A. Schulman, Inc. 8-K
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
Date of Report (Date of earliest event reported) January 26, 2006
A. SCHULMAN, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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0-7459 |
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34-0514850 |
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(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification No.) |
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3550 West Market Street, Akron, Ohio
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44333 |
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(Address of principal executive offices)
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(Zip Code) |
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
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o Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The information set forth under Item 3.03 Material Modification to Rights of Security
Holders is incorporated herein by reference.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
On January 25, 2006, the Rights Agreement, dated as of January 12, 1996, between A. Schulman,
Inc. (the Company) and Society National Bank, as amended
(the Original Rights Agreement),
expired by its terms. On January 26, 2006, in response to the expiration of the Original Rights
Agreement, the Board of Directors of the Company adopted a Stockholder Rights Plan which provides
that one Right shall be attached to each share of common stock, par value $1.00 per share, of the
Company (the Common Stock), as set forth below. The Rights will be issued on February 9, 2006, to
stockholders of record as of the close of business on such date and will entitle the registered
holder to purchase from the Company a unit (a Unit) consisting of one one-thousandth of a share
of Series A Junior Participating Special Stock, no par value (the Special Stock), at a purchase
price of $85.00 per Unit (the Purchase Price), subject to adjustment. The description and terms
of the Rights are set forth in the Rights Agreement (the Rights Agreement), dated as of January
26, 2006, between the Company and National City Bank, as Rights Agent (the Rights Agent).
Initially, the Rights will be attached to all certificates representing shares of Common Stock
then outstanding, and no separate Rights certificate will be distributed. The Rights will separate
from the Common Stock upon the earlier of (i) 10 days following 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 20% or more of the outstanding shares of Common Stock
(the Stock Acquisition Date) or (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group of affiliated or associated persons
beneficially owning 20% or more of such outstanding shares of Common Stock (the earlier of (i) and
(ii), the Distribution Date). Until the Distribution Date, (i) the Rights will be evidenced by
the Common Stock certificates and will only be transferable with such Common Stock certificates,
(ii) new Common Stock certificates will contain a legend incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common Stock represented by
such certificate. Except as otherwise may be determined by the Board of Directors, Rights will only
attach to shares of Common Stock issued and outstanding prior to the Distribution Date.
The Rights will not be exercisable prior to the Distribution Date and will expire at the close
of business on February 9, 2012, unless earlier redeemed by the Company as described below. At no
time will the Rights have any voting power.
As soon as practicable after the Distribution Date, separate 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.
In the event that an Acquiring Person becomes the beneficial owner of 20% or more of the then
outstanding shares of Common Stock, each holder of a Right will thereafter have the
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right to receive, upon exercise, shares of Common Stock (or, in certain circumstances, cash,
property or other securities of the Company), having a value equal to two times the Exercise Price
of the Right. The Exercise Price is the Purchase Price times the number of shares of Common Stock
associated with each Right (initially, one). Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph (the Flip-in Events), 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. However, Rights are not exercisable following the
occurrence of any of the Flip-in Events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
In the event that following the Stock Acquisition Date, (i) the Company engages in a merger or
business combination transaction in which the Company is not the surviving corporation, (ii) the
Company engages in a merger or business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or exchanged, or (iii) 50% or
more of the Companys assets or earning power is sold or transferred, each holder of a Right
(except Rights which have previously been voided as set forth above) shall thereafter have the
right to receive, upon exercise of the Right, 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 Units of Special 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 on, or a subdivision, combination or
reclassification of, the Special Stock, (ii) if holders of the Special Stock are granted certain
rights or warrants to subscribe for Special Stock or convertible securities at less than the
current market price of the Special Stock, or (iii) upon the distribution to holders of the Special
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 adjustments in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the
Special Stock on the last trading date prior to the date of exercise.
At any time until 10 days following the Stock Acquisition Date, the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right
of a holder of a Right will be to receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof, in such capacity, 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 of the Company (or other consideration) as set
forth above.
A committee of the Companys Board of Directors comprised of independent directors selected by
the Board of Directors (the TIDE Committee) will meet not less than once every three years to
review the terms and conditions of the Rights Agreement, including whether the
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termination or modification of the Rights Agreement is in the best interest of the Company and its
stockholders, and to make a recommendation to the Board of Directors based upon its review. The
first meeting of the TIDE Committee will take place no later than February 9, 2009.
Other than those provisions relating to the principal economic terms of the Rights, any of the
provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interest of any Acquiring Person), or to shorten
or lengthen any time period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the Rights are not
redeemable.
The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire the Company in certain circumstances. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover proposals or tender
offers. However, the Rights are not intended to prevent a takeover, but rather are designed to
enhance the ability of the Board of Directors to negotiate with a potential acquiror on behalf of
all of the stockholders.
The Rights Agreement between the Company and the Rights Agent specifying the terms of the
Rights, which includes as Exhibit B thereto the Form of Rights Certificate, is attached hereto as
Exhibit 4.1 and is incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the Rights Agreement.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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Exhibit Number |
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Description |
4.1
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Rights Agreement, dated as of January 26, 2006, between the
Company and the Rights Agent, which includes as Exhibit B
thereto the Form of Rights Certificate. |
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99.1
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Press Release, dated January 26, 2006. |
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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.
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A. Schulman, Inc.
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By: |
/s/ Robert A. Stefanko
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Robert A. Stefanko |
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Executive Vice President |
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Date: January 27, 2006
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