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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DAIRY MART CONVENIENCE STORES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2497894
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(State of incorporation or organization) (IRS Employer Identification No.)
One Vision Drive, Enfield, Connecticut 06082
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Preferred Stock Purchase Rights
Class A Common Stock, $.01 Par Value Per Share
Class B Common Stock, $.01 Par Value Per Share
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(Title of Class)
Name of exchange on which securities are to be registered: American Stock
Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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Item 1. Description of Securities To Be Registered.
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The authorized capital stock of the Company consists of 20,000,000 shares
of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
10,000,000 shares of Class B Common Stock, par value $.01 per share (the "Class
B Common Stock" and, together with the Class A Common Stock, the "Common Stock")
and 1,000,000 shares of Serial Preferred Stock, par value $.01 per share (the
"Serial Preferred Stock").
Voting Rights--Common Stock
As of August 23, 1996, there were 2,869,129 shares of Class A Common Stock
issued and outstanding held of record by approximately 608 stockholders and
2,751,482 shares of Class B Common Stock issued and outstanding held of record
by approximately 338 stockholders.
Holders of Class A Common Stock are entitled to elect 25% of the Board of
Directors (rounded up to the nearest whole number) elected by the holders of
Common Stock so long as the number of outstanding shares of Class A Common Stock
is at least 10% of the total number of outstanding shares of both classes of
Common Stock. Currently, the holders of Class A Common Stock are entitled, as a
class, to elect two directors of the Company, and the holders of the Class B
Common Stock are entitled, as a class, to elect the remaining five directors.
The holders of a majority of the Class B Common Stock can and will continue to
be able to elect a majority of the directors elected by the holders of Common
Stock, so long as the number of outstanding shares of Class B Common Stock is at
least 12.5% of the number of outstanding shares of both classes of Common Stock.
If the number of outstanding shares of Class B Common Stock falls below that
percentage, directors not elected by the holders of Class A Common Stock will be
elected by the holders of both classes of Common Stock, with holders of Class A
Common Stock having one-tenth vote per share and holders of Class B Common Stock
having one vote per share.
Directors may be removed, with or without cause, by the holders of the
class or classes of Common Stock that elected them. Vacancies in a directorship
may be filled by the vote of the class of shares that had previously filled that
vacancy, or by the remaining directors of that class; however, if there are no
such directors, the vacancy may be filled by the remaining directors.
If the number of outstanding shares of Class A Common Stock should become
less than 10% of the total number of outstanding shares of both classes of
Common Stock, the holders of Class A Common Stock would not have the right to
elect 25% of the Board of Directors elected by the holders of Common Stock.
Directors would then be elected by all stockholders voting as one class, except
holders of Class A Common Stock would have one-tenth vote per share and holders
of Class B Common Stock would have one vote per share. The holders of Class A
Common Stock and Class B Common Stock must vote together as a
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single class in order to amend the Company's Certificate of Incorporation to
increase or decrease the aggregate number of authorized shares of any class or
classes of stock.
Except for the election or removal of directors as described above and
except for class votes as required by law, holders of both classes of Common
Stock vote or consent as a single class on all matters, with each share of Class
A Common Stock having one-tenth vote per share and each share of Class B Common
Stock having one vote per share.
Dividends--Common Stock
Cash or property dividends can be declared and paid on the Class A Common
Stock without being declared and paid on the Class B Common Stock. No cash or
property dividend may be paid on the Class B Common Stock unless a dividend at
least equal in amount per share is paid concurrently on the Class A Common
Stock.
Dividends paid on shares of Class A Common Stock or Class B Common Stock
may be paid only as follows:
(i) shares of Class A Common Stock may be paid only to holders of
shares of Class A Common Stock unless there is no Class A Common Stock
outstanding, and shares of Class B Common Stock may be paid only to holders
of Class B Common Stock; and
(ii) the same number of shares shall be paid in respect of each
outstanding share of Class A and Class B Common Stock. For example, if a
stock dividend of two shares of Class A Common Stock were paid for each
share of Class A Common Stock held, a stock dividend of two shares of Class
B Common Stock would simultaneously be paid for each share of Class B
Common Stock held.
