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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 23, 1999
BRADLEES, INC.
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(Exact name of registrant as specified in charter)
MASSACHUSETTS
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(State or Other Jurisdiction of Incorporation)
1-11134 04-3156108
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(Commission file number) (IRS employer identification number)
ONE BRADLEES CIRCLE, BRAINTREE, MA 02184
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(Address of principal executive offices) (Zip code)
(781) 380-3000
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 23, 1999, the Board of Directors of our Company,
Bradlees, Inc., a Massachusetts corporation (the "Company"), adopted a
Shareholder Rights Agreement (the "Rights Agreement") and declared a dividend
of one preferred stock purchase right (a "Right") for each outstanding share
of common stock, par value $.01 per share. The dividend is payable on
November 26, 1999 to the stockholders of record on November 26, 1999. The
Company also has elected by vote of its Board to be subject to the provisions
of Section 50A of Chapter 156B of the General Laws of the Commonwealth of
Massachusetts, which, among other things, requires that the Company have a
classified Board of Directors.
Our Board has adopted this Rights Agreement to protect the Company's
stockholders from any coercive or otherwise unfair takeover tactics. In
general terms, it works by imposing a significant penalty upon any person or
group which acquires 15% or more of our outstanding common stock without the
approval of our Board. The Rights Agreement should not interfere with any
merger or other business combination approved by our Board in the future.
For those interested in the specific terms of the Rights Agreement
as made between our Company and BankBoston, N.A., as the Rights Agent, on
November 23, 1999, we provide the following summary description. Please note,
however, that this description is only a summary and is not complete, and
should be read together with the entire Rights Agreement, which is
incorporated herein by reference and has been filed as an exhibit to our
Registration Statement on Form 8-A filed with the Securities and Exchange
Commission on November 30, 1999.
THE RIGHTS. Our Board authorized the issuance of one Right for each share of
common stock outstanding as of November 26, 1999. Therefore as of November
26, l999, each share of common stock also represents one Right. The Rights
will initially trade with, and will be inseparable from, the common stock.
Until the Rights become exercisable, they are evidenced only by the
certificates or book-entry credits that represent shares of common stock. New
Rights will accompany any new shares of common stock we issue after November
26, 1999 unless and until the Distribution Date described below.
EXERCISE PRICE. Each Right will allow its holder to purchase from our Company
one one-thousandth of a share of Series A Junior Participating Cumulative
Preferred Stock (the "Preferred Stock") for $45.00, once the Rights become
exercisable. This portion of a share of Preferred Stock will give the
stockholder approximately the same dividend, voting, and liquidation rights as
would one share of common stock. Prior to exercise, the Right does not give its
holder any dividend, voting, or liquidation rights.
EXERCISABILITY. The Rights will not be exercisable until
- 10 days after the public announcement that a person or group has become
an "Acquiring Person" by becoming the beneficial owner of 15% or more
of our outstanding common stock, or, if earlier,
- 10 business days (or a later date determined by our Board before any
person of group becomes an Acquiring Person) after a person or group
begins a tender or exchange
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offer which, if consummated, would result in that person or group
becoming an Acquiring Person.
We refer to the date when the Rights become exercisable as the
"Distribution Date." Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock will constitute
a transfer of Rights. After that date, the Rights will separate from the common
stock and be evidenced by book-entry credits or by Rights certificates that we
will mail to all eligible holders of common stock. Any Rights held by an
Acquiring Person are void and may not be exercised.
Our Board may reduce the threshold at which a person or group becomes
an Acquiring Person from 15% to not less than 10% of the outstanding common
stock.
CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON.
- FLIP IN. If a person or group becomes an Acquiring Person, all holders
of Rights except the Acquiring Person may, for $45.00, purchase shares
of our common stock with a market value of $90.00, based on the market
price of the common stock prior to such acquisition.
- FLIP OVER. If our Company is later acquired in a merger or similar
transaction after the Distribution Date, all holders of Rights
except the Acquiring Person may, for $45.00, purchase shares of the
acquiring corporation with a market value of $90.00 based on the market
price of the acquiring corporation's stock, prior to such merger.
PREFERRED STOCK PROVISIONS.
Each one one-thousandth of a share of Preferred Stock, if issued:
- will not be redeemable.
- will entitle holders to quarterly dividend payments of $.001 per share,
or an amount equal to the dividend paid on one share of common stock,
whichever is greater.
- will entitle holders upon liquidation either to receive $1.00 per share
or an amount equal to the payment made on one share of common stock,
whichever is greater.
- will have the same voting power as one share of common stock.
- and if shares of our common stock are exchanged via merger,
consolidation, or a similar transaction, will entitle holders to a per
share payment equal to the payment made on one share of common stock.
The value of one one-thousandth interest in a share of Preferred Stock should
approximate the value of one share of common stock.
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EXPIRATION. The Rights will expire on November 23, 2009, unless earlier
exercised following the Distribution Date or redeemed or exchanged.
REDEMPTION. Our Board may redeem the Rights for $.01 per Right only until the
earliest of (i) the time at which any person or group becomes an Acquiring
Person or (ii) the expiration of the Rights Agreement. If our Board redeems any
Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only
right of the holders of Rights will be to receive the redemption price of $.01
per Right. The redemption price will be adjusted if we have a stock split of or
stock dividends on our common stock.
