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| ADAM > SEC Filings for ADAM > Form 8-K on 1-Jul-2009 | All Recent SEC Filings |
1-Jul-2009
Entry into a Material Definitive Agreement, Amendments to Articles of Inc. or Bylaws; Ch
On June 26, 2009, the Board of Directors of A.D.A.M., Inc. (the "Company") declared a dividend distribution of one Preferred Stock Purchase Right (each a "Right" and collectively the "Rights") for each outstanding share of Common Stock, $0.01 par value ("Common Stock"), of the Company. The distribution will be paid as of July 31, 2009 (the "Record Date"), to shareholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of the Company's Series B Preferred Stock, $0.01 par value (the "Preferred Stock"), at a price of $12.00 (the "Purchase Price"). The description and terms of the Rights are set forth in the Rights Agreement dated as of June 29, 2009 (the "Rights Agreement"), between the Company and American Stock Transfer & Trust Company (the "Rights Agent").
Until the earlier to occur of (i) the tenth day following the first date of public announcement by the Company or by a person or group of affiliated or associated persons ("Acquiring Person") other than the Company or any subsidiary of the Company or any employee benefit plan or employee stock plan of the Company including, without limitation, in its fiduciary capacity, of any subsidiary of the Company, individual, firm, corporation, or any partnership, trust or other entity (a "Person") organized, appointed, established or holding Common Stock for or pursuant to the terms of any such plan or any Person funding other employee benefits for employees of the Company or any Subsidiary of the Company ("Exempt Person") or a "Grandfathered Person" (as defined in the Rights Agreement), subject to certain conditions as set forth in the Rights Agreement, that such an Acquiring Person has acquired, or obtained the right to acquire, without approval of the Board of Directors or good faith determination of the Board of Directors that such a person or group of affiliated or associated persons has inadvertently become an Acquiring Person, beneficial ownership of securities of the Company representing 15% or more of the outstanding Common Stock of the Company (other than solely as a result of a reduction in the outstanding shares of the Common Stock of the Company) or such earlier date as a majority of the Board of Directors shall become aware of such acquisition of the Common Stock (the "Stock Acquisition Date") (or, if the tenth day after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date) or (ii) the tenth business day (subject to extension by the Board prior to the time a person becomes an Acquiring Person) following the commencement of, or public announcement of an intention to commence, a tender or exchange offer by any person (other than by an Exempt Person), the consummation of which would result in the beneficial ownership of 15% or more of the outstanding Common Stock by such person, together with its affiliates and associates (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to all shares of Common Stock that are issued after the Record Date prior to the Distribution Date (or earlier redemption or expiration of the Rights), by certificates representing such shares of Common Stock (or, in the case of uncertificated shares, the balance in the book-entry system of the transfer agent of the Common Stock) together with the Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be represented by and transferred with, and only with, the Common Stock. Until the Distribution Date (or earlier redemption or expiration of the Rights), new certificates issued for Common Stock (including, without limitation, certificates issued upon
The Rights are not exercisable until the Distribution Date. The Rights will expire upon the earlier of (i) ten years after the date of issuance, or June 29, 2019 or (ii) redemption or exchange by the Company.
The Purchase Price payable, and the number of shares of Preferred 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 Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The number of Rights associated with each share of Common Stock is also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend on the Common Stock payable in Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date.
The Preferred Stock purchasable upon exercise of the Rights will be nonredeemable and junior to any other series of preferred stock the Company may issue (unless otherwise provided in the terms of such other series). Each share of Preferred Stock will have a preferential cumulative quarterly dividend in an amount equal to 1,000 times the dividend declared on each share of Common Stock. In the event of liquidation, the holders of Preferred Stock will receive a preferred liquidation payment equal to an amount per share equal to 1,000 times the aggregate payment to be distributed per share of Common Stock. Each share of Preferred Stock will have 1,000 votes, voting together with the shares of Common Stock. In the event of any merger, consolidation or other transaction in which shares of Common Stock are exchanged for or changed into other securities, cash and/or other property, each share of Preferred Stock will be entitled to receive 1,000 times the amount and type of consideration received per share of Common Stock. The rights of the Preferred Stock as to dividends, liquidation and voting, and in the event of mergers and consolidations, are protected by customary anti-dilution provisions. Fractional shares (in integral multiples of one one-thousandth) of Preferred Stock will be issuable; however, the Company may elect to distribute depositary receipts in lieu of such fractional shares. In lieu of fractional shares other than fractions that are multiples of one one-thousandth of a share, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. Because of the nature of the Preferred Stock's dividend, liquidation and voting rights, the value of one one-thousandth of a share of Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of Common Stock.
In connection with the adoption of the Rights Agreement, the Company filed Articles of Amendment with the State of Georgia on July 1, 2009 attached hereto as Exhibit 3.1. The terms of the Series B Preferred Stock are described in Item 1.01 above, which is incorporated herein by reference.
(d) Exhibits.
3.1 Articles of Amendment to Articles of Incorporation.
4.1 Rights Agreement, effective as of June 29, 2009, between the Company and American Stock Transfer & Trust Company, as Rights Agent (including as Exhibit A the form of Articles of Amendment, as Exhibit B the form of Right Certificate, as Exhibit C the Summary of Terms of Rights Agreement and as Exhibit D a form of letter to the Company's shareholders dated July 1, 2009).
99.1 Press release issued by A.D.A.M., Inc. on July 1, 2009.
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