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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 19,1999
Donnelly Corporation
(Exact name of Registrant as specified in its charter)
Michigan I-9716 38-0493110
(State or other (Commission File No.) (IRS Employer
jurisdiction Identification No.)
of incorporation)
49 West Third Street, Holland, Michigan 49423-2813
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616)786-7000
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Item 2. Acquisition or Disposition of Assets
Effective, January 4, 1999, Donnelly Optics Corporation
("Optics"), a wholly-owned subsidiary of the Registrant, was
merged into Optics Acquisition, Inc. ("Acquisition"), a wholly-
owned subsidiary of Applied Image Group, Inc. ("AIG"), a New
York Corporation. The surviving corporation in this merger was
Optics and its name was changed to Applied Optics, Inc.
("AOI"). Donnelly Optics Corporation designed and manufactured
injection molded optical lenses for the automotive, computer and
medical industries. Applied Image Group develops and
manufactures opto-imaging products for the lighting, automotive,
optical and photonics industries.
The transaction was effected pursuant to an Agreement and Plan of
Merger ("Merger Agreement") dated as of December 1, 1998, among
the Registrant, Optics, Acquisition and AIG. The effective date
of the merger was January 4, 1999.
Pursuant to the Merger Agreement, the Registrant received a
$5,000,000 convertible subordinated promissory note ("Note") of
AOI, guaranteed by AIG, and 13% of the outstanding AIG common
stock. The Note provides that interest shall begin to accrue at
6% on January 4, 2002, with interest-only payments due each
quarter beginning April 4, 2002, and the entire principal amount
due January 3, 2009. The Note is convertible at anytime into
shares of AIG common stock. Upon such conversion, in the full
principal amount of the Note, Donnelly would hold approximately
17% of the outstanding common stock of AIG. As a result of this
transaction, the financial results, assets and liabilities of
Optics have been removed from the Registrant's financial
statements as of December 1, 1998, and were replaced on the
Registrant's balance sheet by the 13% equity interest in AIG and
the $5,000,000 Note.
The terms of the Merger Agreement and the establishment of the
merger consideration were arrived at as a result of arm's length
negotiations between the management of the Registrant and the
management of AIG. There are no material relationships between
the Registrant and AIG or any of their respective affiliates,
directors, officers or associates of any such directors or
officers.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(b) Pro Forma Financial Information
At this time of this report, it is not practicable to
provide pro forma financial statements. Such
statements will be filed under cover of Form 8 as soon
as practicable and not later than February 28, 1999.
(c) Exhibits
Agreement and Plan of Merger among Applied Image Group,
Inc., Optics Acquisition, Inc. Donnelly Corporation,
Donnelly Optics Corporation and Bruno Glavich.
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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.
Date: January 19, 1999
DONNELLY CORPORATION
(Registrant)
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/s/ Scott E. Reed
Senior Vice President, Chief Financial Officer
