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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) December 29, 1998
OAKHURST COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19450 25-1655321
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification No.)
of incorporation)
3513 Concord Pike
Suite 3527
Wilmington, Delaware 19803
(Address of (Zip code)
principal executive
offices)
Registrant's telephone number, including area code: (302) 478-9170
Exhibit Index at Page 9
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Item 2. Acquisition or Disposition of Assets
On December 30 Oakhurst Company, Inc. (the "Company") sold approximately
1,730,000 shares of common stock to KTI, Inc. in a private placement for
$865,000 and as a result, KTI has become a 35% shareholder of the Company. In
conjunction with the placement, Oakhurst entered into a subordinated loan
agreement with KTI pursuant to which KTI has committed to lend the Company up to
$17 million. KTI, Inc. is an integrated, value-added processor of nonhazardous
solid wastes that owns and operates waste-to-energy and recycling facilities
throughout the United States and Canada, with assets in excess of $400 million.
The funds from the private placement and the loans will be invested by the
Company in Oakhurst Technology, Inc. ("OTI"), a wholly-owned subsidiary of the
Company and will be used by OTI for upgrading and retrofitting a 20 megawatt
waste-to-energy facility in Ford Heights, Illinois, and for providing working
capital for the operation of the facility. In consideration of the agreement by
OTI to invest the funds, to provide the working capital, and to operate the
facility, OTI acquired a 50% equity interest in the entity that owns the
facility, New Heights Recovery & Power, LLC (formerly known as CGE Ford Heights,
L.L.C.) ("New Heights"). The interest was acquired from U.S. Bank Trust
National Association, as Indenture Trustee for New Heights as Debtor pursuant
to a Reorganization Plan that was confirmed by the United States Bankruptcy
Court for the District of Delaware on December 15, 1998 (the "Plan").
The New Heights facility was built in 1996 at a cost of approximately $110
million for the purpose of combusting waste rubber to produce electricity. Due
to amendments to the Illinois Retail Rate Act, which repealed certain rate
incentives to the facility, it was closed during start-up testing and the owner
sought protection under federal bankruptcy laws. Pursuant to the Plan, the New
Heights bondholders agreed to convert their $80 million in bonds and other
claims into equity, and to grant 50% of their equity interest in New Heights to
KTI or its affiliate, in return for a commitment to invest in and manage the
project. KTI has designated OTI as its affiliate for these purposes, and KTI
Operations, a wholly-owned subsidiary of KTI, will manage the facility.
The upgrading and retrofitting of the New Heights facility will include the use
of KTI-patented cryogenic crumb rubber processing technology. Oakhurst expects
that over time, subject to the receipt of the necessary permits, the New Heights
facility will be developed as an environmental campus for the processing and
recycling of paper and other non-hazardous wastes in addition to waste rubber.
It is also expected that OTI will invest in businesses that will enhance the
development of the crumb rubber industry and in related opportunities in the
waste-to-energy and recycling sectors.
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The statements contained in the foregoing Item 2 that are not historical facts
contain forward-looking information and accordingly involve risks and
uncertainties. Such forward-looking statements are based on management's belief
as well as assumptions made by, and information currently available to,
management pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Factors including overall economic conditions,
conditions in the waste-to-energy and recycling industries, permitting and
regulatory factors, competitors' and customers' actions and other risk factors
described in the Company's filings with the Securities and Exchange Commission
could cause actual results and outcomes to differ materially. The Company
undertakes no obligation to release publicly the result of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date of this Report on Form 8-K or to reflect the
occurrence of other unanticipated events.
Item 5. Other Events
Effective as of December 29, 1998, Oakhurst Company, Inc. (the "Company")
redeemed all of its rights issued pursuant to its shareholder rights plan dated
as of February 10, 1998. Also effective December 29, 1998, the Company's Board
of Directors adopted a new shareholders rights plan pursuant to a Rights
Agreement (the "Rights Agreement") between Oakhurst Company, Inc. (the
"Company") and American Stock Transfer and Trust Company, as Rights Agent (the
"Rights Agent"), and declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is payable on December 29,
1998 (the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company at a price of $10.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment.
