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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): September 16, 1997
SPECIALTY EQUIPMENT COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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Delaware 0-22798 36-3337593
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1245 Corporate Blvd., Suite 401, Aurora, IL 60504
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
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Registrant's telephone number, including area code: (630) 585-5111
Not applicable.
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(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On September 16, 1997, the Registrant announced that its Board of
Directors (the "Board") has approved a plan to purchase up to $10 million worth
of its Common Stock, par value $.01 per share ("Common Stock"), in the open
market and in private transactions (the "Repuchase Plan"). The total number of
shares of Common Stock to be purchased shall not exceed 600,000 shares, or
approximately 3% of the aggregate outstanding shares as of the announcement.
The exact number of shares to be purchased and the price to be paid will depend
upon the availability of shares, the prevailing market prices and any other
considerations which may in the opinion of the Board or management affect the
advisability of purchasing Common Stock. The shares purchased will be held as
treasury shares and used for general corporate purposes. The share repurchase
will be funded from existing cash, internally generated funds or through
short-term debt. The press release regarding the Repurchase Plan is included
herein as an exhibit and incorporated herein by reference in its entirety.
In connection with the Repurchase Plan, the Registrant entered into a
stock purchase agreement with one if its major stockholders, Malcolm Glazer,
and a family partnership affiliate of Mr. Glazer (the "Glazers"). Pursuant to
this agreement, the Glazers will participate in the Repurchase Plan through an
agreement to sell a pro rata portion of their shares at the average per share
price paid to other selling stockholders. A special committee of the Board,
consisting entirely of outside directors, approved this agreement. The stock
purchase agreement is included herein as an exhibit and incorporated herein by
reference in its entirety.
ITEM 7. EXHIBITS.
Exhibit 99.1. Press Release of Registrant dated September 16, 1997.
Exhibit 99.2. Stock Purchase Agreement dated as of September 16, 1997
between Malcolm Glazer, Malcolm I. Glazer Family Limited
Partnership and the Registrant.
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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.
SPECIALTY EQUIPMENT COMPANIES, INC.
Date: September 16, 1997 By: /s/ Donald K. McKay
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Donald K. McKay
Executive Vice President - Finance
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EXHIBIT 99.1
SPECIALTY EQUIPMENT COMPANIES, INC.
1245 Corporate Boulevard
Aurora, Il 60504
NASDAQ: SPEQ
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
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Don McKay Debra Davis Marnie Freitag
Executive Vice President - Finance General Information Analyst Inquiries
(630) 585-2913 (312) 266-7800 Ext 650 (312) 640-6768
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FOR IMMEDIATE RELEASE
TUESDAY, SEPTEMBER 16, 1997
SPECIALTY EQUIPMENT COMPANIES, INC. ANNOUNCES
STOCK BUYBACK PLAN; SAYS CURRENT
PRICE UNDERVALUES THE COMPANY
AURORA, IL --- SEPTEMBER 16TH - SPECIALTY EQUIPMENT COMPANIES, INC. (NASDAQ:
SPEQ), a leading global supplier to the foodservice and beverage equipment
industries, today announced that its Board of Directors have approved a plan to
purchase $10 million of its common stock (up to 600,000 shares, or
approximately 3 percent) in the open market and in private transactions. The
company currently has 21.4 million fully diluted shares outstanding.
The exact number of shares to be purchased and the price to be paid will depend
upon the availability of shares, the prevailing market prices and any other
considerations which may, in the opinion of the Board of Directors or
management, affect the advisability of purchasing SPEQ shares. The shares
purchased will be held as treasury shares and used for general corporate
purposes. The share repurchases will be funded from existing cash, internally
generated funds or through short-term debt.
One of the company's major shareholders and a Director, Malcolm Glazer, will
participate in the plan and has agreed to sell a pro-rata portion of his shares
at the same prices paid to other selling shareholders so that his percentage
interest in the company will remain the same. A Special Committee of the Board
has approved this agreement.
Specialty's President and CEO Jeffrey P. Rhodenbaugh said, "With our stock
trading at a deep discount to both the S&P 500 multiple and that of our peer
group, we believe that the current price undervalues our company and presents
an attractive investment opportunity to increase shareholder value. Our strong
cash flow and our confidence in our long-term outlook are the driving factors
behind this move.
MORE...
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SPECIALTY EQUIPMENT COMPANIES, INC.
ADD ONE
"Combined with our plans to expand our global leadership positions in our
operating businesses both internally and through acquisitions, this buyback
program should be an important step in expanding the financial community's
recognition of our compelling current valuation relative to our industry as
well as our prospects for long-term growth."
