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
January 27, 1997
Date of Report
(Date of earliest event reported)
CIDCO INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-23296 13-3500734
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
220 Cochrane Circle
Morgan Hill, California 95037
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(Address of principal executive offices and zip code)
(408) 779-1162
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. Other Events
On January 27, 1997, the Board of Directors of CIDCO Incorporated, a
Delaware corporation (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$0.01 per share (the "Common Shares"), of the Company. The dividend is payable
to all holders of record of Common Shares outstanding on February 14, 1997 (the
"Record Date"), and with respect to all Common Shares issued thereafter until
the earliest to occur of the Distribution Date (as defined below), the date on
which the Rights are redeemed or exchanged, and the expiration date of the
Rights (January 27, 2007) and, in certain circumstances with respect to Common
Shares issued after the Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $0.01 per share (the "Preferred Shares"), of the
Company, at a price of $95.00 per one one-thousandth 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") between the
Company and United States Trust Company of New York, as Rights Agent (the
"Rights Agent"), dated as of January 27, 1997, and made part of this Form 8-K as
Exhibit 1 hereto. The following description of the Rights is qualified by
reference to the Rights Agreement.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) ten days following a public announcement that a person or group
of affiliated or associated persons have acquired, or obtained the right to
acquire (except pursuant to a Permitted Offer, as hereinafter defined),
beneficial ownership of 15% or more of the outstanding Common Shares, or 25% or
more in the case of J.W. Seligman (the "Grandfathered Stockholder"), the only
Person known to be the beneficial owner of more than 15% of the Common Shares
outstanding on the Record Date; or (ii) ten business days (or such later date as
the Board of Directors may determine) following 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"). Any person or group whose acquisition of Common Shares
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."
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 or a
copy of the Company's Summary of Rights document 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
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of the Common Shares as of the close of business on the Distribution Date (and
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the later of the Distribution Date
or the effective date of a registration statement under the Securities Act of
1933, with respect to the securities purchasable upon exercise of the Rights,
and will expire at the close of business on January 27, 2007, unless earlier
redeemed or exchanged by the Company as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares 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 interest of the Company,
its stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise thereof at the then current exercise price of the Right, that number of
one one-thousandths of a share of Preferred Shares (or, in certain
circumstances, other securities of the Company) 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 Company is acquired in a merger or other business combination
transaction, or (ii) more than 50% of the Company's (including its Subsidiaries)
assets or earning power is sold or transferred, in either case, with or to 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 thereof at the then current exercise price of
the Right, that number of common shares of the acquiring company or in case of a
sale of assets, the common shares of the person obtaining the greatest portion
of the assets or earning power transferred, 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 Flip-In
Right.
The Purchase Price payable, and the number of one one-thousandths of a
Preferred Share, common shares 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 Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into Preferred Shares
with a conversion price, 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 quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
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The number of outstanding Rights and the number of one one-thousandths
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 $10.00 per share, but will be entitled to an
aggregate dividend per share of 1,000 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 $1,000 per share, with
the liquidation payment to holders of Preferred Shares to be 1,000 times the
aggregate amount, if any, to be distributed to the Common Shareholders. Each
Preferred Share will have 1,000 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
1,000 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-thousandth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
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 Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time after any person becomes an Acquiring Person, the Board of
Directors of the Company may exchange all or part of the then outstanding and
exercisable Rights (other than Rights that have become void as described above)
for Common Shares of the Company at an exchange ratio of one Common Share per
Right. The Board of Directors is not empowered to effect such exchange at any
time after any person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company, or any such Subsidiary, any entity
holding Common Shares for or pursuant to the terms of any such a plan), together
with all affiliates and associates of such person, becomes the beneficial owner
of 50% or more of the Common Shares then outstanding.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain
circumstances, the Company may redeem the Rights in whole, but not in part, at a
price of $0.01 per Right, subject to adjustment (the "Redemption Price") which
redemption shall be effective upon the action of the Board of Directors.
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All of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company 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 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 of the Company, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
The Rights Agreement dated as of January 27, 1997, between the Company
and the Rights Agent, specifying the terms of the Rights, the Form of
Certificate of Designation, Number, Powers, Preferences and Relative,
Participating, Optional and other Special Rights and Qualifications,
Limitations, Restrictions and other Distinguishing Characteristics of the
Preferred Shares (Exhibit A to the Rights Agreement), and the Form of Right
Certificate (Exhibit B to the Rights Agreement), are incorporated herein by
reference as Exhibits 1, 2, and 3. The foregoing description of the Rights is
qualified in its entirety by reference to such exhibits.
ITEM 7. Financial Statements and Exhibits
(c) The following exhibits are hereby made a part of this Form 8-K:
Exhibit 4.1 Rights Agreement dated as of January 27, 1997,
between CIDCO Incorporated (The "Company") and United
States Trust Company of New York, as Rights Agent
("Rights Agreements"), filed on February 4, 1997, as
Exhibit 1 to the Company's Registration Statement on
Form 8-A for the registration of rights to purchase
shares of the Company's Series A Junior Participating
Preferred Stock (the "Preferred Shares") pursuant to
Section 12 of the Securities Exchange Act of 1934
(the "Registration Statement"), is incorporated
herein by reference.
Exhibit 4.2 Form of Certificate of Designation, Number, Powers,
Preferences and Relative, Participating, Optional and
other Special Rights and Qualifications, Limitations,
Restrictions and other Distinguishing Characteristics
of the Preferred Shares (attached as Exhibit A to the
Rights Agreement filed as Exhibit 1 to the
Registration Statement), is incorporated herein by
reference.
Exhibit 4.3 Form of Right Certificate (attached as Exhibit B to
the Rights Agreement filed as Exhibit 1 to the
Registration Statement), is incorporated herein by
reference.
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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 thereunto duly authorized.
Date: February 12, 1997 CIDCO INCORPORATED
(Registrant)
By: /s/Paul G. Locklin
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Paul G. Locklin
President
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