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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) MARCH 16, 1999
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CENTENNIAL TECHNOLOGIES, INC.
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(Exact Name of Registrant as Specified in Charter)
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DELAWARE 1-12912 04-2978400
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
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7 LOPEZ ROAD, WILMINGTON, MASSACHUSETTS 01887
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (978) 988-8848
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ITEM 5. OTHER EVENTS.
On March 16, 1999, the Board of Directors of Centennial Technologies,
Inc. (the "Company"), declared a dividend of one Right for each outstanding
share of the Company's Common Stock to stockholders of record at the close of
business on March 31, 1999 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $.01 par value per share (the
"Preferred Stock"), at a Purchase Price of $6.00 in cash, subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement
dated as of March 16, 1999 (the "Rights Agreement") between the Company and
American Securities Transfer & Trust, Inc., 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 the later of (a) 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 15% or more of the
outstanding shares of Common Stock or (b) the first date on which an executive
officer of the Company has actual knowledge that an Acquiring Person has become
such (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 15% 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.
The Rights are not exercisable until the Distribution Date and will
expire upon the close of business on March 16, 2009 (the "Final Expiration
Date") unless earlier redeemed or exchanged 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. Except as otherwise determined by the Board of Directors
and except for shares of Common Stock issued
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upon exercise, conversion or exchange of then outstanding options, convertible
or exchangeable securities or other contingent obligations to issue shares, only
shares of Common Stock issued prior to the Distribution Date will be issued with
Rights.
In the event that any Person becomes an Acquiring Person, then, promptly
following the first occurrence of such event, 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, that number of shares of Common Stock
of the Company (or, in certain circumstances, cash, property or other securities
of the Company) which equals the exercise price of the Right divided by 50% of
the current market price (as defined in the Rights Agreement) per share of
Common Stock at the date of the occurrence of such event. However, Rights are
not exercisable following such event until such time as the Rights are no longer
redeemable by the Company as described below. Notwithstanding any of the
foregoing, following the occurrence of such event, 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 a "Section 11(a)(ii) Event."
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger or if the Company is the surviving entity, but shares of its outstanding
Common Stock are changed or exchanged for stock or securities (of any other
person) or cash or any other property, 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
50% 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
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on, or a subdivision, combination 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.
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 shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) 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.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors, a minimum preferential quarterly
dividend payment of $10 per share or, if greater, an aggregate dividend of 1,000
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 $1,000 per share and will be entitled to an
aggregate payment of 1,000 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with the
Common Stock. In the event of any merger, consolidation or other transaction in
which Common Stock is changed or exchanged, each share of Preferred Stock will
be entitled to receive 1,000 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.
At any time prior to the earlier of (i) the tenth Business Day (or such
later date as may be determined by the Board of Directors of the Company) after
the Stock Acquisition Date, or (ii) the Final Expiration Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"), payable in cash or stock. 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. The Rights
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may also be redeemable following certain other circumstances specified in 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 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.
The foregoing description of the Rights does not purport to be complete
and is qualified in its entirety by reference to such Exhibits.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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EXHIBIT NO. EXHIBIT
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4.1 Form of Rights Agreement, dated as of March
16, 1999, between Centennial Technologies,
Inc. and American Securities Transfer &
Trust, Inc. which includes as Exhibit A the
Certificate of Designations of the Series A
Junior Participating Preferred Stock, as
Exhibit B the Form of Rights Certificate,
and as Exhibit C the Summary of Rights to
Purchase Preferred Stock(1).
99.1 Press Release, dated March 16, 1999,
announcing adoption of the Stockholder
Rights Plan.
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(1) Incorporated herein by reference to the Registrant's Registration
Statement on Form 8-A, dated March 30, 1999, and filed with the
Securities and Exchange Commission on March 30, 1999.
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SIGNATURES
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 hereunto duly authorized.
Date: March 30, 1999 CENTENNIAL TECHNOLOGIES, INC.