The Company has not paid any cash dividends during the last two fiscal
years and pursuant to loan covenants contained in its credit agreement with its
principal lender, is currently restricted from paying any dividends on its
capital stock.
Conversion--Common Stock
At the option of the holder of record, each share of Class B Common Stock
is convertible at any time into one share of Class A Common Stock. Conversion
of a significant number of shares of Class B Common Stock into Class A Common
Stock could put control of the entire Board of Directors into the hands of the
current holders of the Class B Common Stock.
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Other Rights--Common Stock
Shareholders of the Company have no preemptive or other rights to subscribe
for additional shares. On liquidation, dissolution or winding up of the
Company, all shareholders, regardless of class, are entitled to share ratably in
any assets available for distribution to holders of shares of Common Stock. No
shares of either class are subject to redemption. The Company may not subdivide
or combine shares of either class without at the same time proportionally
subdividing or combining shares of the other class.
Transfer Agent
The transfer agent and registrar for shares of the Class A Common Stock and
Class B Common Stock is the American Stock Transfer Company.
Charter and Bylaw Provisions Relating to Changes in Control
As discussed above, the Board of Directors of the Company is divided into
two classes. The Company's Certificate of Incorporation contains provisions
prohibiting certain "business combinations" with "interested stockholders." The
Company's bylaws require that nominations for the Board of Directors and
proposals made by a stockholder must comply with particular notice proposals.
These provisions would make more difficult or discourage a proxy contest or the
assumption of control by a holder of a substantial block of the Company's Common
Stock or the removal of the incumbent Board of Directors. Such provisions could
also have the effect of discouraging a third party form making a tender offer or
otherwise attempting to obtain control of the Company.
Serial Preferred Stock
The Board of Directors may, without action of the shareholders of the
Company, issue Preferred Stock from time to time in one or more series with
distinctive serial designations.
The Board of Directors is authorized to determine, among other things, with
respect to each series which may be issued: (i) the dividend rate and conditions
and the dividend preferences, if any; (ii) whether dividends would be cumulative
and, if so, the date from which dividends on such series would accumulate; (iii)
whether, and to what extent, the holders of such series would enjoy voting
rights, if any, in addition to those prescribed by law; (iv) whether, and upon
what terms, such series would be convertible into or exchangeable for shares of
any other class of capital stock or other series of Preferred Stock; (v)
whether, and upon what terms, such series would be redeemable; (vi) whether or
not a sinking fund would be provided for the redemption of such series and, if
so, the terms and conditions thereof; and (vii) the preference, if any, to which
such series would be entitled in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Company. With regard to
dividends, redemption and liquidation preference, any particular series of
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Preferred Stock may rank junior to, on a parity with or senior to any other
series of Preferred Stock and any class of the Common Stock.
It is not possible to state the actual effect of the authorization of the
Preferred Stock upon the rights of holders of the Common Stock, either Class A
or Class B, until the Board of Directors determines the specific rights of the
holders of a series of the Preferred Stock. However, such effects might include
(a) restrictions on dividends on the Common Stock if dividends on Preferred
Stock have not been paid; (b) dilution of the voting power of the Common Stock
to the extent that the Preferred Stock has voting rights; (c) dilution of the
equity interest of the Common Stock to the extent that the Preferred Stock is
converted into Common Stock; or (d) the Common Stock not being entitled to share
in the Company's assets upon liquidation until satisfaction of any liquidation
preference granted the holders of the Preferred Stock. Issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could make it more difficult for a
third party to acquire a majority of the outstanding voting stock. Accordingly,
the issuance of Preferred Stock may be used as an "anti-takeover" device without
further action on the part of the shareholders of the Company.
