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 7, 2005
Capstone Turbine Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-1375 95-4180883
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
21211 Nordhoff Street, Chatsworth, California 91311
(Address of principal executive offices) (Zip Code)
(818) 734-5300
(Registrant's telephone number, including area code)
Not Applicable
(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:
[ ] 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))
Item 1.01 Entry into a Material Definitive Agreement.
--------- -------------------------------------------
On July 7, 2005, Capstone Turbine Corporation, (the
"Company") entered into a Rights Agreement (the "Rights Agreement") with
Mellon Investor Services LLC, as Rights Agent. In connection with the Rights
Agreement, the Board of Directors of the Company authorized a dividend
distribution of one Right (each, a "Right") for each authorized and
outstanding share of common stock, par value $0.001 per share (the "Common
Stock"), of the Company to stockholders of record at the close of business on
July 18, 2005 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company a unit consisting of one one-hundredth of a share
(a "Unit") of Series A Junior Participating Preferred Stock, par value $0.001
per share (the "Series A Preferred Stock") at a Purchase Price of $10.00 per
Unit, subject to adjustment. The description and terms of the Rights are set
forth in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
certificates will be distributed. Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur 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 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), other than as a result of repurchases of stock
by the Company or certain inadvertent actions by institutional or certain
other stockholders, or (ii) 10 days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer
(other than a Permitted Offer, as defined below) that would result in a person
or group beneficially owning 15% or more of the outstanding shares of Common
Stock.
Until the Distribution Date, (i) the Rights will be
represented by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation 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.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Series A Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date
and will expire at 5:00 P.M. (California time) on July 18, 2015, unless such
date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below (including by virtue of the "sunset provision,"
described below).
As soon as practicable after the Distribution Date, 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. Except as otherwise
determined by the Board, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that any person or any group of affiliated or
associated persons becomes an Acquiring Person, except pursuant to an offer
for all outstanding shares of Common Stock which the independent directors
determine to be fair to, and otherwise in the best interests of, the Company
and its stockholders, after receiving advice from one or more investment
banking firms (a "Permitted Offer"), each holder of a Right will thereafter
have the right to receive, upon exercise, in lieu of the fractional shares of
Series A Preferred Stock, that number of 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.
Notwithstanding any of the foregoing, following the occurrence of the event
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. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable or exchangeable by the Company as
set forth below.
For example, at an exercise price of $10.00 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $20.00 worth of Common Stock (or other consideration, as
noted above) for $10.00. Assuming that the Common Stock had a per share value
of $1.00 at such time, the holder of each valid Right would be entitled to
purchase twenty shares of Common Stock for $10.00.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than with an entity which acquired the shares pursuant to a Permitted
Offer), (ii) the Company engages in a merger or other 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
Company's assets, cash flow 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, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price
of $0.0001 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board). Immediately upon the action of the Board
authorizing redemption of the Rights, the Rights will terminate and the
holders of Rights will be entitled only to receive the $0.0001 redemption
price.
Pursuant to the "sunset provision" contained in the Rights
Agreement, continuation of the Rights Agreement will be put to a vote of the
Company's stockholders at the Company's 2008 annual meeting of stockholders.
If the majority of the shares of Common Stock outstanding and entitled to vote
at that time are not voted in favor of continuation of the Rights Agreement,
the Rights will automatically terminate and the holders of Rights will be
entitled only to receive the $0.0001 redemption price.
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person and prior to the acquisition by
such person or group of fifty percent (50%) or more of the outstanding Common
Stock, the Company may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of Series
A Preferred Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
Until a Right is exercised or exchanged, 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 Common Stock (or
other consideration) of the Company or for common stock of the acquiring
company or in the event of the redemption of the Rights as set forth above.
No fractional shares of Series A Preferred Stock (other than
fractions that are integral multiples of one one-hundredth of a share) will be
issued, and in lieu thereof, cash will be paid in accordance with the Rights
Agreement.
Series A Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board, dividends payable
in cash in an amount per share (rounded to the nearest cent) equal to 100
times the aggregate per share amount of dividends declared on the Common Stock
of the Company. In the event of any liquidation, dissolution or winding up of
the Company, the holders of shares of Series A Preferred Stock shall have the
right to receive an amount equal to $1.00 per share of Series A Preferred
Stock, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment. Each share of
Series A Preferred Stock will have 100 votes on all matters submitted to a
vote of the stockholders of the Company. In the event of any merger,
consolidation or other transaction in which Common Stock is changed or
exchanged, each share of Series A Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock. Because of the nature
of the Series A Preferred Stock's dividend, liquidation and voting rights, the
value of one one-hundredth of a share of Series A Preferred Stock purchasable
upon exercise of each Right should approximate the value of one share of
Common Stock.
Any of the provisions of the Rights Agreement may be amended
by the Board 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, or to shorten or lengthen any time period
under the Rights Agreement. The foregoing notwithstanding, no amendment may be
made at such time as the Rights are not redeemable.
The Rights are intended to protect the stockholders 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 stockholders, as determined by the Board. The Rights should also not
interfere with any merger or other business combination approved by the Board.
This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is attached as Exhibit 4.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders
--------- ---------------------------------------------------
See the disclosure set forth under "Item 1.01 Entry into a
Material Definitive Agreement," which is incorporated into this Item 3.03 by
reference
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in
--------- ------------------------------------------------------------
Fiscal Year
-----------
On July 8, 2005, the Company filed a Certificate of
Designation of Series A Junior Participating Preferred Stock with the
Secretary of State of the State of Delaware setting forth the terms of the
Series A Junior Participating Preferred Stock issuable upon exercise of the
Rights (if the Rights become exercisable) as disclosed under "Item 1.01 Entry
into a Material Definitive Agreement." A copy of the Certificate of
Designation is attached as Exhibit 3.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Item 8.01 Other Events
--------- ------------
On July 6, 2005, the Company issued a press release
announcing the adoption of the Rights Agreement. A copy of the press release
is attached as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
--------- ----------------------------------
Exhibits.
3.1 Certificate of Designation of Series A Junior Participating
Preferred Stock.
4.1 Rights Agreement, dated July 7, 2005 between Capstone Turbine
Corporation and Mellon Investor Services LLC, as Rights Agent.
99.1 Press release dated July 6, 2005.
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.
Dated: July 8, 2005
CAPSTONE TURBINE CORPORATION
By: /s/ John Tucker
------------------------
Name: John Tucker
Title: Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Certificate of Designation of Series A Junior Participating Preferred
Stock.
4.1 Rights Agreement, dated July 7, 2005 between Capstone Turbine
Corporation and Mellon Investor Services LLC, as Rights Agent.
99.1 Press release dated July 6, 2005.