Registration No. 33-62922
Filed pursuant to Rule 424(b)(3)
SUPPLEMENT DATED JANUARY 11, 1996
TO PROSPECTUS DATED JANUARY 14, 1994
33,340 Shares of Common Stock
WESTCOTT COMMUNICATIONS, INC.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On January 9, 1996, the Board of Directors of Westcott
Communications, Inc. (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, of the Company
(the "Common Stock"). The dividend is payable on January 22,
1996 (the "Record Date") to the shareholders of record on that
date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Stock") of the Company at a price of $80.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of January 9,
1996, as the same may be amended from time to time (the "Rights
Agreement"), between the Company and KeyCorp Shareholder
Services, Inc., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 20% or more of the
outstanding shares of Common Stock (thereby becoming an
"Acquiring Person") or (ii) 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 of affiliated persons 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 the beneficial ownership by
a person or group of 20% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect
to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a
copy of this Summary of Rights.
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 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 issuances of 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
certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation or a copy of this Summary
of Rights, will also constitute the transfer of the Rights
associated with the shares of 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 Common
Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
Rights will be issued with all shares of Common Stock issued
between the Record Date and the Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 9, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in
each case as described below.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights is 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 or purchase Preferred
Stock at a price, or securities convertible into Preferred Stock
with a conversion price, less than the then-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 or dividends payable
in Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
The number of outstanding Rights is also subject to
adjustment 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, consolidations or combinations of the
Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock
will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1.00 per share but
will be entitled to an aggregate dividend of 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 a minimum preferential liquidation payment of $100.00 per
share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will
have 100 votes, voting together with the Common Stock. In
addition, the Preferred Stock will vote separately as a class
were required by law. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a share of Preferred Stock purchasable upon exercise
of each Right should approximate the value of one share of Common
Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right at the then-current
exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of
the Right.
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In the event that, after a person or group has become 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 provisions
will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become
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 person with whom the
Company has engaged in the foregoing transaction (or its parent)
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 any person or group becomes an Acquiring
Person and prior to the earlier of one of the events described in
the previous paragraph or the acquisition by such person or group
of 50% or more of the outstanding shares of Common Stock, the
Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become
void), in whole or in part, for shares of Common Stock, or one
one-hundredths of a share of Preferred Stock (or shares of a
class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), having a value
per Right equal to the difference between the market value of the
shares of Common Stock receivable upon exercise of the Right and
the exercise price of the Right.
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. No fractional
shares of Preferred Stock will be issued (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), and in lieu thereof an
adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading day prior to the date of
exercise.
At any time prior to the time an Acquiring Person has become
such, the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). 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.
Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the redemption price, amend the
Rights in any manner. After the Rights are no longer redeemable,
the Company may, except with respect to the redemption price,
amend the Rights in any manner that does not adversely affect the
interests of holders of the Rights.
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.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company in certain circumstances.
Accordingly, the existence of the Rights may deter certain
acquirors from making takeover proposals or tender offers. The
Rights should not interfere with any merger or other business
combination approved by the Board of Directors of the Company
since the Board of Directors may, at its option, at any time
prior to the time an Acquiring Person has become such, redeem all but not
less than all the then outstanding Rights at $.01 per Right.
For the purposes of the Rights Agreement, the Board of
Directors has established the Series A Junior Participating
Preferred Stock with 290,000 authorized shares, none of which
were outstanding as of the date of this Prospectus, from the
shares of preferred stock the Board of Directors is authorized
pursuant to the Company's Articles of Incorporation to establish
and issue by resolution without any further stockholder approval.
Shares of the Series A Junior Participating Preferred Stock may
be purchased pursuant to the terms and conditions of the Rights
Agreement. Rights and privileges of the Series A Junior
Participating Preferred Stock are set forth in the form of the
Statement of Resolutions Establishing and Designating Series A
Junior Participating Preferred Stock which is included as an
Exhibit to the Rights Agreement that is an Exhibit to the Current
Report on Form 8-K of the Company dated January 10, 1996. The
foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the
Rights Agreement.
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 January 11, 1996. 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, as the same may be amended from time to
time, which is hereby incorporated herein by reference.
