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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
Date of Report (Date of earliest event reported): December 2, 1997
TransAct Technologies Incorporated
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21121 06-1456680
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
7 Laser Lane, Wallingford, CT 06492
Address of Principal Executive Offices) (Zip Code)
Registrants telephone number,
including area code: (203)269-1198
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(Former Name or Former Address, if Changed Since Last Report.)
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Item 5. Other Events.
On December 2, 1997, the Board of Directors of TransAct Technologies
Incorporated (the "Company") declared a distribution of one Right for each
outstanding share of Common Stock, par value $.01 per share (the "Company Common
Stock"), to stockholders of record at the close of business on December 15, 1997
and for each share of Company Common Stock issued (including shares distributed
from Treasury) by the Company thereafter and prior to the Distribution Date.
Each Right entitles the registered holder, subject to the terms of the Rights
Agreement, to purchase from the Company one one-thousandth of a share (a "Unit")
of Series A Preferred Stock, par value $.01 per share (the "Preferred Stock"),
at a Purchase Price of $69.00 per Unit, subject to adjustment. The Purchase
Price is payable in cash or by certified or bank check payable to the order of
the Company or by wire transfer of immediately available funds to the account of
the Company. The description and terms of the Rights are set forth in a Rights
Agreement between the Company and American Stock Transfer & Trust Company as
Rights Agent (the "Rights Agreement").
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Common Stock and the
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement (the date of such announcement being the "Stock Acquisition Date")
that a person or group of affiliated or associated persons (other than the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or such Subsidiary) (an "Acquiring Person") has acquired, obtained the
right to acquire, or otherwise obtained beneficial ownership of 15% or more of
the then outstanding shares of Company Common Stock and (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of the then
outstanding shares of Company Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by Company Common Stock certificates and will
be transferred with and only with such Company Common Stock certificates,
(ii) new Company Common Stock certificates issued after December 15, 1997 (also
including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on
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the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights.
In the event that (i) the Company is the Surviving corporation in a merger
with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes an Acquiring Person, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., by means of a reverse stock split or
recapitalization) (each such event being a "Section 11(a)(ii) Event"), then, in
each such case, each holder of a Right will thereafter have the right to
receive, upon exercise, Units of Preferred Stock (or, in certain circumstances,
Company Common Stock, 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 multiplied by the number of Units of Preferred Stock
issuable upon exercise of a Right prior to the events described in this
paragraph. Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph, 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.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
and the Company is not the surviving corporation (other than a merger described
in the preceding paragraph), (ii) any Person consolidates or merges with the
Company and all or part of the Company Common Stock is converted or exchanged
for securities, cash or property of any other Person or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise, common stock of the
Acquiring Person having a value equal to two times the exercise price of the
Right.
The Purchase Price payable, and the number of Units of Preferred Stock
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) if
holders of the Preferred Stock are granted 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 the
holders of the Preferred 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 adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
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At any time until ten days following the Stock Acquisition Date, a
majority of the Continuing Directors may redeem the Rights in whole, but not in
part, at a price of $.0001 per Right (the "Redemption Price"), payable, at the
election of such majority of the Continuing Directors, in cash or shares of
Company Common Stock. Immediately upon the action of a majority of Continuing
Directors ordering the redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The Board of Directors, at its option, may exchange each Right for (i) one
Unit of Preferred Stock or (ii) such number of Units of Preferred Stock as will
equal (x) the difference between the aggregate market price of the number of
Units of Preferred Stock to be received upon a Section 11(a)(ii) Event and the
Purchase Price divided by (y) the market price per Unit of Preferred Stock upon
the Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, 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 Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended at any time
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests 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. Supplements or amendments
to the Rights Agreement may be made only if approved by a majority of Continuing
Directors.
A total of 200,000 shares of Preferred Stock will be reserved for issuance
upon exercise of the Rights. The Units of Preferred Stock that may be acquired
upon exercise of the Rights will be nonredeemable and subordinate to any other
shares of preferred stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend rate of $.01 per Unit but will, in any event, be entitled to a dividend
equal to the per share dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $.01 per Unit
and the per share amount paid in respect of a share of Company Common Stock.
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Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by a majority of the Continuing Directors unless the offer
is conditioned on a substantial number of Rights being acquired. However, the
Rights should not interfere with any merger or other business combination
approved by a majority of the Continuing Directors because the Rights may be
redeemed by the Company at $.0001 per Right at any time on or prior to the tenth
business day following the Stock Acquisition Date (subject to extension by a
majority of the Continuing Directors). Thus, the Rights are intended to
encourage persons who may seek to acquire control of the Company to initiate
such an acquisition through negotiations with the Board of Directors. However,
the effect of the Rights may be to discourage a third party from making a
partial tender offer or otherwise attempting to obtain a substantial equity
position in the equity securities of or seeking to obtain control of, the
Company. To the extent any potential acquirors are deterred by the Rights, the
Rights may have the effect of preserving incumbent management in office.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes as Exhibit A the Form of Rights
Certificate, is attached hereto as Exhibit 4 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 such Exhibit 4.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 4 Form of Rights Agreement dated as of December
2, 1997, between TransAct Technologies
Incorporated and American Stock Transfer & Trust
Company, including Form of Rights Certificate as
Exhibit A, Summary of Rights to Purchase Preferred
Stock as Exhibit B and the Form of Certificate of
Designation for the Preferred Stock as Exhibit C.
Exhibit 99(a) Press Release dated December 2, 1997.
Exhibit 99(b) Form of Letter to Stockholders of TransAct
Technologies Incorporated regarding the adoption of
the Rights Plan pursuant to the Rights Agreement.
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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 hereunto duly authorized.
TRANSACT TECHNOLOGIES
INCORPORATED
By /s/ Richard L. Cote
_________________________
Name: Richard L. Cote
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Date: December 2, 1997
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EXHIBIT INDEX
Sequential
Exhibit Page
No. Description No.
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4 Form of Rights Agreement dated as
of December 2, 1997, between
TransAct Technologies Incorporated and
American Stock Transfer & Trust Company,
including Form of Rights Certificate as
Exhibit A, Summary of Rights to
Purchase Preferred Stock as Exhibit B
and Form of Certificate of Designation
for the Preferred Stock as Exhibit C.
99(a) Form of Press Release dated December
2, 1997
99(b) Form of Letter to Stockholders of
TransAct Technologies Incorporated
regarding the adoption of the Rights
Plan pursuant to the Rights Agreement.
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