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) July 1, 2002
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CORECOMM HOLDCO, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware * 13-4078506
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
110 East 59th Street, 26th Floor, New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 906-8485
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Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
*This report is being filed with the Securities and Exchange Commission by
CoreComm Holdco, Inc. as a successor issuer to CoreComm Limited by virtue of
paragraph (a) of Rule 12g-3 under the Securities Exchange Act of 1934, as
amended. The Commission File Number of CoreComm Limited is 000-31359.
Item 5. Other Events.
(A) CoreComm Limited, a Delaware corporation ("Limited"), has completed its
two-phase recapitalization plan announced on October 31, 2001 and as a result,
CoreComm Holdco, Inc., a Delaware corporation ("we" or the "Company") and
former wholly-owned subsidiary of Limited, has become the parent company and
sole stockholder of Limited. The second phase of this recapitalization plan
was the exchange offer and subsequent merger (the "Merger"), described in the
Company's prospectus dated July 1, 2002. Because the Merger was consummated
pursuant to Section 253 of the Delaware General Corporation Law, no
stockholder approval was required. Pursuant to the Merger, CoreComm Merger
Corp., a Delaware corporation and wholly-owned subsidiary of the Company, was
merged with and into Limited. Following the Merger the Company will continue
to maintain its headquarters and principal executive offices at 50 Monument
Road, Bala Cynwyd, Pennsylvania, 19004 and 110 East 59th Street, 26th Floor,
New York, New York 10022.
The Merger was consummated on July 1, 2002. Upon effectiveness
of the Merger, the Company became the successor to Limited's listing on the
Nasdaq National Market ("Nasdaq"), replacing Limited. Shares of the
Company's common stock will initially trade on Nasdaq under the symbol
"COMMD," and after 20 trading days will trade under the symbol "COMM," the
symbol under which shares of Limited common stock traded prior to the
Merger. Nasdaq requires that where a stock is a new issue of an existing
stock, the letter "D" be appended to the end of the company's four-letter
stock symbol for 20 trading days. Because the Company is the successor to
Limited's Nasdaq listing, the Company's common stock is being treated as a
"new issue" of an existing stock and so must trade with a "D" appended to
its four-letter stock symbol for the initial 20 trading days following the
Merger.
Although Nasdaq has agreed to transfer the listing, Nasdaq's
continued listing requirements require that an issuer meet one of two
alternative maintenance standards. The first maintenance standard requires
that an issuer have total stockholders' equity of at least $10.0 million or
$4.0 million in net tangible assets and that an issuer's common stock have
a minimum bid price of $1.00, at least two market makers, at least 400
stockholders that hold 100 or more shares each and at least 750,0000
publicly held shares having a market value of at least $5.0 million. The
second maintenance standard requires that an issuer have either a total
market capitalization value of listed securities of at least $50.0 million
or total assets and total revenues of at least $50.0 million each and that
an issuer's common stock have a minimum bid price of $3.00, at least four
market makers, at least 400 stockholders that hold 100 or more shares each
and at least 1.1 million publicly held shares having a market value of at
least $15.0 million. There is a risk that the Company will fail to meet one
or more of the continued listing standards, particularly the minimum market
value of shares held by non-affiliates requirement of both of the
maintenance standards and the stockholders' equity or net tangible assets
requirement of the first maintenance standard. In light of the foregoing,
we cannot assure you that the Company will be able to maintain the Nasdaq
National Market listing for shares of the Company's common stock for the
initial 20 trading days following the Merger or thereafter. If the
Company's common stock is delisted from the Nasdaq National Market, it
could have a negative impact on the trading activity and price of the
Company's common stock and could make obtaining quotations with respect to
the trading of the Company's common stock difficult. In addition, the
delisting of the Company's common stock from the Nasdaq National Market
could also make it more difficult for the Company to raise equity capital
in the future.
If the Company's common stock is delisted from the Nasdaq National
Market, the shares will likely begin trading on the Over-the-Counter
Bulletin Board. The Over-the-Counter Bulletin Board is not considered an
exchange. Shares that trade on the Over-the-Counter Bulletin Board do not
enjoy the same liquidity as shares that trade on the Nasdaq National Market
and obtaining timely and accurate quotations is more difficult.
