January 14, 1999.
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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, thereto duly authorized.
DYNAMIC MATERIALS COMPANY
Dated: January 14, 1999 By: /S/ JOSEPH P. ALLWEIN
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Joseph P. Allwein
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Rights Agreement, dated as of January 8, 1999, between the
Company and Harris Trust and Savings Bank which includes the
Certificate of Designations for the Series A Junior Participating
Preferred Stock as Exhibit A and the form of Right Certificate as
Exhibit B. (Incorporated by reference on Form 8-A as filed with
Commission as of January 21, 1999.)
99.1 Press Release dated January 14, 1999.
[DYNAMIC MATERIALS CORPORATION LETTERHEAD]
PRESS RELEASE
DYNAMIC MATERIALS CORPORATION DECLARES DIVIDEND
DISTRIBUTION OF PREFERRED STOCK PURCHASE RIGHTS
Denver, Colorado, January 14, 1999 -- The Board of Directors of DYNAMIC
MATERIALS CORPORATION ("DMC") today announced that it declared a dividend
distribution of one Preferred Stock Purchase Right on each outstanding share of
DMC Common Stock effective as of January 8, 1999.
Joseph P. Allwein, President and Chief Executive Officer of DMC, stated:
"The Rights are designed to assure that all of DMC's stockholders receive fair
and equal treatment in the event of any proposed takeover of the Company and to
guard against partial tender offers, squeeze-outs, open market accumulations and
other abusive tactics to gain control of DMC without paying all stockholders a
control premium."
The Rights will be exercisable only if a person or group acquires 15% or
more of DMC's Common Stock or announces a tender offer the consummation of which
would result in ownership by a person or group of 15% or more of the Common
Stock. If prior to the redemption, exchange or termination of the Rights, a
person or group acquires 15% or more of DMC's outstanding Common Stock, each
Right will entitle its holder (other than such person or members of such group)
to purchase, at the Right's then current exercise price, a number of DMC's
Preferred Shares having a market value of twice such price. In addition, if,
prior to the redemption, exchange or termination of the Rights, DMC is acquired
in a merger or other business combination transaction after a person has
acquired 15% or more of the Company's outstanding Common Stock, each Right
(other than the Rights beneficially owned by the Acquiring Person) 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 of twice such price.
Following the acquisition by a person or group of beneficial ownership or
15% or more of the Company's Common Stock and prior to an acquisition of 50% or
more of the Common Stock, the Board of Directors may exchange the Rights (other
than Rights owned by such person or group), in whole or in part, at an exchange
ratio of one share of Common Stock per Right.
The Rights are intended to enable all DMC stockholders to realize the
long-term value of their investment in the Company. The Rights will not prevent
a takeover, but should encourage anyone seeking to acquire the Company to
negotiate with the Board prior to attempting takeover.
The dividend distribution will be made on January 15, 1999, payable to
stockholders of record on that date. The Rights will expire on January 9, 2009.
The Rights distribution is not taxable to stockholders and DMC's Board of
Directors may redeem the Rights at any time prior to the acquisition of
beneficial ownership of 15% or more of the Company's Common Stock.
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[Summary description of DYNAMIC MATERIALS CORPORATION and its business]
