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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 26, 1999
HPSC, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-11618 04-256004
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
60 State Street, Boston, MA 02109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 720-3600
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ITEM 5. OTHER EVENTS.
On April 26, 1999, HPSC, Inc. (the "Company") amended its Rights
Agreement, dated August 3, 1993 (the "Rights Plan"), to eliminate those
provisions that require that certain actions may only be taken by
"Continuing Directors" and to make certain other changes. This Amendment to
the Rights Plan was made in response to the Delaware Court of Chancery's
recent decision in Carmody v. Toll Brothers, Inc. In the view of the
Company's Board of Directors, based on advice of counsel, the Toll Brothers
decision has cast doubt on the legality under Delaware law of "Continuing
Directors" provisions, also referred to as "dead-hand" provisions, in many
existing shareholders rights plans. Although the opinion related to the
denial of a motion to dismiss an action challenging the "Continuing
Directors" provision and not an opinion addressing the actual validity of
the provision under Delaware law, the Delaware court stated that a
"Continuing Directors" provision was open to challenge under Delaware law
on both statutory and fiduciary grounds. A "Continuing Directors" provision
provides that outstanding rights can only be redeemed by "Continuing
Directors," which is generally defined to mean directors who were members
of the board at the time the Rights Agreement was adopted and any other
person who subsequently becomes a member of the board if such person's
nomination for election to the board was recommended or approved by a
majority of the continuing directors. While the Company's Rights Plan
differs in significant respects from the plan considered in the Toll
Brothers case, particularly as regards to the "Continuing Directors"
provisions thereof, the Board of Directors believes the disputed validity
of these provision under the Toll Brothers opinion warrants action to amend
the Rights Plan.
In addition, the Rights Plan was amended to (i) eliminate outdated
references to Healthco International, Inc., a former stockholder of the
Company, and (ii) exclude John W. Everets and his Affiliates and Associates
from the definition of "Acquiring Person" so that his holdings of the
Company's common stock do not trigger the dilutive provisions of the Rights
Plan.
The First Amendment to the Rights Agreement is attached hereto as
Exhibit 4.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
EXHIBIT NUMBER
4.1 First Amendment dated as of April 26, 1999 to Rights Agreement dated
as of August 3, 1993 between HPSC, Inc. and First National Bank of Boston, as
Rights agent.
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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 hereunto duly authorized.
HPSC, INC.
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Registrant
DATED: April 26, 1999 By: /s/ John W. Everets
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John W. Everets
Chairman and Chief
Executive Officer
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EXHIBIT 4.1
FIRST AMENDMENT TO RIGHTS AGREEMENT
Pursuant to Section 27 of the Rights Agreement (the "Agreement") dated as
of August 3, 1993 between HPSC, Inc., a Delaware corporation ("Company") and
BankBoston, N.A., the successor to First National Bank of Boston (the "Rights
Agent"), the Company and the Rights Agent hereby amend the Agreement as of April
26, 1999, as follows:
1. Section 1 of the Agreement is amended as follows:
(a) The definition of "Continuing Directors" in subparagraph 1(i) is
deleted and the following phrase is substituted therefor: "Intentionally
Omitted."
(b) The definition of "Grandfathered Stockholder" in subparagraph
1(m) is deleted and the following definition is substituted therefor:
"Grandfathered Stockholder shall mean John W. Everets (including his
Affiliates and Associates)."
(c) The phrase "who are Continuing Directors and" is deleted from
subparagraph 1(n).
2. The phrase "who are Continuing Directors and" is deleted from
paragraph 10 of the Agreement.
3. Section 11 is amended as follows:
(a) The word "Continuing" following the phrase "a majority of" and
before the word "Directors" is deleted from subparagraph 11(a)(ii)(B).
(b) The parenthetical phrase "or, in the case of a Person which is a
Grandfathered Stockholder, prior to the time that such person acquires
additional shares of Common Stock representing 1/2% or more of the
outstanding Common Stock" is deleted from subparagraph 11(a)(ii)(B).
4. Section 23(a) is amended by replacing the semicolon after the
parenthetical phrase ending with the words "Redemption Price" with a period and
deleting the remainder of the subparagraph.
5. Section 23(c) is amended by deleting the phrase "if there are
Continuing Directors then in office, such Board of Directors" and substituting
the following phrase therefor: "the Board of Directors", and by deleting the
phrase ", by action of a majority of its Continuing Directors,".
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6. The following phrase is deleted from subclause (iv) of Section 27 of
the Agreement: "(1) approved by a majority of the Continued Directors and (2)."
The undersigned officer of the Company, being an appropriate officer of the
Company and authorized to do so by the resolution of the board of directors of
the Company dated as of April 26, 1999, hereby certifies to the Rights Agent
that these amendments are in compliance with the terms of Section 27 of the
Agreement.
HPSC, Inc.
By: /s/ John W. Everets
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John W. Everets
Chairman of the Board and Chief
Executive Officer
Acknowledged and Agreed:
BankBoston, N.A.
By: /s/ Katherine Anderson
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Name: Katherine Anderson
Title: Administrative Manager
