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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
SYLVAN LEARNING SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Charter)
MARYLAND 52-1492296
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(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation)
9135 GUILFORD ROAD, COLUMBIA, MARYLAND 21046
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(Address of Principal Executive Offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so
registered Name of each exchange on which registered
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None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class to be so
registered Name of each exchange on which registered
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Preferred Share Purchase Rights Nasdaq Stock Market
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED:
The Board of Directors of Sylvan Learning Systems, Inc. (the "Company")
has authorized a distribution of one preferred share purchase right (a "Right")
for each outstanding share of common stock, par value $.01 per share (the
"Common Shares"), of the Company. The dividend is payable on November 7, 1996
(immediately after the Company's 3-for-2 stock split is effected in the form of
a dividend (the "Stock Dividend")) to stockholders of record on October 7, 1996
(the "Record Date"). The terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and State Street Bank &
Trust Company, as Rights Agent (the "Rights Agent"), dated as of October 7,
1996, as amended from time to time.
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of a Series A Junior Participating Preferred Stock,
without par value, of the Company (the "Preferred Shares") at a price of $157.00
per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The $157.00 Purchase Price was determined after taking into
consideration the Stock Dividend.
Until the earlier to occur of (i) 20 business days following a public
announcement that an "Acquiring Person" acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Shares or
(ii) 20 business days following the commencement or announcement of an intention
to make a tender offer or exchange offer the consummation of which would result
in the "Acquiring Person" becoming the beneficial owner of 15% 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 with a summary description of the Rights attached thereto.
Acquiring Person is defined as any person or group of affiliated or associated
persons, other than (i) employee benefit plans of the Company and its
subsidiaries or (ii) R. William Pollock, as long as he does not acquire more
than an additional 1% of the outstanding Common Shares during the term of the
Rights Agreement, other than Common Shares issued in connection with the
Company's December 1995 acquisition of Drake Prometric, L.P. 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 the
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 or a summary
description of the Rights being attached thereto, 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.
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The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 7, 2006, unless earlier redeemed 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
or warrants to subscribe for Preferred Shares or convertible securities at less
than the 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 out of earnings or retained
earnings or dividends payable in Preferred Shares) or of subscription rights or
warrants (other than those referred to above). The number of outstanding Rights
and the number of one one-hundredths 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.
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 Preferred or Common Shares will be issued
(other than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, a payment in cash will
be made based on the market price of the Preferred or Common Shares on the last
trading date prior to the date of exercise.
In the event that the Company were acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power were sold, proper provision will be made so that each holder of a
Right shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the exercise price of the Right. In the event that
the Company were the surviving corporation in a merger and the Common Shares
were not changed or exchanged, or in the event that any person becomes the
beneficial owner of 20% or more of the Company's Common Shares and hence an
Acquiring Person (other than pursuant to a cash tender offer for all outstanding
shares which is determined by a majority of the members of the Board of
Directors who are not officers of the Company to be fair and in the best
interest of stockholders) or engages in one of a number of self-dealing
transactions specified in the Rights Agreement (a "Flip-In Event"), proper
provision will be made so that each holder of a Right, other than Rights that
are or were beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the Right
(or Preferred Shares if so elected by the
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Board of Directors). However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time as the Rights
are no longer redeemable by the Corporation as set forth below.
At any time until twenty days following the date a person becomes an
Acquiring Person, the Company, by a vote of the Board of Directors that includes
the concurrence of a majority of the Disinterested Directors, may redeem the
Rights in whole, but not in part, at a price of $.05 per Right (the "Redemption
Price"). The right of redemption also may be reinstated under certain
circumstances described in the Rights Agreement, including if a term, provision,
covenant or restriction of the Rights Agreement is held by a court or other
authority to be invalid, void or unenforceable. Under no circumstances
following the occurrence of a Flip-In Event may the Rights be exercised prior to
the expiration of the Company's twenty day right of redemption. Immediately
upon the action of the Board of Directors ordering redemption of the Rights,
with, where required, the concurrence of a majority of Disinterested Directors,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price. The term
"Disinterested Director" shall mean any member of the Board of Directors of the
Company, while such Person is a member of the Board, who is not (i) an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, or (ii) a Person,
an Affiliate, Associate, or representative of a Person, any of whom has stated
an intent to take, or to consider taking, any action which would result in such
Person becoming an Acquiring Person, or which would cause a Triggering Event.
At any time after any person becomes an Acquiring Person, the Board of
Directors of the Company may, at its option, exchange all or part of the then
outstanding and exercisable Rights (excluding Rights of an Acquiring Person that
have become void) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof. Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Acquiring Person, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding. In lieu of Common Shares, the Board of
Directors may elect to substitute Preferred Shares for any such exchange.
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. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
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
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$5.00 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 the Common Shares. Finally, in the event of any
merger, consolidation or other 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 protected by customary antidilution
provisions.
Other than an amendment to those provisions relating to the principal
economic terms of the Rights or to shorten the final expiration date of the
Rights Agreement, any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date,
including, without limitation, any amendment deemed to be necessary or
appropriate in light of any judicial or other legal developments, whether or not
binding precedent in respect of the Rights Agreement. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board (in
certain circumstances, with the concurrence of a majority of the Disinterested
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interest of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
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governing redemption shall be made at such time as the Rights are not
redeemable. Without limiting any of the foregoing, at any time prior to a
Person (other than certain employee benefit plans of the Company) becoming an
Acquiring Person, the Board may amend the Rights Agreement to lower the
threshold for exercisability of the Rights (and the determination of the
existence of an Acquiring Person) from 15% to any percentage greater than the
greater of (i) the largest percentage of outstanding Common Shares then known to
the Company to be beneficially owned by any Person or group of affiliated or
associated persons (other than employee benefit plans of the Company and its
subsidiaries) and (ii) 10%.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Current Report on Form 8-K
dated September 27, 1996 and filed with the Securities and Exchange Commission
on October 2, 1996. 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 amended from time to time, which is hereby incorporated herein by reference.
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ITEM 2. EXHIBITS.
1. Rights Agreement between the Company and State Street Bank & Trust
Company, as Rights Agent, dated as of October 7, 1996, which
includes as Exhibit A the Form of Right Certificate. Pursuant to
the Rights Agreement, Right Certificates will not be mailed until
as soon as practicable after the earlier of the twentieth business
day following announcement that a person or group has acquired
beneficial ownership of 15% or more of the Common Shares or the
twentieth business day after a person commences or announces its
intention to commence an offer the consummation of which would
result in a person beneficially owning 15% or more of the Common
Shares.
SIGNATURES
Pursuant to the requirements of Section 12 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.
SYLVAN LEARNING SYSTEMS, INC.
By: /s/ B. Lee McGee
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B. Lee McGee, Senior Vice President
and Chief Financial Officer
Date: October 29, 1996
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EXHIBIT INDEX
Exhibit Description
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1.** Rights Agreement between the Company and State Street Bank & Trust
Company, as Rights Agent, dated as of October 7, 1996 which includes as
Exhibit A the Form of Right Certificate. Pursuant to the Rights
Agreement, Right Certificates will not be mailed until as soon as
practicable after the earlier of the twentieth business day following
announcement that a person or group has acquired beneficial ownership
of 15% or more of the Common Shares or the twentieth business day after
a person commences or announces its intention to commence an offer the
consummation of which would result in a person beneficially owning 15%
or more of the Common Shares.
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** Incorporated by reference to the Company's Current Report on Form 8-K
dated September 27, 1996 and filed with the Securities and Exchange
Commission on October 2, 1996.