As a result of the Merger, each outstanding warrant to purchase
shares of Limited common stock that was granted under any warrant agreement
of Limited was a warrant to purchase shares of the Company's common stock
in accordance with the provisions of such warrant agreement. Each
outstanding option to purchase shares of Limited common stock that was
granted under any stock option or compensation plan or arrangement of
Limited terminated on the date the merger was consummated.
(B) This report is being filed with the Securities and Exchange Commission by
the Company as a successor issuer to Limited by virtue of paragraph (a) of
Rule 12g-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Commission File Number of Limited is 000-31359. This Form
8-K is being filed by the Company as a successor issuer, as required by
paragraph (f) of Rule 12g-3 under the Exchange Act.
(C) The following is a description of our capital stock:
Authorized Capital Stock
Our authorized capital stock consists of 250,000,000 shares
of common stock, par value $0.01 per share, and 10,000,000 shares of preferred
stock, par value $0.01 per share. As of June 28, 2002, we had (1) 30,000,054
shares of common stock issued and outstanding, which were held of record by
approximately 43 stockholders, including CoreComm Limited, and (2) no shares
of preferred stock issued or outstanding. The currently outstanding shares of
common stock are validly issued, fully paid and non-assessable. The number of
authorized shares of any of our preferred stock or our common stock may be
increased or decreased, but not below the then number of shares outstanding,
by the vote of the holders of a majority of our voting power and no vote of
the holders of any of our preferred stock or our common stock voting
separately as a class is required. The following description is qualified in
all respects by reference to our charter and our amended by-laws.
Common Stock
The holders of our common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of our
stockholders and do not have cumulative voting rights in the election of
directors. The holders of our common stock are not entitled to vote on any
amendment to our charter that relates solely to the terms of one or more
outstanding series of preferred stock if the holders of the affected series
are entitled, either separately or together with the holders of one or more
other series, to vote thereon pursuant to our charter or pursuant to the
Delaware General Corporation Law. Holders of our common stock are entitled to
receive proportionately dividends as may from time to time be declared by our
board of directors out of funds legally available for the payment of
dividends. In the event of our liquidation, dissolution or winding up, holders
of our common stock would be entitled to share proportionately in all of our
assets available for distribution to holders of our common stock remaining
after payment of liabilities and liquidation preference of any outstanding
preferred stock. Holders of our common stock have no preemptive rights and
have no rights to convert our common stock into any other securities, and
there are no redemption provisions with respect to the common stock.
Preferred Stock
Our charter authorizes the board of directors to issue one
or more series of preferred stock and determine, with respect to any series,
the rights, if any, and their qualifications, limitations or restrictions, as
are stated in resolutions adopted by the board of directors providing for the
issue of the series and as are permitted by the Delaware General Corporation
Law.
The ability of the board of directors to issue one or more
series of preferred stock provides increased flexibility in structuring
possible future financings and acquisitions and in meeting other corporate
needs which might arise. The authorized shares of preferred stock, as well as
shares of our common stock, are available for issuance without further action
by our stockholders, unless any action is required by applicable law or the
rules of any stock exchange or automated quotation system on which our
securities may be listed or applicable rules of any self-regulatory
organization. If the approval of our stockholders is not required for the
issuance of shares of preferred stock or common stock, the board of directors
does not intend to seek stockholder approval. The board of directors will make
any determination to issue the shares based on its judgment as to our best
interests and the best interests of our stockholders. The board of directors,
in so acting, could issue preferred stock having terms that could discourage
an acquisition attempt or other transaction that some or a majority of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their shares over the then current
market price of our shares.
Series A Junior Participating Preferred Stock
In connection with the adoption of our stockholder rights
plan, which is described below, our board of directors designated and reserved
for issuance Series A Junior Participating Preferred Stock. A total of
1,000,000 shares of Series A preferred stock are authorized. No shares are
issued or outstanding. When issued and paid for in accordance with the
stockholder rights plan, the Series A preferred stock will be fully paid and
nonassessable. We will appoint a transfer agent for the Series A preferred
stock if any shares are issued.
Dividends and Ranking. Each share of Series A preferred
stock entitles its holders to receive dividends out of our funds legally
available for the payment of dividends when, as and if declared by our board
of directors. With respect to those dividends, the Series A preferred stock
will rank:
o senior to all classes of our common stock and to each other class of
capital stock or series of preferred stock that is designated to rank
junior to the Series A preferred stock;
o junior to all classes of preferred stock that is designated to rank
senior to the Series A preferred stock; and
o equal to all classes of preferred stock that is designated to rank
equally with the Series A preferred stock.
