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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
DECEMBER 14, 1999
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DIGITAL RECORDERS, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 1-13408 56-1362926
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
4018 PATRIOT DRIVE, SUITE 100
DURHAM, NORTH CAROLINA 27703
(Address of principal executive offices)
(919) 361-2155
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Effective December 14, 1999, Digital Recorders, Inc. (the "Company")
adopted a rights agreement designed to prevent any potential acquiror from
gaining control of the Company without fairly compensating the stockholders and
to protect the Company from unfair or coercive takeover attempts. The plan was
not adopted in response to any specific effort to acquire the Company.
The Board of Directors approved the declaration of a dividend of one
right for each outstanding share of the Company's common stock on the record
date of December 27, 1999. Each of the rights, which are not currently
exercisable, entitles the holder to purchase 1/1000th of a share of the
Company's newly designated Series D Junior Participating Preferred Stock at an
exercise price of $20. Until exercisable, the rights are represented by and
traded with the Company's common stock and no separate certificates for the
rights will be issued.
In general, the rights will become exercisable only if any person or
group of affiliated persons makes a public announcement that it has acquired 15%
or more of the Company's stock or that it intends to make or makes a tender
offer or exchange offer for 15% or more of the Company's stock. Under certain
circumstances, each holder of a right (other than the person or group who
acquired 15% or more the Company's stock) is entitled to purchase shares of the
Company's common stock having a market value equal to two times the exercise
price. If, after a person has acquired 15% or more of the Company's common
stock, the Company is acquired in a merger or other business combination
transaction or there is a sale or transfer of a majority of the Company's assets
or earning power, each holder of a right is entitled to purchase shares of the
acquiring Company's common stock having a market value equal to two times the
exercise price.
The rights may be redeemed by the Company for $.001 per right prior to
the acquisition of ownership of 15% or more of the Company's stock and the
rights will expire in ten years. The rights distribution is not taxable to
shareholders. As soon as practicable after the record date, a summary of the
plan will be mailed to each stockholder of record on the record date.
The rights agreement, together with the exhibits thereto consisting of
the form of designation of preference for the new Series D Preferred Stock, the
form of rights certificate which would be used if the rights became exercisable
and the summary of the agreement, are being filed on a Form 8-A on or about the
same date as this Form 8-K.
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.
DIGITAL RECORDERS, INC.
Date: December 16, 1999 By: /s/ Lawrence Taylor
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Lawrence Taylor, Chief Financial Officer and
Vice President
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