Page one of eight pages.
Exhibit Index is on
page four.
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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): August 17, 1999
Commission File Number 0-15323
NETWORK EQUIPMENT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2904044
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Paseo Padre Parkway
Fremont, California 94555
(510) 713-7300
(Address of principal executive offices, including zip code, area code, and
telephone number)
[Not Applicable]
----------------
(Former Name or Former Address, if Changed Since Last Report.)
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Item 5. Other Events
On July 12, 1999, the Board of Directors of N.E.T. voted to extend
N.E.T.'s existing Stockholder Rights Plan for an additional 10 years. In
addition, the Board voted to amend the Plan: 1) to adjust the exercise price to
$80.00 per one-one hundredth of a share of Series A Preferred Stock; and 2) to
adopt a Three Year Independent Director Evaluation Provision or "TIDE provision"
whereby a committee of independent directors of N.E.T. will review and evaluate
the Rights Plan at least once every three years to determine if it continues to
be in the best interests of N.E.T. and its stockholders to maintain the Rights
Plan in effect. On July 15, 1999, the Board sent a letter to all shareholders
informing them of the extension of the Rights Plan and the changes adopted.
Amendment No. 2 to the Rights Agreement extending the Plan and
incorporating the amendments approved by the Board of Directors became effective
August 17, 1999. On September 15, 1999, a letter was sent to all stockholders
informing them that the amendment to the Rights Plan had been finalized and
providing them with a Summary of the Right to Purchase Preferred Shares.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
4.4 Amendment No. 2 to Rights Agreement, dated as of August 17,
1999 between Network Equipment Technologies, Inc. and
BankBoston as Rights Agent (Note 1)
99.1 Network Equipment Technologies, Inc. Press Release dated
September 14, 1999
99.2 Summary of Rights to Purchase Preferred Shares
(d) Notes
(1) Incorporated by Reference from the corresponding Exhibit
previously filed as an Exhibit in the Registrant's Registration
Statement on Form 8-A/A filed with the Securities and Exchange
Commission on August 19, 1999.
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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.
Dated: September 15, 1999 NETWORK EQUIPMENT
TECHNOLOGIES, INC.
By: /s/ Hubert A.J. Whyte
----------------------
Name: Hubert A.J. Whyte
Title: President and Chief Executive Officer
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EXHIBIT INDEX
Page No. in Sequentially
Exhibit No. Description Numbered Current Report
- ----------- ----------- -----------------------
99.1 Network Equipment Technologies, Inc. 5
Press Release dated September 14, 1999
99.2 Summary of Rights to Purchase Preferred Shares 6
4
PRESS RELEASE
[LETTERHEAD OF N.E.T.]
FOR IMMEDIATE RELEASE:
N.E.T. ANNOUNCES COMPLETION AND AMENDMENT OF STOCKHOLDER RIGHTS PLAN
Fremont, CA, September 14, 1999 -- On August 17, 1999, N.E.T. completed
the extension and amendment of its Stockholder Rights Plan by signing an
amendment to the Rights Agreement governing the Plan with BankBoston, the Rights
Agent. The N.E.T. Board of Directors approved the extension and amendment to the
Plan on July 12, 1999. The Rights Plan has been extended for an additional 10
years, expiring on August 24, 2009. In addition, the Plan was amended to adjust
the exercise price to $80.00 per one one-hundredth of a share of Series A
Preferred Stock and to add a Three Year Independent Director Evaluation
Provision or "TIDE" provision. The TIDE provision was added to enable a
committee of independent directors to review and evaluate the Rights Plan at
least once every three years to determine if it continues to be in the best
interests of N.E.T. and its stockholders.
The purpose of the Rights Plan is to encourage negotiation between anyone
seeking to acquire N.E.T. and the Board of Directors so that stockholder value
will be maximized in any proposed transaction. At this time, N.E.T. is not aware
of any specific effort to acquire control of N.E.T. and is extending and
amending the Rights Plan with a view towards the long-term interests of N.E.T.
and its stockholders.
Network Equipment Technologies, Inc. (N.E.T.), headquartered in Fremont,
Calif., is a leading worldwide supplier of multiservice wide area networks used
by service providers, government organizations and enterprises in more than 75
countries. N.E.T. multiservice WANs and ATM products integrate voice, data, and
video traffic with ATM, frame relay, IP and ISDN capabilities. The company is
certified to the worldwide ISO 9001 standard for design, manufacturing and
service. Join us at the first address in networking: http://www.net.com for
further information.
# # #
N.E.T. is a trademark and the N.E.T. logo is a registered trademark of
Network Equipment Technologies, Inc.
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SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On August 15, 1989, the Board of Directors of Network Equipment
Technologies, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right" for each outstanding share of common stock, par value
$.01 per share (the "Common Shares"), of the Company. The dividend was payable
on August 25, 1989 (the "Record Date") to the stockholders of record on that
date. Each right initially entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of the Company at an
initial price of $120 per one one-hundredth of a Preferred Share (the "Initial
Purchase Price"), subject to adjustment.
On June 12, 1990, the Board of Directors of the Company approved Amendment
No. 1, dated as of June 12, 1990 ("Amendment No. 1") to the Rights Agreement
between the Company and The First National Bank of Boston, as Rights Agent,
dated as of August 15, 1989 (the "Original Rights Agreement").
On July 12, 1999, the Board of Directors of the Company approved Amendment
No. 2, dated as of August 17, 1999 ("Amendment No. 2"; together with Amendment
No. 1, the "Amendments") to the Rights Agreement between the Company and
BankBoston, successor to The First National Bank of Boston, as Rights Agent (the
Original Rights Agreement, together with Amendment No. 1 and Amendment No. 2,
shall be referred to as the "Rights Agreement"). Among other changes, Amendment
No. 2 amends the Initial Purchase Price to $80 per one one-hundredth of a
Preferred Share (the "Amended Purchase Price"), subject to adjustment.