Specialty Equipment Companies, Inc. manufactures a broad array of commercial
cooking and refrigeration equipment for the foodservice industry. Specialty's
operating units are Beverage-Air, Gamko, Taylor, Wells/Bloomfield and World
Dryer. Its products are sold to major fast food restaurant and convenience
store chains, specialty chains, soft drink bottlers international breweries and
institutional foodservice operators around the world. Its common stock is
traded on the NASDAQ Stock Market under the ticker symbol "SPEQ."
Except for historical information contained herein, this press release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those anticipated and discussed herein. These factors include: general
economic conditions and their impact on the growth of the quick service
restaurant and soft drink bottler industries, the Company's dependence on its
major customer and key management personnel, the effects of competition, the
significance of the Company's outstanding indebtedness and other factors
detailed elsewhere from time to time in the Company's filings with the
Securities and Exchange Commission.
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For more information on Specialty Equipment Companies, Inc. via facsimile at no
cost, simply dial 1-800-PRO-INFO and enter the company symbol SPEQ.
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EXHIBIT 99.2
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of September 16, 1997 (the
"Agreement"), between MALCOLM GLAZER ("Glazer"), MALCOLM I. GLAZER FAMILY
LIMITED PARTNERSHIP (the "Partnership" and collectively with Glazer, the
"Glazers") and SPECIALTY EQUIPMENT COMPANIES, INC. a Delaware corporation
("Company").
WITNESSETH
WHEREAS, the Board of Directors (the "Board") of the Company has
determined that it is in the best interests of the Company and its stockholders
to commence a stock repurchase plan pursuant to which the Company repurchases
shares of the Company's Common Stock, par value $.01 per share ("Common
Stock"), having an aggregate fair market value (as determined based upon the
prevailing market price on the Nasdaq National Market for a share of Common
Stock at the time of repurchase) of $10,000,000 for $10,000,000 (the
"Repurchase Plan");
WHEREAS, the Glazers own beneficially and of record 40.83% (the "Applicable
Percentage") of the outstanding shares of Common Stock, such amount having been
calculated in accordance with Rule 13d-3 pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"); and
WHEREAS, Glazer and his sons, Avram and Kevin Glazer, serve on the Board of
Directors of the Company;
WHEREAS, the Company desires to make certain of the repurchases pursuant to
the Repurchase Plan through open market purchases in compliance with Rule
10b-18 under the Exchange Act; and
WHEREAS, the Company and the Glazers agree that the Glazers' participation in
any open market purchases by the Company could have unintended adverse effects
on the Company, the Repurchase Plan and the Glazers; and
WHEREAS, the Glazers desire to sell shares of Common Stock in the Repurchase
Plan in an amount which would equal the Applicable Percentage of the aggregate
number of shares of Common Stock to be repurchased by the Company pursuant to
the Repurchase Plan (the "Aggregate Shares") and the Company desires to
repurchase from the Glazers such number of shares and that the purchase price
for the shares to be sold by the Glazers to the Company shall be the average
price paid by the Company for shares purchased by the Company from shareholders
other than the Glazers pursuant to the Repurchase Plan.
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AGREEMENT
NOW THEREFORE, in connection of the foregoing recitals and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
Glazers and the Company agree as follows:
1. Sale and Purchase of Shares.
Subject to the terms and conditions of this Agreement, the Glazers shall
sell to Company and Company shall purchase from Glazers, the Applicable
Percentage of the Aggregate Shares pursuant to and in accordance with the terms
hereof. In no event may the Aggregate Shares in any event exceed a number of
shares equal to $10,000,000 divided by the average purchase price paid per
share of Common Stock paid by the Company pursuant hereto and in connection
with other purchases pursuant to the Repurchase Plan. The obligations of the
Glazers hereunder are joint and several in all respects.
2. Closings.
(a) Time and Dates. The transfer of the shares of Common Stock hereunder
and payments therefore will be made at weekly closings (the "Closings") to be
held at 10 A.M. Chicago time on Tuesday of each week commencing on September
22, 1997, at the offices of Lazard Freres, or at such other time or location as
Glazer and Company shall mutually agree. The time and date of such payment and
delivery are referred to in this Agreement as the "Closing Dates". Each such
Closing shall relate to the Applicable Number of shares of Common Stock, as
determined in accordance with Section 2(b) hereof, with the purchase price for
such shares being equal to the Applicable Aggregate Price as determined in
accordance with Section 2(b) hereof.
