U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 2007
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GREATBATCH, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-16137 16-1531026
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
9645 Wehrle Drive, Clarence, New York 14031
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 759-6901
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Not Applicable
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(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))
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Item 1.01 Entry into a Material Definitive Agreement.
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(a) As previously reported, on March 22, 2007, Greatbatch,
Inc. (the "Company") entered into separate privately
negotiated agreements under which it will exchange $50 million
aggregate principal amount of its outstanding 2 1/4%
Convertible Subordinated Debentures due 2013 (the "Outstanding
Debentures") for an equivalent principal amount of a new
series of 2 1/4% Convertible Subordinated Debentures due 2013
(the "New Debentures"), and under which it will issue an
additional $80 million aggregate principal amount of New
Debentures. On March 28, 2007, Greatbatch completed the
exchange of Outstanding Debentures for New Debentures and the
sale of the additional New Debentures. After completion of the
exchange, approximately $120 million in aggregate principal
amount of Outstanding Debentures remain outstanding.
The Company issued the New Debentures pursuant to an
indenture, dated as of March 28, 2007, by and between the
Company and Manufacturers and Traders Trust Company, as
trustee, (the "2007 Indenture"). The New Debentures bear
interest at 2 1/4% per annum, with interest payable on June 15
and December 15 of each year, commencing June 15, 2007. The
New Debentures mature on June 15, 2013. The New Debentures are
unsecured indebtedness of the Company, and rank pari passu in
right of payment to the Outstanding Debentures and junior in
right of payment to the Company's senior indebtedness,
including its bank credit facility.
The New Debentures will be convertible upon the occurrence of
certain conditions into shares of the Company's common stock
at an initial conversion price of approximately $34.70 per
share, which is equivalent to an initial conversion ratio of
approximately 28.8219 shares per $1,000 principal amount of
New Debentures. The conversion price and the conversion ratio
will adjust automatically upon certain changes to the
Company's capitalization.
The New Debentures are convertible at the option of the
holders at such time as: (i) the closing price of the
Company's common stock exceeds 150% of the conversion price of
the New Debentures, initially $34.70, for 20 out of 30
consecutive trading days; (ii) the trading price per $1,000
principal amount of New Debentures is less than 98% of the
product of (x) the closing sale price of common stock for each
day during any five consecutive trading day period and (y) the
conversion rate per $1,000 principal amount of New Debentures;
(iii) the New Debenture has been called for redemption, at any
time on or after the date the notice of redemption has been
given until the close of business on the business day
immediately preceding the redemption date; (iv) the Company
distributes to all holders of common stock rights or warrants
entitling them to purchase additional shares of common stock
at less than the average closing price of common stock for the
ten trading days immediately preceding the announcement of the
distribution; (v) the Company distributes to all holders of
common stock any form of dividend which has a per share value
exceeding 5% of the price of the common stock on the day prior
to such date of distribution; (vi) the Company affects a
consolidation, merger, share exchange or sale of assets
pursuant to which its common stock is converted to cash or
other property; (vii) the period beginning 60 days prior to
but excluding June 15, 2013; and (viii) certain fundamental
changes occur or are approved by the Company's Board of
Directors.
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Conversions in connection with corporate transactions that
constitute a fundamental change require the Company to pay a
premium make-whole amount whereby the conversion ratio on the
New Debentures may be increased by up to 8.2 shares per $1000
principal amount. The premium make-whole amount will be paid
in shares of common stock upon any such conversion, subject to
the net share settlement feature of the New Debentures
described below.
The New Debentures contain a net share settlement feature,
which requires the Company, unless it has made an election
under the 2007 Indenture, upon conversion of the New
Debentures, to pay holders in cash for each $1,000 principal
amount of New Debentures the lesser of $1,000 and the
conversion value of the New Debentures, unless the Company
otherwise elects. Any amounts in excess of $1,000 will be
settled in shares of the Company's common stock, or at the
Company's option, cash.
The New Debentures are redeemable by the Company at any time
on or after June 20, 2012, and prior to maturity, or at the
option of a holder upon the occurrence of certain fundamental
changes affecting the Company. The New Debentures do not
contain the put option provisions of the Outstanding
Debentures which provide the holders a one-time option to
require the Company to repurchase the Outstanding Debentures
on June 15, 2010.
