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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 10, 1999
AgriBioTech, Inc.
(Exact name of issuer as specified in its charter)
Nevada 0-19352 85-0325742
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
120 Corporate Park Drive, Henderson, Nevada (89014)
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702)566-2440
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Item 5. Other Events.
On November 10, 1999, the Board of Directors of AgriBioTech, Inc., a Nevada
corporation (the "Company"), declared a dividend distribution of one right
(each, a "Right") on each outstanding share of the Company's Common Stock to
shareholders of record at the close of business on November 24, 1999. One Right
will also be distributed for each share of Common Stock issued after November
24, 1999, until the Distribution Date (which is described in the next
paragraph). Each Right entitles the registered holder to purchase from the
Company, upon the occurrence of a Distribution Date, a unit consisting of one
one-hundredths of a share (a "Unit") of Series A Junior Participating Preferred
Stock (the "Preferred Stock"), at a purchase price (the "Purchase Price") of
$20.00 per Unit, subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement dated as of November 11, 1999 (the "Rights
Agreement") between the Company and Corporate Stock Transfer, Inc., as Rights
Agent.
The Rights Agreement provides that the Company must redeem the Rights (that
is, terminate the Rights Agreement) if the holders of a majority of the
outstanding shares of Common Stock have not approved continuation of the Rights
Agreement or the use of blank check preferred stock as an anti-takeover device
by a vote taken (i) no later than the third annual meeting of stockholders after
November 10, 1999 and (ii) no less frequently than every third annual meeting
thereafter.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), or (ii) 10 business days following the public
announcement of a tender offer or exchange offer that would, if consummated,
result in a person or group beneficially owning 15% or more of such outstanding
shares of Common Stock, subject to certain limitations.
Under the terms of the Rights Agreement, The State of Wisconsin Investment
Board, which owns approximately 18.9% of the outstanding shares of the Company's
Common Stock, will be permitted to continue to own such shares, and to increase
its ownership to up to 20% of the outstanding shares of Common Stock, without
becoming an Acquiring Person and triggering a Distribution Date.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after November 24, 1999 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding, even without such
notation, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable after the
Distribution Date, Rights Certificates will be mailed to holders of record of
the Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on November 11, 2009, subject to extension by the Board of
Directors, unless earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person, each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive, at the
time specified in the Rights Agreement, (x) upon exercise and payment of the
Purchase Price, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the Purchase
Price or (y) at the discretion of the Board of Directors, upon exercise and
without payment of the Purchase Price, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to the difference between the Purchase Price and the value of the
consideration which would be payable under clause (x). Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void. Flip-In Rights are not exercisable following the occurrence of the
event set forth above until such time as the Rights are no longer redeemable by
the Company as set forth below.
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In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange or other business
combination in which the Company is not the surviving corporation, (ii) the
Company is the surviving party in a merger, statutory share exchange or other
business combination and all or part of the Company's Common Stock is exchanged
for stock or other securities of another corporation, or (iii) 50% or more of
the Company's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
common stock of the acquiring corporation having a value equal to two times the
Purchase Price. The holders of a Right will continue to have the Flip-Over Right
whether or not such holder exercises or surrenders the Flip-In Right. The events
set forth in this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Preferred Stock 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
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the 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 quarterly cash dividends) 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 share of Preferred Stock issuable upon
exercise of each Right are 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
Common Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in each such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time after any person becomes an Acquiring Person, the Company may
exchange all or part of the Rights for shares of Common Stock at an exchange
ratio of one share per Right, as appropriately adjusted to reflect any stock
dividend, stock split or similar transaction.
In general, the Company may redeem the Rights in whole, but not in part, at
a price of $0.001 per Right, at any time until 10 business days following the
Stock Acquisition Date. After the redemption period has expired, the Company's
right of redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to less than 15% (or, in the case of The State of Wisconsin
Investment Board, 20% or less) of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company and there are no
other Acquiring Persons. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $0.001 redemption price.
