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) July 8, 2005
INVACARE CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 0-12938 95-2680965
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Invacare Way, P.O. Box 4028, Elyria, Ohio 44036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (440) 329-6000
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(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):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1.01. Entry into a Material Definitive Agreement.
The information set forth in Item 3.03 of this Current Report on Form 8-K
is incorporated into this Item 1.01 by reference.
Item 3.03. Material Modification of Rights of Security Holders.
Effective July 8, 2005, the Board of Directors of Invacare Corporation (the
"Company") adopted a new shareholder rights plan, as set forth in the Rights
Agreement, dated July 8, 2005, between the Company and National City Bank, as
Rights Agent (the "Rights Agreement"). The Rights Agreement replaces the
Company's previous shareholder rights plan which expired on July 7, 2005. In
order to implement the new Rights Agreement, the Board of Directors declared a
dividend of one Right for each outstanding share of the Company's Common Shares
and Class B Common Shares to shareholders of record at the close of business on
July 19, 2005 (the "Record Date"). Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a Series A Participating Serial
Preferred Share, without par value (the "Preferred Shares"), at a Purchase Price
of $180.00 in cash, subject to adjustment. The new Rights replace the rights
that were outstanding pursuant to the Company's previous shareholder rights
plan, which rights expired in accordance with their terms on July 7, 2005. The
description and terms of the Rights are set forth in the Rights Agreement.
The following summary of the principal terms of the Rights Agreement is a
general description only and is qualified in its entirety by reference to the
detailed terms and conditions of the Rights Agreement. A copy of the Rights
Agreement is attached hereto as Exhibit 4.1 and is incorporated herein by
reference. Unless the context otherwise requires, the capitalized terms used
herein shall have the meanings ascribed to them in the Rights Agreement.
Rights Initially Evidenced by Common Share Certificates; Distribution Date
Initially, the Rights are not exercisable and will be attached to all
certificates representing outstanding Common Shares and Class B Common Shares,
and no separate Rights Certificates will be distributed. The Rights will
separate from the Common Shares and Class B Common Shares, and the "Distribution
Date" will occur, upon the earlier of (i) 10 business days following the first
date of 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 shares representing 30% or more of the outstanding
voting power of the Company (the "Share 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 beneficially owning shares representing 30% or more
of the outstanding voting power of the Company. The Distribution Date may be
deferred in circumstances determined by the Board of Directors. In addition,
certain inadvertent acquisitions will not trigger the occurrence of the
Distribution Date. Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be evidenced by the certificates
for Common Shares and Class B Common Shares outstanding on the Record Date,
together with the Summary of Rights attached to the Rights Agreement, or by new
certificates for Common Shares and Class B Common Shares issued after the Record
Date which contain a notation incorporating the Rights Agreement by reference,
(ii) the Rights will be transferred with and only with such certificates for
Common Shares and Class B Common Shares; and (iii) the surrender for transfer of
any certificates for Common Shares or Class B Common Shares outstanding (with or
without a copy of this Summary of Rights or such notation) will also constitute
the transfer of the Rights associated with the Common Shares or Class B Common
Shares represented by such certificate.
Issuance of Rights Certificates; Expiration of Rights
The Rights are not exercisable until the Distribution Date and will expire
upon the close of business on July 8, 2015 (the "Final Expiration Date") unless
earlier redeemed or exchanged as described below. As soon as practicable after
the Distribution Date, separate Rights Certificates will be mailed to holders of
record of the Common Shares and Class B Common Shares as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, and except for Common Shares and Class B Common Shares
issued upon exercise, conversion or exchange of then outstanding options,
convertible or exchangeable securities or other contingent obligations to issue
shares or pursuant to any employee benefit plan or arrangement, only Common
Shares and Class B Common Shares issued prior to the Distribution Date will be
issued with Rights.
Right to Buy Company Common Shares
In the event that any Person becomes an Acquiring Person, then, promptly
following the occurrence of the later of the Share Acquisition Date and the
Distribution Date, each holder of a Right (except as provided below and in
Section 7(e) of the Rights Agreement) shall thereafter have the right to
receive, upon exercise, that number of Common Shares of the Company (or, in
certain circumstances, cash, property or other securities of the Company) which
equals the exercise price of the Right divided by 50% of the current market
price (as defined in the Rights Agreement) per Common Share at the date of the
occurrence of such event. However, Rights are not exercisable following such
event until such time as the Rights are no longer redeemable by the Company as
described below. Notwithstanding any of the foregoing, following the occurrence
of such event, 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. The event summarized in this paragraph is referred to as a
"Section 11(a)(ii) Event."
For example, at an exercise price of $180 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following a Section
11(a)(ii) Event would entitle its holder to purchase for $180 such number of
Common Shares (or other consideration, as noted above) as equals $180 divided by
one-half of the current market price (as defined in the Rights Agreement) of the
Common Shares. Assuming that the Common Shares had a market price of $45 per
share at such time, the holder of each valid Right would be entitled to purchase
eight Common Shares, having a market value of 8 x $45, or $360, for $180.
Right to Buy Acquiring Company Shares
In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger or if the Company is the surviving entity, but its outstanding Common
Shares are changed or exchanged for shares or securities (of any other person)
or cash or any other property, or (ii) more than 50% 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 set forth above) shall, after the latest of
the Share Acquisition Date, the Distribution Date and the occurrence of such
event, have the right to receive, upon exercise, that number of common shares of
the acquiring company which equals the exercise price of the Right divided by
50% of the current market price (as defined in the Rights Agreement) of such
common shares at the date of the occurrence of the event. The events summarized
in this paragraph are referred to as "Section 13 Events." A Section 11(a)(ii)
Event and Section 13 Events are collectively referred to as "Triggering Events."
