SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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
INSO CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 04-3216243
(State of Incorporation (IRS Employer
or Organization) Identification No.)
31 St. James Avenue, Boston, Massachusetts 02116
(Address of principal executive offices) (zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of each class to be so registered)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES
TO BE REGISTERED
On July 11, 1997, the Board of Directors of INSO Corporation
(the "Company"), declared a dividend of one preferred stock purchase
right (a "Right") for each outstanding share of the Company's
Common Stock to stockholders of record at the close of business on
July 24, 1997 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-
thousandth of a share (a "Unit") of Series A Junior Participating
Preferred Stock, $.01 par value per share (the "Preferred Stock"), at a
purchase price of $145 in cash per Unit (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement dated as of July 11, 1997 (the "Rights
Agreement") between the Company and State Street Bank & Trust
Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier
of (i) 10 business days (or such later date as may be determined by the
Board of Directors of the Company) following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business
days (or such later date as may be determined by the Board of
Directors of the Company) following the commencement of a tender
offer or exchange offer that would result in a person or group
beneficially owning 30% or more of such outstanding shares of
Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the rights), (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding, even without such
notation, will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
Houghton Mifflin Company shall not be deemed to be an
"Acquiring Person" unless Houghton Mifflin Company becomes after
the close of business on the Record Date the beneficial owner of more
than the Grandfathered Percentage of the shares of Common Stock
then outstanding (other than as a result of an acquisition of Common
Stock by the Company which, by reducing the number of shares of
Common Stock outstanding, increases the proportionate number of
shares of Common Stock beneficially owned by Houghton Mifflin
Company). "Grandfathered Percentage" shall mean, with respect to
Houghton Mifflin Company, the percentage of the outstanding shares
of Common Stock that Houghton Mifflin Company beneficially owns
as of the close of business on the Record Date plus an additional five
percentage points; provided, that, in the event Houghton Mifflin
Company shall sell, transfer, or otherwise dispose of any outstanding
shares of Common Stock after the close of business on the Record
Date, the Grandfathered Percentage shall, subsequent to such sale,
transfer or disposition, mean the lesser of (i) the Grandfathered
Percentage as in effect immediately prior to such sale, transfer or
disposition or (ii) the percentage of outstanding shares of Common
Stock that Houghton Mifflin Company beneficially owns immediately
following such sale, transfer or disposition plus an additional five
percentage points. No Person (other than Houghton Mifflin Company)
shall be deemed to be the "beneficial owner" of shares of Common
Stock that are issuable upon the exchange or redemption of the 6%
Exchangeable Notes due 1999 of Houghton Mifflin Company (known
as the "Stock Appreciation Income Linked Securities" or "SAILS")
until such shares are issued upon such exchange or redemption.
The Rights are not exercisable until the Distribution Date and
will expire upon the earliest of the close of business on July 24, 2007
(the "Final Expiration Date") or the redemption or exchange of the
Rights as described below.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, such separate Rights
Certificates alone will represent the Rights.
In the event that any Person becomes an Acquiring Person,
unless the event causing the 20% threshold to be crossed is a Permitted
Offer (as defined in the Rights Agreement), then, promptly following
the first occurrence of such event, proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) of the Rights Agreement) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price, in
lieu of a number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company that equals
the result obtained by (x) multiplying the then current Purchase Price
by the then number of one one-thousandths of a share of Preferred
Stock for which a Right is then exercisable, and (y) dividing that
product by 50% of the current market price per share of Common
Stock on the date of such first occurrence. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. The event summarized in this paragraph
is referred to as "Section 11(a)(ii) Event."
In the event that, at any time after any Person becomes an
Acquiring Person, (i) the Company is acquired in certain merger or
other business combination transactions in which the Company is not
the surviving corporation or its Common Stock is changed or
exchanged (other than a merger which follows a Permitted Offer), or
(ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously
have been voided as set forth above) shall thereafter have the right to
receive, upon exercise, that number of shares of common stock of the
acquiring company which equals the exercise price of the Right
divided by one-half of the current market price of such common stock
at the date of the occurrence of the event. The events summarized in
this paragraph are referred to as "Section 13 Events." A Section
11(a)(ii) Event and Section 13 Events are collectively referred to as
"Triggering Events."
At any time after the occurrence of a Section 11(a)(ii) Event,
subject to certain conditions, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such Acquiring
Person which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-thousandth of a share
of Preferred Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock 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, com-
bination or reclassification of, the Preferred Stock, (ii) if holders of the
Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the then-current
market price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or
retained earnings) or of subscription rights or warrants (other than
those referred to above).
The number of Rights associated with each share of Common
Stock is also subject to adjustment in the event of a stock split of the
Common Stock or a stock dividend on the Common Stock payable in
Common Stock or subdivisions, consolidations or combinations of the
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 a
minimum preferential quarterly dividend payment of $10 per share and
will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of Common Stock. In the event of liquidation, the
holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1000 per share and will be
entitled to an aggregate payment of 1000 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 1000
votes, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which Common Stock is
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.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of one one-thousandth of a
share of Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of
the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price
of the Preferred Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier of (i) the Distribution Date, or
(ii) the Final Expiration Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"), payable in cash, provided, however, that from and after the
time that any Person shall become an Acquiring Person (other than
pursuant to a Permitted Offer) and prior to the expiration of the
Company's redemption right, the Company may redeem the Rights
only if at the time of the action of the Board of Directors there are then
in office not less than two Continuing Directors (as defined in the
Rights Agreement) and such redemption is approved by a majority of
the Continuing Directors then in office. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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.
Subject to certain exceptions, any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the
Company prior to such time as the Rights are no longer redeemable.
A copy of the Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights, which includes as
Exhibit A the Form of Certificate of Designations, as Exhibit B the
Form of Rights Certificate, and as Exhibit C the Summary of Rights to
Purchase Preferred Stock, is filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K, dated July 11, 1997, and is incorporated
herein by reference. The foregoing description of the Rights
Agreement and the Rights does not purport to be complete and is
qualified in its entirety by reference to such Exhibit.
ITEM 2. EXHIBITS.
Exhibit No. Description
1 Rights Agreement, dated as of July 11, 1997
between INSO Corporation and State Street
Bank & Trust Company, as Rights Agent, which
includes as Exhibit A the Form of Certificate of
Designations, as Exhibit B the Form of Rights
Certificate, and as Exhibit C the Summary of
Rights to Purchase Preferred Stock.(1)
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(1) Incorporated by reference to the Registrant's Current Report on
Form 8-K, dated July 11, 1997 and filed by the Registrant with the
Commission.
SIGNATURE
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, thereunto duly
authorized.
Date: July 16, 1997 INSO CORPORATION
/s/ Bruce G. Hill
By: Bruce G. Hill
Title: Vice President and
General Counsel
EXHIBIT INDEX
Exhibit No. Description
1 Rights Agreement, dated as of July 11, 1997
between INSO Corporation and State Street
Bank & Trust Company, as Rights Agent, which
includes as Exhibit A the Form of Certificate of
Designations, as Exhibit B the Form of Rights
Certificate, and as Exhibit C the Summary of
Rights to Purchase Preferred Stock.(1)
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(1) Incorporated by reference to the Registrant's Current Report on
Form 8-K, dated July 11, 1997 and filed by the Registrant with the
Commission.
