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): May 31, 1999
CROMPTON & KNOWLES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Massachusetts 1-4663 04-1218720
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
One Station Place, Metro Center, Stamford, Connecticut 06902
(Address of principal executive offices) (zip code)
(203) 353-5400
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
Crompton & Knowles Corporation, a Massachusetts corporation ("Crompton"),
Park Merger Co., a Delaware corporation and wholly owned subsidiary of Crompton
("Newco"), and Witco Corporation, a Delaware corporation ("Witco"), have entered
into an Agreement and Plan of Reorganization, dated as of May 31, 1999 (the
"Merger Agreement"). The Merger Agreement provides for, among other things: (a)
the merger of Crompton with and into Newco (the "First Step Merger"), to be
immediately followed by (b) the merger of Witco with and into Newco (the "Second
Step Merger," and, with the First Step Merger, the "Merger"). The name of the
combined company will be "C & K Witco Corporation" and its headquarters will
remain in the State of Connecticut. Vincent A. Calarco, Chairman, President and
Chief Executive Officer of Crompton, will be the President and Chief Executive
Officer of the combined company. E. Gary Cook, Chairman, President and Chief
Executive Officer of Witco will be the Chairman of the Board of the combined
company. The board of directors of the combined company will consist of 7
directors appointed by Crompton and 7 directors appointed by Witco. The Merger
is expected to be (1) accounted for under the "purchase" method of accounting
and (2) a "reorganization" under the Internal Revenue Code of 1986, as amended.
At the effective time of the First Step Merger, (a) each share of common
stock, par value $.10 per share, of Crompton ("Crompton Common Stock")
outstanding immediately prior to the effective time of the First Step Merger
will be converted into one share of common stock, par value $.01 per share of
Newco ("Newco Common Stock"), and (b) all rights with respect to Crompton Common
Stock pursuant to stock options outstanding at such effective time, whether or
not then exercisable, shall be converted into and become rights with respect to
Newco Common Stock on otherwise similar terms. At the effective time of the
Second Step Merger, (a) each share of common stock, par value $5.00 per share,
of Witco ("Witco Common Stock") outstanding immediately prior to the effective
time of the Second Step Merger will be converted into the right to receive
0.9242 shares (the "Exchange Ratio") of Newco Common Stock and (b) all rights
with respect to Witco Common Stock pursuant to stock options outstanding at such
effective time, whether or not then exercisable, shall be converted into and
shall become rights with respect to Newco Common Stock on otherwise
substantially similar terms, adjusted to reflect the Exchange Ratio.
Consummation of the Merger is subject to a number of conditions, including
(a) the adoption of the Merger Agreement by the stockholders entitled to vote
thereon of each of Crompton and Witco, (b) receipt of all requisite governmental
approvals and (c) certain other customary conditions. Each of the parties has
also agreed to pay a fee of $30 million (the "Termination Fee") to the other
party in the event that the Merger Agreement is terminated under certain
circumstances relating to a competing transaction.
In connection with the Merger Agreement, Witco and Crompton have also
entered into cross stock option agreements, each dated May 31, 1999. Pursuant to
the Witco stock option agreement, Witco granted to Crompton an irrevocable
option to purchase, under circumstances in which the Termination Fee is payable
by Witco, up to 11,471,159 shares of Witco Common Stock at a price, subject to
certain adjustments, of $17.50 per share (the "Crompton Option"). Pursuant to
the Crompton stock
option agreement, Crompton granted to Witco an irrevocable option to purchase,
under circumstances in which the Termination Fee is payable by Crompton, up to
13,025,917 shares of Crompton Common Stock at a price, subject to certain
adjustments, of $18.375 per share (the "Witco Option" and, with the Crompton
Option, the "Options"). Each of the Options, if exercised by the grantee
thereof, is intended to provide the grantee, before giving effect to the
exercise of such Option, 19.9% of the total number of shares then issued and
outstanding. Under certain circumstances, each of the parties may be required to
repurchase the applicable Option or the shares acquired pursuant to the exercise
of such Option.
A copy of the joint press release of June 1, 1999, regarding the
Merger is attached as Exhibit 99.1 hereto, and is hereby incorporated herein by
reference.
A copy of the presentation to investors, dated June 1, 1999,
regarding the Merger and given jointly by Crompton and Witco is attached as
Exhibit 99.2 hereto and is hereby incorporated herein by reference.
The exhibits to this current report on Form 8-K contain forward looking
statements with respect to the financial conditions, results of operations and
businesses of each of Crompton and Witco and, assuming the consummation of the
Merger, a combined Crompton/Witco, including statements relating to: (a) the
cost savings and accretion to reported earnings that will be realized from the
Merger; (b) the impact on revenues of the Merger; and (c) the restructuring
charges expected to be incurred in connection with the Merger. These forward
looking statements involve certain risks and uncertainties. Factors that may
cause actual results to differ materially from those contemplated by such
forward looking statements include, among others, the following possibilities:
(1) expected cost savings from the Merger cannot be fully realized or realized
within the expected time-frame; (2) revenues following the Merger are lower
than expected; (3) competitive pressure among companies in the chemical products
industry increases significantly; (4) costs or difficulties related to the
integration of the businesses of Crompton and Witco are greater than expected;
(5) general economic conditions, either internationally or nationally or in the
states in which the combined company will be doing business, are less favorable
than expected; or (6) legislation or regulatory requirements or changes
adversely affect the businesses in which the combined company would be engaged.
Such forward-looking statements speak only as of the date on which such
statements were made, and Crompton undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which any such statement is made to reflect the occurrence of unanticipated
events.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
- Not Applicable
(b) Pro forma financial information.
- Not Applicable
(c) Exhibits.
99.1 Joint press release, dated June 1, 1999, issued by Crompton &
Knowles Corporation and Witco Corporation
99.2 Investor Presentation Materials, dated June 1, 1999,
regarding the Merger.
SIGNATURE
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 hereunder duly authorized.
CROMPTON & KNOWLES CORPORATION
By: /s/ John T. Ferguson II
Name: John T. Ferguson II
Title: Secretary
Date: June 2, 1999
EXHIBIT INDEX
99.1 Joint press release, dated June 1, 1999, issued by Crompton & Knowles
Corporation and Witco Corporation.
99.2 Investor Presentation Materials, dated June 1, 1999, regarding the
Merger.