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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 - July 26, 2000
(Date of Earliest Event Reported)
GUILFORD MILLS, INC.
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(Exact name of registrant as specified in its charter)
Commission File No. 1-06922
Delaware 13-1995928
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(State of Incorporation) (I.R.S. Employer
Identification No.)
4925 West Market Street, Greensboro, NC 27407
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(Address of principal Zip Code
executive offices)
Registrant's telephone number, including area code: (336) 316-4000
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NY2:\925955\05\J%GZ05!.DOC\51040.0001
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ITEM 5. OTHER EVENTS.
Adoption of Stockholder Rights Plan
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On July 26, 2000, the Board of Directors of Guilford Mills,
Inc., a Delaware corporation (the "Corporation"), declared a dividend
distribution of one Preferred Stock Purchase Right for each outstanding share of
common stock, par value $0.02 per share (the "Common Stock"), of the
Corporation. The distribution was made payable as of August 23, 2000 to
stockholders of record on that date (the "Record Date"). Each Right, once
exercisable, entitles the registered holder to purchase from the Corporation one
one-hundredth (1/100) of a share of preferred stock of the Corporation,
designated as Series A Junior Participating Preferred Stock (the "Preferred
Stock"), at a price of $20.00 per one one-hundredth (1/100) of a share
("Exercise Price"), subject to certain adjustments. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") by and
between the Corporation and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent").
The Rights will replace similar rights issued by the
Corporation in 1990, which expire on August 23, 2000.
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Corporation (an "Acquiring Person") and (ii)
the tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement by any
person of a tender or exchange offer, the consummation of which would result in
such person or group of affiliated or associated persons becoming an Acquiring
Person.
An Acquiring Person does not include (A) the Corporation, (B)
any subsidiary of the Corporation, (C) any employee benefit plan or employee
stock plan of the Corporation or of any subsidiary of the Corporation, or any
trust or other entity organized, appointed, established or holding voting stock
for or pursuant to the terms of any such plan, (D) any person or group of
affiliated or associated persons whose ownership of 15% or more of the shares of
voting stock of the Corporation then outstanding results solely from (i) any
action or transaction or transactions approved by the Board of Directors before
such person or group became an Acquiring Person or (ii) a reduction in the
number of issued and outstanding shares of voting stock of the Corporation
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
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reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% or more of the Corporation's voting stock unless
such acquisition of additional voting stock would not result in such person
becoming an Acquiring Person by reason of clause (i) or (ii) above), or (E) any
person who, as of July 26, 2000, together with all affiliates and associates of
such person, was the beneficial owner of 15% or more of the voting stock of the
Corporation outstanding as of such date; provided, however, that any person
described in this clause (E) shall become an Acquiring Person if (i) such
person, together with all affiliates and associates of such person, after July
26, 2000, acquires beneficial ownership of an additional 1% or more of the
voting stock (unless such acquisition is pursuant to a transaction described in
clause (D)(i) or (D)(ii) above) or (ii) such person, together with all
affiliates and associates of such person, after July 26, 2000, reduces its
beneficial ownership of the voting stock to less than 15% of the outstanding
voting stock and thereafter becomes the beneficial owner of 15% or more of the
outstanding voting stock (unless such acquisition is pursuant to a transaction
described in clause (D)(i) or (D)(ii) above).
Prior to the Distribution Date, the Rights will not be
exercisable, will not be represented by a separate certificate, and will not be
transferable apart from the Corporation's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate with a copy of a Summary of
Rights attached thereto. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), new Common Stock certificates issued
after the Record Date will contain a legend incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any of the Common Stock
certificates outstanding as of the Record Date, with or without a copy of a
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Stock 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 Stock as of the close of business on the Distribution Date, and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on July 26, 2010, unless earlier
redeemed or exchanged by the Corporation as described below.
Shares of Preferred Stock purchasable upon exercise of the
Rights will be non-redeemable and, unless otherwise provided in connection with
the creation of a subsequent series of preferred stock, will be subordinate to
any other series of the Corporation's preferred stock. The Preferred Stock may
not be issued except upon exercise of Rights. Each share of Preferred Stock will
be entitled to receive when, as and if declared, a quarterly dividend in an
amount equal to the greater of $1.00 per share or 100 times the cash dividends
declared on the Corporation's Common Stock. In addition, the holders of the
Preferred Stock are entitled to receive 100 times any non-cash dividends (other
than dividends payable in equity securities) declared on the Common Stock, in
like kind. In the event of the liquidation of the Corporation, the holders of
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Preferred Stock will be entitled to receive, for each share of Preferred Stock,
a payment in an amount equal to the greater of $2,000 or 100 times the payment
made per share of Common Stock. Each share of Preferred Stock will have 100
votes, voting together with the Common Stock. 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 100 times the amount
received per share of Common Stock. The rights of Preferred Stock as to
dividends, liquidation and voting are protected by anti-dilution provisions.
