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UNITED STATES
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) May 15, 1998
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BMC INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
MINNESOTA 1-8467 41-0169210
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
ONE MERIDIAN CROSSINGS
SUITE 850
MINNEAPOLIS, MINNESOTA 55423
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 851-6000
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 15, 1998, Vision-Ease Lens Azusa, Inc., f/k/a VIS-ORC, Inc. (the
"Company") (a wholly-owned subsidiary of Vision-Ease Lens, Inc., in turn a
wholly-owned subsidiary of BMC Industries, Inc. ("BMC")) acquired
substantially all of the assets, properties and rights (the "Assets") used in
the Orcolite business unit (the "Business"), an operating division of
Monsanto Company, a Delaware corporation ("Monsanto"), for the cash purchase
price of $101,000,000. The purchase price represents the stated purchase
price of $100,000,000 plus $1,000,000 in working capital adjustments. BMC
financed this acquisition in full with the proceeds of a loan obtained from
various lenders pursuant to a $275,000,000 Credit Agreement dated as of May
15, 1998, among BMC, Bankers Trust Company (as Administrative Agent), NBD
Bank (as Documentation Agent) and Various Lending Institutions. BMC intends
that the Assets will continue to be used by the Company in the development,
manufacture and marketing of ophthalmic lenses.
The foregoing description of the Asset Purchase Agreement, as amended (the
"Asset Purchase Agreement") between the Company and Monsanto dated as of
March 25, 1998, does not purport to be complete and is qualified in its entirety
by reference to (i) the Asset Purchase Agreement as in effect on March 25, 1998,
which is attached to the Registrant's Current Report on Form 8-K dated March 25,
1998, filed with the Commission on April 3, 1998, and incorporated herein by
reference; and (ii) Amendment No. 1 to Asset Purchase Agreement dated as of May
15, 1998 between Monsanto and the Company, which is attached hereto as an
exhibit and incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The financial statements required by this Item will be filed as soon
as practicable, and in any event not later than July 29, 1998.
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information required by this Item will be
filed as soon as practicable, and in any event not later than July 29,
1998.
(c) EXHIBITS.
2.1 Asset Purchase Agreement, dated as of March 25, 1998,
between Monsanto Company and VIS-ORC, Inc. (1)
The Registrant hereby agrees to furnish supplementally a
copy of any omitted schedule or exhibit to the Commission
upon request.
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(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated March 25, 1998 and filed with the Commission on April 3, 1998. (File No.
1-8467)
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2.2 Amendment No. 1 to Asset Purchase Agreement, dated as of May
15, 1998, between Monsanto Company and Vision-Ease Lens
Azusa, Inc., f/k/a VIS-ORC, Inc.
The Registrant hereby agrees to furnish supplementally a
copy of any omitted schedule or exhibit to the Commission
upon request.
99.1 Press Release of BMC Industries, Inc. dated May 18, 1998.
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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.
BMC INDUSTRIES, INC.
Date: May 29, 1998 By /s/ Jeffrey J. Hattara
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Jeffrey J. Hattara
Vice President of Finance and
Administration, and Chief
Financial Officer
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EXHIBIT INDEX
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<CAPTION>
No. Exhibit No. Page
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2.1 Asset Purchase Agreement, dated as of March 25, 1998, Incorporated
between Monsanto Company and VIS-ORC, Inc. by Reference(1)
2.2 Amendment No. 1 to Asset Purchase Agreement, dated Filed
as of May 15, 1998, between Monsanto Company and Electronically
Vision-Ease Lens Azusa, Inc., f/k/a VIS-ORC, Inc.
99.1 Press Release of BMC Industries, Inc. dated Filed
May 18, 1998. Electronically
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(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated March 25, 1998 and filed with the Commission on April 3, 1998. (File
No. 1-8467)
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AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (this "AGREEMENT"), is
made as of May 15, 1998, by and between Monsanto Company, a Delaware corporation
("SELLER"), and Vision-Ease Lens Azusa, Inc., a Minnesota corporation, f/k/a
VIS-ORC, Inc. ("BUYER").
WITNESSETH
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement dated as of March 25, 1998 (the "PURCHASE AGREEMENT").
WHEREAS, the parties hereto desire to amend the Purchase Agreement as set
forth herein. Capitalized terms not defined herein shall have the meaning
ascribed to such terms pursuant to the Purchase Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereby agree as follows:
1. In consideration of settling and comprising certain pre-Closing claims
and positions of each of Buyer and Seller, Buyer and Seller hereby agree and
acknowledge that the Purchase Price of $100,000,000 payable at Closing shall be
increased by an amount equal to $1,000,000, representing the working capital
adjustment and the capital expenditures adjustment. Buyer hereby agrees that it
will not make a claim for or allege a breach of Section 2.1 or Section 2.2 of
the Purchase Agreement.
2. In consideration of Buyer's and Seller's agreements in paragraph 1
above, SCHEDULE 2.3(b) of the Purchase Agreement is hereby amended to include,
as an Excluded Liability, the obligations and liabilities as they relate to (i)
the alleged claims set forth in a letter dated as of May 5, 1998 to Warren B.
