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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
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): June 26, 1996
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AVECOR CARDIOVASCULAR INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-21330 41-1695729
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
13010 County Road 6, Plymouth, Minnesota 55441
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 612/559-9504
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 5. OTHER EVENTS.
On June 26, 1996, the Board of Directors of AVECOR Cardiovascular Inc. (the
"Company") declared a dividend distribution of one preferred stock purchase
right (a "Right") for each outstanding share of the Company's Common Stock, par
value $.01 per share (the "Common Shares"), payable to shareholders of record at
the close of business on August 2, 1996 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company at any time
following the Distribution Date (as defined below) one one-thousandth of a share
(a "Preferred Share Fraction") of the Company's Series A Junior Preferred Stock,
par value $.01 per share (the "Preferred Shares"), or a combination of
securities and assets of equivalent value, at a purchase price of $80.00 per
Preferred Share Fraction (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") dated as of June 26, 1996, between the Company and Norwest
Bank Minnesota, N.A., as Rights Agent.
Initially, the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such Common Share
certificates, and no separate Rights Certificates will be distributed. The
Rights will separate from the Common Shares and will be distributed to the
holders thereof on the "Distribution Date," which shall be the first to occur of
the following: (i) the close of business on the tenth business day 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 Common Shares, other than
as a result of a Permitted Offer, as defined (the "Stock Acquisition Date");
(ii) the close of business on the tenth business day (or such later date as the
Board of Directors, acting by a majority of the Continuing Directors, may
determine) following the commencement of a tender offer or exchange offer (other
than a Permitted Offer, as defined) that would result in a person or group
beneficially owning 15% or more of the outstanding Common Shares; or (iii) the
close of business on the tenth business day after a determination by at least a
majority of the Continuing Directors that a Person is an Adverse Person, and
that such Person, alone or together with its affiliates and associates, has
become the beneficial owner of a substantial amount of Common Shares (which
amount shall in no event be less than 10% of the Common Shares then outstanding)
and (a) such beneficial ownership by such Person is intended to cause the
Company to repurchase the Common Shares beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions intended to provide such Person with short-term financial
gain under circumstances where at least a majority of the Continuing Directors
determines that the best long-term interests of the Company and its shareholders
would not be served by taking such action or entering into such transaction or
series of transactions at that time or (b) such beneficial ownership is causing
or reasonably likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position).
A "Permitted Offer" means a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms determined, prior to the
purchase of shares under such tender or exchange offer, by at least a majority
of the members of the Board who are Continuing Directors,
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who are not officers of the Company and who are not Acquiring Persons or
Affiliates, Associates, nominees or representatives of an Acquiring Person, to
be adequate and otherwise in the best interests of the Company and its
shareholders (other than the Person or any Affiliate or Associate thereof on
whose behalf the offer is being made).
A "Continuing Director" is (i) any person who is a member of the Board of
Directors prior to June 26, 1996, while such person is a member of the Board of
Directors, who is not an Acquiring Person or an Adverse Person, or an affiliate
or associate of either of the foregoing, or a representative or designee of an
Acquiring Person or an Adverse Person or any such affiliate or associate, or
(ii) any person who subsequently becomes a member of the Board of Directors who
is not an Acquiring Person or an Adverse Person, or an affiliate or associate of
either of the foregoing, or a representative or designee of an Acquiring Person,
an Adverse Person or any such affiliate or associate, and whose nomination or
election to the Board of Directors is recommended or approved by a majority of
the Continuing Directors.
Until the Distribution Date, (i) the Rights will be evidenced by Common
Share certificates and will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after August 2, 1996
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Shares
outstanding will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 25, 2006, unless earlier redeemed or exchanged
by the Company as described below (the earliest of all such dates, the
"Expiration Date").
As soon as practical after the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. All Common Shares issued prior to the earlier of the
Distribution Date and the Expiration Date will be issued with Rights. Common
Shares issued after the Distribution Date upon the exercise of employee stock
options, issuances under other employee stock benefit plans or the conversion of
convertible securities issued prior to the Distribution Date will be issued with
Rights.
In the event (i) that a person or group, with certain exceptions, becomes
the beneficial owner of more than 15% of the then outstanding Common Shares,
other than as a result of a Permitted Offer or (ii) at least a majority of the
Continuing Directors determines that a person is an Adverse Person, then each
holder of a Right will thereafter have the right to receive, upon exercise, that
number of Preferred Share Fractions (or in certain circumstances, that number of
Common Shares, cash, property or other securities of the Company) having a
market value equal to two times the Exercise Price of the Right. The Rights,
however, are not exercisable following the occurrence of either of the events
set forth above until such time as the Rights are no longer redeemable by the
Company as set forth below. Notwithstanding any of the foregoing, following the
occurrence of either of the events set forth above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or Adverse Person (or certain related
persons and transferees) will be null and void. The events set forth in this
paragraph are referred to as "Section 11(a)(ii) Events."
