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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
June 14, 2000
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Date of Report (Date of
earliest event reported)
DATA CRITICAL CORPORATION
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(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
Delaware 000-27855 91-1901482
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
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19820 North Creek Parkway, Suite 100, Bothell, Washington 98011
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(Address of Principal Executive Offices) (Zip Code)
(425) 482-7000
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(Registrant's Telephone Number, Including Area Code)
None
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On June 14, 2000, Data Critical Corporation's board of directors
declared a dividend on each share of outstanding common stock of one right (a
"Right") to purchase one one-thousandth of a share of preferred stock. The
dividend is payable on July 21, 2000 to our shareholders of record on that date.
In addition, our board of directors authorized the issuance of one Right for
each additional share of common stock that becomes outstanding between July 21,
2000 and the earliest of:
. the distribution date, which is the earliest of: (1) the close of
business on the tenth day after a public announcement that a person
has acquired beneficial ownership of 20% or more of our outstanding
shares of common stock; and (2) the close of business on the tenth day
after commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer for outstanding shares of common
stock which could result in the offeror becoming the beneficial owner
of 20% or more of our outstanding shares of common stock;
. the date on which the rights expire, July 21, 2010; and
. the date, if any, on which we redeem the Rights.
Each Right entitles its registered holder to purchase from us one one-
thousandth of a share of our Series A Participating Preferred Stock, at a price
of $75.00 per one one-thousandth of a preferred share, subject to adjustment as
described below. The description and terms of the Rights are set forth in a
Preferred Share Rights Agreement we executed with ChaseMellon Shareholder
Services, L.L.C., as Rights Agent. A copy of the Rights Agreement is attached
as Exhibit 2.1 to our Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on July 12, 2000.
Until the distribution date, the Rights will be evidenced by the
certificates for the shares of common stock registered in the names of the
holders, rather than by separate certificates. Therefore, until the
distribution date, or earlier redemption or expiration of the Rights, the Rights
will be transferred with and only with the shares of common stock.
As soon as practicable after the distribution date, separate
certificates evidencing the Right will be mailed to holders of record of the
shares of common stock as of the close of business on the distribution date.
These separate certificates alone will evidence the Rights from that time
forward.
The Rights are not exercisable until the distribution date and will
expire on July 21, 2010, unless we redeem or exchange them prior to expiration,
as described below. From and after the distribution date, the holder of any
Right will be entitled to exercise that Right to purchase one one-thousandth of
a share of preferred stock for the then current purchase price.
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In addition, upon any person acquiring beneficial ownership of 20% or
more of our outstanding shares of common stock, the Rights will entitle each
right holder, other than such beneficial owner of 20% or more of our outstanding
shares of common stock, or any affiliate or associate of that person, to
purchase, for the purchase price, the number of shares of our common stock which
at the time of the transaction would have a market value of twice the then
current purchase price.
Any Rights that are at any time beneficially owned by a beneficial owner of
20% or more of our outstanding shares of common stock, or any affiliate or
associate of that person, will automatically become null and void. Furthermore,
any holder of any Rights who beneficially owns more than 20% of our shares of
common stock, any affiliate or associate of that person, or any purported
transferee or subsequent holder, will be unable to exercise or transfer their
Rights.
After a person becomes the beneficial owner of 20% or more of our
outstanding shares of common stock, our board of directors may elect to exchange
each Right, other than those that have become null and void and nontransferable
as described above, for shares of common stock, without payment of the purchase
price. The exchange rate in this situation would be one share of common stock
per preferred stock purchase right.
Each of the following events would entitle each holder of a Right to
purchase, for the purchase price, shares of common stock of another publicly
traded corporation:
. the acquisition of Data Critical in a merger by that publicly traded
corporation;
. a business combination between Data Critical and that publicly traded
corporation; or
. the sale or other transfer of 50% or more of our assets or assets
accounting for 50% or more of our earning power, in one or more
transactions, to that publicly traded corporation.
The number of shares of the other corporation to which each holder would be
entitled is that number of shares having a market value equal to twice the then
current purchase price. If for any reason the Rights cannot be exercised for
shares of the other entity involved in a transaction described above, each
holder of a Right would be entitled to exchange its rights for an equivalent
amount of cash from the other party.
