SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) May 2, 2002
THORATEC CORPORATION
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(Exact name of registrant as specified in its charter)
California 1-8145 94-2340464
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(State or other jurisdiction of incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
6035 Stoneridge Drive, Pleasanton, California 94588
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (925) 847-8600
Item 5. Other Events
On May 3, 2002, Thoratec Corporation (the "Corporation") issued a press
release announcing that its Board of Directors (the "BOARD") adopted a
Shareholder Rights Plan on that date. The press release is attached to this
Current Report as Exhibit 99.1.
As part of that plan, the Board declared a dividend distribution of one
preferred share purchase right (a "RIGHT") as part of that plan for each
outstanding share of Common Stock (the "COMMON STOCK") of the Corporation. The
dividend is payable to the shareholders of record on May 17, 2002 (the "RECORD
DATE"), and with respect to shares of Common Stock issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to shares of Common Stock issued after the Distribution Date. Except as set
forth below, when it becomes exercisable, each Right entitles the registered
holder to purchase from the Corporation one one-thousandth (1/1000th) of a share
of Series RP Preferred Stock, without par value (the "PREFERRED STOCK"), of the
Corporation at a price of $70.00 per one one-thousandth (1/1000th) of a share of
Preferred Stock (the "PURCHASE PRICE"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "AGREEMENT")
between the Corporation and Computershare Trust Company, Inc. a Colorado
corporation, as rights agent (the "RIGHTS AGENT"), dated as of May 2, 2002.
Initially, the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate certificates
representing the Rights ("RIGHT CERTIFICATES") will be distributed. The Rights
will separate from the Common Stock upon the earlier to occur of (A) a person or
group of affiliated or associated persons having acquired, without the prior
approval of the Board, beneficial ownership of 15% or more of the outstanding
shares of Common Stock (except pursuant to a Permitted Offer, as explained
below) or (B) ten days (or such later date as the Board may determine) after the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the completion of which would result in a person or group of
affiliated or associated persons becoming an Acquiring Person (as defined below)
(the "DISTRIBUTION DATE"). A person or group whose acquisition of shares of
Common Stock cause a Distribution Date pursuant to clause (A) above is an
"Acquiring Person," with certain exceptions set forth in the Agreement. The date
that a person or group is first publicly announced to have become such by the
Corporation or such Acquiring Person is referred to below and in the Agreement
as the "Shares Acquisition Date".
The Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the associated shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuance of shares of Common Stock will contain a notation incorporating the
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable after the Distribution
Date, Right Certificates will be mailed to the holders of record of the shares
of Common Stock as of the Close of Business (as defined in the Agreement) on the
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Distribution Date (and to each initial record holder of certain shares of Common
Stock issued after the Distribution Date), and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the Close of Business on May 2, 2012, unless earlier redeemed by the
Corporation as described below.
If any person becomes an Acquiring Person (except pursuant to a tender
or exchange offer which is for all outstanding shares of Common Stock at a price
and on terms which a majority of certain members of the Board determines to be
adequate and in the best interests of the Corporation, its shareholders and
other relevant constituencies, other than such Acquiring Person, its affiliates
and associates (a "PERMITTED OFFER")), each holder of a Right will thereafter
have the right (the "FLIP-IN RIGHT") to receive, upon exercise, the number of
shares of Common Stock (or, in certain circumstances, of one one-thousandths
(1/1000ths) of a share of Preferred Stock or other securities of the
Corporation) having a value (immediately before such triggering event) equal to
two times the exercise price of the Right. Notwithstanding the foregoing, after
the occurrence of the event described above, all Rights that are, or (under
certain circumstances specified in the Agreement) were, beneficially owned by
any Acquiring Person or any affiliate or associate thereof will be null and
void. The Board has the option, at any time after any person becomes an
Acquiring Person, to exchange all or part of the then-exercisable Rights
(excluding those that have become void, as described in the immediately
preceding sentence) for shares of Common Stock, at an exchange ratio determined
by dividing the then-applicable Purchase Price by the then-current market price
per share of Common Stock as determined in accordance with the Agreement.
However, this option generally terminates if any person becomes the beneficial
owner of 50% or more of the Common Stock.