Warrants
As of August 23, 1996, there were Warrants (the "Warrants") to purchase
1,715,000 shares of Series A Common Stock issued and outstanding, held
beneficially by approximately 96 holders.
The Warrants were issued pursuant to several (Series B) Note and Warrant
Purchase Agreements between the Company and certain purchasers dated as of
December 1, 1995 (the "Series B Purchase Agreements") and the Amended and
Restated Indenture, dated as of December 1, 1995, among the Company, certain
guarantors and First National Bank, as trustee (the "Indenture"), pursuant to
which the Company's Series A Notes were issued.
At any time until December 1, 2001, each Warrant entitles the registered
holder to purchase the number of shares of the Company's Class A Common Stock
specified in such Warrant at an initial exercise price of $6.95 per share. The
exercise price shall be adjusted on the first anniversary date of the Warrants
to the lower of (x) the initial exercise price and (y) 110% of the average
closing price of Class A Common Stock during the 30 trading days immediately
preceding the first anniversary date of the Warrants. The Warrants may be
exercised by surrendering to the Company or its designated agent the Warrants
and the payment of the exercise price (i) by wire transfer, cash, check or money
order, payable in United States funds, (ii) by delivering the Company's Series A
Notes and Series B Notes, (iii) to the extent permitted by the Indenture and the
Company's credit agreement with its principal lender, by authorizing the Company
to withhold from such issuance of shares of Common Stock upon exercise of the
Warrant a number of Shares of Common Stock determined by dividing the warrant
exercise price by the closing Class A Common Stock price on the date immediately
preceding the exercise date or (iv) any combination thereof.
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No fractional shares of Class A Common Stock will be issued in connection with
the exercise of Warrants. If the holder would otherwise be entitled to receive
a fractional share of Class A Common Stock, the number of shares issuable upon
exercise will be rounded up to the next larger whole share. The Company is
required to keep available a sufficient number of authorized shares of Class A
Common Stock for issuance to permit exercise of the Warrants. The Warrants are
not redeemable by the Company.
The Warrants will expire at 5:00 p.m., New York time on December 1, 2001.
In the event a holder of Warrants fails to exercise the Warrants prior to their
expiration, the Warrants will expire and the holder thereof will have no further
rights with respect to the Warrants. A holder of Warrants does not have any
rights, privileges or liabilities as a stockholder of the Company.
The exercise price of the Warrants and the number of shares issuable upon
exercise of the Warrants are subject to adjustment to protect against dilution
in the event of stock dividends, stock splits, combinations, subdivisions,
reclassifications, purchases or redemptions of Class B Common Stock at a price
greater than the Class A Common Stock, or issuances of Class A Common Stock (or
convertible securities, options, grants or other rights to purchase Class A
Common Stock, excluding shares issuable upon exercise of currently outstanding
options and up to 650,000 shares issuable for future grants under the Company's
option plans) at a price less than the greater of the market price or warrant
price of Class A Common Stock. The adjustments to the exercise price and number
of shares issuable upon exercise of the Warrants occurs at the time of issuance
of a convertible security, option or right, and in the event such convertible
securities, options or rights later expire or terminate, the exercise price of
the Warrants may be increased and the number of shares issuable upon exercise of
the Warrants may be decreased.