Grayson and Michael H. Weed from Henry A. Singer, counsel for Optics Technology,
Inc. and attached hereto as EXHIBIT A (ii) any similar claims asserted in
writing against Buyer by Optics Technology, Inc. relating to U.S. Patent Nos.
5,015,426 and 5,512,221, or (iii) similar claims asserted in writing against
Buyer relating to claims asserted in the documents received by Seller from
counsel for Optics Technology, Inc. as of May 15, 1998 relating to a form of
patent application No. 08/803,854 ((i), (ii) and (iii) collectively, the "OPTICS
CLAIM"). Notwithstanding anything in the Purchase Agreement to the contrary,
Seller hereby agrees to assume full, unconditional and unlimited responsibility
for, and to indemnify and hold harmless the Buyer Protected Parties from, any
Losses (without any remaining potential risk or adverse effects to the Buyer
Protected Parties) incurred, experienced or suffered by the Buyer Protected
Parties as a result of, or with respect to, or arising out of, the Optics Claim
or the resolution or settlement thereof as contemplated hereby. Without
limiting the generality of the foregoing, "Losses", solely for the purposes of
this Agreement, shall include: (a) any damages resulting from an interruption
in the Business, (b) costs relating to changes in the Business's manufacturing
processes or equipment implemented or required by Seller pursuant to paragraph 3
hereof and (c) any royalties or fees required as part of licensing agreements.
"Losses" shall not include any patent annuities to maintain patents after issue.
Buyer agrees that it will use reasonable efforts to mitigate any Losses,
potential
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risks or adverse effects to the Buyer Protected Parties and shall use
reasonable efforts to avoid interruption to the Business relating to or arising
out of the Optics Claim. To the extent permitted under that certain Asset
Purchase Agreement by and among Benson Eyecare Corporation, BEC Group, Inc. and
Optical Radiation Corporation and Seller dated as of February 11, 1996, Buyer
agrees in relation to the Optics Claim to subrogate its rights whether by law
or equity to Seller under such agreement and Seller may exercise any and all
subrogation rights whether by law or equity under such agreement.
3. Notwithstanding anything in the Purchase Agreement to the contrary,
Buyer and Seller hereby agree and acknowledge that Seller shall proceed in a
commercially reasonable manner to resolve the Optics Claim and in connection
therewith shall
(a) assume and have sole responsibility for, and discretion and
right to control, the defense, settlement, avoidance or compromise of the
Optics Claim and any action, lawsuit, proceeding, investigation,
interference or other administrative, judicial or private proceeding
relating to the Optics Claim or other claim or action which may be asserted
by Optics Technology, Inc.;
(b) have sole responsibility for, and discretion and right to
file, prosecute and issue, any patent application on behalf of Buyer where
the invention was made by the Business's personnel or consultants prior to
the date of this Agreement including provoking, prosecuting and settling
any interference with patent applications or patents of Optics Technology,
Inc.;
(c) have sole responsibility for, and discretion and right to
bring and control, settle or cease, any legal action seeking declaratory
judgment of invalidity and/or unenforceability of patents of Optics
Technology, Inc.;
(d) have sole responsibility for, and discretion and right to
enter into, any license in connection with the Optics Claim; and
(e) have the sole responsibility for, and discretion and right
to avoid, any part of the Optics Claim by designing around claims.
Seller warrants that any of its activities under subparagraphs (a)
through (e) above shall not result in any potential risk to, or adverse effect
on, the quality or competitive position of the products produced by the
Business. In addition, Seller acknowledges that any Losses from any such
activities shall be subject to indemnification under paragraph 2 hereof.
Buyer hereby agrees that it will expeditiously cooperate with Seller
in the filing of any required or permitted notices, reports, legal actions,
claims, patent applications in connection with Seller's actions to defend,
settle or compromise the Optics Claim and will furnish such records,
information, witnesses, testimony and other assistance of its employees as may
be reasonably requested by Seller, including participating in conferences,
discovery, hearings, trials, appeals and other proceedings which Seller may have
with Optics Technology, Inc. or before any administrative
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or judicial body. Unless otherwise consented to in writing by Seller, Buyer
will not destroy, alter or otherwise dispose of any of the records relating
to know-how, manufacturing and production processes and techniques, research
and development activities, drawings, specifications, designs, plans,
engineering and technical data and reports, purchase orders, books and
records of the Business relating to the Optics Claim (hereinafter "RECORDS")
and will allow Seller and its representatives and attorneys to have access to
such Records upon request during normal business hours and to examine, copy
and use any part of such Records for any permitted action of Seller in
connection with the Optics Claim. With regard to the operation of this
paragraph 3, Buyer hereby agrees to cooperate with any decision by Seller to
redesign, reconstruct, retrofit, augment or otherwise modify equipment used
in the Business in connection with the defense, settlement, compromise or
avoidance of the Optics Claim.
Seller acknowledges that (a) all of its actions under this paragraph 3
shall be conducted at Seller's expense, (b) costs and expenses incurred by Buyer
at Seller's request in connection with any such actions shall be included among
"Losses" and shall be promptly paid or reimbursed by Seller and (c) Seller shall
promptly pay, upon receipt of reasonable written evidence, any Loss by Buyer for
which Seller has responsibility hereunder.
