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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): August 9, 2005
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ADVANCED MARKETING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16002 95-3768341
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
5880 Oberlin Drive
San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(858) 457-2500
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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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 (see General Instruction A.2. below):
|_| 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 Entry into a Material Definitive Agreement.
On August 9, 2005, Advanced Marketing Services, Inc., a Delaware
corporation (the "Company"), announced that its the Board of Directors adopted a
stockholder rights plan to discourage abusive takeover tactics and to provide
the Company's Board of Directors with sufficient time to respond appropriately
to a takeover attempt and seek alternative opportunities, if appropriate, to
maximize stockholder value. Under the rights plan, the Company will make a
dividend distribution of one Common Stock purchase right (a "Right") for (i)
each outstanding share of Common Stock, par value $0.001 per share, of the
Company (the "Common Stock") outstanding at the close of business on August 22,
2005 (the "Record Date"), and (ii) each additional share of Common Stock which
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Expiration Date (as such terms are defined below) and the
date, if any, on which such rights are redeemed. Each Right entitles the
registered holder to purchase from the Company one one-tenth share of Common
Stock at the price of $3.00 per one one-tenth of a share of Common Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
In general, until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Stock (provided that a person or entity holding 15% or more
of the outstanding Common Stock as of August 9, 2005, will not be an Acquiring
Person unless that person or entity subsequently acquires additional shares of
the Common Stock) 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 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 15% or more of the outstanding Common Stock
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate with a copy
of the Summary of Rights attached thereto.
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 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 Common Stock 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 Stock outstanding as of the Record Date,
even without such notation or a copy of the Summary of Rights being 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 Common Stock 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 August 9, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number and kind of shares or other
securities covered by each Right, 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 Common Stock, (ii) upon the grant to
holders of Common Stock of certain rights or warrants to subscribe for or
purchase Common Stock at a price, or securities convertible into Common Stock
with a conversion price, less than the then-current market price of the Common
Stock, or (iii) upon the distribution to holders of Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends or dividends
payable in Common Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-tenths of a
share of Common 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, prior to the
Distribution Date.
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 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,
such number of shares of common stock of the Principal Party (as defined in the
Rights Agreement) as shall be equal to the result obtained by (x) multiplying
the then current Purchase Price by the number of Units for which a Right is then
exercisable and dividing that product by (y) 50 percent of the current market
price per share of the common stock of the Principal Party (determined in the
same manner as the current market price of Common Stock is determined under
Section 11(d) of the Rights Agreement) on the date of consummation of such
consolidation, merger, sale or transfer.
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 Stock, the Board of Directors of the Company 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 share of Common Stock per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued and in
lieu thereof, an adjustment in cash will be made based on the market price of
the shares of Common Stock on the last trading day prior to the date of
exercise.
At any time prior to the close of business on the tenth day after the first
date of public announcement of an acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 15% or more of the outstanding
Common Stock, the Board of Directors of the Company may redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend,
reclassification or similar transaction occurring after the date hereof.
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.
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 of Directors 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 of Directors. The Rights should also not interfere
with any merger or other business combination approved by the Board of
Directors, because the Board of Directors may, at its option, redeem all of the
then-outstanding Rights at the redemption price.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, a copy of
which is attached hereto as Exhibit 4.1.
Item 3.03 Material Modifications to Rights of Security Holders.
The disclosure provided in Item 1.01 of this Report is hereby incorporated
by reference into this Item 3.03.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
4.1 Rights Agreement, dated August 9, 2005, between Advanced
Marketing Services, Inc. and American Stock Transfer & Trust
Company, as Rights Agent.
99.1 Public announcement by Advanced Marketing Services, Inc., dated
August 9, 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: August 15, 2005 ADVANCED MARKETING SERVICES, INC.
/s/ Bruce C. Myers
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Bruce C. Myers,
President and Chief Executive Officer