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In the event that, at any time following the Stock Acquisition Date, other
than pursuant to a Permitted Offer, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is not the surviving
corporation or the Common Shares are changed or exchanged or (ii) 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 to receive that number of shares of common stock of
the acquiring company which equals the exercise price of the Right divided by
one-half of the current market price of such common stock at the date of the
occurrence of the event. The events set forth in this paragraph are referred to
as "Section 13 Events," and the Section 11(a)(ii) Events and the Section 13
Events are collectively referred to as the "Triggering Events."
At any time after the occurrence of a Section 11(a)(ii) Event, at the
election of a majority of the Continuing Directors, the Company may exchange the
Rights (other than Rights which have become void), in whole or in part, at an
exchange ratio of one Preferred Share Fraction per Right (subject to
adjustment).
The Purchase Price payable and the number of Preferred Share Fractions
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,
split, combination, consolidation or reclassification of, the Preferred Shares,
(ii) if all holders of any security of the Company are granted rights, options
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 Preferred Shares of evidences of
indebtedness or assets (excluding quarterly cash dividends ) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company will not be required to issue fractional Preferred Shares
other than fractions which are integral multiples of Preferred Share Fractions
(or, in the event of an appropriate election, Common Shares) and, in lieu of
such fractional Preferred Shares (or Common Shares, as the case may be), an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading date prior to the date of exercise.
In general, at any time prior to the first to occur of (i) ten days
following the Stock Acquisition Date, (ii) ten days after a person is determined
to be an Adverse Person, or (iii) the Final Expiration Date, the Company, acting
by a majority of the Continuing Directors, may redeem the Rights in whole, but
not in part, at a price of $.001 per Right (payable in cash, stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
redemption of the Rights, the Rights will terminate and the only right of the
holders of the Rights will be to receive the $.001 redemption price.
The Preferred Shares purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such other stock). Each
Preferred Share will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each Common Share. In the event of
liquidation, the holders of Preferred Shares will receive a preferred
liquidation payment equal to the greater of $1,000 per share, plus accrued
dividends, or 1,000 times the payment made with respect to each Common Share.
Each Preferred Share will have 1,000 votes, voting together with the Common
Shares. In the event of any merger, consolidation or other
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transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 1,000 times the amount and type of consideration received
per Common Share. The rights of the Preferred Shares as to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
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 receive dividends. The creation of the Rights should not be taxable
to shareholders. Shareholders may, however, depending upon the circumstances,
recognize taxable income in the event that the rights become exercisable for
Preferred Shares (or other consideration) of the Company or for common stock of
an acquiring company as set forth above.
Any of the provisions of the Rights Agreement, including the definition of
Acquiring Person or the Purchase Price, may be amended by at least a majority of
the Continuing Directors prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by at least a
majority of the Continuing Directors 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 Adverse Person), or to
shorten or lengthen certain time periods under the Rights Agreement. However,
no amendment to adjust the time period governing redemption can be made at such
time as the Rights are not redeemable.
As of June 30, 1996, there were 7,782,918 Common Shares outstanding and
967,520 Common Shares reserved for issuance under outstanding warrants and
various stock-based compensation plans of the Company. Each outstanding Common
Share on August 2, 1996 will receive one Right. So long as the Rights Agreement
remains in effect and the Rights continue to remain attached to and trade with
the Common Shares, the Company will issue one Right for each Common Share issued
between the Record Date and any Distribution Date, so that all outstanding
shares will have attached Rights. Assuming 7,800,000 shares of Common Stock are
outstanding on the Record Date, the Company will have initially reserved for
issuance upon exercise of the Rights 105,000 Preferred Shares.
The Rights have certain anti-takeover effects. The Rights will 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. The Rights should
not interfere with any merger or other business combination approved by at least
a majority of the Continuing Directors of the Company because the Continuing
Directors may, at their option, either (i) declare the transaction to be a
"permitted offer," or (b) at any time before the close of business on the 10th
business day following the Stock Acquisition Date or the date on which a person
is determined to be an Adverse Person, redeem the then outstanding Rights at the
redemption price.
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SIGNATURES
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: July 31, 1996 AVECOR CARDIOVASCULAR INC.
By: /s/ ANTHONY BADOLATO
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Anthony Badolato
Chief Executive Officer
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