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) June 12, 1997
TOLL BROTHERS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9186 23-2416878
(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 938-8000
(Former name or former address, if changed since last report)<PAGE>
Item 5. Other Events.
(a) Shareholder Rights Plan.
On June 12, 1997, the Board of Directors of Toll Brothers, Inc.
(the "Company") adopted a Shareholder Rights Plan, providing for a
distribution of one preferred stock purchase right (a "Right") for each
share of Common Stock, par value $0.01 per share, of the Company
(the "Common Stock"). Each Right entitles the registered holder to purchase
from the Company a unit (a "Unit") consisting of one one-thousandth of a
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Preferred Stock"), at a Purchase Price of $100.00 per Unit (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights Agreement"), dated
as of June 12, 1997, between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier of (i) ten
(10) days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii)
ten (10) business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 15% or more
of the outstanding shares of Common Stock. The definition of Acquiring
Person excludes any Exempted Person (as defined below). Until the
Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
Any person who, together with all affiliates and associates of
such person, is the beneficial owner of Common Stock, options and/or warrants
exercisable for shares of Common Stock representing 15% or more of the
shares of Common Stock outstanding on June 12, 1997, will be an "Exempted
Person." In addition, any person who, together with all affiliates and
associates of such person, becomes the beneficial owner of Common Stock,
options and/or warrants exercisable for shares of Common Stock representing
15% or more of the shares of Common Stock then outstanding as a result of a
purchase by the Company or any of its subsidiaries of shares of Common Stock
will also be an "Exempted Person." However, any such person will no longer
be deemed to be an Exempted Person and will be deemed to be an
Acquiring Person if such person, together with all affiliates and
associates of such person, becomes the beneficial owner, at any time after
the date such person became the beneficial owner of 15% or more of the then
outstanding shares of Common Stock, of additional securities representing
1,000 or more shares of Common Stock, except if such additional securities are
acquired (x) pursuant to the exercise of options or warrants to purchase
Common Stock outstanding and beneficially owned by such person as of the
date such person became the beneficial owner of 15% or more of the then
outstanding shares of Common Stock or as a result of an adjustment to the
number of shares of Common Stock for which such options or warrants
are exercisable pursuant to the terms thereof, or (y) as a result of a stock
split, stock dividend or the like. A purchaser, assignee or transferee of
the shares of Common Stock (or options or warrants exercisable for Common
Stock) from an Exempted Person will not thereby become an Exempted Person,
except that a transferee from the estate of an Exempted Person who receives
Common Stock as a bequest or inheritance from an Exempted Person shall be an
Exempted Person so long as such transferee continues to be the beneficial
owner of 15% or more of the then outstanding shares of Common Stock.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on July 11, 2007 unless earlier redeemed by
the Company as described below. At no time will the Rights have any voting
power.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that an Acquiring Person becomes the beneficial
owner of 15% or more of the then outstanding shares of Common Stock (unless
such acquisition is made pursuant to a tender or exchange offer for all
outstanding shares of the Company, at a price determined by
a majority of the independent directors of the Company who are Continuing
Directors (as defined below) to be fair and otherwise in the best interest
of the Company and its shareholders after receiving advice from one or more
investment banking firms (a "Qualifying Offer"), each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock (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. The
Exercise Price is the Purchase Price times the number of Units associated
with each Right (initially, one). Notwithstanding any of the foregoing,
following the occurrence of an Acquiring Person becoming such (the "Flip-In
Event"), all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void. However, Rights are not exercisable following the
occurrence of a Flip-In Event until such time as the Rights are no longer
redeemable by the Company as set forth below.
In the event that following the Stock Acquisition Date, (i) the
Company engages in a merger or business combination transaction in which
the Company is not the surviving corporation (other than a merger
consummated pursuant to a Qualifying Offer); (ii) the Company engages in a
merger or business combination transaction in which the Company is the surviving
corporation and the Common Stock is changed or exchanged; or (iii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive,
upon exercise of the Right, common stock of the acquiring company having a
value equal to two times the Exercise Price of the Right.
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or 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) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustments in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof,
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.
At any time after the Stock Acquisition Date, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by an
Acquiring Person), in whole or in part, at an exchange ratio equal to (i) a
number of shares of Common Stock per Right with a value equal to the spread
between the value of the number of shares of Common Stock for which the
Rights may then be exercised and the Purchase Price or (ii) if prior to the
acquisition by the Acquiring Person of 50% or more of the then outstanding
shares of Common Stock, one share of Common Stock per Right (subject to
adjustment). Any such exchange shall require the concurrence of a majority
of the Continuing Directors.
At any time until ten (10) days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a
price of $0.001 per Right. Under certain circumstances, the decision to
redeem shall require the concurrence of a majority of the Continuing
Directors. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $0.001 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the adoption
of the Rights Plan and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock (or other
consideration) of the Company as set forth above or in the event the Rights
are redeemed.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board (in certain circumstances, with the concurrence
of the Continuing Directors) in order to cure any ambiguity, to make changes
which do not adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement is being filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from
the Company. This Summary of Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
4.1 Rights Agreement, dated as of June 12, 1997, by and between the
Company and the Rights Agent, which includes as Exhibit B
thereto the Form of Rights Certificate, incorporated herein by
reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A, dated June 20, 1997.
<PAGE>
SIGNATURE
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, thereunto duly authorized.
TOLL BROTHERS, INC.
(Registrant)
Date: June 20, 1997 By:/s/ Joseph R. Sicree
________________________________
Name:Joseph R. Sicree
Title:Vice President
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
4.1 Rights Agreement, dated as of June 12, 1997, by and between
the Company and the Rights Agent, which includes as Exhibit B
thereto the Form of Rights Certificate, incorporated herein by
reference to Exhibit 1 to the Company's Registration Statement
on Form 8-A, dated June 20, 1997.
<PAGE>
