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
June 10, 1997
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Date of Report (date of earliest event reported)
WTD INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Oregon 0-16158 93-0832150
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
WTD INDUSTRIES, INC.
10260 S.W. Greenburg Rd., #900
Portland, OR 97223
(503) 246-3440
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(Address including zip code and telephone number including
area code, of registrant's principal executive offices)
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Item 5. Other Events
Mr. Larry G. Black has been elected to the Board of Directors of WTD
Industries, Inc. ("Company") effective June 10, 1997. Mr. Black is
president of Quinault Corporation ("Quinault") owner of approximately 25%
of the Company's common stock.
In connection with Mr. Black joining the Board, the Company, Quinault,
Black and Mr. Bruce L. Engel, president of the Company, have entered into an
agreement dated effective June 10, 1997, providing for first refusal rights to
the Company and Mr. Engel, and option rights to Mr. Engel, on the Company's
securities held by Quinault. The agreement restricts the Company from
taking certain actions to dilute Quinault's holdings and restricts Quinault's
ability to cause management changes or the liquidation, sale or other
disposition of the Company.
Item 7. Financial Statements and Exhibits
Exhibits
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10.7 Agreement dated effective as of June 10, 1997 between the Company,
Engel, Quinault and Black.
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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.
WTD INDUSTRIES, INC.
Date: June 11, 1997 /s/ K. S. Martin
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K. Stanley Martin
Vice President-Finance
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INDEX TO EXHIBITS
The following exhibits are filed as part of this Current Report on Form 8-K.
Exhibit Description
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10.7 Agreement dated effective as of June 10, 1997 among the Company,
Engel, Quinault and Black.
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Exhibit 10.7
AGREEMENT
This Agreement is made and entered into this 10th day of June, 1997, by and
among WTD Industries, Inc., an Oregon corporation (the "Company"), and Bruce L.
Engel ("Engel"), and Quinault Corporation, a Delaware corporation ("Quinault"),
and Larry G. Black ("Black").
RECITALS
A. Quinault owns approximately twenty-five percent (25%) of the issued and
outstanding common stock of the Company.
B. As a significant shareholder, Quinault has discussed representation on
the Company's board of directors and its representative is willing to serve as a
director of the Company.
C. To provide for harmony and continuity of the Company's management,
Quinault agrees to grant certain rights to acquire a portion of Quinault's
shares of the Company's common stock and each of the parties agrees to take
and/or refrain from taking the actions described herein.
Now, therefore, in consideration of the covenants, agreements, warranties
and payments herein set forth, the parties agree as follows:
1. Right of First Refusal. If, at any time prior to the close of business
on June 15, 1999, Quinault elects to sell some or all of the shares of common
stock of the Company it then holds (the "Offered Shares"), Quinault agrees to
notify the Company and Engel by telephone or facsimile of such impending sale
(the "Notice of Sale") and the Company and Engel shall, for a period of
twenty-four (24) hours after the date of the Notice of Sale, have the right to
purchase any portion or all of the Offered Shares by giving written notice to
Quinault of its or his election to purchase within such twenty-four (24) hour
period. The purchase price per share for the Offered Shares shall be the price
per share of the Company's common stock quoted on NASDAQ on the close of
business on the date of the Notice of Sale and shall be payable in cash at
closing which shall occur within five (5) business days after the date of the
Notice of Sale. In the event that both the Company and Engel elect to purchase
the Offered Shares, the Company shall have the first right to purchase some or
all of the Offered Shares and Engel may purchase the remaining Offered Shares,
if any.
2. Grant of Option. Quinault hereby grants to Engel an option (the
"Option") to purchase for nine dollars ($9.00) per share that number of shares
of the common stock of the Company held by Quinault on June 15, 1999 (the
"Exercise Date"), such that upon exercise of the Option, the number of shares of
the Company's common stock owned by Engel and his Affiliates" (as defined below)
is equal to the number of such shares owned by Quinault, Black and their
Affiliates. The maximum number of shares which may be purchased under the Option
shall be
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equal to one-half of the difference obtained by subtracting the number of common
shares held by Engel and his Affiliates from the number of common shares held by
Quinault, Black and their Affiliates on the Exercise Date. For purposes of this
Section 2, the shares of common stock of the Company held by Engel and his
Affiliates or by Quinault, Black and their Affiliates, as the case may be, on
June 15, 1999, shall include all shares of common stock of the Company and the
number of shares of common stock of the Company which any other securities or
rights in securities then held by such parties are convertible into. For
calculation of the number of common shares, the "Conversion Price" for shares of
the Company's Preferred Stock shall be determined pursuant to Article 4 of the
Fourth Restated Articles of Incorporation of WTD Industries, Inc. filed on
December 7, 1992, the relevant provisions of which are attached hereto as
Exhibit "A." Engel may exercise all or any portion of the Option by giving
written notice to Quinault of his election to exercise at least five (5)
business days prior to the Exercise Date. The purchase price shall be payable at
closing which shall occur within fifteen (15) days after the Exercise Date. If,
during such fifteen (15) day period, Engel fails to take all actions necessary
for closing to occur, the Option shall automatically terminate without further
notice. "Affiliate" of a specified person or entity shall mean a person or
entity that directly or indirectly controls or is controlled by, or is under
common control with the person or entity specified. Except for minor children
and spouses, relatives of a specified person shall not be considered Affiliates.