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. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for stock (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
Prior to the Distribution Date, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made when the Rights are not redeemable.
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The Company has initially authorized and reserved 1,000,000 shares of
Preferred Stock for issuance upon exercise of the Rights. As of November 10,
1999, there were 49,878,281 shares of Common Stock issued and outstanding.
The Rights may be deemed to have certain antitakeover effects. The Rights
generally may cause substantial dilution to a person or group that attempts to
acquire the Company under circumstances not approved by the Board of Directors
of the Company.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes the Certificate of Designations creating
the Preferred Stock, the Form of the Rights Certificate and the Summary of
Rights to Purchase Shares, is attached as Exhibit 99.1 to the Company's
Registration Statement on Form 8-A filed with the Commission. The foregoing is
qualified in its entirety by reference thereto.
The Rights may be deemed to have certain antitakeover effects. The Rights
generally may cause substantial dilution to a person or group that attempts to
acquire the Company under circumstances not approved by the Board of Directors
of the Company.
Item 7. Financial Statements and Exhibits.
(c) The following exhibit is filed as a part of this report:
99.1 Press Release dated November 12, 1999 announcing the adoption of the
Rights Agreement.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.
Date: November 16, 1999
AGRIBIOTECH, INC.
By: /s/ Randy Ingram
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Randy Ingram
Executive Vice President and
Chief Financial Officer
FOR IMMEDIATE RELEASE November 12, 1999
Contact:
Doug Fisher Howard Kalt
AgriBioTech, Inc. Kalt Rosen Chase & Co. LLC
702-566-2440 415-397-2686
AGRIBIOTECH, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
HENDERSON, NEVADA, November 12, 1999 - AgriBioTech, Inc. (Nasdaq NMS: ABTX),
today announced that its Board of Directors has approved the adoption of a
Shareholder Rights Plan under which all shareholders of record as of November
24, 1999, will receive rights to purchase shares of a new series of Preferred
Stock.
The Rights Plan is designed to enable all AgriBioTech shareholders to realize
the full value of their investment and to provide for fair and equal treatment
for shareholders in the event that an unsolicited attempt is made to acquire
AgriBioTech. The adoption of the Rights Plan is intended as a means to guard
against abusive takeover tactics and is not in response to any particular
proposal.
The rights will be distributed as a non-taxable dividend and will expire in ten
years. The rights will be exercisable only if a person or group acquires 15
percent or more of the AgriBioTech Common Stock or announces a tender offer for
15 percent or more of the Common Stock.
If a person or group acquires 15 percent or more of AgriBioTech's Common Stock,
all shareholders except the purchaser will be entitled to acquire AgriBioTech
Common Stock at a 50 percent discount. The effect will be to discourage
acquisitions of more than 15 percent of AgriBioTech Common Stock without
negotiations with the Board.
The rights will trade with AgriBioTech's Common Stock, unless and until they are
separated upon the occurrence of certain future events. The rights distribution
is not taxable to the shareholders. AgriBioTech's Board of Directors may redeem
the rights prior to the expiration of a specified period following the
acquisition of more than 15 percent of AgriBioTech's Common Stock. Additional
details regarding the Rights Plan will be outlined in a summary to be mailed to
all shareholders following the Record Date.
The terms of the Rights Plan allow The State of Wisconsin Investment Board,
which owns approximately 18.9% of AgriBioTech's Common Stock, to maintain its
investment in AgriBioTech, as well as to acquire up to 20% of the Company's
Common Stock, without triggering the rights.
Continuation of the Rights Plan will be subject to shareholder approval no later
than the third annual meeting of stockholders following the Board's adoption of
the Plan and periodically thereafter.
AgriBioTech is a vertically integrated, full service seed company specializing
in the forage and turfgrass seed sector, complete with research and development
of proprietary seed varieties, seed processing plants, and a national and
international distribution and sales network. AgriBioTech's vision is to lead
the turf grass and forage seed industry in discovering its potential value.