To preserve the economic value of the Rights, the number of preferred
shares or other securities issuable upon exercise of a Right, the purchase
price, the redemption price and the number of Rights associated with each
outstanding common share are all subject to adjustment by our board of
directors. Our board of directors may make adjustments in the event of any
change in the common or preferred shares, including, for example, changes
associated with stock dividends or stock splits, recapitalization, mergers or
consolidations, split-ups, split-offs or spin-offs, or distributions of cash,
assets, options, warrants, indebtedness or subscription rights to holders of
common or preferred shares.
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At any time prior to any person acquiring beneficial ownership of 20% or
more of our outstanding shares of common stock, our board of directors may
redeem the Rights in whole, but not in part. The redemption price of $.01 per
Right, subject to adjustment as provided in the Rights Agreement, may be in cash
or shares of Data Critical common stock.
At any time prior to the distribution date, we may, without the approval of
any holder of the Rights, supplement or amend any provision of the Rights
Agreement, including the date on which the distribution date would occur, the
time during which the Rights may be redeemed and the terms of the preferred
shares.
The preferred shares issuable upon exercise of the Rights have the
following characteristics:
. they are not redeemable;
. the holders of preferred shares will be entitled to a preferential
quarterly dividend payment equal to 100 times the dividend declared per
common share, if any;
. in the event of Data Critical's voluntary or involuntary dissolution,
liquidation or winding up, the holders of preferred shares will be entitled
to a preferential payment per share of all accrued and unpaid dividends and
distributions per share, plus either (i) $1,000 per preferred share or (ii)
1,000 times the distribution to be made per common share, whichever is
greater;
. the holders of preferred shares will be entitled to 1,000 votes per share,
voting together with the shares of common stock; and
. the holders of preferred shares will be entitled to receive, per share,
1,000 times the amount received per common share, in the event of any
merger, business combination, consolidation or other transaction in which
the shares of common stock are exchanged.
Because of the nature of the preferred shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a preferred share
issuable upon exercise of each Right should approximate the value of one common
share. Customary antidilution provisions are designed to protect that
relationship in the event of certain changes in the common and preferred shares.
We may, but are not required to, issue fractional shares which are an
integral multiple of one one-thousandth of a preferred share upon the exercise
of Rights. In lieu of fractional shares, we may utilize a depository
arrangement as provided by the terms of the preferred shares. In the case of
fractions other than one one-thousandth of a preferred share or integral
multiples thereof, we may make a cash payment based on the market price of such
shares.
Until a Right is exercised, the holder of such right will have no rights as
a Data Critical stockholder, including, without limitation, the right to vote or
receive dividends.
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As of July 7, 2000, there were approximately 12,239,433 shares of common
stock outstanding. Each share of common stock outstanding at the close of
business on July 21, 2000, will receive one Right. Our board of directors has
reserved sufficient preferred shares for issuance upon exercise of the Rights.
The terms of the Rights and the Rights Agreement provide our board of
directors with the flexibility to determine when an offer to purchase, acquire
or exchange shares of Data Critical common stock is adequate and otherwise in
the best interests of the company. The Rights will not interfere with any
merger or other business combination approved by our board of directors since
the board of directors may, at its option, redeem all, but not less than all, of
the then outstanding Rights at the redemption price. The Rights have certain
antitakeover effects and will cause substantial dilution to a person that
attempts to acquire Data Critical on terms not approved by our board of
directors. The Rights should not affect any prospective offeror willing to make
an all-cash offer at a full and fair price, or willing to negotiate with our
board of directors.
This summary of the Rights is not complete and is qualified in its entirety
by reference to the Rights Agreement, which is filed as an exhibit to our
Registration Statement filed July 12, 2000 and is incorporated into this
document by reference. A copy of the Rights Agreement is also available from
Data Critical free of charge.
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Item 7. Exhibits
4.1 Rights Agreement, dated as of June 15, 2000, between Data Critical
Corporation and ChaseMellon Shareholder Services, L.L.C., incorporated
herein by reference to Exhibit 2.1 to the Company's Registration Statement
on Form 8-A, filed July 12, 2000.
99.1 Press release issued June 15, 2000.
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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 hereunto duly authorized.
DATA CRITICAL CORPORATION
Dated: July 10, 2000 By /s/ Michael E. Singer
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Michael E. Singer
Vice President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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4.1 Rights Agreement, dated as of June 15, 2000, between
Data Critical Corporation and ChaseMellon Shareholder
Services, L.L.C., incorporated herein by reference to
Exhibit 2.1 to the Company's Registration Statement on
Form 8-A, filed July 12, 2000.
99.1 Press release issued June 15, 2000.
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