Form 8k
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): December 13, 2008
NN, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-23486 62-1096725
(State or other
jurisdiction of incorporation) (Commission File Number) (IRS Employer
Identification No.)
2000 Waters Edge Drive
Johnson City, Tennessee 37604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423)743-9151
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17CFT
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFT
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFT 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13c-4(c) under the
Exchange Act (17CFT 240.13c-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 16, 2008, NN, Inc. (the "Company") entered into a Rights Agreement
dated as of December 16, 2008 (the "Rights Agreement") between the Company and
Computershare Trust Company, N.A., as Rights Agent. The following summary of the
principal terms of the Rights Agreement is a general description only and is
subject to the detailed terms and conditions of the Rights Agreement. The Rights
Agreement is attached as Exhibit 4.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Issuance of Rights for Outstanding Common Shares
Pursuant to the Rights Agreement, the Board of Directors of the Company (the
"Board") declared a dividend distribution of one preferred share purchase right
(a "Right") for each outstanding share of common stock, $0.01 par value, of the
Company (the "Common Shares"). The dividend is payable on December 15, 2008 (the
"Record Date") to the stockholders of record as of the close of business on that
date. Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock, $0.01
par value, of the Company (the "Preferred Shares") at a purchase price of $14.00
(the "Purchase Price"), subject to adjustment.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date (defined below).
Until the Distribution Date, certificates for the Rights ("Right Certificates")
will not be sent to stockholders and the Rights will attach to and trade
together with the Common Shares. Accordingly, Common Share certificates
outstanding on the Record Date will evidence the Rights related thereto, and
Common Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender or transfer of
any certificates for Common Shares outstanding as of the Record Date will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
Distribution Date
The Rights will separate from the Common Shares, Right Certificates will be
issued, and the Rights will become exercisable upon the earlier of: (i) the
close of business on the tenth (10th) business day (or such later date as may be
determined by action of the Board prior to such time as any person becomes an
Acquiring Person) following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding Common Shares or (ii) the close of
business on the tenth (10th) business day (or such later date as may be
determined by action of the Board prior to such time as any person becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in such person becoming an Acquiring Person (the earlier of such dates being
called the "Distribution Date").
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, separate Right
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 Right Certificates
alone will evidence the Rights from and after the Distribution Date. The Rights
will expire on the earliest of (i) the close of business on December 16, 2011
(the "Final Expiration Date"), or (ii) redemption or exchange of the Rights as
described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further events described
below, holders of the Rights will be entitled to receive, upon exercise and the
payment of the Purchase Price, one one-hundredth share of the Preferred Shares.
In the event that the Company does not have sufficient Preferred Shares
available for all Rights to be
exercised, or the Board decides that such action is necessary and not contrary
to the interests of Rights holders, the Company may instead substitute cash,
assets or other securities for the Preferred Shares for which the Rights would
have been exercisable under this provision or as described below.
Right to Buy Company Common Shares
Unless the Rights are earlier redeemed, in the event that an Acquiring Person
becomes the beneficial owner of 15% or more of the Common Shares then
outstanding, then proper provision will be made so that each holder of a Right
which has not previously been exercised (other than Rights beneficially owned by
the Acquiring Person, which will thereafter be void) will thereafter have the
right to receive, upon exercise, Common Shares having a value equal to two times
the Purchase Price.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed, in the event that, after the
earlier of the date of (i) public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such or (ii) the public disclosure of
facts by the Company or an Acquiring Person indicating that an Acquiring Person
has become such, (x) the Company is acquired in a merger or other business
combination transaction, or (y) 50% or more of the Company's consolidated assets
or earning power are sold (other than in transactions in the ordinary course of
business), proper provision must be made so that each holder of a Right which
has not previously been exercised (other than Rights beneficially owned by the
Acquiring Person, which will thereafter be void) will thereafter have the right
to receive, upon exercise, shares of common stock of the acquiring company
having a value equal to two times the Purchase Price.
