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)
May 15, 2000
IVC INDUSTRIES, INC.
--------------------
(Exact name of registrant as specified in its charter)
Delaware
--------
(State or other jurisdiction of incorporation)
0-23624 22-1567481
------- ----------
(Commission file number) (IRS employer identification number)
500 Halls Mill Road, Freehold, New Jersey 07728
-----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number: (732) 308-3000
<PAGE>
ITEM 5. OTHER EVENTS
On May 15, 2000, the Board of Directors of IVC Industries, Inc. (the
"Corporation") declared a dividend distribution of one preferred stock purchase
right (a "Right") for each outstanding share of Common Stock, par value $0.08
per share (the "Common Stock"), of the Corporation. The dividend is payable to
the shareholders of record on May 24, 2000 (the "Record Date"), and with respect
to shares of Common Stock issued thereafter until the Distribution Date (as
defined below) and, in certain circumstances, with respect to shares of Common
Stock issued after the Distribution Date. Except as set forth below, each Right,
when it becomes exercisable, entitles the registered holder to purchase from the
Corporation one-thousandth of a share of Series A Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), of the Corporation at a price of $21
per one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement between the Corporation and American Stock Transfer & Trust Company,
as Rights Agent, dated as of May 15, 2000 (the "Rights Agreement").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the shares of
Common Stock upon the earliest to occur of (i) expiration of the Board's right
to redeem the Rights during the 10 day period (or any extension of such 10 day
period) (the "Window Period") following the date a person or group of affiliated
or associated persons (other than exempted shareholders) becomes the beneficial
owner of 15% or more of the outstanding shares of Common Stock (except pursuant
to a Permitted Offer, as hereinafter defined, or if the acquisition is approved
in advance by the Board of Directors); or (ii) the close of business on the
tenth day (or such later date as the Board may determine) after the commencement
of, or announcement of an intention to make, a tender offer or exchange offer,
the consummation of which would result in a person or group becoming an
Acquiring Person (as hereinafter defined) (the earliest of such dates being
called the "Distribution Date"). A person or group whose acquisition of shares
of Common Stock causes a Distribution Date pursuant to clause (i) above is an
"Acquiring Person." The date that a person or group becomes an Acquiring Person
is the "Shares Acquisition Date." Notwithstanding the foregoing, an Acquiring
Person shall not include (i) any person who or which, together with all
affiliates and associates of such person, as of the close of business on the day
the Corporation publicly announces that the Board of Directors has adopted the
Rights Agreement (the "Announcement Date"), was the beneficial owner of more
than 15% of the shares of Common Stock, and (ii) E. Joseph Edell, Arthur S.
Edell, Marc Z. Edell, their respective spouses and descendants and the spouses
of such descendants, and any trust, the entire beneficial interest of which is,
during the term of such trust held for the benefit of one or more of the
foregoing individuals, and (iii) Andrew Pinkowski; provided, however, that any
such person, together with all affiliates and associates of such person, shall
cease to be exempt from being an Acquiring Person if the number of shares of
Common Stock beneficially owned by that person (by acquisition), together with
all affiliates and associates of such person, (other than as a result of a stock
dividend, stock split or stock distribution by the Corporation) exceeds by more
than one percent of the number of shares of Common Stock beneficially owned by
that person, together with all affiliates and associates of such person, as of
the Announcement Date.
