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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 12 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 1999
RURAL CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-27416 41-1693295
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
3905 Dakota Street SW
Alexandria, Minnesota 56308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (320) 762-2000
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Item 5. Other Events.
On April 30, 1999, the Board of Directors of Rural Cellular Corporation
(the "Company"), declared a dividend of one preferred share purchase right (a
"Class A Right") for each outstanding share of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), of the Company. The dividend is
payable on May 20, 1999 (the "Record Date") to shareholders of record on that
date. A similar Class B Rights Agreement has been adopted for holders of the
Company's Class B Common Stock, par value $.01 per share (the "Class B Common
Stock").
Each Class A Right entitles the registered holder to purchase from the
Company one one-hundredth of a Series A Junior Participating Preferred Share,
par value $.01 per share (the "Series A Preferred Shares"), of the Company at a
price of $120 per one one-hundredth of a Series A Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Class A Rights
are set forth in a Class A Share Rights Agreement (the "Class A Rights
Agreement"), dated April 30, 1999, between the Company and Norwest Bank
Minnesota, National Association, as Rights Agent (the "Rights Agent").
Initially, the Class A Rights will attach to all certificates
representing Class A Common Stock then outstanding and no separate Class A Right
Certificates will be distributed. The Class A Rights will separate from the
Class A Common Stock and a Distribution Date for the Class A Rights will occur,
subject to certain exceptions, upon the earlier of:
(i) the close of business on the fifteenth day following a
public announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" (i.e., has become, subject to certain
exceptions, the beneficial owner of 15% or more of the outstanding shares of
Class A Common Stock and Class B Common Stock, taken as a whole (collectively,
the "Common Shares"); or
(ii) the close of business on the fifteenth day following the
commencement or public announcement of a tender offer or exchange offer the
consummation of which would result in a person or group of affiliated or
associated persons becoming, subject to certain exceptions, the beneficial owner
of 15% or more of the outstanding Common Shares.
Until the Distribution Date,
(i) the Class A Rights will be evidenced by the Class A Common
Stock certificates and will be transferred with and only with the Class A Common
Stock,
(ii) new Class A Common Stock certificates issued after the
Record Date upon transfer or new issuance of shares of Class A Common Stock will
contain a notation incorporating the Class A Rights Agreement by reference, and
(iii) the surrender for transfer of any Class A Common Stock
certificate, even without such notation or a copy of the Summary of Class A
Rights attached thereto, will also
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constitute the transfer of the Class A Rights associated with the Class A
Common Stock represented by such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Class A Rights ("Class A Right Certificates") will
be mailed to holders of record of the Class A Common Stock as of the close of
business on the Distribution Date and such separate Class A Right Certificates
alone will evidence the Class A Rights.
The Class A Rights are not exercisable until the Distribution Date. The
Class A Rights will expire on May 20, 2009, unless extended or earlier redeemed
or exchanged by the Company as described below.
The Purchase Price payable, and the number of Series A Preferred Shares
or other securities or property issuable, upon exercise of the Class A 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 Series A Preferred Shares,
(ii) upon the grant to holders of the Series A Preferred Shares
of certain rights, options or warrants to subscribe for or purchase Series A
Preferred Shares or convertible securities at less than the then current
market price of the Series A Preferred Shares, or
(iii) upon the distribution to holders of the Series A Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends or dividends payable in Series A Preferred Shares) or of
subscription rights or warrants (other than those described in clause (ii)
hereof).
The number of Series A Preferred Shares issuable upon the exercise of a
Class A Right is also subject to adjustment in the event of a dividend on Class
A Common Stock payable in Class A Common Stock, or a subdivision, combination or
consolidation of the Class A Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Series A Preferred Shares will be issued
(other than fractional shares which are integral multiples of one one-hundredth
(subject to adjustment) of a Series A Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) if in lieu thereof
a payment in cash is made based on the closing price (pro-rated for the
fraction) of the Series A Preferred Shares on the last trading date prior to the
date of exercise.
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 Class A Right, other than Class A Rights that are or were
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise thereof at the then current
exercise price of the Class A Right that number of shares of Class A Common
Stock
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having a market value of two times the exercise price of the Class A
Right, subject to certain possible adjustments. For example, if the exercise
price were $120, each holder of a Class A Right would be entitled to purchase
$240 in market value of Class A Common Stock for $120.
In the event that, after the Distribution Date or within 15 days prior
thereto, the Company is acquired in certain mergers or other business
combination transactions or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold after the Distribution
Date or within 15 days prior thereto in one transaction or a series of related
transactions, each holder of a Class A Right (other than Class A Rights which
have become void under the terms of the Class A Rights Agreement) will
thereafter have the right to receive, upon exercise thereof at the then current
exercise price of the Class A Right, that number of common shares of the
acquiring company (or, in certain cases, one of its affiliates) having a market
value of two times the exercise price of the Class A Right. Thus, if the
exercise price were $120, each holder of a Class A Right would be entitled to
purchase $240 in market value of common shares of the acquiring company for
$120.