4. In order to equitably credit each of Buyer and Seller for the
Collections and Disbursements (each term as defined below) of the Business for
the period commencing as of the close of business on May 8, 1998 and ending
with the close of business on May 15, 1998 (the "Adjustment Period"), Buyer and
Seller have agreed to the following post closing adjustment. No later than
forty-five (45) days after Closing, Buyer will prepare and provide to Seller its
calculations of the Collections and Disbursements of the Business during the
Adjustment Period. Seller and Buyer shall thereafter cooperate to agree upon
such calculations, including Buyer making available to Seller such detail and
backup as reasonably necessary for Seller to review Buyer's calculations. To
the extent Collections exceed Disbursements for the Adjustment Period, Seller
shall pay to Buyer the difference. To the extent Disbursements exceed
Collections for the Adjustment Period, Buyer shall pay to Seller the difference.
Any payment required to be made pursuant to this paragraph shall be made within
five (5) business days of the agreement by the parties on the calculations made
hereunder. For purposes of this Agreement, a Disbursement is any check, draft,
wire transfer or cash equivalent transfer prepared by Seller in payment for an
obligation of the Business, excluding any payroll obligations to employees. For
purposes of this Agreement, a Collection is cash or cash equivalents (including
checks or drafts) received by Seller with respect to an account receivable of
the Business.
5. Section 11.1(b) of the Purchase Agreement is hereby restated as
follows:
"(b) Notwithstanding anything in the foregoing to the contrary,
subject to Section 11.3(b) (Time to Assert Claims) and Section 11.4
(Deductible), Seller's obligation for indemnity under Section 11.1(i) and
Section 11.1(vii) shall be for (after the application of the Deductible) the
next $250,000 of liability and (ii) thereafter only for one-half of any Losses
up to a maximum liability for Seller of $5,000,000 (which is Seller's maximum
obligation pursuant to such Sections in respect of Buyer's Losses in an
aggregate amount of $10,000,000); provided however that such limitation shall
not apply to Seller's obligation to indemnify Buyer under Section 5.8,
11.1(iii),
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11.1(iv), 11.1(v), 11.1(vi), 11.1(viii), 11.8, 12.8 and Article 7 or in
respect of Seller's fraud or willful breaches or misconduct."
6. Buyer hereby agrees that the Optics Claims shall be added as item to
all of the Seller disclosure schedules attached to the Purchase Agreement and
Buyer agrees that it will not make a claim for or allege a breach of, to the
extent that it relates to the Optics Claim, any of the representations or
warranties contained in the Purchase Agreement.
7. Buyer hereby agrees and acknowledges that the consents listed on
SCHEDULE 9.5 to the Purchase Agreement have either been obtained or waived and
that Seller has used its reasonable efforts to obtain any other consents to the
agreements related to the Business that require consent.
8. Paragraphs 2 and 3 of this Agreement shall continue in effect and
shall not expire until there exists no possibility of a Loss or adverse effect
to the Buyer Protected Parties.
9. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware.
10. This Agreement may be executed by the parties hereto in separate
counterparts (including by telecopied signature pages), each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
11. Except as expressly amended hereby, the Purchase Agreement shall
remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
MONSANTO COMPANY, SELLER
By: /s/Jan S. Wolpert
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Name: Jan S. Wolpert
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Its: V.P. Venture Capital
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VISION-EASE LENS AZUSA, INC.
F/K/A VIS-ORC, INC., BUYER
By: /s/Jeffrey J. Hattara
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Name: Jeffrey J. Hattara
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Its: Treasurer
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Contact: Jeffrey J. Hattara (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC INDUSTRIES COMPLETES ACQUISITION OF ORCOLITE UNIT
May 18, 1998 - Minneapolis, Minnesota - BMC Industries, Inc. ("BMC") announced
today that it has successfully completed the acquisition of Monsanto Company's
Orcolite operations, based in Azusa, California, effective May 15, 1998.
Orcolite, a producer of polycarbonate and hard-resin plastic ophthalmic lenses,
will be managed as part of BMC's Vision-Ease Lens subsidiary.
BMC paid a purchase price of $100 million, plus $1 million in working capital
adjustments. The Orcolite acquisition was funded through borrowings under BMC's
new $275 million syndicated bank credit facility, which was completed
contemporaneously with the closing of the acquisition.
"I am very excited about the successful consummation of the Orcolite
acquisition," said Paul B. Burke, Chairman and CEO of BMC. "This acquisition is
an integral part of our strategic growth strategy. The integration of Orcolite
into our existing Vision-Ease operations will greatly enhance our leadership
position in the growing polycarbonate segment of the ophthalmic lens market. We
look forward to working closely with Orcolite personnel to ensure a smooth
transition into the BMC and Vision-Ease family."
BMC Industries, Inc. is one of the world's largest manufacturers of aperture
masks for color picture tubes used in televisions and computer monitors. The
Company is also a leading producer of polycarbonate, glass and plastic eyewear
lenses. BMC's common stock is traded on the New York Stock Exchange under the
symbol BMC.
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