An event of default under the 2007 Indenture will occur if the
Company: (i) is delinquent in making certain payments due
under the New Debentures; (ii) fails to deliver certain
required notices; (iii) fails to deliver all cash and any
shares of common stock upon conversion of the New Debentures;
(iv) fails, following notices, to cure a breach of a covenant
under the New Debentures or the 2007 Indenture; or (v)
commences or has commenced against it any proceeding seeking
liquidation, reorganization or other relief under any
bankruptcy, insolvency or similar law.
In connection with the issuance of the New Debentures, the
Company entered into a registration rights agreement, dated as
of March 28, 2007 (the "2007 Registration Rights Agreement"),
with the holders of the New Debentures, under which the
Company has agreed to file a shelf registration statement with
respect to the resale of the New Debentures and the Company
common stock issuable upon conversion thereof. The Company is
obligated to file this registration statement within 30 days
of the closing of the issuance of the New Debenture and to
cause such registration statement to become effective within
90 days of the closing of the transaction. In the event that
the Company fails to comply with its obligations under the
2007 Registration Rights Agreement, the Company is obligated
to make additional payments to the holders of the New
Debentures.
The form of exchange and purchase agreement, the 2007
Indenture and the 2007 Registration Rights Agreement are
included herewith and incorporated herein by reference. The
foregoing descriptions of such agreements are for summary
purposes only and are qualified in their entirety by the full
text of such agreements.
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(b) On March 27, 2007, Greatbatch, Inc. (the "Company")
entered into separate privately negotiated agreements under
which it will exchange approximately an additional $67.8
million aggregate principal amount of its Outstanding
Debentures for an equivalent principal amount of New
Debentures (the "Additional New Debentures"). The transactions
are expected to close, subject to customary closing
conditions, on April 2, 2007.
The Additional New Debentures will be issued subject to the
terms of the 2007 Indenture pursuant to a supplemental
indenture thereto, and will the contain the same terms as the
New Debentures described in Item 1.01(a) above. The holders of
the Additional New Debentures will be entitled to the benefits
of the 2007 Registration Rights Agreement described in Item
1.01(a) above.
The New Debentures, the Additional New Debentures and the
common stock issuable upon conversion of the New Debentures
and the Additional New Debentures will not be registered under
the Securities Act of 1933, as amended, or the securities laws
of any state and, unless so registered, may not be offered or
sold in the United States except pursuant to an applicable
exemption from the registration requirement of the Securities
Act and applicable state securities laws.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
Under an Off-Balance Sheet Arrangement of a Registrant.
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(a) See Item 1.01(a) above, which is incorporated by reference
herein.
(b) See Item 1.01(b) above, which is incorporated by reference
herein.
Item 3.02 Unregistered Sales of Equity Securities.
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(a) See Item 1.01(a) above, which is incorporated by reference
herein. The issuance of the New Debentures is exempt from
registration under the Securities Act of 1933, as amended,
pursuant to Rule 506 promulgated thereunder.
(b) See Item 1.01(b) above, which is incorporated by reference
herein. The issuance of the Additional New Debentures is
exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 506 promulgated thereunder.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
10.1 Form of Exchange and Purchase Agreement, dated March
22, 2007, by and between Greatbatch, Inc. and certain
other parties thereto.
10.2 Form of Registration Rights Agreement, dated March 28,
2007, by and between Greatbatch, Inc. and certain other
parties thereto.
10.3 Indenture, dated March 28, 2007, by and between
Greatbatch, Inc. and Manufacturers and Traders Trust
Company, as trustee.
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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, thereunto duly authorized.
GREATBATCH, INC.
Dated: March 29, 2007
By: /s/ Thomas J. Mazza
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Thomas J. Mazza
Senior Vice President and
Chief Financial Officer
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EXHIBIT
NUMBER DESCRIPTION
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10.1 Form of Exchange and Purchase Agreement, dated
March 22, 2007, by and between Greatbatch,
Inc. and certain other parties thereto
10.2 Form of Registration Rights Agreement, dated March
28, 2007, by and between Greatbatch, Inc.
and certain other parties thereto
10.3 Indenture, dated March 28, 2007, by and between
Greatbatch, Inc. and Manufacturers and
Traders Trust Company, as trustee
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