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
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Date of Report (Date of Earliest Event Reported): September 30, 1997
BONTEX, INC.
(Exact name of Registrant as specified in its charter)
Virginia 0-5200 22-1427551
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Bontex Drive
Buena Vista, Virginia 24416-0751
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (540) 261-2181
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On September 30, 1997, the Board of Directors of Bontex, Inc. adopted a
Shareholder Rights Plan designed to protect shareholders from abusive
takeover tactics and from any attempt to acquire control of the Corporation
for an inadequate price. The Board declared a dividend of one right on each
outstanding share of Bontex Common Stock, payable to shareholders of record
on October 15, 1997.
The Shareholder Rights Plan was not adopted in response to any specific
threat to acquire control of the Corporation. The plan was approved after
careful consideration and study during the past eighteen months to enhance
the Board's ability to protect shareholders' interests. Over 1,200
companies, inside and outside Virginia and many Fortune 500 companies, have
adopted similar rights plans.
The rights plan is not intended to and will not prevent an acquisition
of the Corporation. Nor does the rights plan in any way weaken the
Corporation's financial strength or interfere with its business plans. The
issuance of the Rights has no dilutive effect, will not affect reported
earnings per share, is not taxable to Bontex or its shareholders, and will
not change the way Bontex shares are traded.
The Plan provides that until a person or group acquires 20% or more of
Bontex's Common Stock or commences a tender offer that will result in such
person or group owning 20% or more of Bontex's Common Stock, the rights will
be evidenced by the Common Stock certificates, will automatically trade with
the Common Stock and will not be exercisable. Thereafter, separate rights
certificates will be distributed, and each right will entitle its holder to
purchase Participating Preferred Stock having economic and voting terms
similar to those of one share of Common Stock for an exercise price of $9.00.
The Plan further provides that if any person or group acquires 20% or
more of Bontex's Common Stock, ten days thereafter (or such earlier or later
date as the Board may choose), each right other than rights held by the 20%
or greater shareholder, to the extent permitted by applicable law, will
entitle its holder to purchase for $9.00 (exercise price) a number of shares
of Bontex Common Stock having a market value of twice the exercise price.
Also, if Bontex is involved in a merger with an owner of 20% or more of the
Common Stock or sells more than 20% of its assets or earning power or is
involved with an owner of 20% or more of the Common Stock in certain "self
dealing" transactions, each right will entitle its holder to purchase, for
the exercise price, a number of shares of Common Stock of the acquiring
company having a market value of twice the exercise price. If any person or
group acquires between 20% and 50% of Bontex's Common Stock, Bontex's Board
may, at its option, exchange one share of Bontex Common Stock for each right.
At the discretion of the Board, Bontex will be entitled to redeem the
rights for $0.01 per right at any time prior to announcement that a 20%
position has been acquired, and for ten days after the announcement, unless
such period has been extended by the Board of Directors.
<PAGE>
The plan contains special grandfather provisions which exclude from
those persons who trigger the plan, James C. Kostelni, the current CEO of the
Corporation, and named shareholders who beneficially own in excess of 20% of
the currently outstanding Bontex Common Stock. These persons may increase
their current stock holdings in Bontex by up to 5%, and with Board approval,
in excess of 5%, without causing the rights to separate and become
exercisable.
A letter regarding the Rights Plan and a summary of terms of the Plan
will be mailed to all Bontex shareholders.
Bontex is a leading global manufacturer of elastomeric wet web
impregnated fiberboard products used by the footwear, headwear, luggage,
leathergoods, and automotive industries. The Company maintains corporate
headquarters and manufacturing facilities at Bontex, Inc., USA, One Bontex
Drive, Buena Vista, Virginia and at Bontex SA, Stembert Belgium; distribution
and converting facility at Bontex Italia, Verona, Italy; and distribution
subsidiaries, Bontex de Mexico, SA de CV, in Leon, Mexico and Bontex Hong
Kong in Hong Kong. Bontex also maintains a network of liaison offices and
distributors globally to market Bontex products.
The stock of Bontex, Inc. is traded over-the-counter on the Nasdaq
stock market under the symbol of BOTX.
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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.
BONTEX, INC.
By s/James C. Kostelni
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James C. Kostelni
President
Date: October 8, 1997