Exchange Provision
At any time after the acquisition by an Acquiring Person of 15% or more of the
outstanding Common Shares and prior to the acquisition by such Acquiring Person
of a majority or more of the outstanding Common Shares, the Board may exchange
the Rights (other than Rights owned by the Acquiring Person), in whole or in
part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
Redemption
At any time prior to the time any person becomes an Acquiring Person, the Board
may redeem the Rights in whole, but not in part, at a price of $0.001 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Adjustments to Prevent Dilution
The Purchase Price payable, the number of Rights, and the number of Preferred
Shares or Common Shares or other securities or property issuable upon exercise
of the Rights are subject to adjustment from time to time in connection with the
dilutive issuances by the Company as set forth in the Rights Agreement. With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price.
Cash Paid Instead of Issuing Fractional Shares
No fractional portion less than integral multiples of one one-hundredth of a
share of Preferred Shares will be issued upon exercise of a Right 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.
No Stockholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company (other than any rights resulting from such holder's
ownership of Common Shares), including, without limitation, the right to vote or
to receive dividends.
Amendment of Rights Agreement
The terms of the Rights may be amended by the Board without the consent of the
holders of the Rights, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights (other than the Acquiring Person and its Affiliates
and Associates).
Rights and Preferences of the Preferred Shares
Preferred Shares purchasable upon exercise of the Rights will not be redeemable.
Each Preferred Share will be entitled to a quarterly dividend payment of 100
times the dividend declared per Common Share. In the event of liquidation, the
holders of the Preferred Shares will be entitled to an aggregate payment of 100
times the aggregate payment made per Common Share. Each Preferred Share will
have 100 votes, voting together with the Common Shares. 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. These rights are protected by customary anti-dilution
provisions.
Because of the nature of the dividend, liquidation and voting rights of the
shares of the Preferred Shares, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.
Certain Anti-takeover Effects
The Rights approved by the Board are designed to protect and maximize the value
of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board. Takeover attempts frequently include coercive
tactics to deprive the Company's Board and its stockholders of any real
opportunity to determine the destiny of the Company. The Rights have been
declared by the Board in order to deter such tactics, including a gradual
accumulation of shares in the open market of a 15% or greater position to be
followed by a merger or a partial or two-tier tender offer that does not treat
all stockholders equally. These tactics unfairly pressure stockholders, squeeze
them out of their investment without giving them any real choice and deprive
them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and will not do
so. The Rights may be redeemed by the Company at $.001 per Right at any time on
or prior to the public announcement of the accumulation of 15% or more of the
Common Shares by a single acquiror or group. Accordingly, the Rights should not
interfere with any merger or business combination approved by the Board.
Issuance of the Rights does not in any way weaken the financial strength of the
Company or interfere with its business plans. The issuance of the Rights
themselves has no dilutive effect, will not affect reported earnings per share,
should not be taxable to the Company or to its stockholders, and will not change
the way in which the Common Shares are presently traded. The Board believes that
the Rights represent a sound and reasonable means of addressing the complex
issues of corporate policy created by the current takeover environment.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board. The
Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the Board, except
pursuant to an offer conditioned upon the negation, purchase or redemption of
the Rights.
ITEM 3.03 MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS.
The information set forth in Items 1.01 and 5.03 is incorporated by reference.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR.
Certificate of Designation
In connection with the adoption of the Rights Agreement referenced in Item 1.01
above, the Company filed a Certificate of Designation of Series A Junior
Participating Preferred Stock with the Secretary of the State of Delaware on
December 15, 2008. See the description in Item 1.01 (also incorporated by
reference in Item 3.03) of this Current Report on Form 8-K for a more complete
description of the rights and preferences of the Series A Junior Participating
Preferred Stock. The Certificate of Designation is attached as Exhibit 3.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
By-Law Amendments
On December 13, 2008, the Board approved amendments to the Company's Restated
By-Laws (the "By-Laws"), effective immediately. The amendments revise Article II
of the Company's By-Laws. The principal features of the amendments are as
follows:
Section (2) Notice of Annual Meeting. This amendment revises the
existing by-law provision by limiting the business that may be
transacted at an annual stockholders' meeting to only such business
that is (a) specified in the notice of the annual meeting given by the
Board, (b) otherwise properly brought before the annual meeting by the
Board, or (c) otherwise properly brought before the annual meeting by a
stockholder of record on the date of giving the notice and on the
record date for the determination of stockholders entitled to vote at
such meeting and who complies with the newly proposed advance notice
by-law summarized in Section (13) of the By-Laws below.
Section (12) Action by Written Consent of Stockholders. This amendment
revises the existing by-law provision by requiring stockholders who
wish to act by written consent to request that the Board set a record
date for that action.