The Rights Agreement as amended by the Amendments provides that initially,
the Rights will attach to all certificates representing outstanding Common
Shares, and no separate certificates evidencing the Rights ("Rights
Certificates") will be distributed. Until the Distribution Date (as defined
below), (i) the Rights will be evidenced solely by Common Share certificates and
will be transferred with and only with such Common Share certificates, and (ii)
new Common Share certificates issued after the Record Date will contain a legend
incorporating the Rights Agreement, as amended, by reference.
The Rights will separate from the Common Shares and become exercisable on
the Distribution date, which is the earlier of (i) the 10th day following the
first date of public announcement that an Acquiring Person (as defined below)
has become such (such date of public announcement being the "Shares Acquisition
Date"), or (ii) the 10th Business Day following the commencement of a tender
offer or exchange offer that would result in a person or group Beneficially
Owning 20% or more of the then outstanding Common Shares without the consent of
a majority of Continuing Directors. An "Acquiring Person" means any Person which
without the prior approval of a majority of the Continuing Directors becomes the
Beneficial Owner of 15% or more of the Common Shares then outstanding. A
"Continuing Director" means any existing member of the Board of Directors prior
to the date of the Rights Agreement and successors approved by a majority of the
Continuing Directors, and in each case who is not an Acquiring Person or an
Affiliate or Associate thereof. The Company recognizes that there has been
recent activity in the State of Delaware regarding "continuing director
provisions." As such, the Company notes that Amendment No. 1 added a provision
to Section 31 of the Rights Agreement, as amended, which states that if "any
provision requiring that a determination be made by less than the entire Board
[i.e., the Continuing Directors] . . . is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, such
determination shall be made by the Board."
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Common Shares as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights.
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The Rights will expire at the Close of Business on August 24, 2009, unless
earlier redeemed or exchanged by the Company as described below.
Pursuant to Amendment No. 2, the Rights Agreement now contains a
Three-year Independent Director Evaluation Provision ("Tide Provision") pursuant
to which the Rights Agreement shall be evaluated by a committee of outside
directors at least once every three years to determine whether the Agreement
continues to be in the best interest of the Company.
In the event that an Acquiring Person exists, then, from and after the
Close of Business on the tenth day following the Shares Acquisition Date, each
Right not owned by the Acquiring Person (or any Affiliate or Associate thereof)
will thereafter entitle its holder to receive, upon exercise, Common Shares (or,
in certain circumstances cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
In the event that, at any time following the Shares Acquisition Date, and
without the consent of a majority of the Continuing Directors (i) the Company is
acquired in a merger or other business combination transaction with another
person (ii) 50% or more of the Company's assets or earning power is sold or
transferred to another person, then, each Right (except Rights owned by the
Acquiring Person or any Affiliate or Associate of the Acquiring Person) shall
thereafter entitle its holder to receive, upon exercise, Common Shares (or, in
certain circumstances, cash, property or other securities) of such other person
having a value equal to two times the exercise price of the Right.
Upon the occurrence of any of the events descried in the foregoing two
paragraphs, if any of the Rights are Beneficially Owned by an Acquiring Person
or any Affiliate or Associate thereof, such Rights will become null and void and
no holder thereof will have any right with respect thereto.
The Amended Purchase Price payable, and the number of Preferred Shares
issuable, upon exercise of the Rights and the number of Rights are subject to
adjustment from time to time to prevent dilution (all as more fully described in
the Rights Agreement).
With certain exceptions, no adjustment in the Amended Purchase Price will
be required until cumulative adjustments amount to at least 1% of the Amended
Purchase Price. No fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share) or fractional
Rights will be issued an, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares or Rights, respectively, prior
to the date of exercise.
At any time until the Close of Business on the tenth day following the
Shares Acquisition Date, the Company may, at its option and upon approval of a
majority of the Continuing Directors, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment in certain
circumstances (the "Redemption Price"), payable, at the option of the Company in
cash or Common Shares. The redemption of the Rights may be made effective at
such time and on such basis and with such conditions as the Continuing Directors
may approve. Upon the redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
In addition, the Company may, at its option, at any time after the Close
of Business on the tenth day following the Shares Acquisition Date and prior to
the acquisition of 50% or more of the outstanding Common Shares by any person or
group, exchange all or part (if in part, on a pro rata basis) of the then
outstanding and exercisable Rights (except for Rights which have become void as
described above) at an exchange ratio of one Common Share (or in certain
instances equivalent fractions of Preferred Shares) for each Right, subject to
adjustment in certain circumstances.
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. While the distribution
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of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income
upon the Rights becoming exercisable for Preferred Shares or Common Shares (or
other consideration), upon being exercised, upon redemption or upon exchange.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. 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. 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 initially purchasable upon exercise of each Right should approximate the
value of one Common Share.
Any of the provisions of the Rights Agreement as amended by the Amendment
may be amended without the consent of the holders of Rights, at any time prior
to the Distribution Date. After the Distribution Date, the Company (with the
approval of a majority of Continuing Directors) may amend the provisions of the
Rights Agreement without the consent of holders of Rights only in order to cure
any ambiguity, defect or inconsistency, or to make changes (including, without
limitation, changes to the Amended Purchase Price, the Redemption Price or any
time periods specified therein) which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person or an
Affiliate or Associate of an Acquiring Person).
A copy of Amendment No. 2 to the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8A/A. Copies of Amendment No. 2 along with copies of the Rights Agreement
are available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement as amended, which is incorporated into this
Summary by reference.
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