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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 16, 1998
ZURN INDUSTRIES, INC.
IRS Employer
State of Commission Identification
Incorporation File Number Number
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Pennsylvania 1-5502 25-1040754
Address and
Telephone Number
14801 Quorum Drive
Addison, Texas 75240 - 7584
972 - 560 - 2000
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ITEM 5. OTHER EVENTS.
On February 16, 1998, Zurn Industries, Inc. (the "Company"), U.S.
Industries, Inc., a Delaware corporation ("U.S. Industries"), USI, Inc., a
Delaware corporation and a wholly-owned subsidiary of U.S. Industries ("USI"),
Blue Merger Corp., a Delaware corporation and a wholly-owned subsidiary of USI
("B-Corp"), and Zoro Merger Corp., a Pennsylvania corporation and a wholly-owned
subsidiary of USI ("Z-Corp"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which Z-Corp would merge with and into the
Company (the "Zurn Merger") and B-Corp would merge with and into U.S. Industries
(the "U.S. Industries Merger" and, collectively with the Zurn Merger, the
"Mergers"), and the Company and U.S. Industries would thereby become
wholly-owned subsidiaries of USI. Each of the Mergers is intended to be tax-free
to each of the Company and U.S. Industries and their respective stockholders and
to be accounted for as a pooling of interests. In connection with the Mergers,
USI would change its name to "U.S. Industries, Inc."
Pursuant to the Merger Agreement, at the effective time of the Mergers,
(i) each share of common stock, par value $0.01 per share, of U.S. Industries
issued and outstanding immediately before the effective time would be converted
into the right to receive one share of common stock, par value $0.01 per share,
of USI ("USI Common Stock") and (ii) each share of common stock, par value $0.50
per share, of the Company ("Zurn Common Stock") issued and outstanding
immediately before the effective time would be converted into the right to
receive 1.6 shares of USI Common Stock.
The obligations of the parties to the Merger Agreement to consummate
the Mergers are conditioned upon, among other things, (i) approval and adoption
of the Merger Agreement by U.S. Industries' stockholders and the Company's
shareholders, (ii) the absence of any order or injunction that prohibits the
consummation of the Mergers, (iii) the waiting period pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated, (iv) a Registration Statement on Form S-4 relating to the
USI Common Stock to be issued in connection with the Mergers having been
declared effective by the Securities and Exchange Commission and not being
subject to any stop order or proceeding seeking the same, (v) USI and the
Company having received a letter from Ernst & Young LLP stating that each of the
Mergers will qualify as a pooling of interests transaction, and (vi) the shares
of USI Common Stock to be issued in connection with the Mergers having been
authorized for listing on the New York Stock Exchange, upon official notice of
issuance.
The Merger Agreement provides for the payment by the Company to U.S.
Industries of a termination fee of $10 million, and up to $2 million in
expenses, if the Merger Agreement is terminated under certain circumstances. In
addition, the Company and U.S. Industries have entered into a Stock Option
Agreement (the "Stock Option Agreement") pursuant to which the Company has
granted to U.S. Industries an option to purchase such number of shares of Zurn
Common Stock at $44.30 per share as would represent 10.1% of the outstanding
shares of Zurn Common Stock (the "Option"). In general, the same circumstances
that would give rise to the payment of a termination fee by the Company to U.S.
Industries under the Merger Agreement would also result in the Option becoming
exercisable. The total profit that U.S. Industries could realize upon exercise
of the Option is limited to $5 million.
Copies of the Merger Agreement and Stock Option Agreement are filed as
Exhibits 2.1 and 10.1, respectively, hereto and are incorporated herein by this
reference. The foregoing summary is qualified in its entirety by reference to
such documents.
On February 17, 1998, the Company and U.S. Industries issued a press
release announcing the execution of the Merger Agreement. A copy of the press
release is filed as Exhibit 99.1 hereto and is incorporated herein by this
reference.
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ITEM 7. EXHIBITS.
Exhibit
Number Exhibit
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2.1 Agreement and Plan of Merger, dated February 16, 1998, among the
Company, U.S. Industries, USI, B-Corp, and Z-Corp.
10.1 Stock Option Agreement, dated February 16, 1998, between the
Company and U.S. Industries.
99.1 Press release, dated February 17, 1998, issued by the Company and
U.S. Industries.
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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 hereunto duly authorized.
ZURN INDUSTRIES, INC.
/s/ GEORGE W. HANTHORN
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GEORGE W. HANTHORN
Vice President -
General Counsel and Secretary
February 17, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
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2.1 Agreement and Plan of Merger, dated February 16, 1998, among the
Company, U.S. Industries, USI, B-Corp, and Z-Corp.
10.1 Stock Option Agreement, dated February 16, 1998, between the Company
and U.S. Industries.
99.1 Press release, dated February 17, 1998, issued by the Company and U.S.
Industries.