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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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): May 26, 1998
Badger Meter, Inc.
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(Exact name of registrant as specified in its charter)
Wisconsin 1-6706 39-0143280
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
4545 West Brown Deer Road, Milwaukee, Wisconsin 53223
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(Address of principal executive offices, including zip code)
(414) 355-0400
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(Registrant's telephone number)
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Item 5. Other Events.
On May 15, 1998, the Board of Directors of Badger Meter, Inc.
(the "Company") declared a dividend of one common share purchase right (a
"Right") for each outstanding share of common stock, $1.00 par value, of the
Company (the "Common Shares"). The dividend is payable on June 15, 1998 to the
shareholders of record on June 1, 1998 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one Common Share at
a price of $140.00 per Common Share, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement dated May 26, 1998 (the "Rights Agreement"), between the Company and
Firstar Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, a subsidiary of the Company, an employee benefit plan of the
Company or a subsidiary or a trustee thereof, or the voting trust created by
the Badger Meter Voting Trust Agreement dated as of June 1, 1953, as amended,
the voting trust created by the Badger Meter Officers Voting Trust Agreement
dated as of December 18, 1991, as amended, or any trustee of such voting trusts
(the "Voting Trusts and Trustees")) (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding Common Shares (the
"Shares Acquisition Date") or (ii) 10 business days (or such later date as may
be determined by action of the Company's Board of Directors prior to such time
as any person 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 (other than the Company, a subsidiary of the Company, an employee benefit
plan of the Company or a subsidiary or the Voting Trusts and Trustees) of 20%
or more of such outstanding Common Shares (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with respect to
any of the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date, upon
transfer or new issuance of Common Shares, will contain a notation
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 Common Shares, outstanding as of the Record Date, even
without such notation, will also constitute the transfer of the Rights
associated with the Common Shares 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 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 May 26, 2008 (the "Final Expiration Date"), unless
the Rights are earlier redeemed or exchanged by the Company, or the Rights Plan
is amended, in each case as described below.
The Purchase Price payable, and the number of Common 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 Common
Shares; (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with
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a conversion price, less than the then current market price of the Common
Shares; or (iii) upon the distribution to holders of the Common Shares of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
or dividends payable in Common Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of Common
Shares 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.
In the event that any person becomes an Acquiring Person (a
"Flip-In Event"), each holder of a Right will thereafter generally have the
right to receive upon exercise that number of Common Shares (or, in certain
circumstances cash, property or other securities of the Company or a reduction
in the Purchase Price) having a market value of two times the then current
Purchase Price. Notwithstanding any of the foregoing, following the occurrence
of a Flip-In Event all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, or subsequently become beneficially
owned by an Acquiring Person, related persons and transferees will be null and
void.
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction or (ii) 50% or more of its consolidated assets or
earning power are sold (the events described in clauses (i) and (ii) are herein
referred to as "Flip-Over Events"), proper provision will be made so that each
holder of a Right will (subject to the limitations set forth in the Rights
Agreement) 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
acquiring company which at the time of such transaction will have a market
value of two times the then current Purchase Price.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Common Shares will be issued. In
lieu thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading day prior to the date of exercise.
The Purchase Price is payable by certified check, cashier's
check, bank draft or money order or, if so provided by the Company, the
Purchase Price following the occurrence of a Flip-In Event and until the first
occurrence of a Flip-Over Event may be paid in Common Shares having an
equivalent value.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by any Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by any Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
At any time prior to a person becoming 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"). 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.
Immediately upon
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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.
Other than provisions relating to certain of the principal
economic terms of the Rights, the terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to lower the threshold for exercisability of the
Rights from 20% to not less than 10%, with appropriate exceptions for any
person then beneficially owning a percentage of the number of Common Shares
then outstanding equal to or in excess of the new threshold, except that from
and after the Distribution Date no such amendment may adversely affect the
interests of the holders of the Rights.
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.
As of May 20, 1998, there were 3,316,028 Common Shares issued
and outstanding (and 1,843,028 Common Shares reserved for issuance, including
the Common Shares reserved for issuance upon conversion of the Class B Common
Stock, $.10 par value, of the Company (the "Class B Common Stock")). Each
outstanding Common Share on the Record Date will receive one Right. As long as
the Rights are attached to the Common Shares, the Company will issue one Right
for each Common Share which becomes outstanding between the Record Date and the
Distribution Date so that all such shares will have attached Rights.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on redemption of the Rights or on a
substantial number of Rights being acquired. The Rights should not interfere
with any merger or other business combination approved by the Board of
Directors of the Company prior to the time that the Rights may not be redeemed
(as described above) since the Board of Directors may, at its option, at any
time until the Shares Acquisition Date redeem all but not less than all the
then outstanding Rights at $.01 per Right. In addition to the Company's
current two class capital structure, with holders of shares of Class B Common
Stock having ten votes per share in contrast to the one vote per share
available to holders of Common Shares, the Rights are designed to provide
additional protection against abusive takeover tactics such as offers for all
shares at less than full value or at an inappropriate time (in terms of
maximizing long-term shareholder value), partial tender offers and selective
open-market purchases. The Rights are intended to assure that the Company's
Board of Directors has the ability to protect shareholders and the Company if
efforts are made to gain control of the Company in a manner that is not in the
best interests of the Company and its shareholders.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Right Certificate, is attached hereto as an exhibit. The foregoing description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to such exhibit.
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Item 7. Financial Statements and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibit is being filed
herewith:
(4.1) Rights Agreement, dated as of May 26, 1998,
between Badger Meter, Inc. and Firstar Trust
Company. [Incorporated by reference to
Exhibit (4.1) to the Registration Statement
on Form 8-A of Badger Meter, Inc., dated as
of May 26, 1998 (Commission File No. 1-6706)]
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SIGNATURES
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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 thereunto duly authorized.
BADGER METER, INC.
Date: May 26, 1998 By:/s/ James L. Forbes
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James L. Forbes
President and Chief Executive
Officer
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BADGER METER, INC.
Exhibit Index to Current Report on Form 8-K
Dated May 26, 1998
Exhibit
Number
(4.1) Rights Agreement, dated as of May 26, 1998, between Badger
Meter, Inc. and Firstar Trust Company. [Incorporated by
reference to Exhibit (4.1) to the Registration Statement on
Form 8-A of Badger Meter, Inc., dated as of May 26, 1998
(Commission File No. 1-6706)]
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