Blonder Tongue Laboratories, Inc.: Form 8-K as filed 4/3/2006
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 28, 2006
Blonder Tongue Laboratories, Inc.
(Exact Name of registrant as specified in its charter)
Delaware 1-14120 52-1611421
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
One Jake Brown Road, Old Bridge, New Jersey 08857
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 679-4000
Not Applicable
(Former name or 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.
Amendment to Credit and Security Agreement
On March 29, 2005, Blonder Tongue Laboratories, Inc. (the "Company") and
its majority-owned subsidiary, BDR Broadband, LLC ("BDR"), as Borrowers, and its
wholly-owned subsidiary, Blonder Tongue Investment Company, as Guarantor,
executed a First Amendment to Credit and Security Agreement (the "Amendment")
with National City Business Credit, Inc. ("NCBC") and National City Bank (the
"Bank"). The Amendment (i) modifies the definition of "EBITDA" to exclude
certain non-cash items from the calculation thereof, (ii) increases the
applicable interest rates for each of (a) the $10.0 million asset based
revolving credit facility and (b) the $3.5 million term loan facility, by 25
basis points until such time as the Company has met certain financial covenants
for two consecutive fiscal quarters, (iii) imposes an availability block of
$500,000 under the Company's borrowing base until such time as the Company has
met certain financial covenants for two consecutive fiscal quarters, and (iv)
retroactively defers applicability of the fixed charge coverage ratio until June
30, 2006 and increases the required ratio from 1.00:1.00 to 1.10:1.00
thereunder.
Stock Option Grants to Executive Officers
On March 28, 2006, the Compensation Committee of the Board of Directors of
the Company granted an option to purchase shares of the Company's common stock
to each of its executive officers, including the Chief Executive Officer and the
President. The executive officers who received an option are Peter Daly, Emily
Nikoo, Norman Westcott, Eric Skolnik, Allen Horvath, Kant Mistry, James Luksch
and Robert Palle, Jr. An option to purchase 25,000 shares was granted to each of
Messrs. Westcott, Skolnik, Mistry and Horvath. Mr. Luksch received an option to
purchase 45,000 shares, Mr. Palle and Ms. Nikoo each received an option to
purchase 35,000 shares, and Mr. Daly received an option to purchase 20,000
shares. All of these options were granted pursuant to the Company's 2005
Employee Equity Incentive Plan. All of the options were granted as tax-qualified
incentive stock options, except the options received by Messrs. Luksch and Palle
and Ms. Nikoo, each of whom received non-qualified stock options. The options
will become exercisable in three equal installments on the first, second and
third anniversary of the date of grant and will expire on March 27, 2016. The
exercise price of the options is $1.905 per share, but is subject to increase if
the fair market value of the common stock is higher than $1.905 per share on the
second trading day following the date of public disclosure of the Company's
financial results for the first quarter ending March 31, 2006. If higher, the
exercise price will be equal to the fair market value (equal to the mean average
of the high and low selling prices as reported on the American Stock Exchange)
of the common stock on the second trading day following the date of public
disclosure of the Company's financial results for the first quarter ending March
31, 2006.
Stock Option Grants to Directors
On March 28, 2006, the Board of Directors of the Company granted an option
to purchase shares of the Company's common stock to each of its non-employee
directors, other than James H. Williams. The directors who received an option
are Robert Heaton, James F. Williams, Stephen Necessary, Robert Mayer and Gary
Scharmett. Each of these directors received an option to purchase 10,000 shares
of the Company's common stock. All of these options were granted pursuant to the
Company's 2005 Director Equity Incentive Plan. The options will become
exercisable on March 28, 2007 and will expire on March 27, 2016. The exercise
price of the options is $1.905 per share, but is subject to increase if the fair
market value of the common stock is higher than $1.905 per share on the second
trading day following the date of public disclosure of the Company's financial
results for the first quarter ending March 31, 2006. If higher, the exercise
price will be equal to the fair market value (equal to the mean average of the
high and low selling prices as reported on the American Stock Exchange) of the
common stock on the second trading day following the date of public disclosure
of the Company's financial results for the first quarter ending March 31, 2006.
