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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) April 30, 1999
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FURON COMPANY
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
California 0-8088 95-1947155
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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29982 Ivy Glenn Drive, Laguna Niguel, California 92677
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 831-5350
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
The Board of Directors of Furon Company (the "Company") has
declared a distribution of one Right for each outstanding share of common stock
(the "Common Shares") of the Company to be made as of May 21, 1999 (the "Record
Date") to the shareholders of record on that date. Each Right entitles the
registered holder to purchase from the Company, initially, one one-hundredth of
a share of Junior Participating Preferred Stock ("Preferred Shares") at a price
of $58.75 (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement between the Company and
The Bank of New York, a New York banking corporation, as Rights Agent.
Preferred Shares purchasable upon exercise of the Rights will be
entitled to dividends of 100 times the dividends, per share, declared on the
Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $100 per share and an aggregate
liquidating distribution, per share, of 100 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares and
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.
Because of the Preferred Shares' dividend and liquidation rights,
the value when issued of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "Stock
Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
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 Company's general voting power (the date of such
earlier occurrence being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing the Common Shares and will be
transferred with and only with the Common Shares. New Common Share certificates
issued after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference, and the
surrender for transfer of any certificate for Common Shares, even without such
notation or a copy of this Summary of Rights being 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 the tenth anniversary of the Record Date (the "Final
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Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other
securities or property issuable upon exercise of the Rights, and the number of
outstanding Rights, are subject to adjustment from time to time to prevent
dilution.
A Qualified Offer is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated directors to
be fair to and otherwise in the best interests of the Company and its
shareholders.
In the event that any person becomes an Acquiring Person other
than by a purchase pursuant to a Qualified Offer, proper provision shall be made
so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will not be entitled to the benefit of such adjustment)
will thereafter have the right to receive upon exercise that number of Common
Shares or Common Share equivalents having a market value of two times the
exercise price of the Right.
In the event that, at any time after an Acquiring Person has
become such, the Company is acquired in a merger or other business combination
transaction (other than a merger which follows a Qualified Offer at the same or
a higher price) 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 will
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 will have a market
value of two times the exercise price of the Right.
At any time after an Acquiring Person has become such, the Board
of Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).
Up to and including the tenth business day after a Stock
Acquisition Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which do
not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as Exhibit 2 to the Registration Statement on Form 8-A
dated April 30, 1999. A copy of the Rights Agreement is available free of charge
from the Company. This summary
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description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
ITEM 7. EXHIBITS
Reference is made to the Exhibit Index annexed hereto and made a part
hereof.
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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 hereunto duly authorized.
Date: April 30, 1999
FURON COMPANY
By: /s/ MONTY A. HOUDESHELL
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Monty A. Houdeshell
Vice President and Chief Financial
Officer
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EXHIBIT INDEX
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EXHIBIT NO. NAME OF ITEM
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3.1 Certificate of Determination of Preferences of Junior Participating
Preferred Stock of Furon Company.
4.1 Rights Agreement, dated as of April 30, 1999, between
Furon Company and The Bank of New York, as Rights Agent,
including as exhibits thereto the terms of the designated
Junior Participating Preferred Stock and Form of Right
Certificate (incorporated by reference to Exhibit 2 to the
Registration Statement on Form 8-A, dated April 30, 1999,
filed with the Securities and Exchange Commission by Furon
Company (the "Form 8-A")).
20.1 Press Release, dated April 30, 1999.
20.2 Form of Summary of Rights to be sent to holders of shares of Common
Stock, no par value per share, of Furon Company (incorporated by
reference to Exhibit 3 to the Form 8-A).