The following summary of the principal terms of the Rights Agreement is a
general description only and is subject to the detailed terms and conditions of
the Rights Agreement. A copy of the Rights Agreement is attached as Exhibit 99.1
to the Company's Registration Statement on Form 8-A under the Securities
Exchange Act of 1934 and is incorporated herein by reference thereto.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Rights Agreement.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date (defined below).
Until the Distribution Date, certificates representing the Rights ("Rights
Certificates") will not be sent to stockholders and the Rights will attach to
and trade only with the Common Shares. Accordingly, Common Share certificates
outstanding
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on the Record Date will evidence the Rights related thereto, and Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of the
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
Distribution Date
The Rights will separate from the Common Shares, Rights Certificates will be
issued and the Rights will become exercisable upon such date (the "Distribution
Date") which is the earlier of (i) 10 days following a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired beneficial ownership of 4.5% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 4.5% or more of the outstanding Common Shares.
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights from and after the Distribution Date. All Common
Shares issued prior to the earliest of the Distribution Date, the redemption of
the Rights or the Final Expiration Date (as defined below) will be issued with
Rights. The Rights will expire on December 29, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further events described
below, holders of the Rights will be entitled to receive, upon exercise and the
payment of $10.00 per Right, one one-hundredth of a Preferred Share, subject to
adjustment as described below. In addition, under certain circumstances
described more fully herein, the Rights may become exercisable for Common Shares
having a value equal to two times the Purchase Price and/or Common Stock of
certain acquiring companies having a value equal to two times the Purchase
Price.
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Right to Buy Acquiring Company Stock; Right to Buy Company Common Shares
Unless the Rights are earlier redeemed, in the event that the Company is
acquired in a merger or other business combination transaction or 50% or more of
its consolidated assets or earning power are sold after a person or group has
become an Acquiring Person, proper provision will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right. Similarly, unless the
Rights are earlier redeemed, in the event that any person or group of affiliated
or associated persons becomes an Acquiring Person, proper provision shall be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a market value of
two times the Purchase Price of the Right.
Exchange Provision
At any time after any person or group becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become void), in whole
or in part, at an exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
Redemption
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 4.5% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Adjustments to Prevent Dilution
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion
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price, less than the then-current market price of the Preferred Shares, or (iii)
upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above). The number
of outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price.
Cash Paid Instead of Issuing Fractional Shares
No fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
No Stockholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends.
Amendment to Rights Agreement
The terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights except that from and after such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
Rights and Preferences of the Preferred Shares
Preferred Shares purchasable upon exercise of the Rights will not be redeemable.
Each Preferred Share will be entitled to a minimum preferential quarterly
dividend payment of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount
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received per Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
Certain Anti-takeover Effects
The Rights are designed to deal with the problem of a raider using what the
Board of Directors perceives to be coercive tactics to deprive the Company's
Board of Directors and stockholders of any real opportunity to determine the
destiny of the Company by forcing the raider to negotiate with the Company's
Board of Directors. The Rights may be redeemed by the Company at a redemption
price of $0.001 per Right, subject to adjustment, prior to the public
announcement that 4.5% or more of the Common Shares has been accumulated by a
single acquiror or group. Thus, they should not interfere with any merger or
other business combination approved by the Board of Directors nor affect any
prospective offeror willing to negotiate in good faith with the Board of
Directors. The Rights Agreement does not inhibit any stockholder from utilizing
the Proxy mechanism to promote a change in the management or direction of the
Company. While the Board of Directors is not aware of any effort to acquire
control of the Company, it believes that the Rights Agreement represents a sound
and reasonable means of safeguarding the investment of stockholders in the
Company.
