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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): May 19, 1997
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GENEVA STEEL COMPANY
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(Exact name of registrant as specified in its charter)
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UTAH 1-10459 93-0942346
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(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification No.)
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10 South Geneva Road
Vineyard, Utah 84058
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(Address of principal executive offices, including zip code)
(801) 227-9000
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
The Registrant is voluntarily filing this Report on Form 8-K to report a
dividend of one preferred share purchase right to the holders of the Class A
Common Stock and the Class B Common Stock as summarized below.
On May 19, 1997, the Board of Directors of Geneva Steel Company (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of Class A Common Stock, without par value (the
"Class A Common Shares"), of the Company, and a dividend of one-tenth of one
Right for each outstanding share of Class B Common Stock, without par value (the
"Class B Common Shares" and, together with the Class A Common Shares, the
"Common Shares"), of the Company. The dividend is payable on May 19, 1997 (the
"Record Date") to the stockholders 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, without par value (the
"Preferred Shares"), of the Company at a price of $28 per one one-hundredth 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 First Security Bank of Utah, N.A., as Rights
Agent (the "Rights Agent"), a copy of which is incorporated by reference as
Exhibit 99.1 to this Form 8-K.
Until the earlier to occur of (i) the tenth day after a public
announcement that a person or group of affiliated or associated persons, other
than an Exempt Person (as defined below) have acquired beneficial ownership of
15% or more of the outstanding Class A Equivalent Shares (as defined below)
(such person or group of affiliated or associated persons being hereinafter
referred to as an "Acquiring Person") or (ii) the tenth business day (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 by any person (other than an Exempt Person)
of, or announcement of an intention of any person (other than an Exempt Person)
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
outstanding Class A Equivalent Shares (the earlier of such dates 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 together with a copy of the Summary of Rights in substantially
the form of Exhibit C to the Rights Agreement. A "Class A Equivalent Share"
means either one Class A Common Share or ten Class B Common Shares. An "Exempt
Person" means Joseph A. Cannon or Robert J. Grow (or any affiliate or associate
of such persons and certain transferees), the Company, any subsidiary of the
Company, any employee benefit plan of the Company or a subsidiary of the
Company, or any other entity holding shares for or pursuant to any such plan.
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 upon transfer or new issuance of Common Shares 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 outstanding as of
the Record Date, even without such notation or a copy of the Summary of Rights
being attached thereto, 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 May 19, 2007 (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 Preferred Shares 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 at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the
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Preferred Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (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).
The number of outstanding Rights and the number of one one-hundredths of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
A complete description of the Preferred Shares is set forth in the
Articles of Amendment to the Articles of Incorporation of Geneva Steel Company,
dated May 29, 1997 (the "Articles of Amendment"), a copy of which is
incorporated by reference as Exhibit 99.2 to this Form 8-K. Preferred Shares
purchasable upon exercise of the Rights will not be redeemable. Each Preferred
Share will be entitled to a minimum preferential quarterly dividend payment of
$1 per share but will be entitled to 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 minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment of 100
times the payment made per Common Share. Except as otherwise required by law,
holders of Preferred Shares will have no voting rights. 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.
Because of the nature of the Preferred Shares' dividend and
liquidation rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that 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 after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right (other than Rights
beneficially owned by the 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 acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the event that any person
or group of affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Preferred
Shares having a 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 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 owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one one-hundredth of
a Preferred Share, per Right (subject to adjustment).
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 may, but shall not be required, to issue
fractional Preferred Shares (other than fractions which are integral multiples
of one-hundredth of a Preferred Share). In the event the Board of Directors, in
its sole discretion, elects not to issue fractions of Preferred Shares (other
than fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts), then in lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, an adjustment in cash will
be made based on the market price of the Preferred Shares on the last trading
day prior to the date of exercise.
At any time prior to such time as any person or group of
affiliated or associated persons 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 $.0001 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis with such conditions as the
Board of Directors in its sole discretion may establish. Immediately
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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.
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, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Class A Equivalent Shares then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons (other than an Exempt
Person) and (ii) 10%, except that from and after such time as any person or
group of affiliated or associated persons becomes an Acquiring Person no such
amendment 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 receive dividends.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Company's Board prior to the time that any person or
group has acquired beneficial ownership of 15% or more of the Class A Equivalent
Shares, since until that time the rights may be redeemed by the Company at a
price of $.0001 per Right.
A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights and the Preferred Shares
does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement and the Articles of Amendment, each of which is hereby
incorporated herein by reference.
ITEM 7. EXHIBITS.
The following items are filed as exhibits to this Report:
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Exhibit No. Description of Document
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99.1 Rights Agreement dated as of May 19, 1997, between Geneva Steel Company and Rights
Agent, including Exhibit A (Form of Articles of Amendment to the Articles of
Incorporation designating the Series A Junior Participating Preferred Stock), Exhibit B,
(Form of Right Certificate) and Exhibit C (Summary of Rights to Purchase Preferred
Shares) (incorporated by reference to Exhibit 99.1 of the Company's Registration
Statement on Form 8-A filed on November 21, 1997).
99.2 Articles of Amendment to the Articles of Incorporation of
Geneva Steel Company, dated May 29, 1997 (incorporated by
reference to Exhibit 99.2 of the Company's Registration
Statement on Form 8-A filed on November 21, 1997).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENEVA STEEL COMPANY
/s/ Dennis L. Wanlass
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Dennis L. Wanlass
Vice President, Treasurer and
Chief Financial Officer
Date: November 15, 1997
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