Dividends are payable quarterly in cash on the fifteenth day
of March, June, September and December of each year, in an amount per share
equal to the greater of:
o $0.01; and
o 1,000 times the aggregate per-share amount of all dividends declared on
our common stock since the immediately preceding dividend payment date,
subject to adjustment for subdivision or combination of our common stock.
Liquidation, Dissolution or Winding up. Upon our
liquidation, dissolution or winding up, the holders of outstanding shares of
Series A preferred stock will be entitled to paid out of the assets available
for distribution to our stockholders after payment of any liquidation values
of any securities senior in liquidation rights to the Series A preferred
stock.
After payment of the liquidation values of senior
securities, the holders of the Series A preferred stock will be entitled to
receive $1.00 for each share of Series A preferred stock they hold, plus any
accrued and unpaid dividends or distributions on those shares. If, upon any
liquidation, dissolution or winding up of our company, the remaining assets
available for distribution are insufficient to pay the holders of the Series A
preferred stock and all other securities ranking equally with the Series A
preferred stock with respect to liquidation the full amount to which they are
entitled, the holders of Series A preferred stock will share those remaining
assets ratably, together with the holders of the securities ranking equally
with the Series A preferred stock.
Following the initial payment with respect to each share of
Series A preferred stock, no additional distributions will be made to the
holders of the Series A preferred stock until the holders of shares of common
stock have received an amount per share equal to the amount distributed with
respect to each share of Series A preferred stock divided by 1,000, subject to
adjustment for splits and combinations of our common stock. After the payment
with respect to our common stock, the holders of the Series A preferred stock
and the holders of the common stock will share ratably in any remaining assets
and funds, based on one share of Series A preferred stock equaling 1,000
shares of common stock, subject to adjustment for splits and combinations of
our common stock.
Voting Rights. Subject to adjustments for splits and
combinations of our common stock, each share of Series A preferred stock will
entitle the holder to 1,000 votes on all matters submitted to a vote of our
stockholders. The holders of the Series A preferred stock will vote as a
single class with the holders of our common stock.
If dividends on the Series A preferred stock are in arrears
in an amount equal to six quarterly dividends, all holders of our preferred
stock whose dividends are in arrears with respect to six quarterly periods
will, voting as a single class, be entitled to elect two new directors to our
board of directors. The directors will serve until successors to them have
been elected or until dividends on the Series A preferred stock are no longer
in arrears.
Redemption. The Series A preferred stock is not redeemable.
Conversion. The Series A preferred stock is not convertible.
The Exchange Agreement
In connection with CoreComm Limited's two-phase
recapitalization plan which was publicly announced on October 31, 2001, which
we refer to as the Holdco recapitalization, CoreComm Limited and CoreComm
Holdco entered into an exchange agreement with holders of preferred stock of
CoreComm Limited, holders of debt securities of CoreComm Limited and holders
of debt securities which were joint obligations of CoreComm Limited and
CoreComm Holdco. The transactions contemplated by the exchange agreement
closed in December 2001. The terms of the exchange agreement apply only to the
security holders who were parties to the agreement and do not apply to holders
who tender pursuant to the exchange offers. Pursuant to the agreement:
o the security holders would exchange their securities for shares of
CoreComm Holdco common stock as part of the Holdco recapitalization;
o we would file a shelf registration statement under the Securities Act of
1933, as amended, which we refer to as the Securities Act, covering the
shares of our common stock issued under the exchange agreement;
o none of the security holders, together with their affiliates and their
associates, would acquire any shares of our voting securities, subject to
an allowed annual increase in percent ownership of our outstanding common
shares equal to 0.0735 times their original percent ownership of our
common stock, capped at a maximum of 39%;
o if a securityholder, or any of their affiliates or associates, were to
acquire ownership of our voting securities in contravention of the
restrictions set forth in the exchange agreement, we would have the right
to either (1) purchase, or cause a designee to purchase, any or all of
these securities so acquired at the price paid by the securityholder or
its affiliates or associates or (2) require the security holder, or its
affiliates or associates, to dispose of these securities within 30 days;
o the following additional restrictions apply to each security holder that,
together with its affiliates and associates, owns at least 15% of our
common stock, provided that these restrictions will not apply to any of
these security holders (1) after the nine month anniversary of the
Securities and Exchange Commission, which we refer to as the SEC,
