SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):August 21, 2002 (August 6, 2002)
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Progressive Software Holding, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
001-05513 06-0682273
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(Commission File Number) (IRS Employer Identification Number)
6836 Morrison Boulevard, Charlotte, NC 28211
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(Address of principal executive offices)
(406) 556-9886
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(Registrant's telephone number, including area code)
Tridex Corporation
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(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
As a result of the events described in Item 3 below, Massachusetts Mutual
Life Insurance Company and certain of its affiliates received 2,650,554 shares
of the Series A Common Stock of Progressive Software Holding, Inc. (the
"Successor Company"), the successor by merger to Tridex Corporation (the "Old
Company"), representing approximately 70% of the total voting power of the
Successor Company. In addition, pursuant to the terms of the Certificate of
Incorporation of the Successor Company, upon the occurrence of certain
Triggering Events, the voting rights of the holders of the Series B Common Stock
would increase to 51% of the voting power of all Common Stock of the Successor
Company, all as described in more detail in Item 3 below.
Item 3. Bankruptcy or Receivership
On February 12, 2002, the Old Company and its wholly owned subsidiary,
Progressive Software, Inc. (the "Subsidiary" and, collectively with the Old
Company, the "Debtors") filed voluntary petitions for protection under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") with the United
States Bankruptcy Court for the District of Connecticut (the "Court"). The
Debtors' cases were consolidated for the purpose of joint administration (Case
Nos. 02-50156 and 02-50157). The cases were assigned to Judge Alan H.W. Shiff.
The purpose of the filing was to reorganize the Old Company and the Subsidiary
pursuant to a plan of reorganization (the "Plan"). Following a hearing held on
July 9, 2002 the Court entered an order confirming the Plan. A copy of the
Confirmation Order dated July 9, 2002 is included as Exhibit 99.1 to this filing
and is incorporated herein by reference.
Pursuant to the Plan, on August 6, 2002 (the "Effective Date"), the Old
Company merged with and into the Successor Company, a Delaware corporation
formed on August 2, 2002 for the purpose of implementing the Plan. A copy of the
Certificate of Incorporation dated August 2, 2002, the By-Laws of the Successor
Company dated August 2, 2002 and the Plan of Merger dated August 6, 2002 are
attached hereto as Exhibits 3.1, 3.2 and 4.1, respectively, and are incorporated
herein by reference.
The Successor Company is authorized by its Certificate of Incorporation to
issue a total of 6,000,000 shares of capital stock, each having a par value of
$.01 per share, designated as follows: (i) 4,200,000 shares are designated as
Series A Common Stock (the "Series A Common Stock"); (ii) 800,000 shares are
designated as Series B Common Stock (the "Series B Common Stock" and, together
with the Series A Common Stock, collectively, the "Common Stock"); and (iii)
1,000,000 shares are designated as Preferred Stock (the "Preferred Stock").
The Board of Directors is authorized to issue the Preferred Stock in one or
more series without further stockholder authorization, and to fix and determine
the terms, limitations and relative rights and preferences of the Preferred
Stock and to establish series of Preferred Stock. No shares of Preferred Stock
were issued on the Effective Date.
Each share of Common Stock has one vote on all matters on which
stockholders are entitled or permitted to vote, and holders of each share of
Common Stock will share ratably in all dividends and distributions and all
rights in liquidation, unless and until the occurrence of certain events of
default by the Successor Company under the Credit Agreement (as defined in the
Certificate of Incorporation and hereinafter referenced) and notice to the
Successor Company. Upon the occurrence of such an event of default and notice (a
"Triggering Event") the holders of all outstanding shares of Series B Common
Stock will have in the aggregate 33% of all rights to dividends and
distributions and rights in liquidation, and will have such number of votes per
share of Series B Common Stock as will result in all holders of all outstanding
shares of Series B Common Stock having 51% of all voting rights of the holders
of all Common Stock then outstanding.
