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) June 23, 1998
CHEMICAL LEAMAN CORPORATION
(Exact name of Registrant as specified in charter)
PENNSYLVANIA 000-8517 23-2021808
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or file number Identification
Organization) Number)
102 Pickering Way, Exton, PA 19341-0200
(Address of principal executive offices)
(610) 363-4200
(Registrant's telephone number, including area code)
Item 5. Other Events.
(a) On June 24, 1998, Chemical Leaman Corporation ("CLC") announced that
Palestra Acquisition Corp. ("Palestra"), a Delaware corporation and a
wholly-owned subsidiary of MTL Inc., a Florida corporation ("MTL"), had entered
into an Agreement and Plan of Merger ("CLC Merger Agreement"), dated as of June
23, 1998, by and among Palestra, CLC and the shareholders of CLC (each, a
"Shareholder" and, collectively, the "Shareholders") pursuant to which MTL has
agreed, subject to the satisfaction of certain terms and conditions, to acquire
all of the outstanding shares of common stock, $2.50 par value per share, of CLC
("CLC Common Stock") through the merger (the "CLC Merger") of Palestra with and
into CLC, which thereby will become a wholly-owned subsidiary of MTL. The
Shareholders have approved the consummation of the CLC Merger. The CLC Merger is
expected to close in August or September of 1998, and has an outside closing
date of October 31, 1998.
Under the terms of the Merger Agreement, all shares ("Shares")
of CLC Common Stock held by the Shareholders shall, by virtue of the CLC Merger,
be converted into the right to receive an aggregate amount in cash (and Common
Stock of MTL, as described below) equal to $77.8 million less Transaction
Expenses (as defined in the CLC Merger Agreement attached as Exhibit 2.1 hereto)
in excess of $100,000 (collectively, "Merger Consideration"), subject to certain
setoffs as set forth in the Merger Agreement. A portion of the Shares held by
certain Shareholders who are officers of CLC shall not be converted into cash,
but in lieu thereof, shall be converted into shares of the Common Stock of MTL
as set forth in their employment agreements. In connection with the transactions
contemplated by the CLC Merger, CLC will transfer all of the common stock of
Leaman Air Services, Inc., a subsidiary of CLC, to a principal stockholder of
CLC, as additional consideration for the Shares held by such shareholder.
The aggregate consideration for the outstanding shares of CLC
Common Stock was determined based upon arms-length negotiation between Palestra
and CLC. The acquisition will be accounted for as a purchase. Prior to the
execution of the Merger Agreement, no material relationship existed between CLC
and MTL, or any of its affiliates, any director or officer of CLC or any
associate of any such director or officer.
The closing of the CLC Merger is subject to an amendment to
certain of the terms of existing CLC Notes (as defined in the Merger Agreement),
satisfaction of all of the conditions to MTL's financing arrangements in
connection with the CLC Merger, and customary conditions to mergers of this
type.
(b) Exhibits
2.1 Agreement and Plan of Merger dated as of June 23, 1998, by
and among Palestra Acquisition Corp., Chemical Leaman Corporation and the
shareholders of Chemical Leaman Corporation.
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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.
CHEMICAL LEAMAN CORPORATION
Date: June 25, 1998 By: /s/ David M. Boucher
----------------------
David M. Boucher, Senior Vice
President and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
2.1 Agreement and Plan of Merger dated as of June 23,
1998, by and among Palestra Acquisition Corp.,
Chemical Leaman Corporation and the shareholders of
Chemical Leaman Corporation.
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