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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
NOVEMBER 9, 1998
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(Date of Report)
UTILX CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-16821 91-1171716
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
22820 RUSSELL ROAD, P.O. BOX 97009, KENT, WASHINGTON 98064-9709
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(Address of Principal Executive Offices) (Zip Code)
(235) 395-0200
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(Registrant's Telephone Number, Including Area Code)
NONE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On October 29, 1998, the Board of Directors (the "Board of Directors") of
UTILX Corporation (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 November 9, 1998 (the "Record Date") to the Company's stockholders of record
on that date. In addition, the Board of Directors has authorized the issuance
of one Right with respect to each additional Common Share that becomes
outstanding between the Record Date and the earliest of the Distribution Date,
the Expiration Date (as such terms are hereinafter defined), and the date, if
any, on which the Rights are redeemed. Each Right entitles its registered
holder to purchase from the Company one one-hundredth (1/100th) of a share of
Series D Participating Cumulative Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Shares"), at a price of $8 per one one-hundredth
(1/100th) of a Preferred 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 American Stock Transfer & Trust
Company, as Rights Agent.
Until the earlier of (i) the close of business on the tenth business day
after a public announcement that a person or group (including any affiliate or
associate of such person or group) has acquired beneficial ownership of 15% or
more of the outstanding Common Shares (such person or group being an "Acquiring
Person") and (ii) such date, if any, the Board of Directors may designate
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer for outstanding Common Shares which could
result in the offeror becoming the beneficial owner of 15% or more of the
outstanding Common Shares (the earlier of such dates being the "Distribution
Date"), the Rights will be evidenced by the certificates for the Common Shares
registered in the names of the holders thereof (which certificates for Common
Shares will also be deemed to be Right Certificates, as defined below) and not
by separate Right Certificates. Therefore, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares.
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 to each initial record holder of certain Common Shares
originally issued after the Distribution Date), and such separate Right
Certificates alone will thereafter evidence the Rights.
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The Rights are not exercisable until the Distribution Date and will expire
on November 9, 2008 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
In order to preserve the actual or potential economic value of the Rights,
the number of Preferred Shares or other securities issuable upon exercise of a
Right, the Purchase Price, the Redemption Price (as hereinafter defined) and the
number of Rights associated with each outstanding Common Share are all subject
to adjustment by the Board of Directors in the event of any change in the Common
Shares or the Preferred Shares, whether by reason of stock dividends, stock
splits, recapitalization, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to holders
of Common Shares or Preferred Shares, as the case may be, or otherwise.
In the event a person becomes an Acquiring Person, the Rights will entitle
each holder of a Right (other than an Acquiring Person (or any affiliate or
associate of such Acquiring Person)) to purchase, for the Purchase Price, that
number of Common Shares equivalent to the number of Common Shares which at the
time of the transaction would have a market value of twice the Purchase Price.
Any Rights that are at any time beneficially owned by an Acquiring Person (or
any affiliate or associate of an Acquiring Person) will be null and void and
nontransferable and any holder of any such Right (including any purported
transferee or subsequent holder) will be unable to exercise or transfer any such
Right.
After there is an Acquiring Person, the Board of Directors may elect to
exchange each Right (other than Rights that have become null and void and
nontransferable as described above) for consideration per Right consisting of
one-half of the number of Common Shares that would be issuable at such time upon
the exercise of one Right pursuant to the terms of the Rights Agreement, and
without payment of the Purchase Price.
If the Company is acquired in a merger by, or other business combination
with, or 50% or more of its assets or assets accounting for 50% or more of its
net income or revenues are sold, leased, exchanged or otherwise transferred (in
one or more transactions) to, a publicly traded corporation, each Right will
entitle its holder (subject to the next paragraph) to purchase, for the Purchase
Price, that number of shares of common stock of such corporation which at the
time of the transaction would have a market value of twice the Purchase Price.
If the Company is acquired in a merger by, or other business combination with,
or 50% or more of its assets or assets accounting for 50% or more of its net
income or revenues are sold, leased,
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exchanged or otherwise transferred (in one or more transactions), to an entity
that is not a publicly traded corporation, each Right will entitle its holder
(subject to the next paragraph) to purchase, for the Purchase Price, at such
holder's option, (i) that number of shares of the surviving corporation in the
transaction (which surviving corporation could be the Company) which at the time
of the transaction would have a book value of twice the Purchase Price,
(ii) that number of shares of the ultimate parent entity of the surviving
corporation which at the time of the transaction would have a book value of
twice the Purchase Price, or (iii) if the acquiring entity has an affiliate
which has publicly traded common shares, that number of common shares of such
affiliate which at the time of the transaction would have a market value of
twice the Purchase Price.
At any time prior to any person or group becoming an Acquiring Person, the
Board of Directors may redeem the Rights in whole, but not in part, at a price
(in cash or Common Shares or other securities of the Company deemed by the Board
of Directors to be at least equivalent in value) of $.01 per Right, subject to
adjustment as provided in the Rights Agreement (the "Redemption Price").