declaring the registration statement of which this prospectus forms a
part effective and (2) at any time when a security holder, together with
its affiliates, its associates and specified transferees to which they
transfer our voting securities own less than 10% of the voting power of
all our voting securities. These securities holders are:
o prohibited from subjecting any of our voting securities to any voting
agreements or arrangements or depositing them into a voting trust;
o prohibited from soliciting proxies in opposition to the recommendation of
our board of directors;
o in any election contest, required to vote all of our voting securities
held by it (1) in the same proportion as the votes cast by all other
holders of our voting securities or (2) in the manner recommended by our
board of directors if the election contest involves a proposed change of
control;
o prohibited from acting with any other person or entity for the purpose of
affecting or influencing control of CoreComm Holdco or acquiring, holding
or disposing of our voting securities;
o prohibited from proposing, soliciting or otherwise participating in any
transaction relating to an acquisition of, a business combination or
similar transaction with, or a change of control of, CoreComm Holdco or
encouraging another person or entity to make a tender offer for our
voting securities;
o shares of our common stock issued under the exchange agreement to these
security holders and their affiliates and associates may only be
transferred:
o pursuant to a bona fide public offering;
o pursuant to unsolicited open market sales on any national securities
exchange or automated inter-dealer quotation system on which the shares
are listed;
o pursuant to a tender offer made to our stockholders which our board of
directors has recommended;
o pursuant to a privately-negotiated transaction with a person or entity
that, together with its affiliates and associates, does not own at least
15% of our common stock;
o pursuant to a will or the laws of descent and distribution;
o pursuant to a bequest or similar gift or transfer to any person or entity
that, together with its affiliates and associates, does not own at least
15% of our common stock; or
o as a result of any pledge or hypothecation to a bona fide financial
institution to secure a bona fide loan, guaranty or other financial
accommodation or as a result of any foreclosure with respect thereto;
o if we enter into a definitive agreement with a third party or accept,
approve or recommend an offer from a third party to acquire greater than
50% of our voting securities, each security holder would have the right,
on a pro-rata basis commensurate with its then level of ownership of our
voting securities, to offer to acquire the number of our securities that
is equal to or greater than the number of our voting securities that is
contemplated to be acquired pursuant to the third party offer, and we
would not take any action that would confer a timing advantage to the
third party;
o any security holder, together with its associates and affiliates, may
make a bona fide written offer to acquire or purchase 100% of our capital
stock so long as the offer is definitive in nature or provides for a
make-whole premium or similar significant penalty payable to our other
stockholders in the event that the transaction is not completed;
o each security holder granted an irrevocable proxy to members of our board
of directors and officers to vote all of the shares of our stock which
he, she or it would be entitled to vote in favor of (1) a stock split of
shares of our common stock upon a determination by our board of directors
that a stock split is advisable and in our best interest to more
accurately reflect our capitalization pursuant to the Holdco
recapitalization and an amendment to our charter to effect this stock
split and/or (2) a change in our corporate name to a suitable corporate
name upon a determination by our board of directors that a corporate name
change is advisable and in our best interest and an amendment to our
charter to effect this corporate name change;
o each of Michael Karp and Booth American Company also have a contractual
right to designate directors to CoreComm Holdco's board of directors
whereby:
o so long as Michael Karp, together with his affiliates and associates,
owns at least 15% of our outstanding common stock, Michael Karp has the
right to designate that number of directors to our board of directors so
that his representation on our board of directors is proportionate to
his, together with his affiliates' and associates', ownership percentage
of our common stock; and
o so long as Booth American Company, together with its affiliates and
associates, owns at least 15% of CoreComm Holdco's outstanding common
stock, Booth American Company has the right to designate one director to
our board of directors;
o each security holder agreed (1) that it had not commenced any action
against CoreComm Limited or CoreComm Holdco, (2) to release CoreComm
Limited and CoreComm Holdco from all claims arising from occurrences
taking place on or prior to the closing date and (3) that it would not
assist in any action commenced by or on behalf of the holders of public
notes; and
o each of CoreComm Limited and CoreComm Holdco agreed (1) that it had not
commenced any action against any security holder and (2) to release each
security holder from all claims arising from occurrences taking place on
or prior to the closing date.