Distribution of the Rights will not in any way alter the financial strength of
the Company or interfere with its business plans. The distribution of the Rights
is not dilutive, does not affect reported earnings per share, is not taxable
either to the recipient or to the Company, and will not change the way in which
stockholders can currently trade shares of Common Stock. However, under certain
circumstances, particularly where the Rights are "triggered" as the result of
certain potentially abusive tactics, exercise of the Rights may be dilutive or
affect reported earnings per share.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
4 Rights Agreement, dated as of December 29, 1998 between
Oakhurst Company, Inc. and American Stock Transfer and
Trust Company, including the form of Certificate of
Designation, the form of Rights Certificate and the Summary
of Rights attached thereto as Exhibits A, B and C,
respectively. Filed as Exhibit 99.1 to the Company's
Registration Statement on Form 8-A filed on January 5,
1999.
99 Press Release Dated December 31, 1998.
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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.
Oakhurst Company, Inc.
Date: January 5, 1999 By: /s/ Roger M. Barzun
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Roger M. Barzun
Senior Vice President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description At
------- ----------- --
No. Page
--- ----
<S> <C> <C>
4 Rights Agreement, dated as of December 29, 1998 between
Oakhurst Company, Inc. and American Stock Transfer and Trust
Company, including the form of Certificate of Designation, the
form of Rights Certificate
and the Summary of Rights attached thereto as N/A
Exhibits A, B and C, respectively. Filed as Exhibit 99.1 to
the Company's Registration Statement on Form 8-A filed on
January 5,
1999.
99 Press Release Dated December 31, 1999. 10
</TABLE>
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Exhibit 99
FOR IMMEDIATE RELEASE
Contact: Robert Davies
(817) 416-0717
OAKHURST ANNOUNCES ENTRY INTO THE RECYCLING AND
WASTE-TO-ENERGY BUSINESS
December 31, 1998 -- Oakhurst Company, Inc. (OTC Bulletin Board: OAKC)
("Oakhurst") today announced that it has raised up to $17.8 million in stock and
debt, the proceeds of which will be used to enable it to enter the recycling and
waste-to-energy business.
On December 30 Oakhurst received $865,000 in a private placement of
approximately 1,730,000 shares of common stock to KTI, Inc. ("KTI"). In
conjunction with the placement, Oakhurst entered into a subordinated loan
agreement pursuant to which KTI has committed to lend up to $17.0 million.
These funds will be invested in Oakhurst Technology, Inc. ("OTI"), a
wholly-owned subsidiary of Oakhurst, and used by OTI for upgrading and
retrofitting a 20 megawatt waste-to-energy facility in Ford Heights, Illinois,
and providing working capital for the operation of such facility. As a result,
OTI will acquire a 50% equity interest in the entity that owns the facility
(known as New Heights Recovery & Power, LLC, or "New Heights").
The New Heights facility was built in 1996 at a cost of about $110 million for
the purpose of combusting waste rubber to produce electricity. Due to amendments
to the Illinois Retail Rate Act, which repealed certain rate incentives to the
facility, it was closed during start-up testing and the owner sought protection
under federal bankruptcy laws. Pursuant to a Reorganization Plan that was
confirmed by the bankruptcy court on December 15, 1998, the New Heights
bondholders agreed to convert their $80 million in bonds and other claims into
equity, and to grant 50% of such equity interest in New Heights to KTI or its
affiliate, in return for a commitment to invest in and manage the project. KTI
has designated OTI as its affiliate for these purposes; KTI Operations, a
wholly-owned subsidiary of KTI, will manage the facility.
The upgrading and retrofitting of the New Heights facility will include the use
of KTI-patented cryogenic crumb rubber processing technology. Oakhurst expects
that over time, subject to the receipt of the necessary permits, the New Heights
facility will be developed as an environmental campus, for the processing and
recycling of paper and other non-hazardous wastes in addition to waste rubber.
It is anticipated that New Heights may employ up to 350 people from the Ford
Heights community. It is also expected that OTI will invest in businesses that
will enhance the development of the crumb rubber industry and in related
opportunities in the waste-to-energy and recycling sectors.
