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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) October 1, 1998
HUDSON GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5896 13-1947395
(State or other jurisdiction Commission (I.R.S. Employer
of incorporation) File Number Identification No.)
111 GREAT NECK ROAD, GREAT NECK, NEW YORK 11021
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (516) 487-8610
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events
On October 1, 1998, LAGS (USA) Inc. ("LAGS") gave notice to Hudson
General Corporation (the "Registrant") of exercise of its option to increase
LAGS' interest in Hudson General LLC ("Hudson LLC") from 26% to 49% (the
"Option"). The exercise price of the Option is $29,627,000 and is to be paid by
LAGS on or about November 2, 1998. As a result of the exercise of the Option,
the Registrant's investment in Hudson LLC and paid-in-capital will be increased
by approximately $25,600,000 and $12,700,000 (net of deferred income taxes and
transactional fees), respectively. The Registrant is presently unable to
determine when, or whether, such deferred income taxes will result in a current
tax liability.
LAGS (USA) Inc. is a direct wholly-owned subsidiary of Lufthansa
Airport and Ground Services GmbH, and an indirect wholly-owned subsidiary of
Deutsche Lufthansa AG. LAGS was granted the Option under the terms of the Unit
Purchase and Option Agreement dated February 27, 1996 with the Registrant
pursuant to which LAGS acquired its initial 26% interest in Hudson LLC.
Upon payment of the exercise price to Hudson LLC, LAGS will acquire
from Hudson LLC 230 additional Class B Units of Hudson LLC. Concurrently
therewith, the Registrant will convert 230 of the Class A Units of Hudson LLC
held by it into 230 new non-voting Preferred Units (the "Preferred Units") of
Hudson LLC. After giving effect to the exercise of the Option as described above
and the Registrant's exchange of 230 Class A Units for 230 Preferred Units, LAGS
will own 490 Class B Units and the Registrant will own 510 Class A Units
(representing 49% and 51%, respectively, of the aggregate number of outstanding
Class A and Class B Units). The Preferred Units have a liquidation preference of
$128,811 per Unit, and are redeemable by Hudson LLC at any time on or after
August 1, 2001 for an amount equal to the liquidation preference. From and after
October 1, 2001, the Preferred Units, if not previously called for redemption,
are convertible, at the option of the holders, into Class A Units on a
one-for-one basis. The Preferred Units are entitled to receive a fixed
distribution, payable quarterly, commencing on December 31, 1998. The fixed
distribution rate shall be a percentage equal to 25 basis points below the
24-month United States treasury note yield, as defined, until September 30,
2001, and an Internal Revenue Service safe harbor rate, as defined, thereafter.
Such distributions are cumulative, and all such distributions must be made in
full before any distribution may be made in respect of the Class A and Class B
Units.
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(c) Exhibits
10.8(e) Fifth Amendment to the Limited Liability Company Agreement
dated May 31, 1996, effective as of June 1, 1996, among the
Registrant, LAGS (USA) Inc. and Hudson General LLC dated as of
September 28, 1998.
99.1 Press Release issued on September 17, 1998 relating to
approval by the Supervisory Board of Deutsche Lufthansa AG of
the exercise of Option by LAGS (USA) Inc.
99.2 Press Release issued on October 1, 1998 relating to the notice
of exercise of Option by LAGS (USA) Inc.
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.
HUDSON GENERAL CORPORATION
(Registrant)
Date: October 16, 1998
/s/ Michael Rubin
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Michael Rubin
President
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EXHIBIT INDEX
PAGE NO.
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10.8(e) Fifth Amendment to the Limited Liability Company Agreement 5-12
dated May 31, 1996, effective as of June 1, 1996, among the
Registrant, LAGS (USA) Inc. and Hudson General LLC dated as
of September 28, 1998.
99.1 Press Release issued on September 17, 1998. 13-14
99.2 Press Release issued on October 1, 1998. 15-16
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