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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
PAULA FINANCIAL
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(Exact name of registrant as specified in its charter)
Delaware 95-4640368
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(State of incorporation or organization) (IRS Employer Identification No.)
300 North Lake Avenue, Suite 300, Pasadena, California 91101
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box: / /
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box: /x/
Securities Act registration statement file number to which this form relates:
Not applicable.
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None
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Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Preferred Stock, $0.01 par value per share
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(Title of class)
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(Title of class)
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PAULA FINANCIAL
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 24, 1998, the Board of Directors of PAULA
Financial (the "Company") authorized and declared a dividend of one preferred
stock purchase right (a "Right") for each share of common stock, par value
$0.01 per share, of the Company (the "Common Shares"). The dividend is payable
on October 1, 1998 (the "Record Date") to the holders of record of Common Shares
as of the close of business on such date.
The following is a brief description of the Rights. It is
intended to provide a general description only and is subject to the detailed
terms and conditions of a Rights Agreement (the "Rights Agreement") dated as of
October 1, 1998 by and between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agent).
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below),
(a) the Rights shall not be exercisable, (b) the Rights shall be attached to and
trade only together with the Common Shares and (c) the stock certificates
representing Common Shares shall also represent the Rights attached to such
Common Shares. Common Share certificates issued after the Record Date and prior
to the Distribution Date shall contain a notation incorporating the Rights
Agreement by reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of (a) the
tenth business day (or such later day as shall be desiginated by
the Board of Directors) following the date of the first public announcement
that any person (other than the Company or certain related entities, and with
certain additional exceptions) has become the beneficial owner of 10% or more of
the then outstanding Common Shares (such person is a "10% Stockholder" and the
date of such public announcement is the "10% Ownership Date"), (b) the tenth
business day (or such later day as shall be designated by the Board of
Directors) following the date of the commencement of, or the announcement of an
intention to make, a tender offer or exchange offer, the consummation of which
would cause any person to become a 10% Stockholder or (c) the first date, on or
after the 10% Ownership Date, upon which the Company is acquired in a merger or
other business combination in which the Company is not the surviving corporation
or in which the outstanding Common Shares are changed into or exchanged for
stock or assets of another person, or upon which 50% or more of the Company's
consolidated assets or earning power are sold (other than in transactions in the
ordinary course of business). In calculating the percentage of outstanding
Common Shares that are beneficially owned by any person, such person shall be
deemed to beneficially own any Common Shares issuable upon the exercise,
exchange or conversion of any options, warrants or other securities beneficially
owned by such person; provided, however, that such Common Shares issuable upon
such exercise shall not be deemed outstanding for the
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purpose of calculating the percentage of Common Shares that are beneficially
owned by any other person.
Upon the close of business of the Distribution Date, the
Rights shall separate from the Common Shares, Right certificates shall be
issued, and the Rights shall become exercisable to purchase Preferred Shares as
described in Section 5 below.
3. ISSUANCE OF RIGHT CERTIFICATES
As soon as practicable following the Distribution Date,
separate certificates representing only Rights shall be mailed to the holders of
record of Common Shares as of the close of business on the Distribution Date,
and such separate Right certificates alone shall represent such Rights from and
after the Distribution Date.
4. EXPIRATION OF RIGHTS
The Rights shall expire on October 1, 2008, unless earlier
redeemed or exchanged.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged,
they may be exercised, at the option of the holders, pursuant to paragraphs (a),
(b) or (c) below. No Right may be exercised more than once or pursuant to more
than one of such paragraphs. From and after the first event of the type
described in paragraphs (b) or (c) below, each Right that is beneficially owned
by a 10% Stockholder or that was attached to a Common Share that is subject to
an option beneficially owned by a 10% Stockholder shall be void.
(a) RIGHT TO PURCHASE PREFERRED SHARES. From and
after the close of business on the Distribution Date, each Right (other than a
Right that has become void) shall be exercisable to purchase one one-hundredth
of a share of Series B Junior Participating Cumulative Preferred Stock, par
value $0.01 per share, of the Company (the "Preferred Shares"), at an exercise
price of $100.00 (One Hundred Dollars) (the "Exercise Price"). Prior to the
Distribution, the Company may substitute for all or any portion of the Preferred
Shares that would otherwise be issuable upon exercise of the Rights, cash,
assets or other securities having the same aggregate value as such Preferred
Shares. The Preferred Shares are nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock, are
subordinate to any other series of the Company's preferred stock whether issued
before or after the issuance of the Preferred Shares. The Preferred Shares may
not be issued except upon exercise of Rights. The holder of a Preferred Share is
entitled to receive when, as and if declared, the greater of (i) cash and
non-cash dividends in an amount equal to 100 times the dividends declared on
each Common Share or (ii) a preferential annual dividend of $1.00 per Preferred
Share ($0.01 per one one-hundredth of a Preferred Share). In the event of
liquidation, the holders of Preferred Shares shall be entitled to receive a
liquidation payment in an amount equal to the greater of (1) $1.00 per Preferred
Share ($0.01 per one one-hundredth of a Preferred
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Share), plus all accrued and unpaid dividends and distributions on the
Preferred Shares, or (2) an amount equal to 100 times the aggregate amount to
be distributed per Common Share. Each Preferred Share has 100 votes per
share, voting together with the Common Shares. In the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, the
holder of a Preferred Share shall be entitled to receive 100 times the amount
received per Common Share. The rights of the Preferred Shares as to
dividends, voting and liquidation preferences are protected by antidilution
provisions. It is anticipated that the value of one one-hundredth of a
Preferred Share should approximate the value of one Common Share.