3. Certain Actions by Quinault and Black. Neither Quinault, Black, nor
their Affiliates shall, on or before June 15, 1999, without the prior written
consent of a majority of Company's board of directors, excluding Black, make any
recommendation, take any action or vote its, his or their shares of the
Company's stock in favor of any action which would result in (a) the removal of
Bruce L. Engel as an officer or any director of the Company, or (b) the
liquidation, sale, merger or other combination of the Company with another
entity.
4. Certain Actions to be Taken by Engel and the Company. Immediately upon
execution of this Agreement, Engel and the Company's board of directors shall:
a. appoint Black to fill the currently vacant position on the
Company's board of directors;
b. nominate the following individuals for election to the
Company's board of directors at the next annual meeting of the Company's
shareholders to be held in September 1997: (i) the present management directors
to serve three (3) year terms; (ii) Black and one (1) non-management director to
serve two (2) year terms; and (iii) two (2) other non-management directors to
serve one (1) year terms.
c. recommend to and obtain the approval of the Company's
shareholders for removal of the voting restrictions on certain of Quinault's
common stock under ORS 60.801 - 60.816 (the "Control Share Restriction") at the
next annual meeting of the Company's shareholders in September 1997, or, in the
alternative, amend the Company's Bylaws to eliminate the Control Share
Restriction on any shares of the Company's stock;
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d. reject any proposal by any party to issue additional shares of
the Company's common stock or convert to shares of common stock any of the
Company's debt or equity securities (except for Series A Preferred Stock, Series
B Preferred Stock and stock options presently outstanding) if such issuance or
conversion would have the effect of diluting Quinault's percentage of ownership
interest in the Company.
In the event that Engel, the Company and/or its shareholders, as the case
may be, fail to take each of the actions set forth in a. through d. above, then
this Agreement shall terminate and no party shall have any further obligation to
the others.
5. Notices. Except as otherwise provided herein, any notice or request
hereunder shall be in writing and be given by hand delivery or by facsimile and
shall be deemed effective when so delivered or, facsimile transmission confirmed
to the parties at the following addresses, or such other addresses as any party
may specify to the others by written notice.
Notice to Engel or the Company:
WTD Industries, Inc.
10260 S.W. Greenburg Road, Suite 900
Portland, OR 97223
Attention: Bruce L. Engel
Facsimile: (503) 245-7773
Notice to Quinault or Black:
Quinault Corporation
1606 East Terminal Way
P.O. Box C
Aberdeen, WA 98520
Attention: Larry G. Black
Facsimile: (503) 533-8834
With a copy to:
David R. Koopmans
Short Cressman & Burgess, P.L.L.C.
999 Third Avenue, Suite 3000
Seattle, WA 98104
(206) 340-8856
6. Miscellaneous.
a. Entire Agreement. This Agreement constitutes the entire
agreement of the parties and cancels all prior agreements, oral or written,
related to the subject matter hereof. This Agreement may not be modified except
by an instrument in writing executed by all parties hereto.
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b. Severability. Any provision of this Agreement which is
prohibited by or unlawful or unenforceable under any applicable law of any
jurisdiction will be ineffective as to such jurisdiction without affecting any
other provision of this Agreement. To the full extent, however, that the
provisions of such applicable law may be waived, they are hereby waived, to the
end that this Agreement be deemed to be a valid and binding Agreement
enforceable in accordance with its terms.
c. Controlling Law. All questions concerning the validity and
operation of this Agreement and the performance of the obligations imposed under
the parties under this Agreement will be governed by the laws of the state of
Washington and venue for any action or proceeding hereunder shall be in King
County, Washington.
d. Assignment. This Agreement is not assignable without the prior
written consent of the parties hereto.
e. Attorneys' Fees. If any suit, arbitration or other proceeding
is instituted by either party pertaining to this Agreement or performance
hereunder, the prevailing party, in addition to any other relief as the court
might award, shall be entitled to its costs, expenses and reasonable attorneys'
fees.
f. Counterparts and Facsimiles. This Agreement may be executed by
facsimile or in one or more counterparts each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
to the date first set forth above.
ENGEL: BLACK:
/s/ Bruce L. Engel /s/Larry G. Black
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Bruce L. Engel Larry G. Black
QUINAULT CORPORATION: WTD INDUSTRIES, INC.
By: /s/Larry G. Black By: /s/Bruce L. Engel
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Larry G. Black, President Bruce L. Engel, President
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