On the Effective Date, each outstanding share of Old Company common stock
ceased to be outstanding and every 10 shares of Old Company common stock was,
automatically and without any action on the part of the holder thereof,
converted into and exchanged for the right to receive one share of Series A
Common Stock, totaling approximately 565,429 shares of Series A Common Stock,
representing approximately 15% of all Common Stock outstanding on the Effective
Date. Fractional shares of the Series A Common Stock shall not be issued or
distributed and the number of shares of Series A Common Stock issued to any
holder of Old Company common stock will be rounded up or down to the nearest
whole number. In addition, on the Effective Date certain allowed unsecured
claims were satisfied pursuant to the Plan through the issuance of a total
2,827,145 shares of Series A Common Stock, representing approximately 75% of the
total Common Stock.
Pursuant to the Plan, on the Effective Date, the Successor Company issued
376,953 shares of the Series B Common Stock to its allowed secured creditor, Ark
CLO 2000-1, Limited ("ARK"), representing approximately 10% of the total Common
Stock outstanding on the Effective Date and issued a Warrant to ARK to purchase
418,836 additional shares of Series B Common Stock for a purchase price of $.01
per share. A copy of the Warrant is attached hereto as Exhibit 4.4 and is
incorporated herein by reference. The Warrant is exercisable if the Successor
Company makes a draw under the revolving credit facility described below and for
six months thereafter.
In addition, the Successor Company and the Subsidiary delivered a
$5,300,000 promissory note (the "Term Loan") to ARK payable in accordance with
the terms of a Credit Agreement dated the Effective Date. A copy of the Credit
Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by
reference. The Credit Agreement also provides for up to $500,000 of revolving
credit loans from ARK to be used for working capital ("Revolving Credit Loans").
Draws may be made on Revolving Credit Loans for up to six months following the
Effective Date. The Term Loan and any Revolving Credit Loan bear interest at the
prime rate published by the Wall Street Journal, plus 2%. Interest accrues
starting on the Effective Date and is payable monthly until maturity beginning
on February 6, 2003. Principal payments (including capitalized accrued interest)
on the Term Loan begin 12 months after the effective date, amortized over ten
years, and any outstanding principal and interest on the Term Loan is payable in
full five years after the Effective Date. In addition, in the event the
Successor Company and the Subsidiary have consolidated excess cash flow at any
time after the Effective Date, during the period from the Effective Date until
December 31, 2002, 25% of such excess cash flow must be used to prepay the Term
Loan on January 1, 2003 and during the period after January 1, 2003 until the
Term Loan has been repaid in full, 25% of such excess cash flow must be used to
prepay the Term Loan on the due date of quarterly financial statements and 50%
must be used to prepay the Term Loan on the due date of annual financial
statements pursuant to the Credit Agreement. All Revolving Loans are payable in
full six months after the Effective Date.
In connection with the implementation of the Plan, the Successor Company
and certain holders of Series A Common Stock (the "MassMutual Holders") and
Series B Common Stock, representing approximately 80% of the total Common Stock
outstanding on the Effective Date, entered into a Stockholders Agreement and a
Registration Rights Agreement. Copies of the Stockholders Agreement and the
Registration Rights Agreement are attached hereto as Exhibits 4.2 and 4.3
respectively and are incorporated herein by reference. The Registration Rights
Agreement provides for certain demand registration, piggyback registration and
S-3 registration rights for the MassMutual Holders and the holders of Series B
Common Stock. The Stockholders Agreement provides for the election of a
three-member board of directors (the "Board"), one to be designated by the
MassMutual Holders, one to be designated by the holders of the Series B Common
Stock and one to be designated by certain members of management. In addition,
the Stockholders Agreement requires the approval of holders of two-thirds of the
Series B Common Stock then outstanding with respect to changes in the
Certificate of Incorporation affecting the rights of the Series B Common Stock,
the issuance or authorization of additional Series B Common Stock, changes in
the number of the Board of Directors, and entering into material transactions
with affiliates. Pursuant to the Stockholders Agreement, William A. Beebe,
Thomas R. Schwarz and Lynn Tilton were appointed to the Board on the Effective
Date.
