<PAGE>
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)
April 7, 1998 (March 23, 1998)
DELPHI INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-15946 77-0021975
-------- ------- ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
3501 Algonquin Road, Suite 500, Rolling Meadows, IL 60008
--------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-506-3100
------------
<PAGE>
ITEM 5. OTHER EVENTS.
On March 23, 1998, the Board of Directors of Delphi Information Systems,
Inc., a Delaware corporation (the "Company"), declared a dividend of one
preferred share purchase right ("Right") on each outstanding share of the
Company's Common Stock, $.10 par value per share ("Common Shares"), payable
to stockholders of record at the close of business on March 23, 1998 (the
"Record Date"). Except as described below, each Right, when exercisable,
entitles the holder thereof to purchase from the Company one one-hundredth of
a share of Series A Junior Participating Preferred Shares, par value $.10 per
share (the "Preferred Shares"), of the Company at an exercise price of $25.00
per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Chase Mellon Shareholder
Services, a national banking association, as Rights Agent.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group has become an "Acquiring Person" (as
defined below), (ii) 10 days following the date upon which a majority of the
Board of Directors determines by resolution that a Person has become an
Acquiring Person or (iii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any
person or group becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group (other than certain
exempt persons) becoming an Acquiring Person (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced by Common Share
certificates.
An "Acquiring Person" is a person or group of affiliated or associated
persons who have acquired beneficial ownership of 15% or more of the
outstanding Common Shares, other than the Company, any subsidiary of the
Company, any employee benefit plan of the Company or its subsidiaries, or any
Person (together with such Person's Affiliates and Associates) who was a
Beneficial Owner of Common Shares on the Record Date unless such Person,
alone or together with such Person's Affiliates and Associates, becomes the
Beneficial Owner of a percentage of the aggregate number of Common Shares of
the Company then outstanding equal to or greater than a percentage equal to
1.5 multiplied by a fraction, the numerator of which is (X) the number of
Common Shares beneficially owned by such Person and such Person's Affiliates
and Associates on the Record Date (but not including, for such purposes, any
securities which such Person has the right to acquire pursuant to any
agreement, arrangement or understanding, including any stock option, warrant,
convertible security or other right to acquire Common Shares) and the
denominator of which is (Y) the aggregate number of Common Shares outstanding
on the Record Date. Notwithstanding the foregoing, in no event shall (i) any
Exempt Person be deemed to be an Acquiring Person and (ii) no Person shall
become an "Acquiring Person," as the result of an acquisition of Common
Shares by the Company which, by reducing the number of the Company's Common
Shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares then outstanding;
PROVIDED, HOWEVER, that if a (i) Person shall become the Beneficial Owner of
15% or more of the Common Shares of the Company then outstanding, or
<PAGE>
(ii) in the case of an Exempt Person, such Exempt Person would otherwise
cease to be deemed to be an Exempt Person, by reason of, in each case, share
acquisitions by the Company and shall, after such share acquisitions, (A)
acquire, in one or more transactions, beneficial ownership of an additional
number of Common Shares which exceeds 0.25% of the then-outstanding Common
Shares and (B) beneficially own after such acquisition 15% or more of the
aggregate number of Common Shares of the Company then outstanding, or, in the
case of an Exempt Person, such number of Common Shares of the Company that
would cause such Exempt Person to cease to be an Exempt Person, then such
Person shall be deemed to be an "Acquiring Person." In addition, if the
Board of Directors determines in good faith that a Person who would otherwise
be an Acquiring Person has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of Common Shares so that such
Person would no longer be an Acquiring Person, then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of the Rights Agreement,
which additional number of Common Shares exceeds [10%] of the aggregate
number of Common Shares outstanding on the date of the acquisition of the
last such additional Common Share so acquired. Notwithstanding the
foregoing, (i) no person shall become an Acquiring Person as the result of an
acquisition of Common Shares by the Company which increases the proportionate
number of shares beneficially owned by such person and its affiliates and
associates to 15% or more of the Common Shares then outstanding (PROVIDED,
HOWEVER, that if such person becomes the beneficial owner of 15% or more of
the Common Shares then outstanding by reason of share acquisitions by the
Company and, after such share acquisitions, (A) acquires beneficial ownership
of an additional number of Common Shares equal to 0.25% of the
then-outstanding Common Shares and (B) beneficially owns after such
acquisition 15% or more of the aggregate number of Common Shares then
outstanding, then such person shall be deemed to be an Acquiring Person), and
(ii) if the Board of Directors of the Company determines in good faith that a
person who would otherwise be an Acquiring Person has become such
inadvertently, and such person divests as promptly as practicable a
sufficient number of Common Shares so that such person would no longer be an
