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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
May 30, 2001
(Date of Report; Date of Earliest Event Reported)
AXT, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
000-24085 94-3031310
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(Commission File Number) (IRS Employer Identification No.)
4281 Technology Drive, Fremont, California 94538
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(address of principal executive offices) (Zip Code)
(510) 683-5900
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
(a) Adoption of Rights Agreement.
On April 24, 2001, the Board of Directors of AXT, 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, $0.001 par value ("Common Stock"), of the Company. The distribution was
paid as of May 30, 2001, (the "Record Date"), to stockholders 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, $0.001 par
value (the "Preferred Stock"), at a price of $131.00 per Right (the "Purchase
Price"). The description and terms of the Rights are set forth in the Rights
Agreement dated as of April 24, 2001 (the "Rights Agreement"), between the
Company and Computershare Trust Company, Inc. (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 (each an "Acquiring Person"), other than certain exempt
persons or entities (each an "Exempt Person"), 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 15% or more of the Company's
outstanding Common Stock (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 together with the Summary of Rights attached thereto. For
purposes of the foregoing, each of the following is an Exempt Person: the
Company or Subsidiary of the Company, including, without limitation, in its
fiduciary capacity, any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company, or any Person (as defined in The
Rights Agreement), 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.
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
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Rights), new certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, will contain a legend incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the Company's Common Stock
certificates, with or without the aforesaid legend or the Summary of Rights
attached thereto, will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date, and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
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
April 24, 2011 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 the greater of (a) $3,275.00 or (b) 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 the
greater of (a) $131,000.00 per share, plus accrued dividends to the date of
distribution whether or not earned or declared, or (b) 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 depository receipts in lieu of such
fractional shares. In lieu of
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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 the event (i) any person becomes an Acquiring Person or (ii) any
Acquiring Person or any of its Affiliates or Associates (as defined in the
Rights Agreement), directly or indirectly, (1) consolidates with or merges into
the Company or any of its subsidiaries or otherwise combines with the Company or
any of its subsidiaries in a transaction in which the Company or such subsidiary
is the continuing or surviving corporation of such merger or combination and the
Common Stock of the Company remains outstanding and no shares thereof shall be
changed into or exchanged for stock or other securities of any other person or
of the Company or cash or any other property, (2) transfers, in on one or more
transactions, any assets to the Company or any of its subsidiaries in exchange
for capital stock of the Company or any of its subsidiaries or for securities
exercisable for or convertible into capital stock of the Company or any of its
subsidiaries or otherwise obtains from the Company or any of its subsidiaries,
with or without consideration, any capital stock of the Company or any of its
subsidiaries or securities exercisable for or convertible into capital stock of
the Company or any of its subsidiaries (other than as part of a pro rata offer
or distribution to all holders of such stock), (3) sells, purchases, leases,
exchanges, mortgages, pledges, transfers or otherwise disposes to, from or with
the Company or any of its subsidiaries, as the case may be, assets on terms and
conditions less favorable to the Company or such subsidiary than the Company or
such subsidiary would be able to obtain in arm's-length negotiation with an
unaffiliated third party, (4) receives any compensation from the Company or any
of its subsidiaries for services other than compensation for employment as a
regular or part-time employee, or fees for serving as a director at rates in
accordance with the Company's (or its subsidiary's) past practice, (5) receives
the benefit (except proportionately as a stockholder) of any loans, advances,
guarantees, pledges or other financial assistance or tax credit or advantage, or
(6) engages in any transaction with the Company (or any of its subsidiaries)
involving the sale, license, transfer or grant of any right in, or disclosure
of, any patents, copyrights, trade secrets, trademarks or know-how (or any other
intellectual or industrial property rights recognized under any country's
intellectual property rights laws) which the Company (including its
subsidiaries) owns or has the right to use on terms and conditions not approved
by the Board of Directors of the Company, or (iii) while there is an Acquiring
Person, there shall occur any reclassification of securities (including any
reverse stock split), any recapitalization of the Company, or any merger or
consolidation of the Company with any of its subsidiaries or any other
transaction or transactions involving the Company or any of its subsidiaries
(whether or not involving the Acquiring Person) which have the effect of
increasing by more than 1% the proportionate share of the outstanding shares of
any class of equity securities of the Company or any of its subsidiaries which
is directly or indirectly owned or controlled by the Acquiring Person (such
events are collectively referred to herein as the "Flip-In Events"), then, and
in each such case, each holder of record of a Right, other than the Acquiring
Person, will thereafter have the right to receive, upon payment of the then
current Purchase Price, in lieu of one one-thousandth of a share of Preferred
Stock per outstanding Right, that number of shares of Common Stock having a
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market value at the time of the transaction equal to the Purchase Price (as
adjusted to the Purchase Price in effect immediately prior to the Flip-In Event
multiplied by the number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such Flip-In Event)
divided by one-half the average of the daily closing prices per share of the
Common Stock for the thirty consecutive trading days ("Current Market Price") on
the date of such Flip-In Event. Notwithstanding the foregoing, Rights held by
the Acquiring Person or any Associate or Affiliate thereof or certain
transferees will be null and void and no longer be transferable.
