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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): December 16, 1998
FOURTH SHIFT CORPORATION
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(Exact name of registrant as specified in its charter)
Minnesota 000-21992 41-1437794
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(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
7900 International Drive, Ste. 450, Minneapolis, MN 55425
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 851-1500
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Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On December 16, 1998, the Board of Directors of Fourth Shift
Corporation (the "Company"), declared a dividend of one preferred share purchase
right (a "Right") per share for each outstanding share of Common Stock, $.01 par
value (the "Common Shares"), of the Company. The dividend is payable on
December 28, 1998 to shareholders of record on that date.
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
$.01 par value (the "Preferred Shares"), of the Company at a price of $35 per
one-hundredth of a Preferred Share (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 December 16, 1998, between the
Company and Norwest Bank Minnesota, National Association, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding and no separate Right Certificates
will be distributed. The Rights will separate from the Common Shares, and a
Distribution Date for the Rights will occur upon the earlier of: (i) the first
date of 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 20% or more of the outstanding Common
Shares) (except pursuant to a Permitted Offer, as hereinafter defined) and (ii)
the 10th 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 20% or more of the outstanding Common Shares (or such later
date as may be determined by the Board of Directors of the Company prior to a
person or group of affiliated or associated persons becoming an Acquiring
Person) (the earlier of such dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with the Common
Shares, (ii) new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any Common Share certificate, even without such notation or a copy
of this Summary of Rights attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
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As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares 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 December 16, 2008, unless extended or earlier redeemed or
exchanged by the Company as described below.
The Purchase Price payable and the number of Preferred Shares 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
Shares, (ii) upon the grant to holders of the Preferred Shares of certain
rights, options or warrants to subscribe for or purchase Preferred Shares or
convertible securities at less than the then current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Shares) or of subscription rights or
warrants (other than those described in clause (ii) of this paragraph). 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 fraction of a Preferred Share (other than fractions in integral
multiples of one one-hundredth of a share) will be issued and, in lieu thereof,
an adjustment in cash will be made based on the closing price on the last
trading date prior to the date of exercise.
The number of outstanding Rights and the number of one one-hundredth
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100 per share but will be entitled
to an aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with Common Shares.
Finally, 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 100 times the amount received per Common Share. These
rights are subject to adjustment in the event of a stock dividend on the Common
Shares or a subdivision, combination or consolidation of the Common Shares.
In the event that a person or group becomes an Acquiring Person
(except pursuant to a Permitted Offer (as defined below)), each holder of a
Right, other than the Acquiring Person or the affiliates, associates or
transferees thereof (whose Rights will thereafter be void), will thereafter have
the right to receive upon exercise thereof at the then current exercise price of
the Right that number of Common Shares having a market value of two times the
exercise price of the Right, subject to certain possible adjustments.
In the event that 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 a person
or group becomes an Acquiring Person (except pursuant to a Permitted Offer),
holders of the Rights will thereafter have the Right to receive, upon exercise
thereof at the then current exercise price of the 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 Right.
A "Permitted Offer" is a tender offer or an exchange offer for all
outstanding Common Shares of the Company at a price and on terms determined by a
majority of the Board of Directors of the Company who are not officers of the
Company and who are not Acquiring Persons or affiliates or associates of an
Acquiring Person and after receiving advice from one or more investment banking
firms, to be (a) fair to shareholders (taking into account all factors which the
Board of Directors deems relevant) and (b) otherwise in the best interests of
the Company and its shareholders, employees, customers, suppliers and creditors
and the communities in which the Company does business, and which the Board of
Directors determines to recommend to the shareholders of the Company.
At any time after a person becomes an Acquiring Person (subject to
certain exceptions), and prior to the acquisition by a person of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange all or part of the Rights for Common Shares at an exchange ratio of one
Common Share per Right, subject to adjustment.
At any time before a person has become an Acquiring Person, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"), subject to adjustment. The
redemption of the
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Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors may, in their sole discretion, establish.
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.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission (the "Commission") as an Exhibit to a Registration Statement
on Form 8-A, filed with the Commission on December 17, 1998. A copy of the
Rights Agreement is available free of charge from the Company by contacting the
Secretary at Fourth Shift Corporation, 7900 International Drive, Minneapolis,
Minnesota 55425. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
4 Rights Agreement, dated as of December 16, 1998, between the Company and
Norwest Bank Minnesota, N.A., as Rights Agent, (incorporated by reference
to the Company's Registration Statement on Form 8-A, filed December 17,
1998).
99 Press Release, dated December 17, 1998.
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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.
December 16, 1998 FOURTH SHIFT CORPORATION
By /s/ David Latzke
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David Latzke
Vice President, Chief Financial
Officer, and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
4 Rights Agreement, dated as of December 16, 1998, between the Company
and Norwest Bank Minnesota, N.A., as Rights Agent, (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form
8-A, filed December 17, 1998).
99 Press Release, dated December 17, 1998.
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EXHIBIT 99
FOR IMMEDIATE RELEASE
CONTACT: David G. Latzke
Vice President and Chief Financial Officer
Fourth Shift Corporation
(612) 851-1900
[email protected]
FOURTH SHIFT CORPORATION ADOPTS
SHAREHOLDER RIGHTS PLAN
MINNEAPOLIS, MN -- DECEMBER 17, 1998 -- Fourth Shift Corporation (NASDAQ: FSFT)
announced today that its Board of Directors has adopted a new Shareholder Rights
Plan. The rights issued under the plan will become exercisable by shareholders
other than a potential acquiror only following an acquisition by the acquiror,
without prior approval by the Company's Board of Directors, of 20% or more of
the Common Stock, or the announcement of a tender offer for 20% or more of the
Common Stock.
"Although the Company is not currently discussing any acquisition or merger
proposal with any prospective buyer, the purpose of the plan is to encourage any
prospective buyer to negotiate with the Company's Board before launching a
hostile takeover. In this way, we believe we can best ensure that all
shareholders receive equal treatment and a fair price in any business
combination involving the Company," said Fourth Shift CEO M. M. Stuckey.
The new purchase rights will be distributed as a non-taxable dividend on
December 28, 1998. The rights will trade with the Common Stock. There will be
no rights certificates issued unless the rights become exercisable. The rights
will expire on December 16, 2008.
ABOUT FOURTH SHIFT
Fourth Shift Corporation http://www.fs.com is a Minneapolis-based global
application software company that develops software for manufacturing and
distribution enterprises worldwide. The Company's software has been licensed by
more than 3,300 customer sites in 60 countries including some of the fastest
growing manufacturers and global enterprises from the Fortune 500. Fourth Shift
maintains close strategic relationships with leading information technology
vendors Micro Data Base Systems, Inc. (mdbs), Microsoft, and IBM. Fourth Shift
is a Microsoft Solution Provider Partner. The Company's stock trades in the
United States on the NASDAQ National Market under the symbol FSFT.
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7900 International Drive, Minneapolis, MN 55425-1551, USA
Tel (612) 851-1500 - Fax (612) 851-1560
Asia 86-22-2831-9852 - Europe +44(0)118 975 4000 - Mexico 52-5-631-3725
Internet: http://www.fs.com - E-mail: [email protected]
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