For example, at an exercise price of $180 per Right, each valid Right
following a Section 13 Event would entitle its holder to purchase for $180 such
number of common shares of the acquiring company as equals $180 divided by
one-half of the current market price (as defined in the Rights Agreement) of
such common shares. Assuming that such common shares had a market price of $45
per share at such time, the holder of each valid Right would be entitled to
purchase eight common shares of the acquiring company, having a market value of
8 x $45, or $360, for $180.
Exchange Provision
At any time after the occurrence of a Section 11(a)(ii) Event, when no
person owns shares representing a majority of the outstanding voting power of
the Company, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person which have become void), in
whole or in part, at an exchange ratio of one Common Share, or one
one-thousandth of a Preferred Share (or of a share of a class or series of the
Company's preferred shares having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
Adjustments to Prevent Dilution
The Purchase Price payable, and the number of units of Preferred Shares 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 share
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) if holders of the Preferred Shares are granted certain rights or
warrants to subscribe for Preferred Shares or convertible securities at less
than the then-current market price (as defined in the Rights Agreement) of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings) or of subscription rights
or warrants (other than those referred to above). The number of Rights
associated with each Common Share and Class B Common Share is also subject to
adjustment in the event of a share split of the Common Shares or Class B Common
Shares or a share dividend on the Common Shares or Class B Common Shares payable
in Common Shares or Class B Common Shares or subdivisions, consolidations or
combinations of the Common Shares or Class B Common Shares occurring, in any
such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Preferred Shares (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share) will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading date prior to the date of exercise.
Redemption
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to receive, when, as and if
declared by the Board of Directors, a minimum preferential quarterly dividend
payment of $10 per share or, if greater, an aggregate dividend of 1,000 times
the dividend declared per Common Share or Class B Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $1,000 per share, plus an amount equal to
accrued and unpaid dividends, and will be entitled to an aggregate payment of
1,000 times the payment made per Common Share or Class B Common Share. Each
Preferred Share will have one vote, voting together with the Common Shares and
Class B Common Shares. In the event of any merger, consolidation or other
transaction in which Common Shares and/or Class B Common Shares are changed or
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per Common Share or Class B Common Share. These rights are
protected by customary antidilution provisions. Because of the nature of the
Preferred Shares' dividend and liquidation rights, the value of one
one-thousandth of a Preferred Share purchasable upon exercise of each Right
should approximate the value of one Common Share.
At any time prior to the earlier of the tenth Business Day (or such later
date as may be determined by the Board of Directors of the Company) after the
Share Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right (the "Redemption Price"), payable in cash
or shares. Immediately upon the redemption of the Rights or such earlier time as
established by the Board in the resolution 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 Rights may also be redeemable
following certain other circumstances specified in the Rights Agreement.
No Shareholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. Although the distribution of the Rights should
not be taxable to shareholders or to the Company, shareholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Shares (or other consideration) of the Company or
for common shares of the acquiring company as set forth above.
Amendment of Rights Agreement
Any provision of the Rights Agreement, other than the redemption price, may
be amended by the Board prior to such time as the Rights are no longer
redeemable. Once the Rights are no longer redeemable, the Board's authority to
amend the Rights is limited to correcting ambiguities or defective or
inconsistent provisions in a manner that does not adversely affect the interest
of holders of Rights.
Certain Anti-Takeover Effects
The Rights are intended to protect the shareholders of the Company in the
event of an unfair or coercive offer to acquire the Company and to provide the
Board with adequate time to evaluate unsolicited offers. The Rights may have
anti-takeover effects. The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company without conditioning the offer on a
substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its shareholders, as
determined by a majority of the Board. The Rights should not interfere with any
merger or other business combination approved by the Board.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with its adoption of the Rights Agreement, the Company's
Board of Directors approved an amendment to the Company's Amended and Restated
Articles of Incorporation setting forth the rights, powers and preferences of
the Preferred Shares. The Company filed the Certificate of Amendment to its
Amended and Restated Articles of Incorporation (the "Certificate of Amendment")
with the Secretary of State of the State of Ohio on July 8, 2005.
The information regarding the Preferred Shares set forth in Item 3.03 of
this Current Report on Form 8-K is incorporated by reference into this Item
5.03. A copy of the Certificate of Amendment is attached hereto as Exhibit 3.1
and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit number Description
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3.1 Certificate of Amendment to Amended and Restated Articles of
Incorporation of Invacare Corporation, classifying and
designating the Series A Participating Serial Preferred
Shares.
4.1 Rights Agreement between Invacare Corporation and National
City Bank, dated as of July 8, 2005, including the Form of
Rights Certificate and the Summary of Rights to Purchase
Preferred Shares.
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.
Invacare Corporation
(Registrant)
Date: July 8, 2005
/s/ A. Malachi Mixon, III
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A. Malachi Mixon, III
Chairman and Chief Executive Officer
Exhibit number Description
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3.1 Certificate of Amendment to Amended and Restated Articles of
Incorporation of Invacare Corporation, classifying and
designating the Series A Participating Serial Preferred
Shares.
4.1 Rights Agreement between Invacare Corporation and National
City Bank, dated as of July 8, 2005, including the Form of
Rights Certificate and the Summary of Rights to Purchase
Preferred Shares.