(b) Notices. On or before 1 p.m. Chicago time on the Monday immediately
preceding each Closing, the Company shall deliver to the Glazers a notice
specifying: (i) the number of shares purchased by the Company pursuant to the
Repurchase Plan and not made pursuant to this Agreement in the immediately
preceding calendar week ("Purchased Shares"), (ii) the average price per share
paid for such shares by the Company (the "Average Price"), (iii) Applicable
Number of shares of Common Stock and (iv) the Applicable Aggregate Price for
such shares. The "Applicable Number" shall be equal to the Applicable
Percentage of a fraction (i) the numerator of which is equal to the number of
Purchased Shares during the applicable calendar week and (ii) the denominator
of which is equal to 0.5917. The Applicable Aggregate Price shall equal the
product of the Applicable Number for such calendar week times the Average Price
for such calendar week.
(c) Payment of Purchase Price. The purchase price shall be paid to the
Glazers at each Closing with immediately available funds, by a wire transfer
(to an account specified in writing to the Company by the Glazer's not less
than forty-eight hours prior to any Closing)
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or by a check (naming Glazer, or such other person as specified in writing to
the Company by the Glazers not less than forty-eight hours prior to any
Closing, as the payee) representing good funds. At each Closing, the Glazers
shall deliver to Company stock certificates representing the shares sold
pursuant to the terms of this Agreement duly endorsed for transfer or
accompanied by any necessary or applicable stock powers executed in blank.
(d) Closing Certificate. At each Closing, the Glazers shall deliver a
certificate specifying that one or both of them are the sole and exclusive
record and beneficial owners of the shares of Common Stock to be sold (the
"Glazer Shares"), that the seller of the Glazer Shares has good and marketable
title to such shares, and the absolute right, power and capacity to sell,
assign, transfer and deliver such shares to the Company free and clear of, and
the Glazer Shares are free and clear of, any liens, encumbrances, pledges,
security interests, restrictive agreements, transfer restrictions (other than
pursuant to applicable federal and state securities laws), voting trust
arrangements or claims of any nature whatsoever.
3. Glazers Representations. The Glazers hereby jointly and severally
represent and warrant to Company as follows:
(a) Authority. Glazer has full capacity, right, power and authority,
without the consent of any other person, to execute and deliver this Agreement
and to carry out the transactions contemplated hereby. The Partnership has
taken all requisite partnership action and has the authority to execute and
deliver this Agreement and to carry out the transactions contemplated hereby.
(b) Ownership of Shares by Glazer. The Glazers are the record and
beneficial owner of 7,925,532.14 shares of Common Stock including shares that
can be acquired through the exercise of a warrant to purchase shares of Common
Stock (the "Warrant"), they (individually or collectively) have good and
marketable title to all shares to be sold pursuant to this Agreement ("Such
Shares"), and the absolute right, power and capacity to sell, assign, transfer
and deliver all Such Shares to the Company free and clear of, and Such Shares
are free and clear of, any liens, encumbrances, pledges, security interests,
restrictive agreements, transfer restrictions (other than pursuant to
applicable federal and state securities laws), voting trust arrangements or
claims of any nature whatsoever.
(c) Validity. This Agreement has been duly executed and delivered by the
Glazers and is the lawful, valid and legally binding obligation of the Glazers,
enforceable in accordance with its terms, except to the extent limited by
bankruptcy, solvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
(d) No Conflicts. Neither the execution and delivery of this Agreement nor
the Glazers' performance of their obligations hereunder will conflict with, or
result in a breach or violation of, any provision of the Partnership's
Partnership Agreement, any contract,
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agreement or order to which the Glazers (or either of them) is a party or by
which the Glazers (or either of them) may be bound or any law applicable to the
Glazers (or either of them).
(e) Terms of the Repurchase Plan. The Glazers acknowledge that on signing
this Agreement the Company intends to notify the Nasdaq National Market; issue
a press release announcing the intended number or value of shares it intends to
purchase and describing to the extent it believes is necessary, appropriate or
desirable the details contained in this Agreement with Glazer; and that the
open market purchases are subject to and will be administered in accordance
with Rule 10b-18 under the Exchange Act. The Glazers have reviewed with
counsel Rule 10b-18 and are fully familiar with its terms and the impact which
it may have upon the Company's pursuit of the Repurchase Plan. The Glazers
further acknowledge the Company has no obligation under this Agreement to make
any open market purchases of its stock under the Repurchase Plan.
4. Company Representation The Company hereby represents and warrants to
the Glazers as follows:
(a) Authority. The Company has taken all requisite corporate action and has
the authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby.
(b) Validity. This Agreement has been duly executed and delivered by the
Company and is the lawful, valid and legally binding obligation of Company,
enforceable in accordance with its terms, except to the extent limited by
bankruptcy, solvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
(c) No Conflicts. Neither the execution and delivery of this Agreement nor
the Company's performance of its obligations hereunder will conflict with, or
result in a breach or violation of, any provision of the Company's Certificate
of Incorporation or By-laws, any contract, agreement or order to which the
Company is a party or by which the Company may be bound or any law applicable
to the Company.