If, at any time after the Shares Acquisition Date, (A) the Corporation
is acquired in a merger or other business combination transaction in which the
holders of all the outstanding shares of Common Stock immediately before the
completion of the transaction are not the holders of all the surviving
corporation's voting power, or (B) more than 50% of the Corporation's assets or
earning power is sold or transferred, in either case with or to (i) an Acquiring
Person or any affiliate or associate thereof or (ii) any other person acting on
behalf of or in concert with such Acquiring Person, affiliate or associate, or
(iii) if, in such transaction, all holders of shares of Common Stock are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right (the "FLIP-OVER RIGHT") to receive, upon exercise, common shares of the
acquiring company (or, in certain circumstances, its parent), having a value
equal to two times the exercise price of the Right. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of shares of Preferred Stock,
shares of Common Stock or other securities issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (A) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Preferred Stock, (B) upon the grant to holders of shares of the Preferred
Stock of certain rights or warrants to subscribe for or purchase Preferred Stock
at a price, or securities convertible into Preferred Stock with a conversion
price,
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less than the then current market price of the Preferred Stock or (C) upon the
distribution to holders of shares of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths
(1/1000ths) of a share of Preferred Stock issuable upon exercise of each Right
are 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,
before the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but, if greater, will
be entitled to an total dividend per share of 1,000 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of shares of
the Preferred Stock will be entitled to a minimum preferential liquidation
payment per share in an amount equal to the greater of $70.00 or 1,000 times the
payment made per share of Common Stock plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment (the "SERIES RP LIQUIDATION PREFERENCE"). Thereafter, and after
the holders of shares of the Common Stock receive a liquidation payment of an
amount equal to the quotient obtained by dividing the Series RP Liquidation
Preference by 1,000 (subject to certain adjustments for stock splits, stock
dividends and recapitalizations with respect to the Common Stock), the holders
of shares of the Preferred Stock and the holders of the Common Stock will share
the remaining assets in the ratio of 1,000 to 1 (as adjusted) for each share of
Preferred Stock and Common Stock so held, respectively. Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Preferred Stock will be entitled to receive 1,000
times the amount received per share of Common Stock. These rights are protected
by customary antidilution provisions. If the amount of accrued and unpaid
dividends on the Preferred Stock is equivalent to six full quarterly dividends
or more, the holders of shares of the Preferred Stock will have the right,
voting as a class, to elect two directors in addition to the directors elected
by the holders of shares of the Common Stock until all cumulative dividends on
the Preferred Stock have been paid or set apart for payment through the last
quarterly dividend payment date. No fractional shares of Preferred Stock will be
issued (other than fractions which are one one-thousandth (1/1000th) or integral
multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, which
may, at the election of the Corporation, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading day before the date of
exercise.
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.
At any time before the earlier to occur of (A) a person becoming an
Acquiring Person or (B) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price (payable in cash or, at the Corporation's election, in Common Stock)
of $0.0001 per Right (the "REDEMPTION PRICE"). Any
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redemption would be effective upon the action of the Board. Additionally, after
the Shares Acquisition Date, the Corporation may redeem the then outstanding
Rights in whole, but not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of shares of Common Stock are treated alike but not involving an
Acquiring Person or its affiliates or associates.
Other than those provisions relating to the rights, duties and
obligations of the Rights Agent and certain principal economic terms of the
Rights, all the provisions of the Agreement may be amended by the Board before
the Distribution Date. After the Distribution Date, the Agreement may only be
amended by the Board in order to cure any ambiguity, defect or inconsistency, to
make changes that do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to shareholders of the Corporation, shareholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
As of May 2, 2002, 57,068,988 shares of Common Stock were outstanding.
The Rights have certain anti-takeover effects. The Rights could cause
substantial dilution to a person or group that attempts to acquire, or in all
events does acquire, at least 15% of the Corporation's Common Stock without
conditioning its offer or acquisition on the Rights being redeemed or
invalidated, or a substantial number of Rights being acquired. However, the
Corporation believes that the Rights should not interfere with any tender offer
or merger approved by the Corporation (other than with an Acquiring Person).
That is because the Rights do not become exercisable in connection with a
Permitted Offer or other acquisition exempted by the Board.
The Rights Agreement (including, attached as exhibits to the Right
Agreement, the Form of Certificate of Determination, Preferences and Rights of
the Series RP Preferred Stock, the Form of Right Certificate, and a summary of
the rights) constitute Exhibit 4.1 to this Current Report and are incorporated
here by reference.
The foregoing description of the Rights does not purport to be complete.
It is qualified in its entirety by reference to the Rights Agreement, including
the exhibits to the Rights Agreement.
Item 7. Exhibits
4.1 Rights Agreement dated as of May 2, 2002 between the Corporation and
Computershare Trust Company, Inc., as rights agent, including: (a) as
Exhibit A,
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the Form of Certificate of Determination, Preferences and Rights of
Series CP Stock, (b) as Exhibit B, the Form of Right Certificate and
(c) as Exhibit C, the Summary of Rights to Purchase Series RP
Preferred Shares. This item was filed with the Securities and Exchange
Commission, on the same date this Current Report was filed, as an
exhibit to the Corporation's Form 8-A. It is incorporated by reference
into this Current Report on Form 8-K.
99.1 Press release issued by the Corporation on May 3, 2002.
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, thereto duly authorized.
Dated May 3, 2002
THORATEC CORPORATION
By /s/ M. Wayne Boylston
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M. Wayne Boylston
Senior Vice President
Chief Financial Officer and Secretary
EXHIBIT INDEX
Exhibit Description
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99.1 Press Release issued by the Corporation on May 3, 2002.