The Exercise Price of the Rights and the number of shares of
Preferred Stock issuable upon exercise of the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed, in the event that a
person or group becomes an Acquiring Person, the Rights Agreement provides that
proper provisions will be made so that each holder of record of a Right (other
than Rights beneficially owned by an Acquiring Person and certain affiliates,
associates and transferees thereof, whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of shares of the Preferred Stock having a fair market value
determined in accordance with the Rights Agreement at the time of the
transaction equal to approximately two times the Exercise Price (such value to
be determined with reference to the fair market value of the Corporation's
Common Stock as provided in the Rights Agreement).
In addition, unless the Rights are earlier redeemed or
exchanged, in the event that, after the time that a person or group becomes an
Acquiring Person, the Corporation were to be acquired in a merger or other
business combination (in which any shares of Common Stock are changed into or
exchanged for other securities or assets) or more than 50% of the assets or
earning power of the Corporation and its subsidiaries (taken as a whole) were to
be sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of
record of a Right (other than Rights beneficially owned by an Acquiring Person
and certain affiliates, associates and transferees thereof, whose Rights will
thereupon become null and void) will from and after such date have the right to
receive, upon payment of the Exercise Price, that number of shares of common
stock of the acquiring company having a fair market value at the time of such
transaction determined in accordance with the Rights Agreement equal to
approximately two times the Exercise 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 voting stock, the Board of Directors of the Corporation may
exchange the Rights (other than Rights owned by such person or group which will
have become null and void), in whole or in part, for that number of shares of
the Corporation's Common Stock having a fair market value on the date such
person or group became an Acquiring Person equal to the excess of (i) the fair
market value of Preferred Stock issuable upon the exercise of the Rights over
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(ii) the Exercise Price of the Rights, in each case subject to anti-dilution
adjustments; provided, however, that if such calculation would result in an
exchange ratio that exceeds four shares of Common Stock per Right, then the
exchange ratio shall, notwithstanding, be equal to four shares of Common Stock
per Right, subject to anti-dilution adjustments.
Fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share) may, at the
election of the Corporation, be evidenced by depositary receipts. The
Corporation may also issue cash in lieu of fractional shares which are not
integral multiples of one one-hundredth of a share.
At any time prior to the close of business on the tenth day
after there has been a public announcement that a person has become an Acquiring
Person, the Corporation may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price"). Immediately upon the
effective time of the action of the Board of Directors of the Corporation
authorizing 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.
For as long as the Rights are then redeemable, the Corporation
may, except with respect to the Redemption Price, amend the Rights in any
manner, including an amendment to extend the time period in which the Rights may
be redeemed. At any time when the Rights are not then redeemable, the
Corporation may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
As of July 25, 2000, there were 32,750,094 shares of Common
Stock issued (of which 19,194,295 shares were outstanding and 13,555,799 shares
were held in treasury) and 80,289 shares reserved for issuance under the
Corporation's existing stock option plans. The Corporation's Board of Director
has reserved 400,000 shares of Preferred Stock for issuance upon exercise of the
Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group who attempts to acquire the
Corporation on terms not approved by the Corporation's Board of Directors. The
Rights should not interfere with any merger or other business combination
approved by the Board since they may be redeemed by the Corporation at $0.01 per
Right at any time prior to the close of business on the tenth day after there
has been a public announcement that a person or group has become an Acquiring
Person .
The form of Rights Agreement between the Corporation and the
Rights Agent, specifying the terms of the Rights, which includes as Exhibit A
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the form of Summary of Rights to Purchase Series A Junior Participating
Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the
form of Certificate of Amendment to the Designations setting forth the terms of
the Preferred Stock are attached hereto as exhibits and incorporated herein by
reference. The foregoing description of the Rights is qualified by reference to
such exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
4.1 Rights Agreement dated as of July 26, 2000,
by and between Guilford Mills, Inc. and
American Stock Transfer & Trust Company, as
Rights Agent. The Rights Agreement includes
as Exhibit B the form of Right Certificate
and as Exhibit C the form of Certificate of
Amendment to the Designations.
99.1 Press Release of the Corporation issued on
July 27, 2000.
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SIGNATURES
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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 hereunto duly authorized.
GUILFORD MILLS, INC.
By: Terrence E. Geremski
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Name: Terrence E. Geremski
Title: Executive Vice President
and Chief Financial Officer
Dated: August 9, 2000
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement dated as of July 26, 2000, by and between
Guilford Mills, Inc. and American Stock Transfer & Trust
Company, as Rights Agent. The Rights Agreement includes as
Exhibit B the form of Right Certificate and as Exhibit C the
form of Certificate of Amendment to the Designations.
99.1 Press Release of the Corporation issued on July 27, 2000.
