DORIAN LPG LTD. (NASDAQ:LPG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Item 3.03 below is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
On December 16, 2016, the Board of Directors of the Company
declared a dividend of one preferred share purchase right (a
“Right”) for each outstanding share of common stock, par value
$0.01 per share and adopted a shareholder rights plan, as set
forth in the Rights Agreement dated as of December 16, 2016 (the
“Rights Agreement”), by and between the Company and
Computershare Inc., as rights agent. The dividend is payable on
December 27, 2016 to the stockholders of record on such date.
The Board has adopted this Rights Agreement to protect
stockholders from coercive or otherwise unfair takeover tactics.
In general terms, it works by imposing a significant penalty upon
any person or group which acquires 15% or more of the outstanding
common stock of the Company without the approval of the Board.
The Rights Agreement should not interfere with any merger or
other business combination approved by the Board.
A summary of the terms of the Rights Agreement follows. This
description is only a summary, and is not complete, and should be
read together with the entire Rights Agreement, which has been
filed as an exhibit to this Form 8K. A copy of the Rights
Agreement is available free of charge from the Company upon
request.
The Rights. The Rights will initially trade with, and will be
inseparable from, the common stock. The Rights are evidenced only
by certificates that represent shares of common stock. New Rights
will accompany any new shares of common stock the Company issues
after December 27, 2016 until the Distribution Date described
below.
Exercise Price. Each Right will allow its holder to purchase from
the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock (a “Preferred Share”) for $60
(the “Exercise Price”), once the Rights become exercisable.
This portion of a Preferred Share will give the stockholder
approximately the same dividend and liquidation rights as would
one share of common stock. Prior to exercise, the Right does not
give its holder any dividend, voting, or liquidation rights.
Exercisability. The Rights will not be exercisable until 10 days
after the public announcement that a person or group has become
an “Acquiring Person” by obtaining beneficial ownership of 15%
or more of the outstanding common stock.
For persons who, prior to the time of public announcement of the
Rights Agreement, have publicly disclosed in a Schedule 13D or
Schedule 13G (or an amendment thereto) on file with the
Securities and Exchange Commission that they beneficially own 15%
or more of the Company’s outstanding common stock, the Rights
Agreement “grandfathers” their current level of ownership, so
long as they do not purchase additional shares in excess of
certain limitations.
Certain synthetic interests in securities created by derivative
positions whether or not such interests are considered to be
ownership of the underlying common stock or are reportable for
purposes of Regulation 13D of the Securities Exchange Act are
treated as beneficial ownership of the number of shares of the
company’s common stock equivalent to the economic exposure
created by the derivative position, to the extent actual shares
of the company’s common stock are directly or indirectly held by
counterparties to the derivatives contracts. Swaps dealers
unassociated with any control intent or intent to evade the
purposes of the Rights Plan are excepted from such imputed
beneficial ownership.
The date when the Rights become exercisable is the “Distribution
Date.” Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock
will constitute a transfer of Rights. After that date, the Rights
will separate from the common stock and be evidenced by
book-entry credits or by Rights certificates that the Company
will mail to all eligible holders of common stock. Any Rights
held by an Acquiring Person are void and may not be exercised.
The Board of Directors may reduce the threshold at which a person
or group becomes an Acquiring Person from 15% to not less than
10% of the outstanding common stock.
Consequences of a Person or Group Becoming an Acquiring
Person.
Flip In. If a person or group becomes an Acquiring
Person, all holders of Rights except the Acquiring Person
may, for $60, purchase shares of the Company common stock
with a market value of $120, based on the market price of
the common stock prior to such acquisition.
Flip Over. If the Company is later acquired in a merger
or similar transaction after the Distribution Date, all
holders of Rights except the Acquiring Person may, for
$60, purchase shares of the acquiring corporation with a
market value of $120, based on the market price of the
acquiring corporation’s stock prior to such transaction.
Notional Shares. Shares held by affiliates and associates
of an Acquiring Person, including certain entities in
which the Acquiring Person beneficially owns a majority
of the equity securities, and Notional Common Shares (as
defined in the Rights Agreement) held by counterparties
to a Derivatives Contract (as defined in the Rights
Agreement) with an Acquiring Person, will be deemed to be
beneficially owned by the Acquiring Person.
Preferred Share Provisions.
Each one one-hundredth of a Preferred Share, if issued:
will not be redeemable;
will entitle its holder to quarterly dividend payments of
$.01, or an amount equal to the dividend paid on one
share of common stock, whichever is greater;
will entitle its holder upon liquidation either to
receive $1.00 or an amount equal to the payment made on
one share of common stock, whichever is greater;
will have the same voting power as one share of common
stock; and
if shares of the Company common stock are exchanged via
merger, consolidation, or a similar transaction, will
entitle holders to a per share payment equal to the
payment made on one share of common stock.
The value of one one-hundredth interest in a Preferred Share
should approximate the value of one share of common stock.
Expiration. The Rights will expire on August 31, 2018.
Redemption. The Board may redeem the Rights for $0.01 per Right
at any time before any person or group becomes an Acquiring
Person. If the Board redeems any Rights, it must redeem all of
the Rights. Once the Rights are redeemed, the only right of the
holders of Rights will be to receive the redemption price of
$0.01 per Right. The redemption price will be adjusted if the
Company has a stock split or stock dividends of its common stock.
Exchange. After a person or group becomes an Acquiring Person,
but before an Acquiring Person owns 50% or more of the
outstanding common stock of the Company, the Board may extinguish
the Rights by exchanging one share of common stock or an
equivalent security for each Right, other than Rights held by the
Acquiring Person.
Anti-Dilution Provisions. The Board may adjust the purchase price
of the Preferred Shares, the number of Preferred Shares issuable
and the number of outstanding Rights to prevent dilution that may
occur from a stock dividend, a stock split, a reclassification of
the Preferred Shares or common stock. No adjustments to the
Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights Agreement may be amended by
the Board without the consent of the holders of the Rights.
However, the Board may not amend the Rights Agreement to lower
the threshold at which a person or group becomes an Acquiring
Person to below 10% of the outstanding common stock of the
Company. In addition, the Board may not cause a person or group
to become an Acquiring Person by lowering this threshold below
the percentage interest that such person or group already owns.
After a person or group becomes an Acquiring Person, the Board
may not amend the agreement in a way that adversely affects
holders of the Rights.
The Rights Agreement is attached hereto as Exhibit 4.1 and is
incorporated herein by reference. The foregoing description of
the Rights is qualified in its entirety by reference to such
exhibit.
Item 8.01. Other Events.
Earlier today, the Company announced the declaration of the
dividend of Rights and issued a press release relating to such
events, a copy of which is attached to this Current Report on
Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements, Pro Forma Financial Information
and Exhibits
(a)
Financial statements of businesses acquired.
Not applicable.
(b)
Pro forma financial information.
Not applicable.
(c)
Exhibits.
The following exhibits are filed as part of this report:
4.1
Rights Agreement, dated as of December 16, 2016, between
Dorian LPG Ltd. and Computershare Inc., which includes
the form of Right Certificate as Exhibit A and the
Summary of Rights to Purchase Preferred Shares as Exhibit
B.
99.1
Press Release, dated as of December 16, 2016.
About DORIAN LPG LTD. (NASDAQ:LPG)
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