SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F0RM 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 4, 2004
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Unitrin, 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 or organization)
One East Wacker Drive, Chicago, Illinois 60601
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(Address of principal executive offices) (Zip Code)
0-18298 95-4255452
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(Commission File Number) (I.R.S. Employer Identification No.)
(312) 661-4600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On August 4, 2004, the Board of Directors of Unitrin, Inc.
(the "Company") determined to extend for an additional ten (10) years the
protections provided by its Stockholder Rights Plan which had previously been
adopted in August 1994. In order to implement the extension, the Board of
Directors declared a dividend distribution of one new Right for each
outstanding share of Company Common Stock to stockholders of record at the
close of business on August 16, 2004 (the "Record Date"). These new rights
replaced the previously outstanding Rights which had expired in accordance
with their terms on August 3, 2004. Each Right entitles the registered holder
to purchase from the Company a unit consisting of one one-thousandth of a
share (a "Unit") of Series A Junior Participating Preferred Stock, par value
$0.10 per share (the "Series A Junior Participating Preferred Stock") at a
Purchase Price of $150.00 per Unit, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Wachovia Bank, National Association, as
Rights Agent.
The following summary of the principal terms of the Rights
Agreement is a general description only and is qualified in its entirety by
reference to the detailed terms and conditions of the Rights Agreement. A copy
of the Rights Agreement is attached as Exhibit 4.1 hereto and incorporated
herein by reference. Unless the context otherwise requires, the capitalized
terms used herein shall have the meanings ascribed to them in the Rights
Agreement attached hereto.
Rights Initially Evidenced by Common Share Certificates; Distribution Date
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding or, in the case of
uncertificated shares, the balances indicated in the book-entry account system
of the transfer agent for the Common Stock, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of: (i) ten (10) business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more (22% or more in the case of the Company's existing stockholder,
Singleton Group LLC, and certain related persons) of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), other than as a result of
repurchases of stock by the Company or certain inadvertent actions by
institutional or certain other stockholders; or (ii) ten (10) business days
(or such later date as the Board shall determine) following the commencement
of a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. Until the Distribution Date, (i) the Rights will
be evidenced by the Common Stock certificates or, in the case of
uncertificated shares, the balances indicated in the book-entry account system
of the transfer agent for the Common Stock, and will be transferred with and
only with shares of Common Stock, and (ii) the surrender for transfer of any
shares of Common Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock. Pursuant to the Rights Agreement, the
Company reserves the right to require prior to the occurrence of a Triggering
Event (as defined below) that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
Issuance of Rights Certificates; Expiration of Rights
The Rights are not exercisable until the Distribution Date
and will expire at 5:00 P.M. (New York City time) on August 4, 2014, unless
such date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Directors, or with respect to shares of Common
Stock issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of the Distribution Date,
or upon the exercise, conversion or exchange of securities issued by the
Company after the date of the Rights Agreement, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
1
Right to Buy Company Common Shares
In the event that a Person becomes an Acquiring Person,
except pursuant to an offer for all outstanding shares of Common Stock which
the independent directors determine to be fair and not inadequate and to
otherwise be in the best interests of the Company and its stockholders, after
receiving advice from one or more investment banking firms (a "Qualified
Offer"), each holder of a Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the
exercise price of the Right. Notwithstanding any of the foregoing, following
the occurrence of the event set forth in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, at an exercise price of $150 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $300 worth of Common Stock (or other consideration, as
noted above) for $150. Assuming that the Common Stock had a per share value of
$50 at such time, the holder of each valid Right would be entitled to purchase
six (6) shares of Common Stock for $150.
Right to Buy Acquiring Company Shares
In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than with an entity which acquired the shares pursuant to a Qualified
Offer), (ii) the Company engages in a merger or other business combination
transaction in which the Company is the surviving corporation and the Common
Stock of the Company is changed or exchanged, or (iii) 50% or more of the
Company's assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
Exchange Provision
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or
more of the outstanding Common Stock, the Board may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, 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 (subject to adjustment).
Adjustments to Prevent Dilution
The Purchase Price payable, and the number of Units 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) if holders of the Preferred
Stock are granted 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 regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
2
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, 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.
Redemption
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
No Stockholders' Rights Prior to Exercise
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. While the distribution
of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company or
in the event of the redemption of the Rights as set forth above.
Amendment of Rights Agreement
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement. The foregoing notwithstanding, no
amendment may be made at such time as the Rights are not redeemable.
Certain Anti-Takeover Effects
The Rights are not intended to prevent a takeover of the
Company and will not do so. Subject to the restrictions described above, the
Rights may be redeemed by the Company at $0.01 per Right at any time prior to
the Distribution Date. Accordingly, the Rights should not interfere with any
merger or business combination approved by the Board of Directors. However,
the Rights may have the effect of rendering more difficult or discouraging an
acquisition of the Company deemed undesirable by the Board of Directors. The
Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the Company's
Board of Directors, except pursuant to an offer conditioned upon the negation,
purchase or redemption of the Rights.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit Number Exhibit
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4.1 Rights Agreement, dated as of August 4,
2004, between Unitrin, Inc. and Wachovia
Bank, National Association, including the
Form of Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock, the Form of
Rights Certificate and the Summary of
Rights to Purchase Preferred Stock.
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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 thereunto duly authorized.
Unitrin, Inc.
By: /s/ Scott Renwick
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Name: Scott Renwick
Title: Senior Vice President
Date: August 6, 2004