Acquiring Person, then such person shall not be deemed to be an Acquiring
Person for any purposes of the Rights Agreement.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date 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 certificates for Common Shares will also constitute the
transfer of the Rights associated with the Common Shares 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 Common Shares as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 23, 2008 (the "Final Expiration Date"), unless the Rights
are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or
<PAGE>
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 Shares, (ii)
upon the grant to holders of the Preferred Shares of certain rights or
warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness,
assets or capital stock (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Preferred Shares) 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 cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. The Company will not be required to issue fractional Common
Shares or Preferred Shares (other than fractions which are integral multiples
of one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash may be made based on the market price of the Common Shares
or Preferred Shares on the last trading day prior to the date of exercise.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share. Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to the greater of (1) a
preferential quarterly dividend payment of $100 per share, or (2) 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
preferential liquidation payment of $100 per share, plus an amount equal to 100
times the aggregate amount to be distributed per share of common stock of 100
times the payment made per Common Share. Each Preferred Share will have 100
votes, voting together with the Common Shares except as otherwise required by
law. Finally, 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.
If any person or group becomes an Acquiring Person, then each holder of a
Right (other than Rights beneficially owned by the Acquiring Person, any
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), and certain transferees thereof, which will be void) will have the
right to receive upon exercise of such Right that number of Common Shares (or,
in certain circumstances, cash, property or other securities of the Company)
having a market value of two times the exercise price of the Right.
If at any time after the time that any person or group becomes an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right (other than Rights
beneficially owned by the Acquiring Person, any Associate or Affiliate thereof,
and certain transferees thereof, which will be void) will thereafter have the
right to receive, upon the exercise thereof at the then-current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right.
At any time after the time that any person or group becomes an Acquiring
Person and
<PAGE>
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights beneficially owned by such person or group, any
Associate or Affiliate thereof, and certain transferees thereof, which will
be void), in whole or in part, at an exchange ratio of one Common Share or
one-hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges) per Right (subject to adjustment).
At any time prior to the time that any person becomes an Acquiring Person,
the Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right, subject to adjustment (the "Redemption
Price"), which may (at the option of the Company) be paid in cash, Common Shares
or other consideration deemed appropriate by the Board of Directors. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish; PROVIDED, HOWEVER, that no redemption will be permitted or required
after the time that any person becomes an Acquiring Person. Immediately upon
any 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.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
make the Rights redeemable if the Rights are not then redeemable in accordance
with the terms of the Rights Agreement or may adversely affect the interests of
the holders of the Rights.
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 is subject to all of the terms, provisions and conditions of
the Rights Agreement, as the same may be amended from time to time, which terms,
provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. 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 April ___, 1998. Copies of the Rights Agreement are also on file
at the principal executive offices of the Company and the principal office of
the Rights Agent.
<PAGE>
Item 8. CHANGE IN FISCAL YEAR
On March 23, 1998, the Board of Directors of the Registrant adopted a
resolution to change the Registrant's fiscal year end to December 31
effective in 1998. The Registrant will file Form 10-K for the twelve months
ended March 31, 1998, Form 10-Q for each of the three month periods ended
June 30, 1998 and September 30, 1998, and a transition report on Form 10-K
for the nine months ended December 31, 1998.
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 hereunto duly authorized.
DELPHI INFORMATION SYSTEMS, INC.
/s/Reid E. Simpson
---------------------------------------
Reid E. Simpson
Vice President, Finance and
Administration, Chief Financial
Officer and Secretary
Date: April 7, 1998
EXHIBIT INDEX
Exhibit No. Description
- - ---------- -----------
99.1 Press Release dated March 26, 1998 entitled "DELPHI ADOPTS
SHAREHOLDERS RIGHTS PLAN; ANNOUNCES REVERSE STOCK SPLIT
PROPOSAL"
4.1 Rights Agreement previously filed as an exhiibt to a
Registration Statement on form 8-A dated April 7, 1998
and incorporated herein by reference
4.2 Letter to Stockholders of Delphi Information Systems, Inc.
dated April 7, 1998
<PAGE>
Exhibit 4.2 Letter to Stockholders of Delphi Information Systems, Inc. dated
April 7, 1998.