The Company may at its option substitute for a share of Common Stock
issuable upon the exercise of Rights in accordance with the foregoing paragraph
such number or fractions of shares of Preferred Stock having an aggregate
current market value equal to the Current Market Price of a share of Common
Stock. In the event that insufficient shares of Common Stock are available to
permit the exercise in full of the Rights in accordance with the foregoing
paragraph, the Board of Directors shall, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a party,
(A) determine the excess (such excess, the "Spread") of (1) the value of the
shares of Common Stock issuable upon the exercise of a Right in accordance with
this paragraph (the "Current Value") over (2) the Purchase Price, and (B) with
respect to each Right (other than Rights which have become void pursuant to the
foregoing paragraph), make adequate provision to substitute for the shares of
Common Stock issuable in accordance with this paragraph upon exercise of the
Right and payment of the Purchase Price, (1) cash, (2) a reduction in such
Purchase Price, (3) shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock, (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having a value which,
when added to the value of the shares of Common Stock actually issued upon
exercise of such Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in such Purchase Price); provided, however,
that if the Company shall not make adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the Flip-In Event, then
the Company shall be obligated to deliver, to the extent permitted by applicable
law and any material agreements then in effect to which the Company is a party,
upon the surrender for exercise of a Right and without requiring payment of such
Purchase Price, shares of Common Stock (to the extent available), and then, if
necessary, such number or fractions of shares of Preferred Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. Rights are not exercisable following the
occurrence of the events set forth in the foregoing paragraph until the
expiration of the period during which the Rights may be redeemed as described
below.
Unless the Rights are earlier redeemed, in the event that following the
first occurrence of a Flip-In Event, the Company were to be acquired in a merger
or other business combination in which any shares of the Company's Common Stock
are exchanged or converted for other securities or assets (other than a merger
or other business combination in which the voting power represented by the
Company's securities outstanding immediately prior thereto continues to
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represent all of the voting power represented by the securities of the Company
thereafter and the holders of such securities have not changed as a result of
such transaction), or 50% or more of the assets or earning power of the Company
and its subsidiaries (taken as a whole) were to be sold or transferred in one or
a series of related transactions (such transactions being collectively referred
to herein as the "Flip-Over Events"), the Rights Agreement provides that proper
provision shall be made so that each holder of record of a Right (other than an
Acquiring Person, or affiliates or associates thereof) will from and after such
date have the right to receive, upon payment of the then current Purchase Price,
that number of shares of common stock of the acquiring company having a market
value at the time of such transaction equal to the Purchase Price divided by
one-half the Current Market Price of such common stock.
No fractional shares of Common Stock will be issued upon exercise of the
Rights and, in lieu thereof, a payment in cash will be made to the holder of
such Rights equal to the same fraction of the current market value of a share of
Common Stock.
At any time until the occurrence of a Flip-In Event, the Board may redeem
the Rights in whole, but not in part, at a price of $.001 per Right. Immediately
upon the action of the Board of Directors of the Company authorizing 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 without
any interest thereon.