(b) RIGHT TO PURCHASE COMMON SHARES OF THE COMPANY. From and
after the close of business on the tenth business day (or such later day as
shall be designated by the Board of Directors of the Company) following the 10%
Ownership Date, each Right (other than a Right that has become void) shall be
exercisable to purchase, at the Exercise Price (initially $100.00), Common
Shares with a market value equal to two times the Exercise Price. If the Company
does not have sufficient Common Shares available for all Rights to be exercised,
the Company shall substitute for all or any portion of the Common Shares that
would otherwise be issuable upon the exercise of the Rights, cash, assets or
other securities having the same aggregate value as such Common Shares.
(c) RIGHT TO PURCHASE COMMON STOCK OF A SUCCESSOR CORPORATION.
If, on or after the 10% Ownership Date, (i) the Company is acquired in a merger
or other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the Company's consolidated assets or earning power are sold (other than
in transactions in the ordinary course of business), then each Right (other than
a Right that has become void) shall thereafter be exercisable to purchase, at
the Exercise Price (initially $100.00), shares of common stock of the surviving
corporation or purchaser, respectively, with an aggregate market value equal to
two times the Exercise Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Exercise Price, the number of outstanding Rights and the
number of Preferred Shares or Common Shares issuable upon exercise of the Rights
are subject to adjustment from time to time as set forth in the Rights Agreement
in order to prevent dilution. With certain exceptions, no adjustment in the
Exercise Price shall be required until cumulative adjustments require an
adjustment of at least 1.0%.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
No fractional securities shall be issued upon exercise of a
Right (other than fractions of Preferred Shares that are integral multiples of
one one-hundredth of a Preferred Share and that may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash shall be made based on the market price of such securities on the last
trading date prior to the date of exercise.
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8. REDEMPTION
At any time prior to the earlier of (a) the tenth business day
(or such later day as shall be designated by the Board of Directors) following
the date of the commencement of, or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would cause any person
to become a 10% Stockholder, (b) the tenth business day (or such later day as
shall be designated by the Board of Directors) after the 10% Ownership Date or
(c) the first event of the type giving rise to exercise rights under Section
5(c) above, the Board of Directors may, at its option, direct the Company to
redeem the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"), and the Company shall so redeem the Rights. Immediately
upon such action by the Board of Directors (the date of such action is the
"Redemption Date"), the right of the holders of Rights thereafter shall be to
receive the Redemption Price.
9. EXCHANGE
At any time after the 10% Ownership Date and prior to the
first date thereafter upon which a 10% Stockholder, together with all affiliates
of such 10% Stockholder, shall be the beneficial owner of more than 50% of the
then outstanding Common Shares, the Board of Directors of the Company may, at
its option, authorize and direct the exchange of all, but not less than all, of
the then outstanding Rights for Common Shares, one one- hundredths of Preferred
Shares, debt securities of the Company, other property, or any combination of
the foregoing, which, as of the date of the Board of Directors' action, has a
current market price equal to the difference between the Exercise Price and the
current market price of the shares that would otherwise be issuable upon
exercise of a Right on such date (the "Exchange Ratio"), and the Company shall
so exchange the Rights. Immediately upon such action by the Board of Directors,
the right to exercise Rights shall terminate and the only right of the holders
of Rights thereafter shall be to receive a number of Common Shares equal to the
Exchange Ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall
have no rights as a stockholder of the Company (other than rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The Board of Directors may, from time to time, before and
after the Distribution Date, without the approval of any holder of Rights,
direct the Company and the Rights Agent to supplement or amend any provision of
the Rights Agreement in any manner, whether or not such supplement or amendment
is adverse to any holder of Rights, and the Company and the Rights Agent shall
so supplement or amend such provision; provided, however, that from and after
the earliest of (a) the tenth business day (or such later day as shall be
designated by the Board of Directors) following the 10% Ownership Date, (b) the
first event of the type giving rise to exercise rights under Section 5(c) above,
(c) the Expiration Date or (d) the Redemption Date, the
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Rights Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding Rights other
than a 10% Stockholder; and provided further, however, that from and after
the tenth business day (or such later day as shall be designated by the Board
of Directors) following the 10% Ownership Date, the Rights Agreement shall
not be supplemented or amended in any manner.
Item 2. EXHIBITS.
The Rights Agreement, dated as of October 1, 1998 between
PAULA Financial and ChaseMellon Shareholder Services, L.L.C., as Rights Agent,
which includes as Exhibit A thereto the Form of Rights Certificate to be
distributed to holders of Rights after the Distribution Date (as that term is
defined in the Rights Agreement) is incorporated herein as an Exhibit from
Exhibit 4.3 of the Registrant's Current Report on Form 8-K dated September 24,
1998 and filed with the Commission on October 8, 1998.
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 thereto duly authorized.
PAULA FINANCIAL
(Registrant)
October 1, 1998 By: /s/ Bradley K. Serwin
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Name: Bradley K. Serwin
Title: Senior Vice President
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