William A. Beebe joined the Old Company in June 2000 as Chief Financial
Officer. From his retirement in 1997 from the position of chief financial
officer of Project Pros, Inc. until joining Old Company, Mr. Beebe served in
various consulting capacities. Previously, for more than 30 years, he held
executive and consulting positions, principally that of chief financial officer,
in a number of companies in the food service, software, electronic manufacturing
and distribution industries.
Thomas R. Schwarz has been a Director of the Old Company since he was
Chairman of Grossman's Inc., a retailer of building materials, from 1990 to
1994, when he retired. Mr. Schwarz was President, Chief Operating Officer and a
director of Dunkin Donuts Incorporated, a food service company, from 1980 to
1990. He is a director of TransAct and a director of Lebhar-Friedman Publishing
Company. He is a Trustee of the Tanaka Growth Fund.
Lynn Tilton is a founder and member of Patriarch Partners LLC, the
investment adviser and manager of ARK and related entities. Prior to founding
Patriarch Partners, Ms. Tilton was an executive at Long Drive Management Trust
(LDMT). Preceding her tenure at LDMT, Ms. Tilton was the founding principal and
Executive Managing Director of Papillon Partners, Inc. In 1989, Ms. Tilton
worked as an asset manager for the Oppenheimer Horizon Fund at Oppenheimer & Co.
In December, 1990, she joined Kidder, Peabody & Co., Inc. to head the effort in
distressed debt research and direct certain proprietary investments. From 1993
to 1994, Ms. Tilton was a Managing Director and Head of Sales at M.J. Whitman,
Inc. From 1994 through early-1998, she was a Managing Director, Principal and
Partner at Amroc Investments, Inc. Prior to 1989, Ms. Tilton worked in mergers
and acquisitions at Morgan Stanley & Co. and continued her career in corporate
finance and merchant banking at Goldman, Sachs & Co. and Merrill Lynch. Ms.
Tilton earned a B.A. in American Studies from Yale University and an MBA in
Finance from Columbia University.
On the Effective Date, the Board appointed Christopher Sebes to serve as
the President and Chief Executive Officer, and William A. Beebe to serve as the
Treasurer and Secretary, of the Successor Company. Pursuant to the Plan, the
Successor Company entered into a six-month Employment Agreement with William A.
Beebe and a one-year Employment Agreement with Christopher Sebes, copies of
which are attached hereto as Exhibits 10.2 and 10.3, respectively. In addition,
the Successor Company adopted a Stock Option Plan and authorized the issuance of
up to 418,836 shares of Series A Common Stock pursuant to the Stock Option Plan.
A copy of the Stock Option Plan is attached hereto as Exhibit 10.4.
Attached as Exhibit 99.2 is an unaudited pro forma balance sheet of the Old
Company reflecting assets and liabilities (on a consolidated basis) as of July
31, 2002, giving effect to the reorganization as of such date.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not Applicable
(b) Pro forma financial information
Not Applicable
(c) Exhibits
Exhibit 3.1 - Certificate of Incorporation dated August 2, 2000
Exhibit 3.2 - By-Laws dated August 2, 2002
Exhibit 4.1 - Plan of Merger dated August 6, 2002
Exhibit 4.2 - Stockholders Agreement dated August 6, 2002
Exhibit 4.3 - Registration Rights Agreement dated August 6, 2002
Exhibit 4.4 - Warrant dated August 6, 2002
Exhibit 10.1 - Credit Agreement dated August 6, 2002
Exhibit 10.2 - Employment Agreement with William A. Beebe dated August 6, 2002
Exhibit 10.3 - Employment Agreement with Christopher Sebes dated August 6, 2002
Exhibit 10.4 - Stock Option Plan dated August 6, 2002
Exhibit 99.1 - Confirmation Order dated July 9, 2002
Exhibit 99.2 - Unaudited Pro Forma Balance Sheet of the Old Company dated as of
July 31, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Progressive Software Holding, Inc.
By: /s/ Willaim A. Beebe
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William A. Beebe
Chief Financial Officer
Date: August 21, 2002
