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: December 15, 2004 [insert comma]
(Date of earliest event reported)
DIXON TICONDEROGA COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-8689 23-0973760
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
195 International Parkway
Heathrow, Florida 32746
(Address of principal executive offices, including zip code)
(407) 829-9000
(Registrant's telephone number, including area code)
Check the appropriate box if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
______ Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
______ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
______ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
______ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On December 16, 2004, Dixon Ticonderoga Company, a Delaware corporation
("Dixon"), Fila - Fabbrica Italiana Lapis ed Affini S.p.A., an Italian
corporation ("Fila"), and Pencil Acquisition Corp, a Delaware corporation and a
wholly-owned subsidiary of Fila ("Purchaser"), entered into an Agreement and
Plan of Merger (the "Merger Agreement"), pursuant to which, among other things,
Purchaser will commence an offer to purchase for cash all of Dixon's issued and
outstanding shares of common stock, par value $1.00 per share, [insert comma] at
$7.00 per share. Purchaser's obligation to accept the tendered shares for
purchase is subject to, among other conditions set forth in Annex I of the
Merger Agreement, there being validly tendered and not withdrawn prior to the
expiration of the tender offer, at least 66 2/3% of the outstanding shares of
Dixon common stock.
On December 16, 2004, Dixon, Fila and Wachovia Bank, National Association
as Escrow Agent, entered into an Escrow Agreement providing for Fila to deposit
into escrow with the Escrow Agent the amount of $800,000 (the "Deposit") as
required by the Merger Agreement. The Escrow Agreement provides that the Deposit
be returned to Fila within three (3) Business Days after the valid termination
of the Merger Agreement, unless payable to Dixon pursuant to the Merger
Agreement. The Escrow Agreement also provides that Fila, at the time the tender
offer expires and upon written direction to the Escrow Agent, may cause the
Escrow Agent to deliver the Deposit to the bank or trust company appointed by
Fila to serve as paying agent for the purpose of purchasing shares in the tender
offer.
Concurrently with the execution and delivery of the Merger Agreement,
certain stockholders of Dixon, including Gino N. Pala and Richard F. Joyce,
Dixon's Co-Chief Executive Officers, and other executive officers of Dixon, in
their capacities as stockholders, entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") with Purchaser, pursuant to which each stockholder
agreed to sell their shares to Purchaser (or, at Purchaser's request, to tender
their shares to Purchaser), appointed designees of Purchaser as proxies with
respect to voting all shares beneficially owned by the stockholders, agreed to
vote their shares in favor of the proposed merger and the Merger Agreement and
in opposition to any transaction inconsistent with the proposed merger and the
Merger Agreement, and authorized the proxies to execute and deliver consents
with respect to their shares upon any and all such matters as each such proxy or
its substitute shall in its sole discretion deem proper. The Stock Purchase
Agreement terminates in the event the Merger Agreement is terminated. Shares
subject to the Stock Purchase Agreement represent approximately 28% of the
outstanding shares of Dixon common stock.
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On December 16, 2004, Dixon and its subsidiaries and Wells Fargo Foothill,
Inc., formerly known as Foothill Capital Corporation, Dixon's senior lender
("Lender"), entered into a letter agreement (the "Consent Agreement") providing
that that Lender waives the application of the sections of the Loan and Security
Agreement, dated as October 3, 2002, executed by and among Lender, Dixon and it
subsidiaries (the "Loan Agreement") that would have been violated by the Merger
Agreement and related documents and consents to Dixon's execution and delivery
of the Merger Agreement and related documents and to the consummation of the
merger and all related transactions.
On December 16, 2004, Dixon also entered into an agreement (the "Amendment
Agreement") with The Equitable Life Assurance Society of the United States, John
Hancock Life Insurance Company and Nomura International PLC, Dixon's
subordinated lenders (collectively the "Noteholders") which amends certain
provisions of the Amended and Restated Note and Warrant Purchase Agreement dated
as of October 3, 2002 (as previously amended or supplemented, the "Note
Agreement") between Dixon and the Noteholders to provide that the execution and
delivery of the Merger Agreement and the Stock Purchase Agreement, the granting
of the proxies contemplated by the Stock Purchase Agreement and the commencement
of the tender offer will not constitute a "Change of Control" of the Company, as
defined in the Note Agreement. The Amendment Agreement also provides that the
purchase by Purchaser of shares of Dixon common stock constituting 10% or more
of Dixon's outstanding common stock (whether pursuant to the Stock Purchase
Agreement, the Merger Agreement or otherwise) or the consummation of the merger
contemplated by the Merger Agreement will constitute a "Change of Control," that
the permissions granted by the Amendment Agreement expire on the date that is 75
days after December 16, 2004 (unless extended an additional ten business days in
accordance with the Merger Agreement), and that concurrently with the
consummation of the tender offer, Dixon will pay or cause to be paid in full all
amounts owed to the Noteholders.