At any time prior to the Distribution Date the Company may, without the
approval of any holder of the Rights, supplement or amend any provision of the
Rights Agreement (including the date on which the Distribution Date would occur,
the time during which the Rights may be redeemed or the terms of the Preferred
Shares).
The Preferred Shares issuable upon exercise of the Rights will not be
redeemable. The holders of the Preferred Shares will be entitled to a
preferential quarterly dividend payment equal to the greater of (a) $.01 per
share and (b) 100 times the dividend declared per Common Share, if any. In the
event of dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, the holders of Preferred Shares will be entitled to a
preferential payment per share of all accrued and unpaid dividends and
distributions per share, plus 100 times the distribution to be made per Common
Share. Each Preferred Share will entitle its holder to 100 votes, voting
together with the Common Shares. Finally, in the event of any merger, business
combination, consolidation or other transaction in which the Common Shares are
exchanged, the holders of the Preferred Shares will be entitled to receive per
share 100 times the amount received per Common Share.
Because of the nature of the Preferred Shares' dividend liquidation and
voting rights, the value of the one one-hundredth (1/100th) interest in a
Preferred Share issuable upon exercise of each Right should approximate the
value of one Common Share. Customary antidilution provisions are designed to
protect that relationship in the event of certain changes in the Common Shares
and the Preferred Shares. The Preferred Shares are authorized to be issued in
fractions which are an integral multiple of one one-hundredth (1/100th) of a
Preferred Share. The Company may, but is not
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required to, issue fractional shares upon the exercise of Rights and, in lieu of
fractional shares, the Company may utilize a depository arrangement as provided
by the terms of the Preferred Shares and, in the case of fractions other than
one one-hundredth (1/100th) of a Preferred Share or integral multiples thereof,
may make a cash payment based on the market price of such shares.
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 receive dividends.
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ITEM 7. EXHIBITS
4.1 Rights Agreement, dated as of November 6, 1998, between UTILX Corporation
and American Stock Transfer & Trust Company, incorporated herein by
reference to Exhibit 2.1 to the Company's Registration Statement on
Form 8-A, dated November 9, 1998.
99.1 Press release issued November 9, 1998.
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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 hereunto duly authorized.
UTILX CORPORATION
Dated: November 9, 1998 By /s/ Larry D. Pihl
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Larry D. Pihl
Vice President, Chief Financial
Officer, Controller and Treasurer
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EXHIBIT INDEX
Exhibit Number Description
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4.1 Rights Agreement, dated as of November 6, 1998,
between UTILX Corporation and American Stock
Transfer & Trust Company, incorporated herein by
reference to Exhibit 2.1 to the Company's
Registration Statement on Form 8-A, dated
November 9, 1998.
99.1 Press release issued November 9, 1998.
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PRESS RELEASE
Larry D. Pihl, Vice President & CFO
(253) 395-4596
UTILX CORPORATION DECLARES DIVIDEND
DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS
KENT, WA (November 9, 1998) -- UTILX Corporation (Nasdaq: UTLX)
announced today that its Board of Directors has adopted a Stockholder Rights
Plan and declared a dividend distribution of one Preferred Share Purchase
Right on each outstanding share of UTILX common stock.
William Weisfield, UTILX's Interim Chief Executive Officer, said that
the Rights are designed to ensure that all of UTILX's stockholders receive
fair and equal treatment in the event of a proposed takeover of UTILX, and to
guard against the use of partial tender offers, squeeze-outs, open market
accumulations or other abusive tactics to gain control of UTILX without
paying all stockholders a control premium. The company is not aware that
UTILX is the target of any takeover plans at the present time.
The Rights will be exercisable only if a person or group acquires 15% or
more of UTILX's common stock or announces a tender offer which could result
in the offeror becoming the beneficial owner of 15% or more of the common
stock. 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 $8.
If a person or group acquires 15% or more of UTILX's outstanding common
stock, each Right will entitle its holder (other than the acquiring person or
group) to purchase, at the Right's then-current exercise price, the number of
UTILX's common shares having a market value of twice the exercise price. In
addition, if UTILX is acquired in a merger or other business combination
transaction after a person has acquired 15% or more of UTILX's outstanding
common stock, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, a number of the acquiring company's common
shares having a market value of twice the exercise price.
Following the acquisition by a person or group of beneficial ownership
of 15% or more of UTILX's common stock and before the acquisition of 50% or
more of the common stock, the Board of Directors may exchange all or part of
the Rights (other than Rights owned by the acquiring person or group) for a
consideration per Right consisting of one-half of the Common Stock that would
be issuable upon the exercise of one Right. Alternatively, the Rights are
redeemable for one cent per Right at the option of the Board of Directors,
prior to the acquisition by a person or group of beneficial ownership of 15%
or more of UTILX's common stock.
The nontaxable dividend distribution will be made on November 9, 1998,
payable to stockholders of record on that date. The Rights will expire
November 9, 2008.
UTILX provides services and products used to install, replace, and
renovate underground utilities. Domestically, UTILX provides its technology
through its FlowMole-Registered Trademark-
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and CableCure-Registered Trademark- services, while internationally it
supplies equipment, parts, services, and training. The company is based in
Kent, Washington.
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