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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): June 25, 1996
MATERIAL SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware 1-8803 95-2673173
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(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
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2300 East Pratt Boulevard, Elk Grove Village, IL 60007
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 439-8270
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This Instrument contains 8 pages.
The Exhibit Index is located on page 8.
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ITEM 5. OTHER EVENTS
Adoption of Rights Agreement
On June 20, 1996, the Board of Directors of Material Sciences
Corporation (the "Company") declared a dividend of one Right for each
outstanding share of Common Stock, $0.02 par value, of the Company (the "Common
Stock"). The dividend is payable on July 2, 1996 to the holders of record of the
Common Stock at the close of business on July 2, 1996 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share of its Series B Junior Participating Preferred Stock (the
"Preferred Stock") at a price of $70.00 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of June 20, 1996 (the "Rights Agreement") between the Company
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Rights
Agent").
Until the date (the "Distribution Date") that is the earlier to occur
of (i) the tenth day after the date (the "Stock Acquisition Date") of a public
announcement that a Person (as defined in the Rights Agreement) who or which
together with the Affiliates (as so defined) and Associates (as so defined) of
such Person (an "Acquiring Person") has become the Beneficial Owner (as defined
in the Rights Agreement) of 20% or more of the shares of Common Stock then
outstanding (as described in the Rights Agreement) or (ii) the tenth day after
the date (the "Offer Date") of the commencement by any Person of, or first
public disclosure of an intention to commence by any Person, a tender offer or
exchange offer the consummation of which would result in any Person having
beneficial ownership of 20% or more of the then outstanding shares of Common
Stock (including any Stock Acquisition Date or Offer Date which is after the
date of the Rights Agreement and prior to the issuance of the Rights), the
Rights will be evidenced, with respect to any of the Common Stock certificates
outstanding as of July 2, 1996, by such Common Stock certificates and not by
separate certificates. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Stock. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), certificates issued after July 2, 1996 representing
shares of Common Stock outstanding on July 2, 1996 or shares of Common Stock
issued after July 2, 1996, will contain a notation 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 Common
Stock certificate, with or without a copy of the Summary of Rights mailed to
shareowners of record on the Record Date attached thereto or such notation, will
also constitute the surrender for 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 ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights. Each share of Common Stock issued after the
Distribution Date and prior to the earlier of the redemption, exchange or
expiration of the Rights in connection with certain employee benefit plans or
upon conversion of certain securities, will be issued with Rights.
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The Rights are not exercisable until after the Distribution Date. The
Rights will expire at the close of business on July 1, 2006, unless earlier
redeemed or exchanged by the Company as described below.
The Purchase Price payable, and the number and kinds of shares or
other securities, cash and other property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification, of
the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights, options or warrants to subscribe for or purchase Preferred Stock
(or shares having the same rights, privileges and preferences as the Preferred
Stock) or securities convertible into Preferred Stock or such other shares at a
conversion price less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of securities,
cash, property, evidences of indebtedness or assets (excluding regular periodic
cash dividends, and excluding dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to in clause (ii)
above).
The number of Rights outstanding and the number of shares of Preferred
Stock issuable upon exercise of each Right are also subject to adjustments in
the event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions or combinations of the
Common Stock occurring, in any such case, prior to the Distribution Date.
The Preferred Stock purchasable upon exercise of the Rights will be
non-redeemable. Each share of Preferred Stock will be entitled to receive a
preferential quarterly dividend payment equal to the greater of $10 per share
and 100 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to receive a
preferential liquidation payment equal to the greater of $100 per share and 100
times the payment made per share of 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 Preferred Stock will vote together as a
class with the holders of Common Stock with each share of Preferred Stock
entitled to 100 votes. The Preferred Stock will also have special rights to
elect directors in certain circumstances. These rights are protected by
customary anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights
of the Preferred Stock, the value of the one one-hundredth of a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
When a Person first becomes an Acquiring Person (a "Triggering
Event"), proper provision will be made so that each holder of a Right (other
than the Acquiring Person or its affiliates and associates) will thereafter have
a right to receive, upon the exercise thereof at the then current Purchase
Price, in lieu of shares of Preferred Stock or other securities receivable upon
exercise prior to the occurrence of a Triggering Event, such number of shares of
Common Stock which at the time of such transaction would have a market value of
two times the exercise price of the Right. Upon the occurrence of a Triggering
Event, any Rights that are beneficially
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owned by an Acquiring Person (and certain transferees of an Acquiring Person)
will become null and void.
