SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) January 22, 1997
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INTEGON CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 001-10997 13 3559471
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
500 West Fifth Street
Winston-Salem, North Carolina 27152
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(Address of Principal Executive Offices)
(Zip Code)
(910) 770-2000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former name or address, if changed from last report)
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Item 5. Other Events.
On January 22, 1997, the Board of Directors of Integon Corporation
(the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value
$0.01 per share, of the Company (the "Common Stock"). The dividend is
payable on February 11, 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-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the
Company (the "Preferred Stock") at a price of $70.00 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement, dated as of January 22, 1997, between the
Company and First Chicago Trust Company of New York, as Rights Agent
(the "Rights Agent"), as the same may be amended from time to time (the
"Rights Agreement").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(an "Acquiring Person"), with certain exceptions set forth below, has
acquired beneficial ownership of 20% or more of the outstanding shares
of Common Stock or (ii) 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 of, 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 20% or more of the
outstanding shares of Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate. An Acquiring Person does
not include (A) the Company, any subsidiary of the Company, any
employee benefit plan of the Company or of any subsidiary of the
Company, or any entity or trustee holding Common Stock for or pursuant
to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or
of any subsidiary of the Company, (B) any person that would be deemed
an "Acquiring Person" upon the adoption of the Rights Agreement, unless
and until such person acquires beneficial ownership of any additional
shares of Common Stock after the date of the Rights Agreement, or (C)
any person whose beneficial ownership of 20% or more of the outstanding
shares of Common Stock results from an acquisition of shares of Common
Stock by the Company that, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common
Stock beneficially owned by such person to 20% or more of the shares of
Common Stock then outstanding, unless such person thereafter become the
beneficial owner of any additional shares of Common Stock and upon the
consummation of such acquisition such person beneficially owns 20% or
more of the shares of Common Stock then outstanding. In addition, if
the Board determines that a person or group of affiliated or associated
persons who otherwise would be an Acquiring Person became so
inadvertently, and such person promptly divests sufficient shares so
that the 20% ownership eases, such person will not be deemed an
Acquiring Person.
C-408667.12354.01018
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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 Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer or new
issuances of Common Stock will contain a legend 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 shares of Common Stock outstanding as of the
Record Date, even without such notation or a copy of this Summary of
Rights, will also constitute the transfer of the Rights associated with
the shares of Common Stock 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 Stock 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 January 22, 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 shares 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) upon the grant to
holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock at a price, or securities
convertible into Preferred Stock with a conversion price, less than the
then 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 periodic cash dividends or
dividends payable in Preferred Stock) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths 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 dividend on the Common Stock payable in shares
of Common Stock or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, prior to the Distribution
Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Unless otherwise provided in connection with
the creation of a subsequent series of preferred stock, the Preferred
Stock will be subordinate to any other series of the Company's
preferred stock. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum quarterly dividend payment of $10.00
per share but will be entitled to an aggregate dividend of 1000 times
the dividend declared per share of Common Stock. In the event of the
liquidation of the Company, the holders of the Preferred Stock will be
entitled to receive a minimum liquidation payment of $1000.00 per share
(plus any accrued but unpaid dividends)
C-408667.12354.01018
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but will be entitled to an aggregate payment of 1000 times the payment
made per share of Common Stock. Each share of Preferred Stock will have
1000 votes, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 1000 times the amount received per share of Common
Stock. The rights of Preferred Stock as to dividends, liquidation and
voting are protected by customary antidilution provisions. Because of
the nature of the Preferred Stock's dividend, liquidation and voting
rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive, upon exercise
of a Right at the then current Purchase Price, that number of shares of
Common Stock (or other securities or property) having a market value of
two times the Purchase Price. The Board may also cause the automatic
exchange of each Right (other than those held by the Acquiring Person)
for one share of Common Stock (or, at the Board's option, one
one-thousandth of a share of Preferred Stock) after any person or group
of affiliated or associated persons becomes an Acquiring Person but
prior to the Acquiring Person becoming the beneficial owner of 50% of
the Common Stock.
