SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 26, 1996
Pure World, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-10566 95-3419191
(State of other (Commission (I.R.S. Employer
jurisdiction of File Number) Indentification No.)
376 Main Street, P.O. Box 74, Bedminster, New Jersey 07921
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 234-9220
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Item 5. OTHER EVENTS
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On November 26, 1996, Pure World, Inc. ("Pure World") announced that it and
American Industrial Properties REIT, a Texas real estate investment trust (the
"Trust") had entered into a settlement agreement resolving all disputes,
including litigation, that had arisen between them as a result of Pure World's
efforts to influence the management of the Trust. The settlement is subject to
certain conditions including court approval at a hearing set for December 19,
1996.
The settlement agreement provides that the Trust pay $825,000 to Pure World
to reimburse it for costs incurred in connection with the disputes and as
consideration for releases and a standstill agreement. Subject to approval of
the settlement, Pure World has also agreed to sell its Trust shares to an
affiliate of a Fortune 200 company at a price per share of $2.75 or an aggregate
of approximately $2,494,250. The payment in the settlement and the proceeds of
the stock sale will result in a net gain to Pure World of approximately
$1,200,000 in the fourth quarter ending December 31, 1996. The Trust, for its
part, has agreed to make numerous changes to its Bylaws designed to remedy the
corporate governance problems which Pure World pointed to in the disputes.
The disputes commenced almost three years ago when Pure World opposed the
Trust's attempt to reincorporate in Maryland, an action which Pure World
contended would entrench management and give the Trust Managers a blank check to
recapitalize the Trust. After the Trust's move was rejected by shareholders,
Pure World twice sought to elect its nominees as Trust Managers and although its
nominees did not obtain the requisite 2/3 vote required to elect non-incumbents
in either election, at the 1995 Annual Meeting, its nominees did receive a
plurality of the votes cast. After the 1995 election, the Trust sued Pure World
and its Chairman in the United States District Court in Dallas asserting, among
other things, that Pure World owned, either alone or as part of an alleged
group, in excess of 9.8% of the Trust's outstanding shares in violation of a
Trust Bylaw provision which purported to limit stock ownership to that level. In
September, the Court granted Pure World's motion for partial summary judgment,
holding that the Trust's Bylaw limiting share ownership to 9.8% was invalid
under Texas law. The Trust Managers then adopted another Bylaw limiting
ownership to 9.8%. Upon application of Pure World, the Court on November 12,
1996, entered a preliminary injunction enjoining the Trust from enforcing either
Bylaw limiting share ownership and enjoining the Trust Managers from adopting
similar provisions in the future. As part of the settlement, the parties have
requested that the court lift the injunction and the Trust has agreed to submit
the issue of imposing limitations on share ownership to shareholders.
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Pure World stated that it has always vigorously denied the charges by the
Trust, maintaining that the lawsuit was groundless and only an attempt to
silence a dissident shareholder. Pure World filed its own lawsuit against the
Trust and its Trust Managers accusing them of illegally entrenching themselves
and wasting the Trust's assets. Subsequently a second lawsuit was filed against
the Trust and its Trust Managers on similar grounds by a shareholder unrelated
to Pure World. If the settlement is approved by the Court all the litigation
will be dismissed.
Pure World stated that although it was confident that it would prevail in
the litigation, it determined that continued expenditure of its assets was
unwarranted since most of its objectives in the litigation will be realized in
the settlement. The Trust needs to recapitalize, Pure World declared, and
hopefully the Fortune 200 company will bring the leadership needed to facilitate
this effort. Paul Koether, chairman of Pure World, said: "Pure World will
benefit not only from the financial terms of the settlement but also because the
settlement finally breaks any ties Pure World has with its prior real estate
business and enables management to devote all the company's resources and
attention to its botanical extract business." Pure World owns 83% of Madis
Botanicals, Inc., believed to be the largest manufacturer in the United States
of botanical extracts for the flavor, cosmetic and nutraceutical industries.
Pure World has 7,644,378 shares outstanding.
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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 hereunto duly authorized.
Dated: December 2, 1996
PURE WORLD, INC.
/s/ John W. Galuchie, Jr.
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By: John W. Galuchie, Jr.
Executive Vice President