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EXHIBIT 3.1
CERTIFICATE OF DETERMINATION
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
FURON COMPANY
The undersigned officers of Furon Company, a California
corporation (the "Corporation"), hereby certify that the following resolution
has been duly adopted by the Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority granted to the Board of
Directors of the Corporation by the Articles of Incorporation, a series of
shares of the Preferred Stock of the Corporation is hereby established and the
number of shares constituting such series and the designation thereof, and the
rights, preferences, privileges and restrictions of the shares of such series,
are fixed and established as follows:
I. Designation and Amount
The shares of such series shall be designated as "Junior
Participating Preferred Stock" (the "Junior Preferred Stock") and the number of
shares constituting the Junior Preferred Stock shall be 300,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Junior Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Junior Preferred Stock.
II. Dividends and Distributions
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Junior Preferred Stock with respect to dividends, the holders of shares
of Junior Preferred Stock, in preference to the holders of Common Stock
of the Corporation, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of Junior Preferred Stock, in an amount
per share (rounded to
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the nearest cent) equal to the greater of (a) $1.00 or (b) subject to
the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Junior Preferred Stock.
In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which
holders of shares of Junior Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $1.00 per share on the Junior Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Junior
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Junior Preferred Stock entitled to receive payment
of a dividend or distribution
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declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Junior Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Junior Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the shareholders of the
Corporation.
(B) Except as otherwise provided herein, or in any other resolutions of
the Board creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Junior Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, in the Corporation's Articles of
Incorporation or as otherwise provided by law, holders of Junior
Preferred Stock shall have no voting rights.
IV. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Junior Preferred Stock, except dividends paid ratably on the
Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the
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Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity with the Junior Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of
this Section IV purchase or otherwise acquire such shares at such time
and in such manner.
V. Reacquired Shares
Any shares of Junior Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the Articles of
Incorporation, in any other Certificate of Determination creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Junior
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in
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shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of shares of
Junior Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
VII. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VIII. Redemption
The shares of Junior Preferred Stock shall not be redeemable.
IX. Rank
The Junior Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
X. Amendment
The Articles of Incorporation of the Corporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Junior Preferred Stock, voting together as a single class.
* * * *
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The undersigned officers further certify that the number of shares of
Preferred Stock the Corporation is authorized to issue is 2,000,000 shares, and
that the number of shares constituting the series designated Junior
Participating Preferred Stock, none of which has been issued, is 300,000 shares.
Dated: May ___, 1999
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Monty A. Houdeshell
Vice President and Chief Financial Officer
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Donald D. Bradley
Secretary
Each of the undersigned declares under penalty of perjury that the
matters set forth in the foregoing Certificate of Determination are true and
correct. Executed at Laguna Niguel, California this ___ day of May, 1999.
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Monty A. Houdeshell Donald D. Bradley
Vice President and Secretary
Chief Financial Officer
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EXHIBIT 20.1
[FURON LETTERHEAD]
PRESS RELEASE
For: IMMEDIATE RELEASE
Contact: Mike Hagan/Ron Bissell
Furon Company
(949) 831-5350
Roger Pondel/Rob Whetstone
Pondel/Wilkinson Group
(310) 207-9300
FURON ANNOUNCES NEW SHAREHOLDER RIGHTS PLAN
Laguna Niguel, CA - April 30, 1999 - Furon Company (NYSE:FCY) today announced
it has adopted a new shareholder rights plan in order to discourage abusive
takeover tactics. The new plan will replace the current plan which expires May
31, 1999. It is expected that the new rights will be issued on that date as a
dividend to shareholders of record on May 21, 1999.
In the new plan, if an entity acquires more than 15% of the Company's stock, or
in the event of a "squeeze-out" merger, holders of the rights would be entitled
to purchase either the Company's stock or stock in the merged entity at half of
the market value. The Company will be entitled to redeem the rights for a
nominal amount at any time until the tenth day following a public announcement
that a 15% position in the Company has been acquired. The new plan also
eliminates the "dead-hand" or "continuing director" provisions that were
contained in the prior plan. These provisions provided that only "continuing
directors" could redeem the rights after a distribution date. Complete details
of the new plan will be mailed to shareholders.
Furon, a leading manufacturer of engineered polymer components, serves both the
commercial and healthcare markets.
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