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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)
February 18, 1999
Martin Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-26228 63-0133054
(Commission File No.) (IRS Employer Identification No.)
301 E. Tennessee Street
Florence, Alabama 35630
(Address of principal (Zip Code)
executive offices)
256-767-0330
(Registrant's telephone number including area code)
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Item 5. Other Events
By press release issued on February 23, 1999, Martin
Industries, Inc. announced that its Board of Directors has adopted a
Stockholder Rights Plan and declared a dividend distribution of one Preferred
Share Purchase Right on each outstanding share of common stock.
William H. Martin, III, Chairman of the Board of Directors of
Martin Industries, Inc., stated in the release: "The Rights are designed to
protect Martin's stockholders in the event of an unsolicited attempt to acquire
the Company and to guard against abusive tactics which the Board believes are
not in the best interest of Martin's stockholders. The Rights will not prevent
a takeover, but should encourage anyone seeking to acquire the Company to
negotiate with the Board prior to attempting a takeover."
The Rights will be exercisable only if a person or group
acquires 15% or more of Martin's common stock or announces a tender offer the
consummation of which would result in ownership by a person or group of 15% or
more of the common stock. The Board of Directors is authorized to reduce the
15% thresholds referred to above to not less than 10%. Each Right will entitle
stockholders to buy one one-hundredth of a share of a new series of junior
participating preferred stock at an exercise price of $10.
If a person or group acquires 15% or more of Martin's
outstanding common stock, each Right will entitle its holder (other than such
person or members of such group) to purchase, at the Right's then-current
exercise price, a number of Martin's common shares having a market value of
twice such exercise price. In addition, if Martin is acquired in a merger or
other business combination transaction after a person or group has acquired 15%
or more of the Company's outstanding common stock, each Right will entitle its
holder (other than such person or members of such group) to purchase, at the
Right's then-current exercise price, a number of the acquiring company's common
shares having a market value of twice such exercise price.
Following the acquisition by a person or group of beneficial
ownership of 15% or more of the Company's common stock and prior to an
acquisition of 50% or more of the common stock, the Board of Directors may
exchange the Rights (other than Rights owned by such person or group), in whole
or in part, at an exchange ratio of one share of common stock (or one
one-hundredth of a share of the new series of junior participating preferred
stock or equivalent preferred stock) per Right. Prior to the acquisition by a
person or group of beneficial ownership of 15% or more of the Company's common
stock, the Rights are redeemable by the Company for one cent per Right at the
option of the Board of Directors.
The dividend distribution will be made on March 8, 1999
payable to stockholders of record on that date. The Rights will expire on March
8, 2009. The Rights distribution is not taxable to stockholders. Details of the
Stockholder Rights Plan are outlined in a letter which will be mailed to all
stockholders.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to the Company's Registration
Statement on Form 8-A dated February 24, 1999.
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The Board of Directors also announced that it has adopted
amendments to the Company's by-laws providing that a majority of the members of
the Board of Directors are to be independent directors immediately following
the Company's annual meeting of stockholders to be held in 1999. The amendment
further provides that in the event one or more of the persons nominated by the
Board of Directors to stand for election at the annual meeting to be held in
1999 who meet the definition of independent director are not elected by the
stockholders, the time by which the Board of Directors is required to include a
majority of independent directors shall be extended to the end of the annual
meeting to be held in the year 2000. The amendment states that if the board
thereafter fails to be in compliance with the requirement, whether due to
death, resignation, removal or any other reason, the board shall have until the
second annual meeting after such failure to use its reasonable efforts to be in
compliance. The by-law amendments also provide that the requirement in the
by-laws that the Board of Directors consist of a majority of members who are
independent directors may not be amended by the Board of Directors, but only by
the affirmative vote of a majority of the shares of the Company entitled to
vote thereon and present in person or represented by proxy at a meeting where a
quorum is present and such action is considered. A copy of the amendments to
the by-laws of the Company is included as an exhibit to this Current Report on
Form 8-K.
Item 7. Financial Statements and Exhibits
(a) Financial Statements- None
(b) Pro forma financial information - None
(c) Exhibits
99.1 Amendments to the By-laws of Martin Industries, Inc.
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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, thereunto duly authorized.
MARTIN INDUSTRIES, INC.
DATE: February 24, 1999 By /s/ ROBERT L. GOUCHER
--------------------------------------
Robert L. Goucher
Its President
and Chief Executive Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
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<S> <C> <C>
99.1 Amendments to the By-laws
of Martin Industries, Inc.
</TABLE>
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EXHIBIT 99.1
AMENDMENTS TO THE BY-LAWS
OF
MARTIN INDUSTRIES, INC.