2
<PAGE>
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the shares of Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights) new
Common Stock certificates issued after the Record Date upon transfer or new
issuance of shares of Common Stock 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 shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of the Summary of Rights being attached thereto,
also will constitute the transfer of the Rights associated with the shares of
Common Stock 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 shares of Common Stock
as of the close of business on the Distribution Date (and to each initial record
holder of certain shares of Common Stock issued after the Distribution Date),
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 15, 2010, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person (except (i)
pursuant to a tender or exchange offer which is for all outstanding shares of
Common Stock at a price and on terms which a majority of certain members of the
Board of Directors determines to be adequate and in the best interests of the
Corporation, its shareholders and other relevant constituencies, other than such
Acquiring Person, its affiliates and associates (a "Permitted Offer") or (ii)
pursuant to an acquisition of shares of Common Stock which is approved in
advance by the Board of Directors of the Corporation), each holder of a Right
will thereafter have the right (the "Flip-In Right") to receive upon exercise
thereof the number of shares of Common Stock or of one-thousandths of a share of
Preferred Stock (or, in certain circumstances, other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding shares of Common
Stock immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in
either case with or to an Acquiring Person or any affiliate or associate or any
other person in which such Acquiring Person, affiliate or associate has an
interest or any person acting on behalf of or in concert with such Acquiring
Person, affiliate or associate, or, if in such transaction all holders of shares
of Common Stock are not treated alike, any other person, then each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
common shares of the acquiring company having a value equal to two times the
exercise price of the Right. The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises or surrenders the
3
<PAGE>
Flip-In Right. However, in the event that any person becomes an Acquiring
Person, the Board of Directors may, within a ten-day period (or any extension
thereof) following the date that such person becomes known to be an Acquiring
Person (the "Window Period"), redeem the rights or extend the Window Period in
order to prevent or delay the implementation of the Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred
Stock, Common Stock or other securities 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 Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase shares of Preferred
Stock at a price, or securities convertible into shares of Preferred Stock with
a conversion price, less than the then current market price of the shares of
Preferred Stock, or (iii) upon the distribution to holders of the shares of
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one-thousandths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the shares of Common
Stock or a stock dividend on the shares of Common Stock payable in shares of
Common Stock or subdivisions, consolidations or combinations of the shares of
Common Stock occurring, in any such case, prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to an aggregate
dividend per share of 1000 times the dividend declared per share of Common
Stock. In the event of liquidation, first the holders of the Corporation's Class
A Preferred Stock will be entitled to a preferential liquidation payment of
$0.01 per share; thereafter, the holders of the shares of Preferred Stock and
the shares of Common Stock will share the remaining assets in the ratio of 1000
to 1 (as adjusted) for each share of Preferred Stock and Common Stock so held,
respectively. In the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are one-thousandth or integral multiples of
one-thousandth of a share of Preferred Stock, which may, at the election of the
Corporation, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the shares of
Preferred Stock on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) expiration of the
Window Period following a person becoming an Acquiring Person or (ii) the
expiration of the Rights, and under certain other circumstances, the Corporation
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price") which redemption shall be effective upon the action of
the Board of Directors. Additionally, following a Shares Acquisition Date and
the
4
<PAGE>
expiration of the period during which the holder of Rights may exercise the
Rights, the Corporation may redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price, provided that such redemption (a) is in
connection with a merger or other business combination transaction or series of
transactions involving the Corporation in which all holders of shares of Common
Stock are treated alike but not involving an Acquiring Person or its affiliates
or associates, or (b) if and for so long as the Acquiring Person does not own
15% or more of the voting power of the Corporation and there are no other
Acquiring Persons.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Corporation, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders of the Corporation, shareholders may,
depending upon the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit hereto and made a part hereof. A copy of
the Rights Agreement will be provided upon written request (directed to the
Secretary, at the Corporation's executive offices) for a fee limited to the
Corporation's reasonable expenses in furnishing such exhibit. 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.
As of April 30, 2000, there were 2,088,092 shares of Common Stock
outstanding. In addition, 329,709 shares of Common Stock were reserved for
issuance upon conversion of outstanding Options. Each outstanding share of
Common Stock on the Record Date will receive one Right. As long as the Rights
are attached to the Common Stock, the Corporation will issue one Right with each
new share of Common Stock so that all such shares will have attached Rights.
5,000 shares of Series A Preferred Stock have been reserved for issuance upon
exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired. However, the Rights should not
interfere with any merger or other business combination approved by the
Corporation because the Rights are redeemable under certain circumstances.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, IVC
Industries, Inc. has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
IVC INDUSTRIES, INC.
