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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
Date of Report (Date of earliest event reported) November 25, 1996
INFERENCE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-26334 95-3436352
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation) Number)
100 ROWLAND WAY, NOVATO, CALIFORNIA 94945
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(415) 893-7200
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
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On November 25, 1996, the Board of Directors of Inference Corporation
(the "COMPANY") declared a distribution of one Right for each outstanding share
of common stock (the "COMMON SHARES") of the Company. The distribution is to be
made as of December 10, 1996 (the "RECORD DATE") to the shareholders of record
on that date. Each Right entitles the registered holder to purchase from the
Company, initially, one one-hundredth of a share of Junior Participating
Preferred Stock ("PREFERRED SHARES") at a price of $40.00 (the "PURCHASE
PRICE"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement between the Company and Harris Trust Company of
California, as Rights Agent (the "RIGHTS AGREEMENT").
Preferred Shares purchasable upon exercise of the Rights will be
entitled to dividends of 100 times the dividends, per share, declared on the
Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $100 per share and an aggregate
liquidating distribution, per share, of 100 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares
and in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share.
Because of the Preferred Shares' dividend and liquidation rights, the
value when issued of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Until the earlier to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON") has acquired beneficial ownership of 20% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "STOCK
ACQUISITION DATE," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the Company's general voting power (the date of such
earlier occurrence being called the "DISTRIBUTION DATE"), the Rights will be
evidenced by the certificates representing the Common Shares and will be
transferred with and only with the Common Shares. 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, and the
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surrender for transfer of any certificate for Common Shares, even without such
notation, 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 ("RIGHTS
CERTIFICATES") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "FINAL
EXPIRATION DATE"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of outstanding
Rights, are subject to adjustment from time to time to prevent dilution.
A "QUALIFIED OFFER" is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated continuing
directors to be fair to and otherwise in the best interests of the Company and
its shareholders.
In the event that any person becomes an Acquiring Person other than by
a purchase pursuant to a Qualified Offer, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will not be entitled to the benefit of such adjustment), will
thereafter have the right to receive upon exercise that number of Common Shares
or Common Share equivalents having a market value of two times the exercise
price of the Right.
In the event that, at any time after an Acquiring Person has become
such, the Company is acquired in a merger or other business combination
transaction (other than a merger which follows a Qualified Offer at the same or
a higher price) or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).
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Up to and including the tenth business day after a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $0.001 per Right (the "REDEMPTION PRICE").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which
do not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company.
A copy of the Rights Agreement has been filed as Exhibit 4.1 to this
Current Report on Form 8-K. A copy of the Rights Agreement is available free of
charge from the Company. 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. EXHIBITS
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Reference is made to the Exhibit Index annexed hereto and made a part
hereof.
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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 thereunto duly authorized.
INFERENCE CORPORATION
Date: December 4, 1996 By: /s/ WILLIAM D. GRIFFIN
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Name: William D. Griffin
Title: Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. NAME OF ITEM PAGE NO.
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<S> <C> <C>
4.1 Rights Agreement, dated as of
November 25, 1996, between
Inference Corporation and Harris
Trust Company of California, as
Rights Agent (incorporated by
reference to Exhibit 2 to the
Registration Statement on Form 8-A
dated November 27, 1996 filed with
the Securities and Exchange
Commission by Inference Corporation
(the "Form 8-A")).
4.2 Form of Certificate of Designations
of Junior Participating Preferred
Stock (incorporated by reference to
Exhibit 4 to the Form 8-A).
20.1 Press Release, dated November 26, 7
1996.
20.2 Form of letter to be sent to
stockholders of Inference
Corporation (incorporated by
reference to Exhibit 3 to the Form
8-A).
</TABLE>
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EXHIBIT 20.1
FOR MORE INFORMATION CONTACT:
Bill Griffin
Chief Financial Officer
(415) 893-7261
INFERENCE CORPORATION ADOPTS SHAREHOLDER RIGHTS PLAN
NOVATO, CALIFORNIA - NOVEMBER 26, 1996 - Inference Corporation (NASDAQ:
INFR), today announced that its Board of Directors has adopted a Shareholder
Rights Plan designed to enable all Inference stockholders to realize the full
value of their investment and to provide for fair and equal treatment in the
event that an unsolicited attempt is made to acquire the Company. The adoption
of the Plan is intended as a means to guard against potential uses of takeover
tactics designed to gain control of the Company without paying all stockholders
full and fair value. The distribution of the Rights is not in response to any
proposal to acquire Inference.
Under the Plan, stockholders will receive one Right to purchase one one-
hundredth of a share of a new series of Preferred Stock for each outstanding
share of Inference Common Stock held of record at the close of business on
December 10, 1996. The Rights distribution will not be taxable to stockholders.
The Rights, which will initially trade with the Common Stock, become
exercisable to purchase one one-hundredth of a share of the new Preferred Stock,
at $40.00 per Right, when someone acquires 20 percent or more of Inference's
Common Stock or announces a tender offer which could result in such person
owning 20 percent or more of the Common Stock. Each one one-hundredth of a share
of the new Preferred Stock has terms designed to make it substantially the
economic equivalent of one share of Common Stock. Prior to someone acquiring 20
percent, the Rights can be redeemed for $.001 each by action of the Board. Under
certain circumstances, if someone acquires 20 percent or more of the Common
Stock, the Rights permit the holders to purchase Inference Common Stock having a
market value of twice the exercise price of the Rights, in lieu of the Preferred
Stock. In addition, in the event of certain business combinations, the Rights
permit purchase of the Common Stock of an acquirer at a 50 percent discount. The
Rights expire on November 25, 2006.
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INFERENCE CORPORATION
Inference Corporation is a leading provider of software for strategic
knowledge publishing, knowledge distribution and content management. The company
also offers a complete line of consulting, support and educational services, as
well as a line of pre-packaged knowledge. Based in Novato, Calif., Inference
has licensed its products to over 500 customers -- reaching more than 500,000
end users in over 20 countries. For more information, contact Inference
Corporation at 415 893-7200, send an e-mail to [email protected], or visit its
World Wide Web page at www.inference.com.
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