Section (13) Stockholder Proposals and Nominations. This amendment is a
new provision that requires a stockholder who wishes to bring any item
of business or any nomination of a director before an annual
stockholders' meeting to notify the Company not earlier than 120 days
and not less than 90 days prior to the first anniversary of the
preceding year's annual meeting. Whether in regard to a nominee for
election to the Board or other business, the notice must include the
stockholder's name and address, certain beneficial ownership
information, any voting arrangements of which the stockholder is a
part, any information relating to the stockholder that would be
required to be disclosed in a proxy statement required to be made in
connection with solicitations of proxies for election of directors in a
contested election under federal securities laws, and any other
information reasonably requested by the Company.
If the notice relates to any business other than a nomination of a
director, the notice must set forth a brief description of the business
desired to be brought before the meeting, the reasons for conducting
such business at the meeting, any material interest of the stockholder
in such business, and a description of all arrangements between the
stockholder and any other person in connection with the proposal of
such business by the stockholder.
If the stockholder proposes to nominate a person for election or
reelection to the Board, the notice must include (a) all information
that would be required to be disclosed in a proxy statement required to
be made in connection with solicitations of proxies for election of
directors in a contested election under federal securities laws,
including such person's written consent to be named in the proxy
statement as a nominee and to serve as a director if elected, and (b) a
description of all material monetary arrangements during the past three
years between the stockholder and the proposed nominee. Lastly, the
notice must set forth a representation that the stockholder intends to
vote his/her stock at the meeting to nominate the person or propose the
business specified in the notice.
The amendment also includes a provision that addresses a situation
where the number of directors to be elected to the Board is increased
and there is no public announcement by the Company naming all of the
nominees for director or specifying the size of the increased Board at
least 100 days prior to the first anniversary of the preceding year's
annual meeting. Under this scenario, a stockholder's notice will still
be considered timely, but only with respect to nominees for any new
positions created by such increase in the size of the Board, if it is
delivered to the Company no later than the 10th day following the day
on which the public announcement naming all nominees or specifying the
size of the increased Board is first made by the Company.
Section (14) Compliance Determinations for Director Nominations and
Stockholder Proposals. This amendment is a new provision that expressly
requires director nominations and stockholder proposals to be made in
compliance with the procedures set forth in the By-Laws. The amendment
also gives the Chairman of a stockholders' meeting the power and duty
to determine whether a director nomination or any business proposed to
be brought before the meeting was made or proposed, as the case may be,
in compliance with the procedures set forth in the By-Laws, and to
disregard any proposed director nomination or business that is not in
compliance with the By-Laws.
ITEM 8.01 OTHER EVENTS.
On December 16, 2008, the Company issued a press release describing the dividend
distribution and the Rights. A copy of the press release is included herein as
Exhibit 99.1, which is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit Number Description of Exhibit
3.1 Form of Certificate of Designation of Series A Junior
Participating Preferred Stock of NN, Inc., as filed with the
Secretary of the State of Delaware on December 15, 2008.
3.2 Amendments to the Restated By-Laws of NN, Inc.
4.1 Rights Agreement, dated as of December 16, 2008, by and
between NN, Inc. and Computershare Trust Company, N.A.,
including the form of Certificate of Designation, the Form
of Right Certificate and the Summary of Rights To Purchase
attached thereto as Exhibits A, B and C, respectively.
99.1 Press Release of NN, Inc. dated December 16, 2008.
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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.
NN, INC.
Date: December 18, 2008 By: /s/ William C. Kelly, Jr.
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Name : William C. Kelly, Jr.
Title : Vice President and Chief
Administrative Officer
Exhibit Index
Exhibit Number Description of Exhibit
3.1 Form of Certificate of Designation of Series A Junior
Participating Preferred Stock of NN, Inc., as filed with the
Secretary of the State of Delaware on December 15, 2008.
3.2 Amendments to the Restated By-Laws of NN, Inc.
4.1 Rights Agreement, dated as of December 16, 2008, by and
between NN, Inc. and Computershare Trust Company, N.A.,
including the form of Certificate of Designation, the Form
of Right Certificate and the Summary of Rights To Purchase
attached thereto as Exhibits A, B and C, respectively.
99.1 Press Release of NN, Inc. dated December 16, 2008.