In certain events specified in the Class A Rights Agreement, the
Company is permitted to temporarily suspend the exercisability of the Class A
Rights.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person (subject to certain exceptions) and prior to the
acquisition by a person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange all or part of the Class A Rights (other than Class A Rights which have
become void under the terms of the Class A Rights Agreement) at an exchange
ratio of one share of Class A Common Stock (or equivalent security) per Class A
Right, subject to adjustment.
At any time prior to the close of business on the date of a public
announcement that a person or group of affiliated or associated persons has
become an Acquiring Person, the Board of Directors of the Company may redeem the
Class A Rights in whole, but not in part, at a price of $.001 per Class A Right,
subject to adjustment (the "Redemption Price"), payable in cash. The redemption
of the Class A 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.
The Board of Directors and the Company shall not have any liability to any
person as a result of the redemption or exchange of the Class A Rights pursuant
to the provisions of the Class A Rights Agreement.
The terms of the Class A Rights may be amended by the Board of
Directors of the Company, subject to certain limitations after the Distribution
Date, without the consent of the holders of the Class A Rights, including an
amendment prior to the date a person or group of affiliated or associated
persons becomes an Acquiring Person to lower the 15% threshold for
exercisability of the Class A Rights to not less than the greater of (i) the sum
of .001% and the largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any person or group of affiliated or
associated persons (subject to certain exceptions) or (ii) 10%.
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Until a Class 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.
This summary description of the Class A Rights does not purport to be
complete and is qualified in its entirety by reference to the Class A Rights
Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99 Press Release dated April 30, 1999
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.
Date: May 5, 1999
RURAL CELLULAR CORPORATION
(Registrant)
By: /s/ Wesley E. Schultz
-----------------------------------
Wesley E. Schultz
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Page No. in Sequentially
Exhibit Description of Exhibit Numbered Copy
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<S> <C> <C>
99 Press Release dated
April 30, 1999
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Exhibit 99
Press Release
PRESS RELEASE
RURAL CELLULAR CORPORATION ADOPTS
SHAREHOLDER RIGHTS PLAN
APRIL 30, 1999 -- ALEXANDRIA, MN -- Rural Cellular Corporation (NASDAQ NMS:
RCCC) announced today that its Board of Directors has adopted shareholder rights
plans for each of its Class A Common Stock and Class B Common Stock. Richard P.
Ekstrand, the company's President and CEO stated: "The rights plans are designed
to assure that Rural Cellular Corporation shareholders receive fair and
equitable treatment in the event of an unsolicited attempt to acquire the
company." He further stated: "The rights plans were not adopted in response to
any outside effort to gain control of the company and the company is not
currently aware of such activity."
The rights plans give each holder of Class A Common Stock the right to purchase
1/100th of a newly authorized preferred share that is essentially equivalent to
one share of Class A Common Stock and each holder of Class B Common Stock the
right to purchase 1/100th of a newly authorized preferred share, essentially
equivalent to one share of Class B Common Stock. The exercise price for both the
Class A rights and the Class B rights is $120 per right.
Shareholders do not need to take any action to receive the rights, which are
being distributed in the form of a dividend on the Common Stock. The rights will
attach to all shares of Class A and Class B Common Stock outstanding at the
close of business on May 20, 1999. Shares of Class A and Class B Common Stock
issued after that date will be issued with Class A or Class B rights, as
appropriate. No separate right certificates will be issued unless the conditions
set forth in the plans are met. The rights are not currently exercisable and
possess no current value, and the distribution of the rights is not taxable to
shareholders. The rights expire on May 20, 2009.
The rights become exercisable by existing shareholders only following the
acquisition by a buyer, without prior approval of the company's board of
directors, of 15% or more of the outstanding Common Stock, Class A and Class B,
or following the announcement of a tender offer for 15% of the outstanding
Common Stock. If a person acquires 15% or more of the company's Common Stock,
each right (except those held by the acquiring person) will entitle the holder
to purchase shares of the company's Class A or Class B Common Stock, as
appropriate, having a market value of twice the right's exercise price, or, in
effect, at a 50% discount from its then current market value. If the company
were acquired in a merger or similar transaction after a person acquires 15% of
the company's outstanding Common Stock, without prior approval of the board of
directors, each right would entitle the holder (other than the acquirer) to
purchase shares of the acquiring company having a market value of twice the
exercise price of the right, or, in effect, at a discount of 50%. Until the
acquisition by any person of 15% or more of the company's Common Stock, the
rights can be redeemed by the board of directors for $.001 per right.
Rural Cellular Corporation provides wireless communication services through its
ownership, operation and management of cellular, paging and Personal
Communications Services systems. These systems are concentrated in the Upper
Midwest and New England regions of the United States.
# # #
Contact: Wesley Schultz, Senior V.P.Finance & Administration / CFO (320)
762-2000
Ann K. Newhall, Senior V.P. and General Counsel (320) 762-2000
World Wide Web address: http://www.rccwireless.com
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