On December 16, 2004, Dixon and Registrar and Transfer Company, a New
Jersey corporation, as Rights Agent (the "Rights Agent") under the Rights
Agreement, dated as of March 3, 1995 (the "Rights Agreement"), by and between
Dixon and the Rights Agent, entered into a Rights Plan Amendment (the "Rights
Plan Amendment") which provides that the approval, execution and/or consummation
of the tender offer, the Merger Agreement, the Stock Purchase Agreement and the
merger do not and will not result in the ability of any person to exercise any
right issued under the Rights Agreement and do not and will not cause the rights
to separate from the shares of Dixon common stock to which they are attached or
to be triggered or to become exercisable.
In 1995, Dixon entered into Employment Agreements with Messrs. Pala and
Joyce and in 1998, Dixon entered into similar Employment Agreements with Messrs.
Asta and Dahlberg. In each case, the initial term of the Employment Agreements
was three years, with annual renewal provisions. Amendments to those Employment
Agreements were approved by Dixon's compensation committee on July 7, 2004,
signed on December 15, 2004, and effective as of January 1, 2004 (each, an
"Amendment", and together, the "Amendments"). The Amendments establish a three
year term of employment commencing as of January 1, 2004, with annual renewals
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thereafter, update salaries and titles, change the definition of a Change in
Control as defined in the Employment Agreements so that a Change in Control
approved by Dixon's board of directors is within the definition of that term,
add a provision that during a disability period and after termination for cause
or for Dixon's breach of the Employment Agreement or for Good Reason as defined
in the Employment Agreement, benefits and other compensation will be paid as
provided for under the Employment Agreements. The amount of the severance
payments provided for in the Employment Agreements upon a Change in Control was
not changed.
On December 15, 2004, Dixon entered into a Second Amendment to Employment
Agreement (each, a "Second Amendment", and together, the "Second Amendments")
with each of Gino N. Pala, Richard F. Joyce, Richard A. Asta, Dixon's Executive
Vice President of Finance and Chief Financial Officer, and Leonard D. Dahlberg,
Dixon's Executive Vice President, Consumer Division (each, an "Executive", and
together, the "Executives"). Each Second Amendment amends the Employment
Agreement previously entered into between the applicable Executive and Dixon, as
previously amended by the Amendment. All of the Second Amendments are
conditioned on the closing of the tender offer.
The Second Amendments for Messrs. Pala and Joyce provide that Messers. Pala
and Joyce are not entitled to terminate their respective Employment Agreements
because of a Change in Control (as that term is defined in the Employment
Agreement) until the expiration of the six month period immediately following
the payment by Purchaser for shares of Dixon common stock pursuant to the tender
offer [eliminate comma] (the "Transition Period") and that the payment by
Purchaser for shares of Dixon common stock pursuant to the tender offer will
constitute a Change in Control giving rise to the right of the Executive to
terminate his employment for good reason under the Employment Agreement. The
Executive has the right to terminate his employment for Good Reason as a result
of a Change in Control only during the three month period immediately following
the end of the Transition Period. The Second Amendments for Messrs. Asta and
Dahlberg are the same as those for Messrs. Pala and Joyce, except that the six
month period referred to above is twelve months.
In July, 2004, Dixon's Compensation Committee approved in concept, and in
late November, approved the adoption of a Success Bonus Plan to encourage the
Executives to remain with Dixon and to support the sale of Dixon on terms
approved by the independent members of Dixon's board of directors. The success
bonuses will be paid six months after a closing of the sale of Dixon and will be
forfeited if the Executive does not honor his Employment Agreement through that
six month period unless Dixon agrees to allow the Executive to voluntarily
terminate his employment before that time. The bonuses are in the following
amounts: Pala and Joyce - $46,000, Asta - $34,000, and Dahlberg - $22,500.
Copies of the Merger Agreement, the Stock Purchase Agreement, the Consent
Agreement, the Amendment Agreement, the Rights Plan Amendment, the Amendments,
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the Second Amendments, the Success Bonus Plan, and the press release dated
December 17, 2004 relating to the above-described transactions, are attached as
exhibits to this report and are incorporated herein by reference.