April 7, 1998
To Our Stockholders:
On March 23, 1998, your Board of Directors declared a dividend of
Preferred Share Purchase Rights ("Rights"). The Rights will be issued to
stockholders of record as of the close of business on March 23, 1998 and will
expire in ten years. This letter and the enclosed Summary of Stockholder
Rights Agreement describe the Rights Agreement and explain the Board's
reasons for adopting it.
Many other companies have issued Rights similar to the kind we
approved on March 23, 1998. We consider these Rights to be the best means
currently available of protecting the full value of your investment in the
Company. The Rights Agreement contains provisions designed to protect
stockholders from certain unfair and coercive tactics that have been used in
takeovers and open market stock accumulations. The Board determined that the
adoption of the Rights Agreement would be beneficial to the Company and its
stockholders because it helps assure that the Board has adequate time to
evaluate inquiries from third parties regarding possible transactions
involving the Company, and if the Board determines that pursuing any such
inquiry is in the best interests of the Company's stockholders, to negotiate
favorable terms on behalf of the stockholders.
Issuance of the Rights does not in any way weaken the financial strength of
the Company or interfere with its business plans. The issuance of the Rights
has no dilutive effect, will not affect reported earnings per share, is not
taxable to the Company or to you, and will not change the way in which the
Company's Common Stock is traded. While the Rights dividend is not currently
taxable to you or the Company, stockholders may, depending upon their individual
circumstances, recognize taxable income when the Rights become exercisable.
In addition to authorizing the Rights, your Board authorized a new series
of junior participating preferred stock which could be issued in the event that
the Rights become exercisable. The dividend, liquidation and voting rights, as
well as the non-redemption feature, of the junior participating preferred shares
are designed so that the value of a one-one-hundredth interest in a preferred
share will be approximate the economic value of one share of the Company's
Common Stock.
These actions are more fully described in the enclosed Summary of
Stockholder Rights Agreement. As the Summary indicates, the Rights will
initially trade together with the Company's Common Stock, will be represented by
Company Common Stock certificates, do not have any voting power, are not
currently exercisable and do not become exercisable unless certain acquisition
events occur.
In declaring the Rights dividend, we have expressed our confidence in the
Company's future and our commitment to giving you, our stockholders, every
opportunity to participate fully in that future.
On behalf of the Board of Directors,
/s/ Max Seybold
-------------------------------------
Max Seybold
President and Chief Executive Officer
<PAGE>
Exhibit 99.1 Press Release dated March 26, 1998
RE: DELPHI INFORMATION SYSTEMS, INC.
3501 ALGONQUIN ROAD
ROLLING MEADOWS, IL 60008
(847) 506-3100
NASDAQ: DLPH
FOR FURTHER INFORMATION:
AT DELPHI: AT THE FINANCIAL RELATIONS BOARD:
Reid Simpson Jim Berger
Senior VP/CFO General Information
(847) 506-3100 (312) 640-6689
[email protected]
FOR IMMEDIATE RELEASE
MARCH 26, 1998
DELPHI ADOPTS SHAREHOLDER RIGHTS PLAN;
ANNOUNCES REVERSE STOCK SPLIT PROPOSAL
ROLLING MEADOWS, IL., MARCH 26, 1998-DELPHI INFORMATION SYSTEMS, INC.
(NASDAQ: DLPH), a leading provider of integrated business solutions to the
insurance industry, today announced the adoption of a stockholder rights plan
and declared a dividend distribution of one Preferred Share Purchase Right on
each outstanding share of the company's common stock.
The Rights are intended to enable all Delphi stockholders to realize the
long-term value of their investment in the company as well as to protect
Delphi's other constituents including its customer base, according to company
management.