At any time after the occurrence of a Flip-In Event and prior to the
earlier of a Flip-Over Event or such time as any Person (other than an Exempt
Person), together with all Affiliates and Associates, becomes the Beneficial
Owner of more than 50% of the Common Stock outstanding, the Board of Directors
of the Company may, at its option, exchange all or any portion of the
outstanding Rights (other than Rights held by any Acquiring Person which have
become void) for shares of Common Stock on a pro rata basis, at an exchange
ratio of one share of Common Stock or one one-thousandth of a share of 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. Immediately
upon the ordering of such exchange and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive shares of Common Stock or Common Stock Equivalents
pursuant to the exchange. In the event there are insufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights, the Company shall take all actions necessary to authorize
additional shares.
Until the Rights become nonredeemable the Company may, except with respect
to the redemption price of the Rights, amend the Rights Agreement in any manner.
After the Rights become nonredeemable, the Company may amend the Rights
Agreement to cure any ambiguity, to correct or supplement any provision which
may be defective or inconsistent with any other provisions, to shorten or
lengthen any time period under the Rights Agreement, or to arrange or supplement
the provisions thereunder in any manner which the Company may deem necessary or
desirable, provided that no such amendment may adversely affect the interests of
the holders of the Rights (other than the Acquiring Person or its affiliates or
associates) or cause the Rights to again be redeemable or the Agreement to again
be freely amendable.
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Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
The issuance of the Rights is not taxable to the Company or to
stockholders under presently existing federal income tax law, and will not
change the way in which stockholders can presently trade the Company's shares of
Common Stock. If the Rights should become exercisable, stockholders, depending
on then existing circumstances, may recognize taxable income.
The Rights have certain anti-takeover effects. Under certain circumstances
the Rights could cause substantial dilution to a person or group who attempts to
acquire the Company on terms not approved by the Company's Board of Directors.
However, the Rights should not interfere with any merger or other business
combination approved by the Board.
The form of Rights Agreement between the Company and the Rights Agent
(including as Exhibit A the form of Certificate of Designation, Preferences and
Rights of the Terms of the Series B Preferred Stock, as Exhibit B the form of
Right Certificate, and as Exhibit C the Summary of Terms of Rights Agreement), a
form of letter to the Company's stockholders dated May 30, 2001 and the
Company's press release dated May 4, 2001, are attached hereto as Exhibit 4.2,
Exhibit 20.1 and Exhibit 99.1, respectively, and incorporated herein by
reference. The foregoing description of the Rights is qualified in its entirety
by reference to such exhibits.
(b) Amendment of Bylaws.
On April 24, 2001, the Board of Directors amended the bylaws of the
Company to (i) provide notice of stockholder business at annual and special
meetings; (ii) set forth provisions regulating the conduct of stockholders'
meetings; (iii) establish notice for stockholder nominations of director
candidates; (iv) to conform the provisions in the Bylaws relating to classified
board of directors and written consent of stockholders to the Company's
Certificate of Incorporation; and (v) to permit the use of electronically
transmitted proxies and to revise the vote required for action by stockholders.
The form of Second Amended and Restated Bylaws of the Company is attached
hereto as Exhibit 3.4.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The form of Second Amended and Restated Bylaws of the Company, the Rights
Agreement between the Company and the Rights Agent (including as Exhibit A the
form of Certificate of Designation, Preferences and Rights of the Terms of the
Series A Preferred Stock, as Exhibit B the form of Right Certificate, and as
Exhibit C the Summary of Terms of Rights Agreement), a form of letter to the
Company's stockholders dated May 30, 2001, and the Company's press release dated
May 4, 2001 are attached hereto as Exhibit 3.4, Exhibit 4.2, Exhibit 20.1, and
Exhibit 99.1, respectively, and incorporated herein by reference.
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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.
AXT, INC.
Date: May 30, 2001 By: /s/ Morris S. Young
Morris S. Young
President and
Chief Executive Officer
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EXHIBIT INDEX
Exhibit Description
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3.4 Second Amended and Restated Bylaws of AXT, Inc.
4.2 Form of Rights Agreement between the Company and
Computershare Trust Company, Inc., as Rights Agent (including
as Exhibit A the form of Certificate of Designation,
Preferences and Rights of the Terms of the Series B Preferred
Stock, as Exhibit B the form of Right Certificate, and as
Exhibit C the Summary of Terms of Rights Agreement).
20.1 Form of Letter to AXT, Inc. stockholders, dated May 30, 2001.
99.1 Press Release, dated May 4, 2001.
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