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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: MAY 3, 2006
DATE OF EARLIEST EVENT REPORTED: APRIL 27, 2006
CAMBREX CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-10638 22-2476135
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(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
One Meadowlands Plaza, East Rutherford, New Jersey 07073
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(Address of Principal Executive Offices) (Zip Code)
(201) 804-3000
(Registrant's telephone number, including area code)
N/A
(Former name or 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))
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Item 1.01. Extension of Period to Exercise Stock Options.
On April 28, 2006, the Compensation Committee of the Board of Directors
extended until December 30, 2006, the period to exercise 120,849 employee stock
options granted to James A. Mack, the Company's President, Chief Executive
Officer and Chairman of the Board. These options were otherwise due to expire on
that day due to Mr. Mack's retirement from the Company on April 28, 2005. In
consideration of Mr. Mack's return to active employment of January 1, 2006, the
Committee considered it appropriate and in the shareholders' best interests to
grant such extension.
Item 1.01. Material Modification to Rights of Security Holders.
On April 27, 2006, the Board of Directors (the "Board of Directors") of
Cambrex Corporation (the "Company") (i) adopted a Rights Agreement dated June 5,
2006 (the "Rights Agreement") between the Company and American Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agent"), and (ii) declared a
dividend payable on June 5, 2006 (the "Record Date") of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.10 per share (the "Common Shares"), of the Company.
As previously announced, the Company is in the process of examining
strategic alternatives, including the potential sale of certain assets, in order
to maximize stockholder value. On June 5, 2006, the outstanding rights (the
"Outstanding Rights") issued pursuant to the Rights Agreement between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the "1996
Rights Agreement"), will expire in accordance with the terms of the 1996 Rights
Agreement. In light of the scheduled expiration of the Outstanding Rights and
the negative impact that certain takeover tactics could have both on the
interests of the Company's stockholders and on the Company's ongoing
consideration of strategic alternatives, the Board deemed it desirable and in
the best interests of the Company and its stockholders to adopt a new
Stockholders Rights Plan to be effective upon the expiration of the Outstanding
Rights.
Rights Agreement
The dividend of a Right is payable on the Record Date to the holders of
record of the Common Shares on that date. Each Right entitles the holder to
purchase from the Company one one-hundredth of a share of Series F Junior
Participating Cumulative Preferred Stock, par value $.10 per share, of the
Company (the "Preferred Shares") at a price of $80 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in the Rights Agreement.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons have acquired
beneficial ownership of 10% or more of the outstanding Common Shares (an
"Acquiring Person") or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as
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any person or group of affiliated persons 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 the beneficial
ownership by a person or group of 10% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of the Summary of Rights in the form attached as Exhibit C to the Rights
Agreement.
The Rights Agreement provides that none of the Company's directors or
officers shall be deemed to beneficially own any Common Shares owned by any
other director or officer by virtue of such persons acting in their capacities
as such, including in connection with the formulation and publication of the
Board of Directors, recommendation of its position, and actions taken in
furtherance thereof, with respect to an acquisition proposal relating to the
Company, a tender or exchange offer for the Common Shares or any solicitation of
proxies with respect to any Common Shares.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of the Summary of Rights attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares 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 Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on December 31, 2007 (the "Expiration Date"), unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number 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 stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price 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 dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
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The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Once issued upon exercise of Rights, each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment equal to the
greater of $1 per share or an aggregate dividend of 100 times the dividend
declared per Common Share. In the event of liquidation, the holders of
outstanding Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each outstanding
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each outstanding Preferred Share will be entitled
to receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, 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.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, the Rights Agreement provides that proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive (subject to adjustment) upon exercise thereof at the
then current Purchase Price, that number of Common Shares having a market value
of two times the Purchase Price, unless the event causing such Person to become
an Acquiring Person is an acquisition of Common Shares pursuant to a tender or
exchange offer for all outstanding Common Shares at a price and on terms
determined by at least a majority of the members of the Board of Directors who
are not Acquiring Persons or representatives, nominees, affiliates or associates
of an Acquiring Person, after receiving advice from one or more investment
banking firms, to be at a price which is fair to stockholders (taking into
account all factors which such directors deem relevant, including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were to be sold on an orderly basis designed to realize maximum value)
and otherwise in the best interests of the Company and its stockholders. At any
time after any person or group becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights owned
by such person or group, which will have become void), in whole or in part, at
an exchange ratio of one Common Share, or one one-hundredth of a Preferred Share
(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).
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after
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a person or group has become an Acquiring Person, proper provision will be made
so that each holder of a Right will thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price, that number of shares
of common stock of the acquiring company which at the time of such transaction
will have a market value of two times the Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of the outstanding
Common Shares, the Board of Directors may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish.
The terms of the Rights may be amended by the Board of Directors without
the consent of the holders of the Rights, including an amendment to (a) reduce
the Redemption Price or (b) increase the Purchase Price, except that from and
after such time as any person or group of affiliated or associated persons
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). Notwithstanding the foregoing, the Company may not at any time
amend the Rights Agreement to extend the Expiration Date later than December 31,
2007.
Until a Right is exercised, 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.
A copy of the Rights Agreement will be available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement.
As of May 1, 2006, there were 29,198,491 Common Shares issued and
outstanding. As long as the Rights are attached to the Common Shares, the
Company will issue one Right with each new Common Share so that all such shares
will have Rights attached. The Company's Board of Directors has reserved for
issuance upon exercise of the Rights three hundred thousand (300,000) Preferred
Shares.
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Item 3.03 Material Modification of Rights of Security Holders.
See Item 1.01 directly above, which is 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.
CAMBREX CORPORATION
Date: May 3, 2006 By: /s/
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Name: Peter E. Thauer
Title: Senior Vice President,
General Counsel and
Corporate Secretary