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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
Date of report (Date of earliest event reported): November 9, 2000
Varco International, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-18312 76-0252850
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
2835 Holmes Road, Houston, Texas 77051
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(Address of principal executive offices) (Zip Code)
(713) 799-5100
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(Registrant's telephone number, including area code)
_________________________________________________________________
(former name or former address, if changed since last report)
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Item 5. Other Events.
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On November 9, 2000, the Board of Directors of Varco International, Inc.,
a Delaware corporation (the "Company"), adopted a stockholder rights plan, in
the form of that certain Rights Agreement dated as of November 29, 2000, by and
between the Company and ChaseMellon Shareholders Services, L.L.C., a New Jersey
limited liability company, as Rights Agent (the "Rights Agreement").
In connection with the Rights Plan, the Board of Directors of the Company
declared a dividend of one preferred share purchase right (the "Rights") for
each outstanding share of common stock, par value $.01 per share (the "Common
Shares"), of the Company outstanding at the close of business on December 4,
2000 (the "Record Date"). Each Right will entitle the registered holder thereof,
after the Rights become exercisable and until December 4, 2010 (or the earlier
redemption, exchange or termination of the Rights), to purchase from the Company
one one-hundredth (1/100th) of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Shares"), at a price
of $75.00 per one one-hundredth (1/100th) of a Preferred Share, subject to
certain anti-dilution adjustments (the "Purchase Price"). Except as set forth in
the Rights Plan, until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated persons
(other than L.E. Simmons and his associates and affiliates) has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the Common
Shares (an "Acquiring Person") or (ii) ten (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 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 15% or more of the Common Shares (the earlier
of (i) and (ii) being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate. The Rights will be
transferred with and only with the Common Shares until the Distribution Date or
earlier redemption or expiration of the Rights. 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 will at no time have any
voting rights.
Each Preferred Share purchasable upon exercise of the Rights 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, if any, declared per Common Share. In the event of
liquidation, dissolution or winding up of the Company, the holders of the
Preferred Shares will be entitled to a preferential liquidation payment of $100
per share plus any accrued but unpaid dividends but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes and will vote together with the Common Shares.
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. Preferred Shares will not be
redeemable. These Rights are protected by customary anti-dilution provisions.
Because of the
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nature of the Preferred Share's dividend, liquidation and voting rights, the
value of one one-hundredth of a Preferred Share purchasable upon exercise of
each Right should approximate the value of one Common Share.
In the event that a Person becomes an Acquiring Person or if the Company
were the surviving corporation in a merger with an Acquiring Person or any
affiliate or associate of an Acquiring Person and the Common Shares were not
changed or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then current
Purchase Price of one Right. In the event that, after a person has become an
Acquiring Person, the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the then current Purchase Price of one Right.
At any time after a Person becomes an Acquiring Person and prior to the
earlier of one of the events described in the last sentence in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the then
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which have
become void), in whole or in part, for Common Shares at an exchange rate of one
Common Share per Right (subject to adjustment).
The Rights may be redeemed in whole, but not in part, at a price of $.01
per Right (the "Redemption Price") by the Board of Directors at any time prior
to the time that an Acquiring Person has become such. 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 holders of Rights will only have the right to receive the
Redemption Price.
The Rights will expire on December 4, 2010 (unless earlier redeemed,
exchanged or terminated). ChaseMellon Shareholder Services, L.L.C. is the
Rights Agent.
The Purchase Price payable, and the number of one one-hundredths of a
Preferred Share or other securities or 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, or convertible securities at less than the current market
price of the Preferred Shares or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness, cash, securities or assets
(excluding regular periodic cash dividends at a rate not in excess of 125% of
the rate of the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the four
quarters ended immediately prior to the payment of such dividend, or dividends
payable in Preferred Shares (which dividends will be subject to the adjustment
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described in clause (i) above)) or of subscription rights or warrants (other
than those referred to above).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company beyond those as an existing stockholder,
including, without limitation, the right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company for so long as the Rights are then redeemable, and
after the Rights are no longer redeemable, the Company may amend or supplement
the Rights Agreement in any manner that does not adversely affect the interests
of the holder of the Rights.
One Right will be distributed to stockholders of the Company for each
Common Share owned of record by them on December 4, 2000. As long as the Rights
are attached to the Common Shares, the Company will issue one Right with each
new Common Share so that all such shares will have attached Rights. The Company
has agreed that, from and after the Distribution Date, the Company will reserve
2,000,000 Preferred Shares initially for issuance upon exercise of the Rights.
The rights are designed to assure that all of the Company's stockholders
receive fair and equal treatment in the event of any proposed takeover of the
Company and to guard against partial tender offers, open market accumulations
and other abusive tactics to gain control of the Company without paying all
stockholders a control premium. The Rights will cause substantial dilution to a
person or group that acquires 15% or more of the Company's stock on terms not
approved by the Company's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by the Board of Directors
at any time prior to the first date that a Person or group has become an
Acquiring Person.
The Rights Agreement specifying the terms of the Rights and the text of the
press release announcing the declaration of the Rights, are incorporated herein
by reference as exhibits to this Current Report. The foregoing description of
the Rights is qualified in its entirety by reference to such exhibits.
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Item 7. Exhibits.
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4.1 Rights Agreement, dated as of November 29, 2000, by and between
Varco International, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, which includes the form of Certificate of
Designations of the Series A Junior Participating Preferred Stock
of Varco International, Inc. as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase
Preferred Shares as Exhibit C.
99.1 Text of Press Release, dated November 22, 2000.
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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.
Dated: November 30, 2000
VARCO INTERNATIONAL, INC.
By: /s/ JOSEPH C. WINKLER
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Joseph C. Winkler
Executive Vice President
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EXHIBIT INDEX
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4.1 Rights Agreement, dated as of November 29, 2000, by and between Varco
International, Inc. and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, which includes the form of Certificate of Designations of
the Series A Junior Participating Preferred Stock of Varco International,
Inc. as Exhibit A, the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as Exhibit C.
99.1 Text of Press Release, dated November 22, 2000.
