SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FAIRMARKET, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 04-3551937
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(State or other jurisdiction (IRS employer
of incorporation) identification no.)
500 UNICORN PARK DRIVE, WOBURN, MA 01801
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(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH EACH
TO BE SO REGISTERED CLASS IS TO BE REGISTERED
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NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act:
PREFERRED STOCK PURCHASE RIGHTS
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(Title of Class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On May 17, 2001 the Board of Directors of FairMarket, Inc. (the
"Company") adopted a shareholder rights plan, as set forth in the Shareholder
Rights Agreement, dated May 17, 2001, between the Company and EquiServe Trust
Company, N.A., as Rights Agent (the "Rights Agreement"). The following
description of the terms of the Rights Agreement does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement which is
attached hereto as an exhibit and is incorporated herein by reference.
RIGHTS DIVIDEND
Pursuant to the terms of the Rights Agreement, the Board of Directors
declared a dividend distribution of one Preferred Stock Purchase Right (a
"Right") for each outstanding share of Common Stock of the Company (the "Common
Stock") to shareholders of record as of the close of business on May 18, 2001
(the "Record Date"). In addition, one Right will automatically attach to each
share of Common Stock issued between the Record Date and the Distribution Date
(as hereinafter defined). Each Right entitles the registered holder thereof to
purchase from the Company a unit consisting of one ten-thousandth of a share (a
"Unit") of Series A Junior Participating Cumulative Preferred Stock, par value
$0.001 per share, of the Company (the "Preferred Stock") at a cash exercise
price of $10.00 per Unit (the "Exercise Price"), subject to adjustment, under
certain conditions specified in the Rights Agreement and summarized below.
DISTRIBUTION DATE
Initially, the Rights are not exercisable and are attached to and trade
with all shares of Common Stock outstanding as of, and issued subsequent to, the
Record Date. The Rights will separate from the Common Stock and will become
exercisable upon the earlier of (i) the close of business on the tenth calendar
day following the first public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding shares of Common Stock, other than as a result
of repurchases of stock by the Company or certain inadvertent actions by a
shareholder (the date of said announcement being referred to as the "Stock
Acquisition Date"), or (ii) the close of business on the tenth business day (or
such later day as the Board of Directors may determine) following the
commencement of a tender offer or exchange offer that could result upon its
consummation in a person or group becoming the beneficial owner of 15% or more
of the outstanding shares of Common Stock (the earlier of such dates being
herein referred to as the "Distribution Date").
Notwithstanding the foregoing, with respect to any person who
beneficially owns (for purposes of the Rights Agreement) 15% or more of the
outstanding shares of Common Stock as of May 18, 2001 (such person being
referred to in the Rights Agreement as a "Grandfathered Person"), the
Distribution Date will not occur unless such Grandfathered Person has acquired
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beneficial ownership of shares of Common Stock representing an additional 1/2%
of the outstanding shares of Common Stock.
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), (a) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (b) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference, and (c)
the surrender for transfer of any certificates for Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
SUBSCRIPTION AND MERGER RIGHTS
In the event that a Stock Acquisition Date occurs, proper provision will
be made so that each holder of a Right (other than an Acquiring Person or its
associates or affiliates, whose Rights shall become null and void) will
thereafter have the right to receive upon exercise that number of Units of
Preferred Stock of the Company having a market value of two times the exercise
price of the Right (such right being referred to as the "Subscription Right").
In the event that, at any time following the Stock Acquisition Date, (i) the
Company consolidates with, or merges with and into, any other person, and the
Company is not the continuing or surviving corporation, (ii) any person
consolidates with the Company, or merges with and into the Company and the
Company is the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the shares of Common Stock are
changed into or exchanged for stock or other securities of any other person or
cash or any other property, or (iii) 50% or more of the Company's assets or
earning power is sold, mortgaged or otherwise transferred, each holder of a
Right (other than an Acquiring Person or its associates or affiliates, whose
Rights shall become null and void) will thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a market value equal
to two times the exercise price of the Right (such right being referred to as
the "Merger Right"). The holder of a Right will continue to have the Merger
Right whether or not such holder has exercised the Subscription Right. Rights
that are or were beneficially owned by an Acquiring Person may (under certain
circumstances specified in the Rights Agreement) become null and void.
Until a Right is exercised, the holder will have no rights as a
shareholder of the Company (beyond those as an existing shareholder), including
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Units, other securities of the Company, other
consideration or for common stock of an acquiring company.
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EXCHANGE FEATURE
At any time after a person becomes an Acquiring Person, the Board of
Directors may, at its option, exchange all or any part of the then outstanding
and exercisable Rights for shares of Common Stock or Units at an exchange ratio
specified in the Rights Agreement. Notwithstanding the foregoing, the Board of
Directors generally will not be empowered to effect such exchange at any time
after any person becomes the beneficial owner of 50% or more of the Common Stock
of the Company.
ADJUSTMENTS
The Exercise Price payable, and the number of Units 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).
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments amount to at least 1% of the Exercise
Price. The Company is not obligated to issue fractional Units. If the Company
elects not to issue fractional Units, in lieu thereof an adjustment in cash will
be made based on the fair market value of the Preferred Stock on the last
trading date prior to the date of exercise.
REDEMPTION
The Rights may be redeemed 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) by the Board of Directors only until the
earlier of (i) the time at which any person becomes an Acquiring Person or (ii)
the expiration date of the Rights Agreement. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate
and thereafter the only right of the holders of Rights will be to receive the
redemption price.
AMENDMENT
The Rights Agreement may be amended by the Board of Directors in its sole
discretion until the time at which any person becomes an Acquiring Person. After
such time the Board of Directors may, subject to certain limitations set forth
in the Rights Agreement, amend the Rights Agreement only to cure any ambiguity,
defect or inconsistency, to shorten or lengthen any time period, or to make
changes that do not adversely affect the interests of Rights holders (excluding
the interests of an Acquiring Person or its associates or affiliates). In
addition, the Board of Directors may at any time prior to the time at which any
person becomes an Acquiring
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Person, amend the Rights Agreement to lower the threshold at which a person
becomes an Acquiring Person to not less than the greater of (i) the sum of .001%
and the largest percentage of the outstanding Common Stock then owned by any
person and (ii) 10%.
EXPIRATION DATE
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 18, 2011 (the "Expiration Date"), unless
previously redeemed or exchanged by the Company.
MISCELLANEOUS
The certificate of designations establishing the Preferred Stock and the
form of Right Certificate are attached as Exhibits A and B, respectively, to the
Rights Agreement (which is included as an exhibit to this Form 8-A). The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement which is
incorporated herein by reference.
ITEM 2 - EXHIBITS.
3.1 Certificate of Designations, Preferences and Rights of a Series of
Preferred Stock of FairMarket, Inc. classifying and designating the
Series A Junior Participating Cumulative Preferred Stock.
4.1 Shareholder Rights Agreement, dated as of May 17, 2001, between
FairMarket, Inc. and EquiServe Trust Company, N.A., as Rights Agent.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
FAIRMARKET, INC.
Date: May 21, 2001 By: /s/ Janet Smith
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Name: Janet Smith
Title: Chief Financial Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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3.1 Certificate of Designations, Preferences and Rights of a Series
of Preferred Stock of FairMarket, Inc. classifying and
designating the Series A Junior Participating Cumulative
Preferred Stock.
4.1 Shareholder Rights Agreement, dated as of May 17, 2001, between
FairMarket, Inc. and EquiServe Trust Company, N.A., as Rights
Agent.