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 25, 2000
Graco Inc.
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(Exact name of registrant as specified in its charter)
Minnesota 001-9249 41-0285640
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(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
4050 Olson Memorial Highway
Golden Valley, Minnesota 55422
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(Address of principal executive offices) (Zip Code)
(612) 623-6000
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(Registrant's telephone
number)
Item 5. Other Events.
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On February 25, 2000, the Board of Directors of Graco Inc. (the
"Company"), declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, $1.00 par value (the
"Common Shares"), of the Company. The dividend is payable on March 29, 2000 (the
"Record Date") to shareholders of record at the close of business on that date.
Each Right entitles the registered holder to purchase from the Company
1/400th of a Series A Junior Participating Preferred Share, $1.00 par value (the
"Preferred Shares"), of the Company at a price of $180 per 1/400th of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), dated as of February 25, 2000, between the Company and Norwest Bank
Minnesota, National Association, as Rights Agent (the "Rights Agent").
Initially, the Rights will attach to all certificates representing Common
Shares then outstanding and no separate Right Certificates will be distributed.
The Rights will separate from the Common Shares and a Distribution Date for the
Rights will occur upon the earlier of:
(1) the close of business on the 15th day following a public
announcement that a person or group of affiliated or associated persons
has become an "Acquiring Person" (i.e., has, subject to certain
exceptions, become the beneficial owner of 15% or more of the outstanding
Common Shares), or
(2) the close of business on the 15th day following the first public
announcement of a tender offer or exchange offer the consummation of which
would result in a person or group of affiliated or associated persons
becoming, subject to certain exceptions, the beneficial owner of 15% or
more of the outstanding Common Shares (or such later date as may be
determined by the Board of Directors of the Company before a person or
group of affiliated or associated persons becomes an Acquiring Person).
Until the Distribution Date,
(a) the Rights will be evidenced by the Common Share certificates
and will be transferred with and only with the Common Shares,
(b) new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and
(c) the surrender for transfer of any Common Share certificate, even
without such notation or a copy of this Summary of Rights attached to it,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right 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.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on March 29, 2010, unless extended or
earlier redeemed or exchanged by the Company as described below.
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:
(A) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares,
(B) upon the grant to holders of the Preferred Shares of certain
rights, options or warrants to subscribe for or purchase Preferred Shares
or convertible securities at less than the then current market price of
the Preferred Shares, or
(C) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those described in clause (B) above).
The number of Preferred Shares issuable upon the exercise of a Right is
also subject to adjustment in the event of a dividend on Common Shares payable
in Common Shares, or a subdivision, combination or consolidation of the Common
Shares.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Preferred Shares will be issued (other than
fractional shares that are integral multiples of 1/400th (subject to adjustment)
of a Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) if in lieu of such issuance, a payment in cash is made
based on the closing price (pro-rated for the fraction) of the Preferred Shares
on the last trading date before the date of exercise.
If 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 that are or were beneficially owned by the Acquiring Person
(which will thereafter be void), will have the right to receive upon exercise of
the Right at the then-current exercise price of the Right that number of Common
Shares having a market value of two times the exercise price of the Right,
subject to certain possible adjustments.
If, on or after the Distribution Date or within 15 days prior thereto, the
Company is acquired in certain mergers or other business combination
transactions or 50% or more of the assets or earning power of the Company and
its subsidiaries (taken as a whole) are sold on or after the Distribution Date
or within 15 days before the Distribution Date in one or a series of related
transactions, each holder of a Right (other than Rights that have become void
under the terms of the Rights Agreement) will have the right to receive, upon
exercise of the Right at the then current exercise price of the Right, that
number of Common Shares of the acquiring company (or, in certain cases, one of
its affiliates) having a market value of two times the exercise price of the
Right.
In certain events specified in the Rights Agreement, the Company is
permitted temporarily to suspend the exercisability of the Rights.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person and before the acquisition by a person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights that have become void under the terms of the Rights Agreement), in
whole or in part, for Common Shares or equivalent securities at an exchange
ratio per Right equal to the result obtained by dividing the exercise price of a
Right by the current per share market price of the Common Shares, subject to
adjustment.
