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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): March 30, 1999
U.S. Office Products Company
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-25372 52-1906050
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1025 Thomas Jefferson St., N.W., Suite 600E., Washington, D.C. 20007
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(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (202) 339-6700
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
U.S. Office Products Company ("USOP") has entered into an Investment
Agreement, dated as of March 30, 1999 (the "Investment Agreement"), with
CDR-PC Acquisition, L.L.C. ("CD&R"), an affiliate of an investment fund (the
"Fund") managed by Clayton, Dubilier & Rice, Inc. Pursuant to the Investment
Agreement, CD&R will pay USOP $51 million in cash (the "Investment") in
consideration for the following: USOP will (i) issue to CD&R 73,261.79 shares
of Series A Non-Voting Participating Convertible Preferred Stock ("Preferred
Stock"), par value $.001 per share, and (ii) amend the warrants previously
issued to CD&R in June 1998 (the "Warrants") to reduce the exercise price to
$5.625 per share. The Warrants cover approximately 9.2 million shares of USOP
common stock (the "Common Stock").
Each share of the Preferred Stock will be convertible into 100 shares of
Common Stock if and when it is transferred to anyone other than CD&R or its
affiliates. The Preferred Stock will carry no voting rights, except where
stockholder approval is required for a merger, consolidation, or sale of all
or substantially all of USOP's assets. In that case, the Preferred Stock will
vote together with the Common Stock and each share of Preferred Stock will
have the number of votes equal to the number of shares of Common Stock into
which it is convertible. Additionally, USOP must obtain the approval of
holders of the Preferred Stock before (a) effecting any proposed changes to
USOP's organizational documents that adversely affect the Preferred Stock and
(b) undertaking or agreeing to undertake a reorganization, dissolution,
winding-up, liquidation or similar transaction. The Preferred Stock will have
a liquidation preference of $1.00 per share. The Preferred Stock will carry
no dividend right other than the right to receive dividends if and when
declared and paid on the Common Stock, in the same amount as would be
received by the shares of Common Stock into which the Preferred Stock is
convertible.
The Closing is conditioned upon, among other things, USOP obtaining a
satisfactory amendment to its bank credit agreement and CD&R obtaining the
consent of a majority in interest of its limited partners for a waiver of the
Fund's diversification cap in connection with the Investment.
Upon completion of the Investment, CD&R's equity ownership of USOP will
increase to approximately 37.4% from 24.9% (and to approximately 48.1% from
39.9% assuming full exercise of the Warrants). In addition, the Investment
Agreement will permit CD&R or its affiliates to acquire an additional 1.8% of
the Common Stock, potentially giving CD&R up to 49.9% equity ownership
(assuming full exercise of the Warrants).
Under the Investment Agreement, CD&R will continue to be subject to
certain "standstill" provisions, including restrictions on its ability to
sell its USOP securities or to buy additional USOP voting securities for
certain periods, unless there is a public disclosure of a bona fide tender
offer or other public offer by a person, other than CD&R or its affiliates,
which would result in that person owning 25% or more of the shares of Common
Stock outstanding. However, if such public offer is thereafter abandoned,
CD&R will once again be subject to the standstill provisions.
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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.
U.S. OFFICE PRODUCTS COMPANY
By:/s/ Mark D. Director
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Mark D. Director
Executive Vice President--Administration,
Secretary and General Counsel
Dated: April 9, 1999