Special Charter Provisions
Our charter contains the provisions described below. These
charter provisions may have the effect, alone or in combination with each
other or with the existence of authorized but unissued common stock and any
series of preferred stock, of precluding or rendering more difficult a hostile
takeover, making it more difficult to remove or change the composition of our
incumbent board of directors and our officers, being adverse to stockholders
who desire to participate in a tender offer and depriving stockholders of
possible opportunities to sell their shares at temporarily higher prices.
Classified board and filling of vacancies on the board of
directors. The charter provides that the directors shall be divided into three
classes, each of which shall serve a staggered three-year term, and that
vacancies on our board of directors that may occur between annual meetings may
be filled by our board of directors. In addition, this provision specifies
that any director elected to fill a vacancy on our board of directors will
serve for the balance of the term of the replaced director. At each annual
meeting of stockholders, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term.
Qualification of directors. The charter provides that,
subject to the contractual board representation rights set forth in the
exchange agreement, it is a qualification of at least 81% of the directors
that they not be (1) beneficial owners of 15% or more of our common stock, (2)
affiliates or associates of any beneficial owner of 15% or more of our common
stock or (3) persons whose beneficial ownership of securities would be
required to be aggregated on any Schedule 13D or Schedule 13G required to be
filed under the Exchange Act by any beneficial owner of 15% or more of our
common stock.
Removal of directors. The charter provides that directors
can be removed only by the stockholders for cause and then only by the
affirmative vote of the holders of not less than two-thirds of the combined
voting power of the voting stock.
Voting requirement for some business combinations. The
charter also provides that, in addition to any affirmative vote required by
law, the affirmative vote of holders of two-thirds of the voting power of the
voting stock will be necessary to approve any business combination, proposed
by an interested stockholder. The additional voting requirements will not
apply, however, if:
o the business combination was approved by not less than a majority of the
continuing directors;
o a series of conditions are satisfied requiring, in summary, the
following:
(A) that the consideration to be paid to stockholders
in the business combination must be at least equal
to the higher of:
(1) the highest per-share price paid by the interested
stockholder in acquiring any shares of common stock
during the two years prior to the announcement date
of the business combination or in the transaction
in which it became an interested stockholder, this
date is referred to as the determination date,
whichever is higher; or
(2) the fair market value per share of common stock on
the announcement date or determination date,
whichever is higher, in either case appropriately
adjusted for any stock dividend, stock split,
combination of shares or similar events with
non-cash consideration treated similarly; and
(B) various procedural requirements are complied with,
including the consent solicitation of proxies
according to the rules of the SEC and no decrease
in regular dividends, if any, after the interested
stockholder became an interested stockholder,
except as approved by a majority of the continuing
directors.
An interested stockholder is defined as anyone who is the
beneficial owner of more than 15% of the voting power of the voting stock,
other than CoreComm Holdco and any employee stock plans sponsored by us, and
includes any person who is an assignee of or has succeeded to any shares of
voting stock in a transaction not involving a public offering that were at any
time within the prior two-year period beneficially owned by an interested
stockholder. The term "beneficial owner" includes persons directly and
indirectly owning or having the right to acquire or vote the stock. Interested
stockholders participate fully in all stockholder voting.
A business combination includes the following transactions:
o merger or consolidation of us or any subsidiary of ours with an
interested stockholder or with any other corporation or entity which is,
or after the merger or consolidation would be, an affiliate, associate or
a Schedule 13D related party of an interested stockholder;
o the sale or other disposition by us or a subsidiary of ours of assets
having a fair market value of $10,000,000 or more if an interested
stockholder, or an affiliate, an associate or a Schedule 13D related
party of an interested stockholder is a party to the transaction;
o the adoption of any plan or proposal for our liquidation or dissolution
proposed by or on behalf of an interested stockholder, or an affiliate,
an associate or a Schedule 13D related party of an interested
stockholder; or
o any reclassification of securities, recapitalization, merger with a
subsidiary, or other transaction which has the effect, directly or
indirectly, of increasing the proportionate share of any class of our
outstanding stock, or securities convertible into stock, or a subsidiary
owned by an interested stockholder, or an affiliate, an associate or a
Schedule 13D related party of an interested stockholder.