By: /s/ E. Joseph Edell
---------------------------
E. Joseph Edell
Chairman of the Board and
Chief Executive Officer
Date: May 22, 2000
6
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
10.1 Rights Agreement, dated as of May 15, 2000 between IVC Industries,
Inc. and American Stock Transfer and Trust Company, as Rights Agent,
which includes, as Exhibit A thereto, Form of the Certificate of
Designation, Powers, Preferences and Rights of Series A Preferred
Stock of IVC Industries, Inc., as Exhibit B thereto, Form of Rights
Certificate, and as Exhibit C thereto, Summary of Rights to Purchase
Preferred Stock, incorporated herein by reference to Exhibit 1 to
the Company's Registration 10.1 Statement on Form 8-A, filed on May
19, 2000.
99.1 Press Release, dated May 16, 2000.
7
Exhibit 99.1
IVC INDUSTRIES, INC.
SHAREHOLDER RIGHTS PLAN
Freehold, New Jersey
May 16, 2000
IVC Industries, Inc. (Nasdaq-SCM: IVCO) announced today that its
Board of Directors has adopted a Shareholder Rights Plan designed to protect
shareholders from various abusive takeover tactics, including attempts to
acquire control of the Company at an inadequate price. The Plan also is intended
to provide additional protection from partial or two-tiered takeover attempts,
coercive stock accumulation programs, street sweeps and other tactics that may
be used to gain control of the Company without offering an adequate price to all
shareholders.
Under the Plan, each shareholder will receive a dividend of one
Right for each share of the Company's outstanding Common Stock. Each Right will
entitle the holder to purchase one-thousandth of a share of Series A Preferred
Stock of the Company at an initial exercise price of $21.
Initially, the Rights are attached to the Company's Common Stock and
are not exercisable. They become detached from the Common Stock, and become
immediately exercisable, (i) following expiration of the Board's right to redeem
the Rights during the 10 day period, after any person or group (other than an
exempted shareholder) becomes the beneficial owner of 15 percent or more of the
Company's Common Stock (other than acquisitions which are approved in advance by
the Company's Board of Directors) (the "Window Period"), or any
8
<PAGE>
extension of that period, or (ii) ten days after any person or group announces a
tender or exchange offer that would result in that same beneficial ownership
level (other than pursuant to certain permitted offers).
If a person (other than an exempted shareholder or pursuant to a
pre-approved acquisition) becomes a 15 percent owner in the Company, all Rights
holders, other than such person, will be entitled to purchase shares of the
Company's stock at a discounted price. If the Company is acquired in a merger
after such an acquisition, all Rights holders except the buyer also will be
entitled to purchase stock in the buyer at a discount.
The Plan exempts any existing shareholder (including E. Joseph
Edell, the Company's Chief Executive Officer and certain members of his family
and Andrew Pinkowski a member of the Board of Directors) and their heirs and
entities controlled by them (currently the beneficial owners of approximately
1,210,000 shares of Common Stock), so long as the number of shares of Common
Stock beneficially owned by that shareholder does not exceed, with respect to
all such exempt shareholders, by more than one percent (by acquisition) the
number of shares of Common Stock beneficially owned by that shareholder as of
today. Accordingly, all shareholders beneficially owning (or contemplating
transactions in which they would beneficially own) more than 15% of the
Company's Common Stock should read the Plan carefully before acquiring
additional shares after today. The Plan also exempts acquisitions which, as
described above, are approved in advance by the Board of Directors.
The distribution of Rights will be made to common shareholders of
record on May 24, 2000, and shares of Common Stock that are newly-issued after
that date will also carry Rights until the Rights become detached from the
Common Stock. The Rights will expire on
9
<PAGE>
May 15, 2010. The Company may redeem the Rights for $0.01 each at any time prior
to and during the Window Period, or any extension thereof, after a buyer
acquires a 15 percent position in the Company, and under certain other
circumstances. The Rights distribution is not taxable to shareholders.
Details of the Plan are included with a letter which will be mailed
to all of the Company's shareholders.