ADOPTED FEBRUARY 22, 1999
Section 3.2 of the by-laws of the corporation is amended and restated to read
in its entirety as follows:
"Section 3.2 Qualifications and Composition.
(a) The directors shall designate from among their members one
director to serve as the chairman of the board of the corporation, who shall
serve at the pleasure of the board of directors. In the event that the
president is not a member of the board of directors or his term will expire at
the next meeting at which directors are to be elected, the board of directors
(or the nominating committee of the board of directors, if one exists) shall
nominate the president to fill the first vacancy arising in the board of
directors or to be the successor with respect to the term which is expiring, as
the case may be, and, in the event of any vacancy created by the resignation,
removal, retirement or other termination of the president, the successor to the
president will be elected by the board of directors to fill the unexpired term
of the former president.
(b) By not later than the conclusion of the annual meeting of the
stockholders of the corporation to be held in 1999, and at all times
thereafter, the Whole Board shall consist of a majority of members who are
"independent directors," as such term is defined on Exhibit A attached to and
made a part of these by-laws and as such term may be amended or supplemented
from time to time in the manner provided by the by-laws for the amendment
thereof. The foregoing notwithstanding, in the event that one or more of the
persons nominated by the board of directors to stand for election at the annual
meeting to be held in 1999 who meet such definition of independent director is
not elected by the stockholders, the time by which the corporation shall be in
compliance with the first sentence of this paragraph (b) shall be extended to
immediately following the annual meeting of the stockholders of the corporation
to be held in the year 2000. In the event that at any time after the board of
directors becomes in compliance with the preceding sentences of this paragraph
(b) the Whole Board fails to consist of a majority of such independent
directors, whether due to death, resignation, removal or any other reason, the
corporation shall have until the conclusion of the second annual meeting of
stockholders following the occurrence of the event which results in such
failure to use its reasonable efforts to cause the Whole Board to consist of a
majority of members who are such independent directors, and the corporation
shall not be deemed to be in violation of these by-laws during such period of
time and for so long as the corporation is using such reasonable efforts.
(c) Directors need not be stockholders."
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Article 9 of the by-laws of the corporation is amended and restated to read in
its entirety as follows:
"ARTICLE 9
AMENDMENT OF BY-LAWS
These by-laws may be altered, amended, or repealed at any meeting of
the board of directors or of the stockholders, provided notice of the proposed
change was given in the notice of the meeting and, in the case of a meeting of
the board of directors, in a notice not less than two (2) days prior to the
meeting; provided, however, that, in the case of amendments by stockholders,
notwithstanding any other provisions of these by-laws (except as provided in
the following proviso) or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the capital stock of the corporation
required by law, the certificate of incorporation or these by-laws, the
affirmative vote of the holders of at least seventy-five percent (75%) of the
total votes of all of the then outstanding shares of the Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal any
provision of these by-laws; provided further, however, that only the
stockholders, and not the board of directors, shall be entitled to alter,
amend, or repeal Section 3.2(b) of these by-laws, which action shall require
the affirmative vote of the holders of a majority of the Voting Stock present
in person or represented by proxy and entitled to vote thereon at the meeting
at which a quorum is present and at which such action is considered,
notwithstanding the super-majority provision of the second proviso of this
Article 9. The board of directors shall be entitled to alter or amend Section
3.2(b) of the by-laws in an immaterial respect or to cure any ambiguity or
inconsistency therein."
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EXHIBIT A
Definition of Independent Director
The term "Independent Director" as used in Section 3.2(b) of the
by-laws of Martin Industries, Inc. (the "Company") means a director who:
1. has not been employed by the Company in an executive capacity
within the last five (5) years;
2. is not, and is not affiliated with a company that is, an
advisor or consultant to the Company, or a significant
customer or supplier of the Company;
3. has no personal services contract(s) with the Company or the
Company's senior management;
4. is not affiliated with a not-for-profit entity that receives
significant contributions from the Company;
5. within the last five (5) years, has not had any business
relationships with the Company that the Company has been
required to disclose under the Securities and Exchange
Commission disclosure regulations;
6. is not employed by a public company of which an executive
officer of the Company serves as a director;
7. has not had a relationship described in 1. through 6. above
with any affiliate of the Company; and
8. is not a member of the immediate family of any person
described in 1. through 7. above.
The board of directors retains the exclusive right and authority to
interpret and define the words, terms and phrases used in this Exhibit A,
including, but not limited to, "executive capacity," "affiliate" and
"affiliated," "significant," and "member of the immediate family."
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