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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): May 26, 2000
PremiumWear, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 000-28501 41-0429620
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5500 Feltl Road
Minnetonka, Minnesota 55343-7902
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-800-248-0158 or
(952) 979-1700
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Item 1. Not Applicable.
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Item 2. Not Applicable.
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Item 3. Not Applicable.
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Item 4. Not Applicable.
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Item 5. Other Events.
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PremiumWear, Inc. (the "Company") has entered into an Agreement and
Plan of Merger, dated as of May 26, 2000, by and among New England Business
Service, Inc., Penguin Sub, Inc. and the Company (the "Merger Agreement") under
which NEBS will acquire all outstanding shares of the Company for $13.50 per
share, payable in cash. In accordance with the terms of the Merger Agreement, a
subsidiary of NEBS will commence a tender offer for all of the outstanding
shares of the Company's common stock at $13.50 per share in cash by no later
than June 9, 2000. As part of the transaction with NEBS, the Chairman, the
executive officers and certain employees of the Company have executed certain
amendments to certain Change in Control Severance Agreements and entered into
Employment or Consulting Agreements with the Company and NEBS. These agreements
are described below. The agreements are also attached as exhibits and
incorporated by reference herein.
Employment Agreements and Change in Control Severance Agreements
The Company has entered into Change in Control Severance Agreements
with David E. Berg, Cynthia L. Boeddeker, James S. Bury, Thomas D. Gleason,
Timothy C. Klouda and Dennis G. Lenz (collectively, the "Executives"). The
agreements provide, among other things, for a lump sum cash severance payment to
the Executives in the event of an involuntary termination of employment in
connection with a change in control of the Company, as defined in the agreement,
in an amount equal to two times the executives annual compensation. The Change
in Control Severance Agreement with the Company's Chairman has substantially the
same terms and conditions, except that the severance payment is triggered upon
the change in control of the Company, irrespective of termination of employment.
Each agreement also requires the Company to continue to provide the Executive,
for a period of 24 months, with the benefits and perquisites that were provided
to the Executive prior to the qualifying termination of employment. In addition,
the agreements with Messrs. Gleason and Berg also provide for the Executive to
receive a gross-up payment if the Executive becomes subject to excise tax as a
result of any payments that the Executive receives under the agreement, or
otherwise, which are determined to be "excess parachute payments." The
agreements with the other Executives contain a limitation on the amount of any
payments which constitute "excess parachute payments." The Executives who are
parties to the Change in Control Severance Agreements, other than Mr. Gleason,
have entered into First Amendments to their Change in Control Severance
Agreements with the Company in connection with the Merger Agreement, pursuant to
which such Executives have waived certain of their rights under their Change in
Control Severance Agreements in exchange for new employment agreements.
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In connection with the Merger Agreement, the Company has entered into
Employment Agreements with each of David E. Berg, Cynthia L. Boeddeker, James S.
Bury, Timothy C. Klouda and Dennis G. Lenz effective as of May 26, 2000. The
term of the agreements with Mr. Berg and Ms. Boeddeker continue until June 30,
2003 and the agreements with Messrs. Bury, Klouda and Lenz continue until June
30, 2004, unless terminated as provided in the Agreement. The agreements
generally provide for a base salary, plus eligibility for an annual executive
bonus following the merger with NEBS, which is tied to the performance of the
Company and NEBS, and a Special Incentive Plan based on the Company's
performance, which will be paid in the form of restricted stock of NEBS for the
fiscal years 2001 through 2003. In addition, each of the executives will receive
an option grant to purchase shares of NEBS common stock following the merger
with NEBS and will be paid the pro rata earned amount under the Company's 2000
Bonus Plan within 60 days after the merger with NEBS. Each of the agreements
contains customary employment terms and provides that upon termination of
employment by the Company without Cause or by the executive for Good Reason (as
defined therein), the executive is entitled to his or her base salary for the
remaining term of the Agreement, a pro rata bonus and continued benefits for the
severance period, and accelerated vesting of stock options and restricted stock.
Each of the executives are subject to customary confidentiality, non-competition
and non-solicitation covenants and are entitled to certain indemnification
protection.
In connection with the execution of the Merger Agreement, Mr. Gleason,
the Company's Chairman, entered into a consulting agreement with NEBS and the
Company (the "Consulting Agreement"). The Consulting Agreement has a term of two
years from the date of the Merger Agreement and provides, among other things,
that Mr. Gleason will assist the Company in the transition following the Merger.
In consideration for his services, Mr. Gleason will receive aggregate consulting
and engagement fees of $582,500. The Consulting Agreement also subjects Mr.
Gleason to customary confidentiality, non-competition and non-solicitation
covenants and provides Mr. Gleason with indemnification protection. The
Consulting Agreement supercedes Mr. Gleason's existing Change in Control
Severance Agreement with the Company, unless the Merger with NEBS is not
completed, in which case the Consulting Agreement will be of no effect, and the
Change in Control Severance Agreement will be reinstated.
Item 6. Not Applicable.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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Exhibit 99.1 Agreement and Plan of Merger, dated as of May
26, 2000, by and among New England Business
Service, Inc., Penguin Sub, Inc. and
PremiumWear, Inc. (incorporated by reference to
Exhibit (d)(1) to the Schedule TO of New
England Business Service, Inc. filed on June 9,
2000.
Exhibit 99.2 Amended and Restated Change in Control
Severance Agreement made and entered into by
and between PremiumWear and Thomas D. Gleason
effective as of April 18, 2000.
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Exhibit 99.3 Amended and Restated Change in Control
Severance Agreement made and entered into by
and between PremiumWear and David E. Berg
effective as of May 22, 2000.
Exhibit 99.4(a)-(e) Employment Agreements made and entered into
effective as of May 26, 2000 by and between
PremiumWear, Inc. and (a) David E. Berg, (b)
Cynthia L. Boeddeker, (c) James S. Bury, (d)
Timothy C. Klouda and (e) Dennis G. Lenz.
Exhibit 99.5(a)-(e) First Amendment to Change in Control Severance
Agreement made and entered effective as of May
26, 2000 by and between PremiumWear, Inc. and
(a) David E. Berg, (b) Cynthia L. Boeddeker,
(c) James S. Bury, (d) Timothy C. Klouda and
(e) Dennis G. Lenz.
Exhibit 99.6 Consulting Agreement, dated as of May 26, 2000,
between PremiumWear, Inc., New England Business
Service, Inc. and Thomas D. Gleason.
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, thereunto duly authorized.
PremiumWear, Inc.
By /s/ James S. Bury
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James S. Bury
Vice President of Finance
Dated: June 9, 2000
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