At any time after the first occurrence of a Triggering Event, the
Company may at any time exchange, for all or part of the then-outstanding and
exercisable Rights (which shall not include void Rights), Common Stock shares,
the equivalent of Common Stock shares, or any combination thereof, at an
exchange ratio of one share of Common Stock or units representing fractions
thereof as would be deemed to have the same value as one share of Common Stock
per Right, subject to adjustment (the "Exchange Ratio"). Immediately upon the
effectiveness of the exchange and without any further action or notice, the
right to exercise the Rights will terminate and the only right of a holder of
the Rights will be to receive that number of Common Stock shares, and/or the
equivalent of Common Stock shares, equal to the number of the Rights held by the
holder multiplied by the Exchange Ratio.
In the event that, from and after the occurrence of a Triggering
Event, the Company consolidates with or merges with and into a Person, a Person
consolidates with or merges with and into the Company and in connection
therewith all of part of the Common Stock is changed or exchanged, the Company
effects a share exchange in which all or part of the Common Stock is changed, or
50% or more of the Company's assets or earning power are sold (in one
transaction or a series of transactions), proper provision will be made so that
each holder of a Right (other than the Acquiring Person or its affiliates and
associates) will thereafter have the right to receive, upon the exercise
thereof, that number of shares of common stock of the Principal Party (as
defined in the Rights Agreement) which at the time of the transaction would have
a market value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required unless cumulative adjustments would require an adjustment of at least
1% in the Purchase Price. The Company will not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts). In lieu thereof, at the
Company's option, an adjustment in cash will be made based on the market price
of the Preferred Stock on the last trading date prior to the date of exercise
(or scrip or warrants will be issued).
At any time prior to the earlier to occur of (i) the Stock Acquisition
Date and (ii) the expiration of the Rights, the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
July 2, 1996 (the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock or any other form of
consideration deemed appropriate by the Company's Board of Directors. As soon as
practicable after the action of the Board of Directors of the Company electing
to redeem the Rights, the Company will make announcement thereof, and from and
after the date of the election, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price per Right.
At any time prior to the Stock Acquisition Date, the Company's Board
of Directors may amend or supplement the Rights Agreement without the approval
of the Rights
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Agent or any holder of the Rights. Thereafter, the Board of Directors of the
Company may amend or supplement the Rights Agreement without such approval only
to cure ambiguity, correct or supplement any defective or inconsistent provision
or change or supplement the Rights Agreement in any manner which shall not
adversely affect the interests of the holders of the Rights (other than an
Acquiring Person or an affiliate or associate thereof). Notwithstanding the
foregoing, no amendment or supplement shall (a) decrease the Redemption Price,
(b) change the Purchase Price or change the number of shares of Preferred Stock,
other securities, cash or other property for which a Right is then exercisable
or (c) provide for an earlier Final Expiration Date. Immediately upon the action
of the Board of Directors providing for any amendment or supplement, such
amendment or supplement will be deemed effective.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group other than an exempt person that
attempts to acquire the Company on terms not approved by its Board of Directors.
The Rights should not interfere with any merger or other business combination
approved by its Board of Directors prior to the time a Person becomes an
Acquiring Person, because until such time the Rights may generally be redeemed
by the Company at $.01 per Right and/or the Rights Agreement may be amended or
supplemented.
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.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement attached
as Exhibit I-1, which is incorporated in this Current Report on Form 8-K by
reference.
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ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
I-1 Rights Agreement, dated as of June 20, 1996, between
Material Sciences Corporation and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, including the form of
Certificate of Designation, Preferences and Rights of Series
B Junior Participating Preferred Stock attached thereto as
Exhibit A, the form of Rights Certificate attached thereto
as Exhibit B and the Summary of Rights attached thereto as
Exhibit C. (Incorporated by reference to the Company's
Registration Statement on Form 8-A, filed with the
Commission on June 20, 1996.)
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SIGNATURE
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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.
MATERIAL SCIENCES CORPORATION
By: /s/ William H. Vrba
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Name: William H. Vrba
Title: Senior Vice President,
Chief Financial Officer
and Secretary
Date: June 25, 1996
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EXHIBIT INDEX
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Exhibit No. Description Page No.
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I-1 Rights Agreement, dated as of June 20, 1996, between *
Material Sciences Corporation and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, including
the form of Certificate of Designation, Preferences and
Rights of Series B Junior Participating Preferred Stock
attached thereto as Exhibit A, the form of Rights
Certificate attached thereto as Exhibit B and the Summary
of Rights attached thereto as Exhibit C.
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* Incorporated by reference to the Company's Registration Statement on Form
8-A, filed with the Commission on June 20, 1996.
