Blonder Tongue Form 8-K as filed April 4, 2005
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, 2005
Blonder Tongue Laboratories, Inc.
(Exact Name of registrant as specified in its charter)
Delaware 1-14120 52-1611421
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
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 Loan and Security Agreement
On March 30, 2005, Blonder Tongue Laboratories, Inc. (the "Company") executed a
Third Amendment to Loan and Security Agreement (the "Amendment") with Commerce
Bank, NA (the "Bank"). The Amendment amends the Loan and Security Agreement
dated March 20, 2002, as amended ("Loan Agreement"). The Amendment (i) extends
the maturity date of the Company's line of credit until April 1, 2006, (ii)
provides for an interest rate on the line of credit of the prime rate plus 2.0%,
with a floor of 5.5%, (iii) waives the applicability of the consolidated pre-tax
income covenant for the quarter ended December 31, 2004, (iv) suspends the
applicability of the cash flow coverage ratio covenant until March 31, 2006, and
(v) imposes a financial covenant requiring the Company to achieve certain levels
of consolidated pre-tax income on a quarterly basis commencing with the fiscal
quarter ended March 31, 2005. Upon a default under the Loan Agreement, including
the non-payment of principal or interest, the obligations under the Loan
Agreement may be accelerated. The Amendment also waived the Company's inability
to meet one of its financial covenants as required under the Loan Agreement as
of December 31, 2004.
Stock Option Grants to Executive Officers
On March 29, 2005, 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 other than 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 and Kant Mistry. These
executive officers received an option to purchase 15,000 shares, except Mr. Daly
who received an option to purchase 5,000 shares. All of these options were
granted pursuant to the Company's 1995 Long Term Incentive Plan, except for the
option to purchase 5,000 shares granted to Mr. Daly which was issued under the
Company's 2005 Employee Equity Incentive Plan ("2005 Plan"). This grant to Mr.
Daly is subject to approval of the 2005 Plan at the Company's Annual Meeting of
Stockholders to be held on May 24, 2005. The options will become exercisable on
May 31, 2005 and will expire on March 28, 2015. The exercise price of the
options is $3.84 per share, but is subject to increase if the fair market value
of the common stock is higher than $3.84 per share on the second trading day
following the date of public disclosure of the Company's financial results for
the fiscal year ended December 31, 2004. 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 fiscal year ended December 31, 2004.
Criteria under Bonus Plan
On March 29, 2005, 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, 2005 ("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
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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.
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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.
BLONDER TONGUE LABORATORIES, INC.
By: /s/ Eric Skolnik
Eric Skolnik
Senior Vice President and Chief
Financial Officer
Date: April 4, 2005
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