UNITED STATES 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
January 15, 2001
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(Date of earliest event reported)
Sundog Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-24372 33-0611746
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
10542 South Jordan Gateway, Suite 200
South Jordan, Utah 84005
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (801) 501-7100
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Item 5. Other Events
Effective as of January 31, 2001, the Board of Directors of Sundog
Technologies, Inc. (the "Company") declared a dividend of one Right for each
outstanding share of Common Stock of the Company to shareholders of record at
the close of business on January 31, 2001. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Preferred Shares (the "Preferred Shares") at a Purchase Price of $60.00, subject
to adjustment. The description and terms of the Rights are set forth in a
Shareholder Rights Agreement (the "Rights Agreement") between the Company and
Atlas Stock Transfer Corporation, as Rights Agent.
Initially, the Rights will be attached to the certificates representing
outstanding shares of Common Stock, 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) subject to certain exceptions, ten days
following a public announcement that a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire from
shareholders, beneficial ownership of 15 percent or more of the outstanding
Common Stock or the Board of Directors of the Company shall declare any person
to be an Adverse Person (as described below) (each, an "Acquiring Person") or
(ii) ten days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15 percent or more of
such outstanding Common Stock, as such periods may be extended pursuant to the
Rights Agreement.
An Adverse Person is any person declared to be an Adverse Person by the
Board of Directors upon a determination that such person, alone or together with
its affiliates and associates, has become the beneficial owner of an amount of
Common Stock which the Board of Directors determines to be substantial (which
amount shall be more than 10% of the Common Stock then outstanding) and a
determination by at least a majority of the Board of Directors who are not
officers of the Company, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem appropriate, that
(i) such beneficial ownership by such person is intended to cause the Company to
repurchase the Common Stock beneficially owned by such person or to cause
pressure on the Company to take action or enter into a transaction or series of
transactions intended to provide such person with short-term financial gain
under circumstances where the Board of Directors determines that the best
long-term interests of the Company and its shareholders would not be served by
taking such action or entering into such transactions or series of transactions
at that time or (ii) such beneficial ownership is causing or reasonably likely
to cause a material adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's ability to maintain
its competitive position) on the business or prospects of the Company.
Until the Distribution Date, (i) the Rights will be evidenced by and
will be transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after January 31, 2001, will contain a legend
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificate for Common Stock 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 at the close of business on December 1, 2010, unless earlier redeemed by
the Company as described below.
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As soon as practicable after the Distribution Date, 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, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only Common Stock issued prior to the time the Rights
become exercisable or issued upon exercise or conversion of rights, warrants,
options or convertible securities issued prior to the time the Rights become
exercisable will be issued with Rights.
In the event that any person becomes an Acquiring Person, subject to
the Company's rights of waiver and redemption, each holder of a Right shall
thereafter have the right to receive, upon exercise, in lieu of Preferred
Shares, Common Stock of the Company (or, in certain circumstances, cash,
property or other securities of the Company) having a market value equal to two
times the exercise price of the Right (a "Flip-In Conversion"). However, Rights
are not exercisable as described in this paragraph until such time as the Rights
are no longer redeemable by the Company as described below and the Flip-In
Conversion is no longer subject to waiver by the Board as described below.
Notwithstanding any of the foregoing, if any person becomes an Acquiring Person
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by an Acquiring Person will become null and
void.
For example, at an exercise price of $60 per Right, each Right not
owned by the Acquiring Person (or by certain related parties or transferees)
following the event set forth in the preceding paragraph would entitle its
holder to purchase $120 worth of Common Stock (or other consideration, as noted
above) for $60. Assuming that the Common Stock had a per share value of $10 at
such time, the holder of each valid Right would be entitled to purchase twelve
shares of Common Stock for $60.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation or in which the Common Stock
are exchanged for stock or other securities or property, or (ii) 50 percent 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, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right.
The Purchase Price payable, and the number of one one-hundredths of a
share 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 or the Common Stock, (ii) if holders
of the Preferred Shares are granted certain rights or warrants to subscribe for
Preferred Shares or convertible securities at less than the current market price
of the Preferred Shares, (iii) if holders of Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible securities at
less than the current market price of the Common Stock, or (iv) upon the
distribution to holders of Preferred Shares or Common Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price or the
number of Preferred Shares issuable upon exercise of a Right will be required
until cumulative adjustments would require an increase or decrease of at least 1
percent. No fractional Preferred Shares will be issued (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Shares) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
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At any time until a determination that any person is an Adverse Person
or ten days (or longer if extended pursuant to the terms of the Rights
Agreement) after a person otherwise becomes an Acquiring Person, the Company may
(i) redeem the Rights in whole, but not in part, at a price of $.001 per Right
(payable in cash, Common Stock or other consideration), appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof, or (ii) waive the respective Flip-In Conversion.
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 $.001 redemption price.
At any time after a person becomes an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of Preferred
Shares (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).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder 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 shareholders or to the Company, shareholders 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.
The Preferred Shares will be non-redeemable. The Preferred Shares may
rank on a lower priority in respect of the preference as to dividends and the
distribution of assets with other classes or series of the Company's preferred
shares. Each Preferred Share will be entitled to an aggregate of 100 times the
cash and non-cash (payable in kind) dividends and distributions (other than
dividends and distributions payable in Common Shares) declared on the Company's
Common Stock. In the event of liquidation, the holders of Preferred Shares will
be entitled to receive a liquidation payment in an amount equal to 100 times the
payment made per Common Share, plus an amount equal to declared and unpaid
dividends and distributions thereon. In the event of any merger, consolidation
or other transaction in which Common Stock is exchanged, each Preferred Share
will be entitled to receive 100 times the amount received per share of Common
Stock. The dividend and liquidation rights of the Preferred Stock are protected
by antidilution provisions. Each Preferred Share will be entitled to 100 votes
(subject to certain adjustments) on all matters submitted to the shareholders.
A copy of the Rights Agreement is attached as an Exhibit hereto. 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
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits
3.1 Certificate of Designation re: Series A Preferred
Stock
10.1 Rights Agreement dated as of December 22, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned thereunto duly authorized.
Sundog Technologies, Inc.
By: /s/ Stephen L. Russo
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Stephen L. Russo
Vice President of Operations
and Chief Financial Officer
Date: January 17, 2001