Delphi also announced that it intends to submit to stockholders for their
approval at a special meeting scheduled for May 6, 1998, a proposal to effect
a 1-for-5 reverse split of the company's common stock to create a higher
per-share price, principally to satisfy the Nasdaq Small Cap Market minimum
bid price of $ 1.00 per share as well as to broaden its potential investment
base and rationalize the company's current capital structure.
The Rights are designed to assure that all Delphi stockholders receive fair and
equal treatment in the event of a proposed takeover of the company and to guard
against partial tender offers, squeeze-outs, open market accumulations and other
abusive or unfair tactics to gain control of the company without paying all
stockholders a control premium or a price that would be in the best interests of
stockholders, according to company management.
<PAGE>
Each right will entitle stockholders to buy one-hundredth of a share of a new
series of junior participating preferred stock at an exercise price of
$25.00. The Rights will be exercisable only if a person or group (other than
certain exempt persons) acquires 15 percent or more of Delphi common stock or
announces a tender offer the consummation of which would result in ownership
by a person or group of 15 percent or more of the common stock.
If a person or group (other than certain exempt persons) acquires 15 percent
or more of Delphi's outstanding common stock, each Right will entitle its
holder (other than such person or members of such group) to purchase, at the
Right's then-current exercise price, a number of Delphi's common shares
having a market value of twice the Right's exercise price. In addition, if
at any time after a person or group (other than certain exempt persons)
acquires 15 percent or more of the company's common stock, the company is
acquired in a merger or other business combination transaction, each Right
will entitle its holder to purchase, at A Right's then-current exercise
price, a number of the acquiring Company's common shares having market value
at the time of twice the Right's exercise prices.
Following the acquisition by a person or group (other than certain exempt
persons) of beneficial ownership of 15 percent or more of the company's
common stock and prior to an acquisition of 50 percent or more of the common
stock, the Board of Directors may exchange the Rights (other than those owned
by such person or group), in whole or in part, at the exchange ratio of one
share of common stock (or one-hundredth of a share of the new series of
junior participation preferred stock) per Right.
Prior to the acquisition by a person or group of beneficial ownership of 15
percent or more of the company's common stock, the Rights are redeemable for
$0.001 per right at the option of the Board of Directors.
The dividend distribution will be made to shareholders of record as of the
close of business on March 23. 1998, and the rights will expire on March 23,
2008, unless redeemed earlier or exchanged. The Right distribution is not
taxable to shareholders.
Details of the Rights distribution are contained in a letter to shareholders.
Founded in 1976, Delphi Information Systems, Inc. is the leading supplier of
information and technology to the property and casualty insurance industry
with a family of solutions and services for the agency, brokerage, MGA and
carrier marketplaces. As an independent provider, Delphi is able to focus
its efforts on delivering the highest quality products and services to
enhance the insurance distribution channel, in all aspects of their business.
For more information on Delphi and its products and services, visit the
Delphi Web site at http://www.diph.com.
THIS PRESS RELEASE CONTAINS VARIOUS FORWARD-LOOKING STATEMENTS AND
INFORMATION THAT WE BASED ON MANAGEMENT'S BELIEFS AS WELL AS ASSUMPTIONS MADE
BY AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. SUCH STATEMENTS ARE
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS
TO VA7Y MATERIALLY FROM THOSE STATED SHOULD ONE OR MORE OF THESE RISKS AND
UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING
<PAGE>
ASSUMPTIONS PROVIDE INCORRECT, ACTUAL RESULTS COULD VARY MATERIALLY FROM
THOSE ANTICIPATED, ESTIMATED OR PROJECTED. CERTAIN OF THESE RISKS AND
UNCERTAINTIES ARE DESCRIBED IN MORE DETAIL IN THE COMPANY'S REGISTRATION
STATEMENTS ON FORM S3 FILED UNDER THE SECURITIES ACT OF 1933, REGISTRATION
NO. 333-12 781, AND THE COMPANY'S PERIODIC FILINGS SUBJECT TO THE SECURITIES
EXCHANGE ACT OF 1934. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE SUCH
FACTORS OR TO PUBLICLY ANNOUNCE THE RESULTS OF ANY REVISION TO ANY OF THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT FUTURE EVENTS AND
DEVELOPMENTS.
FOR ADDITIONAL INFORMATION REGARDING DELPHI FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO AND USE THE COMPANY'S STOCK SYMBOL, "DLPH."
