UNITED STATES
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): March 29, 2007
DHB INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-13112 11-3129361
________________________ ________________________ ____________________________
(State of Incorporation) (Commission File Number) (IRS Employer Identification
Number)
2102 SW 2nd Street, Pompano Beach, Florida 33069
____________________________________________ __________
(Address of principal executive office) (Zip Code)
(954) 630-0900
__________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
__________________________________________________________
(Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On April 3, 2007, DHB Industries, Inc. (the "Company") and its subsidiaries
Point Blank Body Armor Inc., Protective Apparel Corporation of America and NDL
Products, Inc. (together, the "Subsidiaries") entered into an Amended and
Restated Loan and Security Agreement (the "Loan Agreement") with LaSalle
Business Credit, LLC ("LaSalle"). The Loan Agreement provides for a three-year
$35.0 million revolving credit facility available to the Subsidiaries, jointly
and severally, bearing interest at the Prime Rate plus 0.25% or, at the
Company's option, LIBOR plus 2.25%. Borrowings are available in the form of
advances or letters of credit granted or issued against percentages of the
Subsidiaries' aggregate eligible accounts receivable and eligible inventory
(subject to a maximum sub-limit for borrowing against eligible inventory of
$17.5 million and to initial reserves against availability totaling $7.0
million, which reserves are to be eliminated upon implementation of a perpetual
inventory system, upon the Company issuing audited financial statements and upon
the Company and LaSalle entering into an amendment to the Agreement regarding
the financial covenants, as further described in the Agreement). Under the Loan
Agreement, the Company and Subsidiaries, renewed and confirmed the existing
security interest held by LaSalle and granted a new security interest to LaSalle
over substantially all assets of the Company and Subsidiaries. The Loan
Agreement contains certain financial covenants, financial reporting
requirements, other affirmative and negative covenants (including limitations on
indebtedness, liens, investments, dividends and distributions and merger and
acquisition transactions). The Loan Agreement contains certain customary
provisions concerning events of default. Upon the occurrence of any such event
of default, the lenders are permitted, among other things, to accelerate the
maturity of the loans under the revolving credit facility and terminate
LaSalle's commitment to make any further revolving loans or to issue any letters
of credit.
As of the close of business on April 3, 2007, the amount outstanding under the
Loan Agreement was approximately $5 million. Amounts outstanding fluctuate daily
based on shipments to and collections from customers.
The foregoing description of the Loan Agreement is qualified in its entirety by
reference to the text of the Loan Agreement, which is attached hereto as Exhibit
10.1 and is incorporated herein by reference.
A copy of a press release issued by the Company announcing entry into the Loan
Agreement is attached hereto as Exhibit 99.1.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
(a) The information provided in response to Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
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(e) On March 29, 2007, the Company entered into a new employment agreement with
Larry R. Ellis, its President and CEO. The agreement, which has an initial term
of four years following the Effective Date, provides for an annual base salary
of $650,000, plus a stipend for living expenses of $5,000 per month. In
addition, Mr. Ellis will be eligible to receive an annual incentive bonus in an
amount to be determined in the discretion of the Compensation Committee of the
Board of Directors of the Company, based on approved performance criteria,
targeted at 100% of base salary. The agreement also provides for the grant to
Mr. Ellis of 900,000 warrants to acquire shares of the Company's common stock,
par value $0.01, at an exercise price equal to $3.46, the closing market price
of such common stock on the Effective Date. The warrants have a 10-year term. As
of the Effective Date, 10% of the warrants will be vested and exercisable, and
30% of the warrants will become vested and exercisable on each of the three
subsequent anniversary dates following the Effective Date, provided that such
future vesting will be accelerated upon the occurrence of a change of control of
the Company, as defined in a warrant award agreement. The employment agreement
also provides for the payment in installments to executive of an aggregate
amount equal to 24 months annual base salary, plus target bonus, in the event
the agreement is terminated prior to the end of the employment term by the
Company without cause or by the executive for good reason, as such terms are
customarily defined in executive employment agreements. As previously disclosed,
under the 2007 board compensation scheme, applicable to only non-employee
directors, Mr. Ellis will no longer receive compensation in his capacity as a
director of the Company.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
10.1 Amended and Restated Loan and Security Agreement, dated as of
April 3, 2007, by and among Protective Apparel Corporation of
America, Point Blank Body Armor Inc., NDL Products, Inc., DHB
Industries, Inc., and LaSalle Business Credit LLC, as
Administrative Agent and Collateral Agent.
99.1 Press Release, dated April 5, 2007.
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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.
DHB INDUSTRIES, INC.
By: /s/ THOMAS CANFIELD
____________________________________________
Thomas Canfield, General Counsel & Secretary
Dated: April 5, 2007
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EXHIBIT INDEX
10.1 Amended and Restated Loan and Security Agreement, dated as of April 3,
2007, by and among Protective Apparel Corporation of America, Point
Blank Body Armor Inc., NDL Products, Inc., DHB Industries, Inc., and
LaSalle Business Credit LLC, as Administrative Agent and Collateral
Agent.
99.1 Press Release, dated April 5, 2007.
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