5. Glazer Covenants. The Glazers, jointly and severally, hereby covenant
and agree as follows:
(a) Limitations on Other Sales by the Glazers.
The Glazers each covenant and agree that from the date hereof until the End
Date (as defined below), neither the Glazers, nor any other member of the
Glazer Group (as defined below) shall, directly or indirectly, sell, offer,
contract to sell, make any short sale, pledge or otherwise dispose of any
shares of Common Stock or any securities convertible into or exchangeable for,
Common Stock or any options, warrants or rights to purchase or acquire
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Common Stock (collectively a "Sale Transaction") other then pursuant to this
Agreement without first providing the Company with (i) ten (10) days' prior
written notice, (ii) a certificate (the "Certificate") in which the Glazers and
any other member of the Glazer Group which is a party to the proposed Sale
Transaction represent and warrant to the Company that (A) such Sale Transaction
(1) is in compliance with all applicable federal or state securities laws,
including without limitation Rule 10b-18 under the Exchange Act and (2) will
not result in the Company's continued consummation of the Repurchase Plan (on
terms described to the Glazers by the Company contemporaneous with the
provision of such representation) being in violation of Regulation M or Rule
10b-18 under the Exchange Act and (B) that such representations and warranties
have been made after consultation with counsel reasonably believed by the
Glazers to be expert in federal securities law and (iii) an indemnification
agreement, in form and substance acceptable to the Glazers, the Company and
their respective counsels, pursuant to which the Glazers indemnify the Company
against any losses which the Company may suffer as a result of the falsity or
incorrectness of any representation or warranty made by the Glazers in the
Certificate.
For the purposes of this Agreement the term "End Date" shall mean the
earliest of the following: (i) the date on which the Company has repurchased
shares pursuant to the Repurchase Plan (whether pursuant hereto or otherwise)
for aggregate consideration of $10,000,000, (ii) the date on which the
Repurchase Date is terminated by the Company's Board (or any committee of the
Board with valid authority) by resolution validly adopted (provided that if the
Board passes a resolution terminating the Repurchase Plan at a later date, the
date of such termination (and not the date the resolution is passed) shall be
the applicable date) and (iii) the 46th Nasdaq National Market trading day
after the Company makes its first purchase pursuant to the Repurchase Plan.
The Company will provide the Glazers with prompt notice of the occurrence of
the End Date.
For the purposes of this Agreement the term "Glazer Group" shall mean the
Glazers and any corporations, persons, partnerships, trusts or other entities
in which the Glazers or their affiliates (as defined under Rule 12b-2 under the
Exchange Act) own 50% or more of the equity securities that are entitled to
vote in the election of directors or persons holding similar positions.
(b) Schedule 13D Amendment. Promptly following signing this Agreement
Glazer shall file with the Securities and Exchange Commission an amended
Schedule 13D to reflect the terms hereof.
6. Governing Law; Jurisdiction and Venue. This Agreement shall be governed
by the laws of the State of Delaware applicable in the case of contracts made
and to be performed in that state, without giving effect to any conflict of law
principles thereunder. The Glazers and the Company irrevocably agree that any
legal action or proceeding again him or it, as the case may be, with respect to
this Agreement and any transactions contemplated hereby shall be brought in the
courts of the State of Delaware, or of the United State of America for the
District of Delaware, and by execution and delivery of this
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Agreement, the Glazers and the Company irrevocably submit to the jurisdiction
of such courts.
7. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
assigns, provided, however, that neither this Agreement, nor any right
hereunder, may be assigned by any party without the consent of the other party
hereto.
(b) Entire Agreement; Amendment. This Agreement, including the recitals
hereto, and the other instruments referred to herein embody the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements with respect thereto. This Agreement may be
amended, and any provision hereof waived, but only in a writing signed by the
party against whom such amendment or waiver is sought to be enforced.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
instrument.
(d) Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or enforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
(e) Captions. The captions herein are inserted for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
(f) Termination. The obligations of the parties hereunder shall terminate
on the End Date; provided however, that (i) the termination shall in no way
effect the validity of any purchase and sale of Common Stock pursuant hereto
prior to such termination and (ii) (1) all representations and warranties made
hereunder and in any certificate delivered in connection herewith and (2) all
indemnity rights and obligations provided in connection with Section 5(a)
hereof shall survive such termination.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as
of the date first above written.
COMPANY:
SPECIALTY EQUIPMENT COMPANIES, INC.
By: /s/ Donald K. McKay
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Its Executive Vice President
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GLAZERS: /s/ Malcolm Glazer
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Malcolm Glazer
MALCOLM I. GLAZER FAMILY
LIMITED PARTNERSHIP
By: /s/ Malcolm Glazer
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Its Trustee
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