If there is an insufficient number of authorized but unissued
shares of Common Stock (or Preferred Stock) to permit the full exchange
of Rights, then debt or equity or other assets of Integon or a
subsidiary may be issued in lieu of Common Stock (or Preferred Stock)
and the Purchase Price may be adjusted.
In the event that, after a person or group of affiliated or
associated persons has become an Acquiring Person, 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, proper
provision will be made so that each holder of a Right (other than
Rights beneficially owned by an Acquiring Person, which will have
become void) will thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, that number of
shares of common stock of the person with whom the Company has engaged
in the foregoing transaction (or its parent), which number of shares at
the time of such transaction will have a market value of two times the
Purchase Price.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by
such person or group of 50% or more of the outstanding shares of Common
Stock, the Board of Directors of the Company may cause the Company to
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 share of Common Stock (or one one-thousandth of a share of
Preferred Stock, or shares of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges)
per Right, subject to adjustment.
C-408667.12354.01018
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No fractional shares of Preferred Stock will be issued (other than
fractions that are integral multiples of one one-thousandth of a share
of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), and in lieu thereof an adjustment in
cash will be made based on the market price of the Preferred Stock on
the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the tenth day after the
time that a person or group of affiliated or associated persons has
become an Acquiring Person (subject to extension by the Board of
Directors, with the approval of a majority of the two-third majority of
the Board) and (ii) the Final Expiration Date, the Board of Directors
may cause the Company to redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). 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, and, after a person or group of affiliated or associated
persons becomes an Acquiring Person, certain circumstances shall
require the concurrence of a two-thirds majority of the Board of
Directors. Immediately 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.
For so long as the Rights are then redeemable, the Company may,
except with respect to the Redemption Price, amend the Rights in any
manner, including an amendment to lower certain thresholds described
above to not less than the greater of (i) the sum of 0.001% and the
largest percentage of the outstanding shares of Common Stock then known
to the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%. After the Rights are no
longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights. Amendments to
the Rights Agreement after a person or group of affiliated or
associated persons becomes an Acquiring Person require the approval of
a two-thirds majority of the Board of Directors.
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 vote or to receive dividends.
As of January 22, 1997, there were 15,736,121 shares of Common
Stock issued and outstanding, 2,480,000 shares reserved for issuance
pursuant to employee benefit plans and 3,722,966 shares reserved for
issuance upon conversion of the Company's $3.875 Convertible Preferred
Stock. As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock so
that all such shares will have Rights attached.
The Rights Agreement is filed herewith as Exhibit 99.1, and is
incorporated herein by reference. A copy of the Rights Agreement is
available free of charge from the Company. This summary description of
the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as the same may be
amended from time to time.
C-408667.12354.01018
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Item 7. Exhibits
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Exhibit No. Description
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99.1 Rights Agreement, including the form of Articles of
Amendment with respect to the Series A Junior
Participating Preferred Stock, included as Exhibit A
to the Rights Agreement, and the forms of Rights
Certificate and of Election to Exercise, included as
Exhibit B to the Rights Agreement, all incorporated
by reference to Exhibit 4 to the Company's
Registration Statement on Form 8-A dated January
31, 1997.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized.
INTEGON CORPORATION
By: /s/ John B. Yorke
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John B. Yorke
Vice President, Corporate General Counsel
and Secretary
Date: January 31, 1997
C-408667.12354.01018
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Rights Agreement, dated as of
January 22, 1997, between Integon
Corporation (the "Company") and
First Chicago Trust Company of New
York, as Rights Agent, including the
form of Articles of Amendment with
respect to the Series A Junior
Participating Preferred Stock of the
Company, included as Exhibit A to
the Rights Agreement, and the forms
of Rights Certificate and of Election
to Exercise, included as Exhibit B to
the Rights Agreement (incorporated
by reference to Exhibit 4 to the
Company's Registration Statement on
Form 8-A dated January 31, 1997).
C-408667.12354.01018
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