Determinations of the fair market value of non-cash
consideration are made by a majority of the continuing directors.
The term continuing directors means any member of our board
of directors, while that person is a member of our board of directors, who is
not an affiliate, associate, Schedule 13D related party or representative of
the interested stockholder and was a member of our board of directors prior to
the time that the interested stockholder became an interested stockholder, and
any successor of a continuing director while that successor is a member of our
board of directors, who is not an affiliate, associate, Schedule 13D related
party or representative of the interested stockholder and is recommended or
elected to succeed the continuing director by a majority of continuing
directors.
The term Schedule 13D related party means an individual or
entity whose beneficial ownership of securities would be required to be
aggregated on any Schedule 13D or Schedule 13G required to be filed by an
interested stockholder.
Voting requirements for some amendments to the charter. The
charter provides that the provisions set forth in this section under the
heading "Special Charter Provisions" may not be repealed or amended in any
respect, unless that action is approved by the affirmative vote of the holders
of not less than two-thirds of the voting power of the voting stock. The
requirement of an increased stockholder vote is designed to prevent a
stockholder who controls a majority of the voting power of the voting stock
from avoiding the requirements of the provisions discussed above by simply
amending or repealing those provisions.
Special By-laws Provisions
Advance notification of business to be transacted at
stockholder meetings. Our amended by-laws provide that to be properly brought
before the annual or any special stockholders' meeting, business must be
either
(1) specified in the notice of meeting, or any supplement or
amendment thereto, given by or at the direction of our board
of directors,
(2) otherwise properly brought before the meeting by or at the
direction of our board of directors, or
(3) otherwise properly brought before the meeting by a
stockholder by giving timely notice in writing to us.
To be timely, a stockholder's notice must be delivered to or mailed and
received at our principal executive offices not less than 75 days nor more
than 90 days prior to the meeting; provided, that in the event that less than
90 days' notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be
received by us not later than the close of business on the fifteenth day
following the day on which the notice of the date of the meeting was mailed or
the public disclosure was made, whichever first occurs.
Election of directors. Our amended by-laws provide that our
board of directors consists of between three and 15 directors, the exact
number as fixed from time to time by the board of directors.
Stockholder nominations. Except for the right of Michael
Karp and Booth American Company to designate directors in accordance with the
exchange agreement, a stockholder may nominate directors only if the
stockholder delivers written notice to us not less than 75 days nor more than
90 days prior to an annual meeting of our stockholders; provided, however,
that in the event that less than 90 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received by us not later than the close of
business on the fifteenth day following the day on which the notice of the
date of the meeting was mailed or the public disclosure was made, whichever
first occurs.
The Stockholder Rights Plan
We adopted a stockholder rights plan on December 17, 2001.
In connection with the stockholder rights plan, our board of directors
declared and paid a dividend of one preferred share purchase right for each
share of our common stock outstanding on December 17, 2001. Each right
entitles the holder, under some circumstances, to purchase from us one
one-thousandth of a share of our Series A Junior Participating Preferred
Stock, par value $0.01 per share, at an exercise price of initially four times
the average closing price of our common stock over the first five days of
trading following the SEC declaring this registration statement effective,
subject to adjustment. There are 1,000,000 shares of Series A preferred stock
authorized for issuance under the plan.
Initially, the rights are attached to outstanding
certificates representing our common stock, and no separate certificates
representing the rights are distributed. The rights will separate from our
common stock, be represented by separate certificates and will become
exercisable upon the earlier of:
o ten business days following a public announcement that a person or group
has acquired or has obtained the right to acquire 15% or more of our
outstanding common stock; or
o ten business days, or a later date as may be determined by the action of
the board of directors prior to the time that any person or group becomes
an acquiring person, after the commencement of, or announcement of an
intention to make, a tender offer or exchange offer for 15% or more of
our outstanding common stock.
If after the rights become exercisable we agree to merge
into another entity, another entity merges into us or we sell or transfer more
than 50% of our assets, each right will entitle the holder to purchase a
number of shares of common stock of the resulting entity at a discount.
