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 11, 2000
TRANS WORLD ENTERTAINMENT CORPORATION
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(Exact name of registrant as specified in its charter)
New York 0-14818 14-1541629
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
38 Corporate Circle
Albany, New York 12203
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (518) 452-1242
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None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On August 11, 2000 the Board of Directors of Trans World Entertainment
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of Common Stock, $0.01 par value (the "Common Stock"), of
the Company. The distribution is payable to holders of record on September 29,
2000 (the "Record Date"). Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock (the "Preferred Stock"), at a price of $80.00 per one
one-thousandth of a share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or group of
affiliated or associated persons, subject to certain exceptions (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of
Common Stock or other voting securities ("Voting Stock") that have 20% or more
of the voting power of the outstanding shares of Voting Stock or (ii) ten
calendar days (or such later date as may be determined by action of the Board of
Directors prior to the time any person or group of affiliated persons becomes an
Acquiring Person) following the commencement or announcement of an intention to
make a tender offer or exchange offer the consummation of which would result in
such person or group acquiring, or obtaining the right to acquire, beneficial
ownership of Voting Stock having 20% or more of the voting power of the
outstanding shares of Voting Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Company's Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificates. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Company's Common Stock will contain a
notation 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 the
Record Date 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 Right
Certificates alone will evidence the Rights. The Rights Agreement provides that,
as defined therein, the term "Acquiring Person" shall not include any Higgins
Stockholder.
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The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on July 31, 2010, unless earlier redeemed or
exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, 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 Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, 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.
Exchange of Rights
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors may exchange the Rights (other than Rights owned by the Acquiring
Person which shall have become void), in whole or in part, at an exchange ratio
of one share of Common Stock (or a fraction of a share of Preferred Stock having
the same market value) per Right (subject to adjustment).
Redemption of Rights
At any time prior to 5:00 P.M. New York City time on the tenth calendar day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights, the Company shall make announcement thereof, and upon such
action, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Rights Holder Not a Stockholder
Until a Right is exercised or exchanged, 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.
Terms of the Preferred Stock
The Preferred Stock will rank junior to all other series of the Company's
preferred stock with respect to payment of dividends and as to distributions of
assets in liquidation. Each share of Preferred Stock will have a quarterly
dividend rate per share
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equal to the greater of $1.00 or 1000 times the per share amount of any dividend
(other than a dividend payable in shares of Common Stock or a subdivision of the
Common Stock) declared from time to time on the Common Stock, subject to certain
adjustments. The Preferred Stock will not be redeemable. In the event of
liquidation, the holders of the Preferred Stock will be entitled to receive a
preferred liquidation payment per share of $1.00 (plus accrued and unpaid
dividends) or, if greater, an amount equal to 1000 times the payment to be made
per share of Common Stock, subject to certain adjustments. Generally, each share
of Preferred Stock will vote together with the Common Stock and any other series
of cumulative preferred stock entitled to vote in such manner and will be
entitled to 1000 votes, subject to certain adjustments. In the event of any
merger, consolidation, combination or other transaction in which shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or other property, each share of Preferred Stock will be entitled to receive
1000 times the aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is changed or
exchanged, subject to certain adjustments. The foregoing dividend, voting and
liquidation rights of the Preferred Stock are protected against dilution in the
event that additional shares of Common Stock are issued pursuant to a stock
split or stock dividend or distribution. Because of the nature of the Preferred
Stock's dividend, voting, liquidation and other rights, the value of the one
one-thousandth of a share of Preferred Stock purchasable with each Right is
intended to approximate the value of one share of Common Stock.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Preferred Stock (or
Common Stock or other securities, as the case may be) 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 or warrants to subscribe for shares of the
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
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractional shares which are integral multiples
of one one-thousandth of a share of Preferred Stock) 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.
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Amendments to 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 order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person); provided, however, that no
supplement or amendment may be made after the Distribution Date which changes
those provisions relating to the principal economic terms of the Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
__, 2000. A copy of the Rights Agreement is 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, which is
hereby incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed herewith and incorporated
herein by reference:
4.1 Rights Agreement, dated as of August 11, 2000, between Trans World
Entertainment Corporation and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent.
4.2 Certificate of Amendment of the Certificate of Incorporation of Trans
World Entertainment Corporation (incorporated by reference to Exhibit
A to the Rights Agreement)
4.3 Form of Right Certificate (incorporated by reference to Exhibit B to
the Rights Agreement)
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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 thereunto duly authorized.
TRAND WORLD ENTERTAINMENT CORPORATION
Date: August 15, 2000 By: /s/ JOHN J. SULLIVAN
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Name: John J. Sullivan
Title: Chief Financial Officer
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EXHIBIT INDEX
Number Description
4.1 Rights Agreement, dated as of August 11, 2000, between Trans
World Entertainment Corporation and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
4.2 Certificate of Amendment of the Certificate of Incorporation
of Trans World Entertainment Corporation (incorporated by
reference to Exhibit A to the Rights Agreement)
4.3 Form of Right Certificate (incorporated by reference to
Exhibit B to the Rights Agreement)
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