KTI, Inc. (Nasdaq: KTIE) is an integrated, value-added processor of
non-hazardous solid wastes that owns and operates waste-to-energy
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and recycling facilities throughout the United States and Canada, with assets in
excess of $400 million.
Oakhurst is a holding company which owns two businesses, Steel City Products and
Dowling's Fleet Service Co., that are distributors in the automotive
aftermarket.
OAKHURST ANNOUNCES CHANGES IN STOCKHOLDER RIGHTS PLAN
Oakhurst also announced that its Board of Directors voted to redeem all
outstanding Rights issued pursuant to Oakhurst's shareholder rights plan dated
as of February 10, 1998 (the "Prior Rights Plan"). The redemption is effective
as of December 29, 1998 (the "Redemption Date") and was approved by the Board of
Directors in order to facilitate the acquisition by KTI of approximately
1,730,000 shares of Oakhurst's common stock. Oakhurst expects to mail to all
holders of Rights as of the Redemption Date the redemption price of $.001 per
Right on or about January 10, 1999.
In conjunction with the stock acquisition by KTI, Oakhurst's Board adopted a new
shareholder rights plan (the "New Rights Plan") and declared a dividend of one
right on each outstanding share of Oakhurst's common stock. The dividend will be
paid to stockholders of record on December 29, 1998.
The New Rights Plan was not adopted in response to any specific proposals or
communications regarding plans to acquire control of Oakhurst. Rather, the New
Rights Plan is intended to deter takeover tactics that are abusive, to preserve
the assets of Oakhurst and to ensure that any acquisition of Oakhurst would
result in full and fair value for all shareholders.
The New Rights Plan is designed to protect the value of every shareholder's
investment and is not intended to prevent an acquisition of Oakhurst at a full
and fair price. Since the rights can be redeemed by the Board of Directors prior
to a triggering event, the plan should not interfere with a transaction that is
in the best interests of Oakhurst and its shareholders. The issuance of the
rights has no accounting or financial impact and there is no dilutive or tax
effect to Oakhurst or its shareholders.
Under the New Rights Plan, the rights are not exercisable and not transferable
apart from Oakhurst's common stock until after such time as a person or group
has acquired 4.5% of Oakhurst's common stock or begins a tender or exchange
offer that would reach the 4.5% level (a "triggering event"). The initial
acquisition by KTI is exempted from the New Rights Plan, but subsequent
acquisitions exceeding the threshold are not. If the rights become exercisable,
separate rights certificates will be issued and will entitle the holder to
purchase one-one hundredth of a share of Series A junior preferred stock of
Oakhurst at an exercise price of $10.00. The New Rights Plan also provides for
appropriate action for possible mergers and steps for the Board of Directors to
take in the time period between the acquisition by a person or group of 4.5% of
Oakhurst's common stock and the acquisition of 50% or more
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of the common stock. The rights may be redeemed by the Board of Directors at a
price of $.001 per right any time prior to the acquisition of 4.5% or more of
Oakhurst's common stock.
Oakhurst has substantial tax loss carryforwards which shelter most of its income
from federal income taxes. A change in control of Oakhurst as defined in the IRS
Code may significantly reduce the availability of the tax losses. Accordingly,
Oakhurst's Certificate of Incorporation includes restrictions on the
registration of transfers of stock resulting in, or increasing, individual
holdings exceeding 4.5%.
The statements contained in this press release that are not historical facts
contain forward-looking information and accordingly involve risks and
uncertainties. Such forward-looking statements are based on management's belief
as well as assumptions made by, and information currently available to,
management pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Factors including overall economic conditions,
demand for after-market automotive products in general and the Company's
products in particular, conditions in the waste- to-energy and recycling
industries, permitting and regulatory factors, competitors' and customers'
actions and other risk factors described in the Company's filings with the
Securities and Exchange Commission could cause actual results and outcomes to
differ materially. The Company undertakes no obligation to release publicly the
result of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date of this release or to reflect the
occurrence of other unanticipated events.
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