Holders of the Warrants have the right to exercise the Warrants to purchase
shares of Class A Common Stock whether or not an effective registration
statement relating to such shares is then in effect and whether or not the
shares are qualified for sale under the securities laws of the jurisdictions in
which the various holders of the Warrants reside. In September 1996, the
Company registered the Warrants and the Class A Common Stock related thereto for
resale under the Securities Act of 1933, as amended (the "1933 Act"). The
Company has undertaken to maintain the effectiveness of the registration
statement for a period of three years or such shorter period which will
terminate when all of the Warrants and the shares of Class A Common Stock into
which the Warrants may be exchanged have been sold, but there can be no
assurance that the Company will be able to do so. The Company will, upon
request, qualify the Warrants and Class A Common Stock for sale under the
securities laws of various state jurisdictions. In the event the holders of the
Warrants exercise the Warrants in the absence of an effective registration
statement relating to such shares and qualification for sale under the
securities laws of the various state jurisdictions, the Warrants and the shares
issued upon exercise of the Warrants will be "restricted securities" as that
term is defined under the 1933 Act. As such, the shares will not be
transferable in the absence of an effective registration statement or an opinion
from counsel
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that an exemption therefrom exists, and the value of the Warrants and the shares
may be materially affected. The Company generally must be notified prior to the
transfer of such restricted securities, although certain transfers of such
"restricted securities" to institutional accredited investors may be effected
without prior notice to the Company. The Warrants may be deprived of any value
if the registration statement relating to them is not kept effective or if the
Warrants or such Class A Common Stock are not qualified or exempt from
qualification in the state jurisdictions in which the holders of the Warrants
reside. In the event a holder of a Warrant, who is an affiliate of the Company
as defined in Rule 144 under the 1933 Act, and who has exercised, in whole or
part, such Warrants while an effective registration statement was in effect,
sells shares of Class A Common Stock in the absence of an effective registration
statement, such sale will be subject to the volume and certain other
requirements of Rule 144 under the 1933 Act.
Shareholder Rights Agreement
On January 19, 1996, the Board of Directors of the Company declared a
dividend of one Preferred Stock Purchase Right (the "Right(s)") for each
outstanding share of Class A Common Stock, and Class B Common Stock of the
Company. The dividend was payable as of January 29, 1996 to stockholders of
record on that date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth (1/100) of a share of a new series of preferred
shares of the Company, designated as Series A Junior Preferred Stock ("Preferred
Stock"), at a price of $30 per one one-hundredth (1/100) of a share (the
"Exercise Price"), subject to certain adjustments. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and The First National Bank of Boston, as Rights Agent ("Rights
Agent"), dated as of January 19, 1996.
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 either (x) 25% or more of the
outstanding shares of either class of voting stock of the Company or (y) 15% or
more of the total outstanding shares of voting stock of the Company (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 or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the ownership of 30% or more of the outstanding shares of either class of voting
stock (even if no shares are actually purchased pursuant to such offer); prior
thereto, the Rights would not be exercisable, would not be represented by a
separate certificate, and would not be transferable apart from the Company's
Common Stock,
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but will instead be evidenced, with respect to any of the Common Stock
certificates outstanding as of January 29, 1996, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto. An
Acquiring Person does not include (A) the Company, (B) any subsidiary of the
Company, (C) DM Associates Limited Partnership (and its general partner(s) and
the holders of the outstanding equity interests in such general partner(s), in
their capacities as such) so long as DM Associates does not increase its
beneficial ownership of the voting stock of the Company, (D) any employee
benefit plan or employee stock plan of the Company or of any subsidiary of the
Company, or any trust or other entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan or (E) any
person or group whose ownership of 25% or more of the outstanding shares of any
class of voting stock or 15% or more of the total outstanding shares of voting
stock of the Company 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 Company 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 reason of clause
(i) or (ii) above shall become an Acquiring Person upon the acquisition of an
additional 1% of any class of the Company's voting stock unless such acquisition
of additional voting stock will not result in such person or group becoming an
Acquiring Person by reason of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after January 29, 1996 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Company's Common Stock certificates
outstanding as of January 29, 1996 with or without a copy of the Summary of
Rights attached, 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 Company's
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 January 19, 2006, unless earlier
redeemed by the Company as described below.
