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UNITED STATES 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):
November 11, 2005
Stericycle, Inc.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Exact name of registrant as specified in its charter)
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28161 North Keith Drive
Lake Forest, Illinois 60045
(847) 367-5910
Not Applicable
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
£ 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))
Item 1.01 Entry into a Material Definitive Agreement
Stericycle, Inc. (the "Company") has entered into a preliminary settlement, dated November 11, 2005, to resolve class action litigation by the minority shareholders of the Company's majority-owned subsidiary, 3CI Complete Compliance Corporation ("3CI"), in which 3CI has joined with the class as a plaintiff. This litigation is pending in state court in Louisiana (Robb, et al. v. Stericycle, Inc., et al., First Judicial District Court, Caddo Parish, Louisiana [No. 467704-A]) (the "Louisiana Litigation").
Under the terms of the preliminary settlement, the Company has agreed to pay a total of $32,500,000 in cash to a trust fund to be established by a claims administrator approved by the court for the purpose of (i) settling all claims in the Louisiana Litigation and in related litigation in state court in Texas (3CI Complete Compliance Corporation v. Waste Systems, Inc., et al., 269th Judicial District, Harris County, Texas [No. 2003-46899]), (ii) canceling or otherwise acquiring all of the shares of 3CI common stock held by members of the plaintiff class and (iii) paying court-approved administrative expenses and legal fees.
The parties to the preliminary settlement intend that, through the settlement, the Company will acquire sufficient shares of 3CI common stock so that, with the shares that the Company and one of its subsidiaries already own, the Company will own 90% or more of 3CI's outstanding common stock. The Company's ownership of 90% or more of 3CI's outstanding common stock would enable the Company to acquire the balance of the outstanding 3CI common stock through a "short-form" merger under Delaware law.
The preliminary settlement has been approved by the Company's board of directors and will be incorporated in a definitive settlement agreement and submitted for approval to the court in the Louisiana Litigation.
A copy of the press release that the Company issued on November 17, 2005 is filed with this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibit is filed with this report:
99.1 Press release issued November 17, 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.
Date: November 17, 2005.
Stericycle, Inc.
By /s/ Frank J.M. ten Brink
Frank J.M. ten Brink
Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit |
Description |
Exhibit 99.1 |
Press Release dated November 17, 2005. |
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November 17, 2005
Exhibit 99.1
FOR FURTHER INFORMATION CONTACT: FOR IMMEDIATE RELEASE
Frank ten Brink 847-607-2012
STERICYCLE ANNOUNCES SETTLEMENT OF 3CI CLASS ACTION LITIGATION
Settlement Will Allow 3CI To Become a Wholly-Owned Subsidiary
Lake Forest, Illinois, November 17, 2005-Stericycle, Inc. (NASDAQ:SRCL), the leading provider in North America of medical waste management and compliance services for the healthcare community, announced today that it has entered into a preliminary settlement to resolve a pending class action lawsuit by the minority shareholders of Stericycle's publicly traded majority-owned subsidiary, 3CI Complete Compliance Corporation, and by 3CI. The settlement remains subject to court approval.
Under the terms of the preliminary settlement, Stericycle will pay a total of $32.5 million. After deducting the plaintiffs' attorneys' fees, in an amount to be approved by the court, the balance of the settlement amount will be paid to members of the plaintiff class to settle all lawsuit claims and alleged damages and will include the purchase or cancellation of all shares of 3CI stock held by the class. The stock purchase will allow 3CI to become a wholly-owned subsidiary of Stericycle.
Stericycle anticipates taking a one-time charge in the fourth quarter of 2005 for settlement and legal expenses. A portion of the $32.5 million will be booked towards the stock purchase when the settlement is finalized. Stericycle does not anticipate that this event will result in any changes to its preliminary 2006 guidance previously given in its conference call of October 25, 2005.
Stericycle and the individual defendants do not admit any liability under the terms of the settlement, and continue to maintain their position that they acted at all times in the best interests of 3CI and its shareholders.
"We agreed to settle this lawsuit to put the matter behind us and focus on realizing the synergies that can be obtained by integrating 3CI's operations into our own," said Mark Miller, Stericycle's President and CEO. "We vigorously fought these allegations for over three years, and were fully prepared to take this matter to a trial on its merits. However, considering the benefits that we expect to gain by being able to integrate 3CI, we concluded that it was in Stericycle's best interest to put an end to the continuing cost and distraction of litigation and to eliminate the uncertainty inherent in a jury trial."
The settlement provides for the dismissal with prejudice of litigation filed in state court in Caddo Parish, Louisiana in July 2002, and litigation pending in state court in Harris County, Texas.
Stericycle provides medical waste collection, transportation, treatment and disposal services and safety and compliance programs. For more information, please visit our website at www.stericycle.com.
Safe Harbor Statement: Statements in this press release may contain forward-looking statements that involve risks and uncertainties, some of which are beyond our control (for example, general economic conditions). Our actual results could differ significantly from the results described in the forward-looking statements. Factors that could cause such differences include difficulties in completing the integration of acquired businesses, changes in governmental regulation of medical waste collection and treatment, and increases in transportation and other operating costs, as well as the various other factors described in our filings with the U.S. Securities and Exchange Commission. As a result, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. We make no commitment to disclose any subsequent revisions to forward-looking statements.