Notice To Investors
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell securities. The tender offers for the outstanding shares of the
Registrant's common stock described in this announcement have not commenced. At
the time the offers are commenced, Purchaser will file a tender offer statement
on Schedule TO with the Securities and Exchange Commission, and the Registrant
will file a solicitation/recommendation statement on Schedule 14D-9. The tender
offer statement (including an offer to purchase, a related letter of transmittal
and other offer documents) and the solicitation/recommendation statement will
contain important information that the Company's security holders should read
carefully before any decision is made with respect to the tender offers. Those
materials will be made available to the Registrant's security holders at no
expense to them. In addition, all of those materials (and all other offer
documents filed with the Securities and Exchange Commission) will be available
at no charge on the Securities and Exchange Commission's Website at
http://www.sec.gov/.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Agreement and Plan of Merger dated December 16, 2004, by and among
Dixon Ticonderoga Company, Fila-Fabbrica Italiana Lapis ed Affini
S.p.A., and Pencil Acquisition Corp.
99.2 Escrow Agreement dated December 16, 2004 by and among Dixon
Ticonderoga Company, Fila-Fabbrica Italiana Lapis ed Affini S.p.A.,
and Wachovia Bank, National Association.
99.3 Stock Purchase Agreement dated December 16, 2004, by and among
Pencil Acquisition Corp., Gino N. Pala, Richard F. Joyce, Richard
Asta, Len Dahlberg, John Adornetto, Laura Hemmings, and Deborah P.
Joyce.
99.4 Letter Agreement dated December 16, 2004 between Dixon Ticonderoga
Company and its subsidiaries and Wells Fargo Foothill, Inc.
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99.5 Amendment Agreement between Dixon Ticonderoga Company, The Equitable
Life Assurance Society of the United States, John Hancock Life
Insurance Company and Nomura International PLC. [insert period]
99.6 Rights Plan Amendment dated December 16, 2004 between Dixon
Ticonderoga Company and Registrar and Transfer Company, as Rights
Agent.
99.7 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Gino N. Pala.
99.8 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Richard F. Joyce.
99.9 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Richard A. Asta.
99.10 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Leonard D. Dahlberg.
99.11 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Gino N. Pala.
99.12 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Richard F. Joyce.
99.13 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Richard A. Asta.
99.14 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Leonard D. Dahlberg.
99.15 Success Bonus Plan.
99.16 Press release dated December 17, 2004. [insert space]
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 hereunto duly authorized.
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Dated: December 17, 2004
Dixon Ticonderoga Company
By: /s/ Richard A. Asta
---------------------
Name: Richard A. Asta
Title: Executive Vice President of
Finance and Chief Financial Officer
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Exhibit Index
Exhibit
Number Description
99.1 Agreement and Plan of Merger dated December 16, 2004, by and among
Dixon Ticonderoga Company, Fila-Fabbrica Italiana Lapis ed Affini
S.p.A., and Pencil Acquisition Corp.
99.2 Escrow Agreement dated December 16, 2004 by and among Dixon
Ticonderoga Company, Fila-Fabbrica Italiana Lapis ed Affini S.p.A.,
and Wachovia Bank, national association.
99.3 Stock Purchase Agreement dated December 16, 2004, by and among
pencil Acquisition Corp., Gino N. Pala, Richard F. Joyce, Richard
Asta, Len Dahlberg, John Adornetto, Laura Hemmings, and Deborah P.
Joyce.
99.4 Letter Agreement dated December 16, 2004 between Dixon Ticonderoga
Company and its subsidiaries and Wells Fargo Foothill, Inc.
99.5 Amendment Agreement between Dixon Ticonderoga Company, The Equitable
Life Assurance Society of the United States, John Hancock Life
Insurance Company and Nomura International PLC
99.6 Rights Plan Amendment dated December 16, 2004 between Dixon
Ticonderoga Company and Registrar and Transfer Company
99.7 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Gino N. Pala.
99.8 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Richard F. Joyce.
99.9 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Richard A. Asta.
99.10 Amendment to Employment Agreement dated December 15, 2004 between
Dixon Ticonderoga Company and Leonard D. Dahlberg.
99.11 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Gino N. Pala
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99.12 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Richard F. Joyce.
99.13 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Richard A. Asta.
99.14 Second Amendment to Employment Agreement dated December 15, 2004
between Dixon Ticonderoga Company and Leonard D. Dahlberg.
99.15 Success Bonus Plan.
99.16 Press release dated December 17, 2004.
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