The Preferred Stock is non-redeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company'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 $.10 per share and 100 times the cash
dividends declared on the Company's Class B Common Stock. In addition,
Preferred Stock is entitled to 100 times any non-cash dividends (other than
dividends payable in equity
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securities) declared on the Class B Common Stock, in like kind. In the event of
liquidation, the holders of Preferred Stock will be entitled to receive a
liquidation payment in an amount equal to the greater of $100 per one one-
hundredth (1/100) of a share or 100 times the payment made per share of Class B
Common Stock. Each share of Preferred Stock will have one vote, voting together
with the Class B Common Stock. In the event of any merger, consolidation or
other transaction in which Class B Common Stock is exchanged, each share of
Preferred Stock will be entitled to receive 100 times the amount received per
share of Class B Common Stock. The rights of Preferred Stock as to dividends,
liquidation and voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is 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 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, after the time
that the Rights become exercisable, the Company were to be acquired in a merger
or other business combination (in which any shares of the Company's Common Stock
are changed into or exchanged for other securities or assets) or more than 50%
of the assets or earning power of the Company 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 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 market value at the time of such
transaction equal to two times the Exercise Price. In addition, unless the
Rights are earlier redeemed, if a person or group (with certain exceptions)
becomes the beneficial owner of either (i) 25% or more of any class of the
Company's voting stock or (ii) 15% or more of the total number of outstanding
shares of the Company's voting stock (other than pursuant to a tender or
exchange offer (a "Qualifying Tender Offer") for all outstanding shares of
Common Stock that is approved by the Board of Directors, after taking into
account the long-term value of the Company and all other factors they consider
relevant in the circumstances), the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right, other than the
Acquiring Person (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 Company's Preferred Stock having a market value at the
time of the transaction equal to two times the Exercise Price (such market value
to be determined with reference to the market value of the Company's Common
Stock as provided in the Rights Agreement).
Fractions of shares of Preferred Stock (other than fractions that are
integral multiples of one one-hundredth (1/100) of a share) may, at the election
of the Company, be evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral multiples of one one-
hundredth (1/100) of a share.
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At any time on or prior to the close of business on the tenth day after the
time that a person has become an Acquiring Person (or such later date as a
majority of the Board of Directors may determine), the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right ("Redemption
Price"). The Rights may be redeemed after the time that any Person has become
an Acquiring Person only if approved by a majority of the Continuing Directors.
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be to
receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may, except with
respect to the redemption price or date of expiration of the Rights, 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 Company may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Amendments to the Rights Agreement from and after the time that any Person
becomes an Acquiring Person requires the approval of a majority of the
Continuing Directors (as provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
As of August 23, 1996, there were 2,869,129 shares of Class A Common Stock
issued and outstanding and 2,751,482 shares of Class B Common Stock issued and
outstanding (and 2,541,321 shares reserved for issuance under the Company's
existing stock option plans and 1,715,000 shares of Class A Common Stock
reserved for issuance pursuant to the Warrants). 98,800 shares of Preferred
Stock have been reserved 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 Company on
terms not approved by the Company'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 Company at $.01 per Right at any time until
the close of business on the tenth day (or such later date as described above)
after a person or group has obtained beneficial ownership of 15% or more of
either class of the voting stock.
The form of Rights Agreement between the Company and The First National
Bank of Boston, as Rights Agent, specifying the terms of the Rights, which
includes as Exhibit A the form of Summary of Rights to Purchase Series A Junior
Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the
form of Certificate of Designations of the Company 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.
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Item 2. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
1. Rights Agreement dated as of January 19, 1996 between Dairy Mart
Convenience Stores, Inc. and The First National Bank of Boston as
Rights Agent, including form of Right Certificate and the form of
Certificate of Designations was filed as Exhibit 1 of the
Company's Form 8-K for the January 19, 1996 event and is
incorporated herein by reference.
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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, thereto duly authorized.
DAIRY MART CONVENIENCE STORES, INC.
By: /S/ GREGORY G. LANDRY
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Gregory G. Landry
Executive Vice President and
Chief Financial Officer
Dated: September 25, 1996
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