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UNITED STATES
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 4, 1996
ZYCON CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 33-95284 94-2348052
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
445 El Camino Real, Santa Clara, CA 95050
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(Address of principal executive offices)
Registrant's telephone number, including area code (408) 241-9900
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(Former name or former address, if changed since last report.)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On December 4, 1996, Zycon Corporation (the "Company"), entered into an
Agreement and Plan for Merger (the "Merger Agreement") with Hadco Corporation, a
Massachusetts corporation ("Parent") and Hadco Acquisition Corp., a Delaware
corporation and a direct wholly-owned subsidiary of Parent ("Purchaser").
Pursuant to the Merger Agreement, Purchaser has commenced a tender
offer for all of the outstanding shares of the Company's common stock, par value
$.001 per share (the "Shares"), at a price of $18.00 per share (the "Offer").
The Offer commenced on December 11, 1996 and will expire 12:00 midnight, New
York City time, on Thursday, January 9, 1997, unless Purchaser extends the time
during which the Offer is open. After the purchase of Shares pursuant to the
Offer, the Merger Agreement provides that the Purchaser will be merged with and
into the Company, with the Company surviving the merger as a wholly-owned
subsidiary of the Parent (the "Merger").
In connection with the Merger Agreement, Parent and Purchaser entered
into an agreement with certain stockholders of the Company comprising all the
members of the Board of Directors of the Company (the "Selling Stockholders") to
purchase all of the Shares owned by the Selling Stockholders (the "Stockholders
Agreement"). Under the Stockholders Agreement the Selling Stockholders have
granted to Parent an irrevocable option (the "Stock Options") to purchase their
shares at a purchase price per share equal to the Offer price. In addition,
Parent has agreed that if it exercises the Stock Options, it, within 30 days
after the date of such exercise, will offer to all other stockholders of the
Company the opportunity to sell their Shares to Parent upon the equivalent terms
and conditions provided with respect to exercise of the Stock Options. The
Selling Stockholders own, in the aggregate, 57% of the Shares on a fully-diluted
basis.
Purchaser expects to obtain the consideration required to consummate
the Offer and the Merger from capital contributions and/or loans from Parent.
Parent expects to use approximately $25,000,000.00 of its cash and has received
a commitment letter, dated December 3, 1996 (the "Bank Commitment Letter"), from
The First National Bank of Boston ("Bank of Boston") to provide either senior
revolving credit or senior revolving credit and term debt facilities, in each
case for up to $250,000,000.00 (1) to finance the purchase of the Shares
pursuant to the Offer and the Merger, (2) to refinance the Company's existing
bank credit agreements, and (3) for working capital and other general corporate
purposes.
The Bank Commitment Letter and the term sheets attached thereto provide
two alternatives for the credit facilities consisting of (1) a $250,000,000.00
five-year revolving credit facility ("Facility A") and (2) a $200,000,000.00
revolving credit facility and a $50,000,000.00 term loan facility ("Facility
B"). Facility A and Facility B are referred to collectively as the "Credit
Facilities".
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The Credit Facilities will contain a sublimit for letters of credit
that will be determined. Parent has agreed to assist Bank of Boston in achieving
the syndication of the Credit Facilities. The Credit Facilities will be
guaranteed by the Parent's subsidiaries. Loans under the Credit Facilities and
the guarantees will not be secured.
The Credit Facilities will bear interest at the London InterBank
Offered Rate plus the Applicable Margin per annum. The Applicable Margin ranges
from 50 to 112.5 basis points depending on the ratio of funded debt to earnings
before interest, taxes, depreciation and amortization. The Credit Facilities
will terminate in five years and any amount outstanding under a revolving credit
facility will be due in full at that time. The principal of any term loan is
payable in equal amounts in 20 consecutive quarters.
The Merger Agreement provides that promptly upon the purchase by
Purchaser pursuant to the Offer of such number of Shares which represents at
least a majority of the outstanding Shares (on a fully diluted basis), and from
time to time thereafter, (1) Parent shall be entitled to designate such number
of directors ("Parent's Designees"), rounded up to the next whole number as will
give Parent, subject to compliance with Schedule 14(f) of the Securities
Exchange Act of 1934, representation on the Board equal to the product of (x)
the number of directors on the Board (giving effect to any increase in the
number of directors pursuant to the Merger Agreement) and (y) the percentage
that such number of Shares so purchased bears to the aggregate number of Shares
outstanding (such number being, the "Board Percentage"), and (2) the Company
shall, upon request by Parent, promptly satisfy the Board Percentage by
increasing the size of the Board or using its best efforts to secure resignation
of such number of directors as is necessary to enable Parent's Designees to be
elected to the Board and shall cause Parent's Designees to be promptly elected.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
See Item 1. above.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. See "Index to Exhibits" on page 5.
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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 hereunto duly authorized.
ZYCON CORPORATION
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(Registrant)
Date: December 18, 1996. /S/ Kenneth R. Shilling
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Kenneth R. Shilling,
Vice President, Finance and
Chief Financial Officer
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INDEX TO EXHIBITS
<TABLE>
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Exhibit Number Name Page Number
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20 The Company's Solicitation/ *
Recommendation Statement on
Schedule 14D-9
99.1 Agreement and Plan of Merger *
among Hadco Corporation, Hadco
Acquisition Corp., and the
Company dated December 4, 1996
99.2 Stockholders Agreement among *
Hadco Corporation, Hadco
Acquisition Corp., and certain
stockholders of the Company dated
December 4, 1996
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* Incorporated by reference to the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Commission on December 11,
1996.