If after someone has acquired 15% or more of our common
stock or our board of directors declares any person to be an adverse person
upon a determination that a person has become the beneficial owner of a
substantial amount of our common stock, which shall in no event be less than
5% of the outstanding common stock, each holder of a right will be entitled to
receive shares of our common stock at a discount. Any rights that are or were
owned by an acquirer of more than 15% of our outstanding common stock or any
person that the board of directors declares to be an adverse person will be
null and void.
We may exchange the rights at a ratio of one share of common
stock for each right at any time after someone acquires 15% or more of our
common stock but before that person acquires 50% or more of our common stock.
We may also redeem the rights at our option at a price of $0.01 per right,
subject to adjustment, at any time before the tenth day following the
announcement that someone has acquired 15% or more of our common stock. The
rights expire on the earliest of December 17, 2011, an exchange or redemption
of the rights as described above, or the completion of a merger as described
above. The rights distribution is not taxable to stockholders.
The stockholder rights plan is intended to encourage a
potential acquirer to negotiate directly with the board of directors, but may
have anti-takeover effects. The stockholder rights plan could significantly
dilute the ownership interests of an acquirer in CoreComm Holdco and therefore
may have the effect of delaying, deterring or preventing a change in control
of CoreComm.
For further description, please refer to the stockholder
rights plan, which was filed with the SEC as Exhibit 4.2 to our registration
statement on Form S-4 (Registration Number 333-82400).
Transfer Agent and Registrar
Our transfer agent and registrar for our common stock is
Continental Stock Transfer & Trust Company.
Section 203 of the Delaware General Corporation Law
Generally, Section 203 of the Delaware General Corporation
Law prohibits a publicly held Delaware corporation from engaging in any
business combination with an interested stockholder for a period of three
years following the time that a stockholder becomes an interested stockholder,
unless:
o prior to that time either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder is
approved by the board of directors of the corporation;
o upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding, for purposes of determining the
number of shares outstanding, those shares held by persons who are both
directors and officers and employee stock plans; or
o at or after that time the business combination is approved by the board
and authorized at an annual or special meeting of stockholders, and not
by written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock which is not owned by the interested
stockholder.
A business combination includes mergers, consolidations,
asset sales, transfers and other transactions resulting in a financial benefit
to the interested stockholder. An interested stockholder is a person who,
together with affiliates and associates, owns 15% or more of the corporation's
voting stock.
Indemnification Provisions
Section 145 of the Delaware General Corporation Law
authorizes a corporation to indemnify its directors, officers, employees and
agents against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement reasonably incurred, including liabilities under
the Securities Act, provided they act in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation,
although in the case of proceedings brought by or on behalf of the
corporation, indemnification is limited to expenses and is not permitted if
the individual is adjudged liable to the corporation, unless the court
determines otherwise. Our charter and amended by-laws require us to indemnify
our officers and directors to the full extent permitted by Delaware law.
Section 102(b)(7) of the Delaware General Corporation Law
authorizes a corporation to limit or eliminate its directors' liability to the
corporation or its stockholders for monetary damages for breaches of fiduciary
duties, other than for
(1) breaches of the duty of loyalty,
(2) acts or omissions not in good faith or that involve
intentional misconduct or knowing violations of
law,
(3) unlawful payments of dividends, stock purchases or
redemptions, or
(4) transactions from which a director derives an
improper personal benefit.
Section 145 of the Delaware General Corporation Law
authorizes a corporation to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation
against any liability asserted against him or her and incurred by him or her
in his or her capacity as a director, officer, employee or agent of the
corporation, or arising out of his or her status as a director, officer,
employee or agent of the corporation. Our charter and amended by-laws provide
that we may, to the full extent permitted by law, purchase and maintain
insurance on behalf of any of our directors, officers, employees or agents
against any liability that may be asserted against him or her and we currently
maintain this insurance. We have liability insurance covering our directors
and officers for claims asserted against them or incurred by them in their
capacity as directors and officers, including claims brought under the
Securities Act.
Insofar as indemnification for liabilities arising from the
Securities Act may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC, this indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORECOMM HOLDCO, INC.
By: /s/ Michael A. Peterson
---------------------------------------
Name: Michael A. Peterson
Title: Executive Vice President -
Chief Operating Officer and
Chief Financial Officer
Dated: July 1, 2002