Also on March 28, 2006, Compensation Committee of the Board of Directors of
the Company granted an option to purchase 10,000 shares of the Company's common
stock to John Dwight who is a director of the Company and is also the Assistant
to the President. The option was granted pursuant to the Company's 2005 Employee
Equity Incentive Plan as a tax-qualified incentive stock option. The option
becomes exercisable in three equal installments on the first, second and third
anniversary of the date of grant and will expire on March 27, 2016. The exercise
price of the option is $1.905 per share, but is subject to increase if the fair
market value of the common stock is higher than $1.905 per share on the second
trading day following the date of public disclosure of the Company's financial
results for the first quarter ending March 31, 2006. If higher, the exercise
price will be equal to the fair market value (equal to the mean average of the
high and low selling prices as reported on the American Stock Exchange) of the
common stock on the second trading day following the date of public disclosure
of the Company's financial results for the first quarter ending March 31, 2006.
Criteria under Bonus Plan
On March 28, 2006, the Compensation Committee of the Board of Directors of
the Company determined that the following executive officers will be
participants in the Blonder Tongue Executive Officer Bonus Plan for the fiscal
year ending December 31, 2006 ("Bonus Year"): Peter Daly, Alan Horvath, James A.
Luksch, Kant Mistry, Emily Nikoo, Robert J. Palle, Jr., Eric Skolnik, and Norman
Westcott.
These participants will be entitled to share in a Bonus Pool based upon a
subjectively determined allocation, which has not yet been finalized by the
Compensation Committee. The Bonus Pool will be equal to the sum of (i) thirty
percent (30%) of the first $1,000,000 (or portion thereof) of the Company's
pre-tax income, plus (ii) twenty percent (20%) of the Company's pre-tax income,
in excess of $1,000,000, but less than or equal to $2,000,000, plus (iii) ten
percent (10%) of the Company's pre-tax income, in excess of $2,000,000, all as
set forth on the Company's audited financial statements for the Bonus Year (in
all cases calculated before taking into account any accrual for such Bonus
Pool); provided, however, that in no event will the Bonus Pool exceed the sum of
the Base Salary (as defined below) of all participants, in the aggregate. The
maximum bonus that may be paid to any participant, regardless of the size of the
Bonus Pool, is 100% of the participant's base salary as of January 1 in any
Bonus Year ("Base Salary"). Also, no bonus will be paid to any participant
unless the Bonus Pool equals or exceeds $90,000.
ITEM 5.02. DEPARTURE OF DIRECTOR.
On March 28, 2006, James H. Williams notified the Board of Directors of the
Company that he will not stand for re-election as a Class II Director of the
Company at the 2006 Annual Meeting of Shareholders to be held on May 24, 2006
(the "2006 Annual Meeting"). Mr. Williams will continue to serve as a Class II
Director until his term expires at the 2006 Annual Meeting. Mr. Williams noted
that his decision was for personal reasons and not due to any disagreement with
the Company on any matter relating to the Company's operations, policies or
practices. Mr. Williams will continue to advise the Company pursuant to his
existing Consulting Agreement.
In connection with Mr. Williams' decision not to stand for re-election, the
Board of Directors determined to reduce the number of directors constituting the
entire Board of Directors from nine (9) directors to eight (8) directors,
eliminating one (1) position from the Class II Directors, effective at the
upcoming 2006 Annual Meeting. As such, only two (2) directors will be nominated
for election to the Board as Class II Directors at the 2006 Annual Meeting.
James A. Luksch, the Company's Chief Executive Officer and Chairman of the
Board of Directors, expressed the Board's and the Company's thanks to Mr.
Williams for his many years of dedication and service to the Company.
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.
BLONDER TONGUE LABORATORIES, INC.
By: /s/ Eric Skolnik
Eric Skolnik
Senior Vice President and
Chief Financial Officer
Date: April 3, 2006