By: /s/ L. Michael Hone
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L. Michael Hone
President and Chief Executive Officer
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EXHIBIT 99.1
Contact: Donald R. Peck
(978) 988-8848
FOR IMMEDIATE RELEASE
CENTENNIAL TECHNOLOGIES ADOPTS SHAREHOLDER RIGHTS PLAN
BOSTON, MA, MARCH 16, 1999 - CENTENNIAL TECHNOLOGIES, INC. (Ticker: CENL)
announced today that its Board of Directors adopted a Shareholder Rights Plan
under which Centennial shareholders will receive a stock purchase right for each
share of Common Stock they hold as of the close of business on March 31, 1999.
Centennial's President and Chief Executive Officer L. Michael Hone addressed the
reasons for the Shareholder Rights Plan - to strengthen the Board's ability to
protect shareholder interests in the event the Company is confronted with
coercive or unfair takeover tactics. "The rights plan will not restrict the
Board's consideration of any takeover offer. However, the Board wants to protect
the best interests of the Company's shareholders," said Hone. "Takeover tactics
may include partial or two-tiered tender offers that do not treat all
shareholders equally, the acquisition of shares constituting control without
offering fair value to all shareholders, or other abusive takeover tactics.
These tactics can unfairly pressure shareholders, squeeze them out of their
investment without giving them any meaningful choice, and deprive them of the
full value of their shares." Hone noted that more than 3,500 public companies
have adopted similar plans.
Each Right will entitle Centennial shareholders to purchase one one-thousandth
of a share of a new series of junior participating preferred stock of the
Company at an exercise price of $6.00 (the "Exercise Price"). The Rights will be
exercisable only if a person or group has acquired beneficial ownership of 15%
or more of the Company's Common Stock or announced a tender or exchange offer
that would result in such person or group owning 15% or more of the Company's
Common Stock.
If any person becomes the beneficial owner of 15% or more of the shares of the
Company's Common Stock (except, in general, pursuant to a tender or exchange
offer for all shares at a fair price as determined by the Company's Board of
Directors), each Right not owned by the 15% or more shareholder will enable its
holder to purchase, at the Exercise Price (in lieu of shares of junior
participating preferred stock), that number of shares of the Company's Common
Stock 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. In addition, if the Company is involved in a merger or other business
combination transaction not approved by the Company's Board of Directors with
another person or group in which it is not the surviving corporation or in
connection with which its Common Stock is changed or converted, or it sells or
transfers 50% or more of its assets or
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earning power to another person, each Right that has not previously been
exercised will entitle its holder to purchase that number of shares of Common
Stock of such other person 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 Company will generally be entitled to redeem the Rights at $.001 per Right
at any time until the 10th day following public announcement that any 15% stock
position has been acquired and in certain other circumstances. The Rights will
expire on March 16, 2009 unless earlier redeemed or exchanged.
This press release contains forward-looking statements. The matters expressed in
such statements are subject to numerous risks and uncertainties, including,
without limitation, the effectiveness of the Shareholder Rights Plan in
deterring tender or exchange offers that fail to provide shareholders with the
fair value of their investments in the Company, and other risks identified in
filings made by Centennial Technologies, Inc. with the Securities and Exchange
Commission (the "Commission") including Centennial's Form 10-Q filed with the
Commission on February 8, 1999 under the heading "Risk Factors."
Centennial Technologies, Inc. provides custom and industry standard PC Cards for
original equipment manufacturers. Centennial is a global leader in the
integration of patented and proprietary technology into application specific
cards for commercial, industrial and military markets. The Company's
headquarters and ISO 9001 certified engineering and manufacturing facility is
located in the Boston, Massachusetts area, with sales and services offices in
California, North Carolina, Indiana and Pennsylvania. The Company's
international sales and service operations are headquartered in the United
Kingdom. More information about Centennial can be obtained on the Internet at
http://www.cent-tech.com.
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