EXCHANGE. After a person or group becomes an Acquiring Person, but before an
Acquiring Person owns 50% or more of our outstanding common stock, our Board
may, at its option, extinguish the Rights by exchanging all or any part of the
then outstanding exercisable Rights for shares of common stock at an exchange
ratio specified in the Rights Agreement, other than Rights held by the Acquiring
Person.
ANTI-DILUTION PROVISIONS. Our Board may adjust the exercise price of the Rights,
the number of shares of Preferred Stock issuable and the number of outstanding
Rights to prevent dilution that may occur from a stock dividend, a stock split,
a reclassification of the Preferred Stock or common stock. No adjustments to the
Exercise Price of less than 1% will be made.
AMENDMENTS. The terms of the Rights Agreement generally may be amended by our
Board without the consent of the holders of the Rights. However, our Board may
not amend the Rights Agreement to lower the threshold at which a person or group
becomes an Acquiring Person to below 10% of our outstanding common stock. In
addition, the Board may not cause a person or group to become an Acquiring
Person by lowering this threshold below the percentage interest that such person
or group already owns. After a person or group becomes an Acquiring Person, our
Board may not amend the Rights Agreement in a way that adversely affects holders
of the Rights.
In accordance with the provisions of Section 50A of Chapter 156B of the
General Laws of the Commonwealth of Massachusetts, the Board of Directors has
been divided into three classes with one class to be elected at each year's
annual meeting of stockholders commencing as of the 2000 annual meeting. The
Board of Directors has been classified as follows: Class I -- Stephen J.
Blauner, Lawrence Lieberman and Charles K. MacDonald; Class II -- Robert A.
Altschuler, Robert G. Lynn and William H. Roth; and Class III -- W. Edward
Clingman, Jr., John M. Friedman, Jr. and Peter Thorner. The Class I Directors
will serve until the annual meeting of stockholders to be held in 2000 and
until their successors are duly elected and qualified; the Class II Directors
will serve until the 2001 annual meeting of stockholders and until their
successors are duly elected and qualified; and the Class III Directors will
serve until the 2002 annual meeting of stockholders and until their
successors are duly elected and qualified. In addition to requiring a
staggered Board, Section 50A provides, among other things, that (i) all
vacancies in the Board shall be filled only by the Board, (ii) Directors
elected by the Board to fill vacancies shall hold office for the remainder of
the term of the class of Directors in which the vacancy occurred or the new
directorship was created, (iii) no decrease in the number of Directors
constituting the Board may shorten the term of any incumbent Director, (iv)
the number of Directors may be fixed only by the Board, and (v) Directors may
be removed by stockholders only for "cause." Section 50A defines "cause" as
only (i) conviction of a felony, (ii) declaration of unsound mind by order of
court, (iii) gross dereliction fo duty, (iv) commission of an action
involving moral turpitude or (v) commission of an action which constitutes
intentional misconduct or a knowing violation of law if such action in either
event results both in an improper substantial personal benefit and a material
injury to the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS.
Exhibit 3.1 - Certificate of Vote of Directors Establishing a
Series of a Class of Stock of Bradlees, Inc.
classifying and designating the Series A Junior
Participating Cumulative Preferred Stock
(incorporated by reference to Exhibit 3.1 of the
Company's Registration Statement on Form 8-A, filed
with the Securities and Exchange Commission on
November 30, 1999).
Exhibit 3.2 - Amendment No. 1 to Amended and Restated By-laws of
Bradlees, Inc. (incorporated by reference to Exhibit
3.2 of the Company's Registration Statement on Form
8-A, filed with the Securities and Exchange
Commission on November 30, 1999).
Exhibit 4.1 - Shareholder Rights Agreement, dated as of November
23, 1999, between Bradlees, Inc. and BankBoston,
N.A., as Rights Agent (incorporated by reference to
the Company's Registration Statement on Form 8-A,
filed with the Securities and Exchange Commission on
November 30, 1999).
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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.
BRADLEES, INC.
Date: November 29, 1999 By: /s/ Peter Thorner
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Name: Peter Thorner
Title: Chairman and
Chief Executive Officer
By: /s/ Cornelius F. Moses III
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Name: Cornelius F. Moses III
Title: Senior Vice President,
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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3.1 Certificate of Vote of Directors Establishing a Series of a
Class of Stock of Bradlees, Inc. classifying and designating
the Series A Junior Participating Cumulative Preferred Stock
(incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form 8-A, filed with the Securities
and Exchange Commission on November 30, 1999).
3.2 Amendment No. 1 to Amended and Restated By-laws of Bradlees,
Inc. (incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement on Form 8-A, filed with the
Securities and Exchange Commission on November 30, 1999).
4.1 Shareholder Rights Agreement, dated as of November 23, 1999,
between Bradlees, Inc. and BankBoston, N.A., as Rights Agent
(incorporated by reference to the Company's Registration
Statement on Form 8-A, filed with the Securities and Exchange
Commission on November 30, 1999).
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