Business Context and Reporting Period
Company: Ball Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: July 26, 2006
Event: Entry into a Material Definitive Agreement and Material Modification to Rights of Security Holders.
On July 26, 2006, the Board of Directors approved a new Rights Agreement to replace the existing agreement expiring on August 4, 2006. The new agreement is with Computershare Investor Services, LLC, as Rights Agent.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on corporate governance and shareholder rights.
| Item | Value/Detail |
|---|---|
| Dividend Distribution | One Right per outstanding share of Common Stock |
| Record Date | August 7, 2006 |
| Exercise Price | $185.00 per Unit (one one-thousandth of a share of Series A Junior Participating Preferred Stock) |
| Expiration Date | August 6, 2016 |
| Redemption Price | $0.001 per Right |
Material Changes Versus Prior Period
- Replacement of Agreement: The 1996 Rights Agreement with First Chicago Trust Company of New York is being replaced by a new agreement with Computershare Investor Services, LLC.
- Triggering Threshold: Rights separate from Common Stock upon the earlier of 10 days following a public announcement that an "Acquiring Person" acquires 10% or more of outstanding shares, or 10 business days following the commencement of a tender offer resulting in such acquisition.
- Exchange Ratio: Upon a Triggering Event, holders (excluding the Acquiring Person) may receive Common Stock (or cash/property) with a value equal to two times the exercise price of the Right.
Guidance, Outlook, and Risks
Management Commentary: The Board declared the dividend distribution to stockholders of record as of August 7, 2006. The Rights are initially attached to Common Stock certificates and will not be distributed separately until a Distribution Date occurs.
Risks and Contingencies:
- Redemption: The Company may redeem the Rights in whole at $0.001 per Right at any time until ten days following the Stock Acquisition Date.
- Nullification: Rights beneficially owned by an Acquiring Person become null and void upon a Triggering Event.
- Tax Implications: While the distribution is not taxable, stockholders may recognize taxable income if Rights become exercisable for Common Stock or are redeemed.
- Amendments: The Board may amend the agreement prior to the Distribution Date. After the Distribution Date, amendments are restricted to curing ambiguities or changes that do not adversely affect holders, except when Rights are not redeemable.
Important Facts for Investors to Verify
- Confirm the Record Date of August 7, 2006, to determine eligibility for the Rights distribution.
- Verify the separation of Rights from Common Stock certificates upon the occurrence of a Distribution Date (triggered by 10% acquisition or tender offer).
- Review the specific terms of the "Qualifying Offer" exception, which allows the Board to determine if an offer is fair and in the best interests of stockholders.
- Note that the Rights expire on August 6, 2016, unless extended, redeemed, or exchanged earlier.