At any time before the time that a person or group of affiliated or
associated persons has become an Acquiring Person, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right, subject to adjustment (the "Redemption Price"), payable in cash. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The Board of Directors and the Company shall not have any liability
to any person as a result of the redemption or exchange of the Rights pursuant
to the provisions of the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors of the
Company, subject to certain limitations after the Distribution Date, without the
consent of the holders of the Rights, including an amendment before the date a
person or group of affiliated or associated persons becomes an Acquiring Person
to lower the threshold for exercisability of the Rights from 15% to not less
than the greater of (a) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned by
any person or group of affiliated or associated persons, or (b) 10% (subject to
certain exceptions).
Until a Right is exercised, the holder of the Right, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights Agreement (including all exhibits thereto) is incorporated by
reference herein. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
Item 7. Exhibits.
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4. Share Rights Agreement, dated as of February 25, 2000, between Graco
Inc. and Norwest Bank Minnesota, National Association, as Rights
Agent (incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, dated March 9, 2000).
99. Press Release dated February 25, 2000.
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.
GRACO INC.
Date: March 10, 2000 By: /s/Robert M. Mattison
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Its: Vice President, General Counsel
and Secretary
Exhibit 99
FOR IMMEDIATE RELEASE: FOR FURTHER INFORMATION:
Friday, February 25, 2000 Mark W. Sheahan (612) 623-6656
GRACO ANNOUNCES REGULAR QUARTERLY DIVIDEND;
AUTHORIZES REPURCHASE OF 1,200,000 COMMON SHARES;
ADOPTS REPLACEMENT SHARE RIGHTS PLAN
MINNEAPOLIS, MN (February 25) - The Board of Directors of Graco Inc. (NYSE: GGG)
has declared a regular quarterly dividend of 14 cents per common share payable
on May 3, 2000 to shareholders of record at the close of business on April 17,
2000. The Company has approximately 20.4 million shares outstanding.
In a separate action, the Board also authorized a plan for the Company to
purchase up to a total of 1,200,000 shares of its outstanding common stock.
These shares will be acquired primarily through open-market purchases to be made
from time to time. The shares acquired will offset stock issued to satisfy stock
options and for other corporate purposes.
The Board of Directors also approved today a share rights plan that will replace
an existing plan when it expires on March 29, 2000.
Under the plan, the Board of Directors has declared a dividend distribution of
one preferred share purchase right on each outstanding share of Graco common
stock held by shareholders of record as of the close of business on March 29,
2000. The rights will expire on March 29, 2010.
Like the existing plan, the new share rights plan is intended to increase the
likelihood that Graco shareholders will realize the long-term value of their
investment. The new share rights plan was not adopted in response to any current
takeover approach or similar development.
Each right will entitle Graco shareholders to buy one four-hundredth of a share
of a series of preferred stock at an exercise price of $180.00 (subject to
adjustment). The rights will generally become exercisable after any person or
group acquires beneficial ownership of 15 percent or more of the Company's
common stock or announces a tender or exchange offer that would result in that
person or group beneficially owning 15 percent or more of the Company's common
stock. If any person or group becomes an owner of 15 percent or more of the
Company's common stock, each right will entitle its holder (other than the
15-percent shareholder or group and related persons) to purchase, at the right's
exercise price, shares of the Company's common stock having a value of twice the
right's exercise price.
In addition, if Graco is acquired in a merger or other business-combination
transaction, or sells 50 percent or more of its assets or earnings power, each
right will generally entitle its holder to purchase, at the right's exercise
price, common shares of the acquiring company having a market value of twice the
right's exercise price.
In certain circumstances, Graco may exchange the rights for shares of its common
stock, delay or temporarily suspend the exercisability of the rights, or reduce
the stock-ownership threshold of 15 percent to not less than 10 percent.
At the option of the Board of Directors, the Company may redeem the rights at
$.001 per right (subject to adjustment) at any time before a person or group
becomes the beneficial owner of at least 15 percent of the Company's common
stock.
Further details of the new share rights plan will be outlined in a letter to be
mailed to all Graco shareholders of record as of March 29, 2000.
Graco Inc. supplies technology and expertise for the management of fluids in
both industrial and commercial applications. It designs, manufactures and
markets systems and equipment to move, measure, control, dispense and spray
fluid materials. A recognized leader in its specialties, Minneapolis-based Graco
serves customers around the world in the manufacturing, processing, construction
and maintenance industries.