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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
May 2, 1997
Date of Report
(Date of earliest event reported)
Commission file number 0-22418
ITRON, INC.
(Exact name of Registrant as specified in its charter)
Washington 91-1011792
(State of Incorporation) (I.R.S. Employer Identification Number)
2818 North Sullivan Road
Spokane, Washington 99216-1897
(509) 924-9900
(Address and telephone number of Registrant's principal executive offices)
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Item 5. Other Events
On May 2, 1997, Itron, Inc. ("Itron" or the "Company") acquired Design
Concepts, Inc. ("DCI") through a merger (the "Merger") of DCI with a wholly
owned subsidiary of the Company. Pursuant to the Agreement and Plan of Merger
dated April 30, 1997 (the "Merger Agreement"), the Company issued 759,297 shares
of unregistered Itron common stock to the shareholders of DCI (the "DCI
Shareholders") in exchange for all outstanding shares of DCI. In addition, all
outstanding options to purchase DCI shares were converted into options to
purchase an aggregate of 19,921 shares of Itron common stock. The Merger was
accounted for as a pooling of interests and is treated as a tax-free
reorganization. Pursuant to the Merger Agreement and an Escrow Agreement,
certificates representing 75,930 of the shares issued in the Merger (the "Escrow
Shares") were deposited with Chase Trust Company of California, as escrow agent,
in order to compensate Itron for any losses incurred by reason of any breach by
DCI of the Merger Agreement (the "Escrow"). The Escrow terminates on May 2,
1998, at which time any Escrow Shares not subject to a disputed claim will be
released to the DCI Shareholders.
In connection with the Merger Agreement, Itron and the DCI Shareholders
entered into a Registration Rights Agreement pursuant to which Itron granted to
the DCI Shareholders the right to participate in Company registrations occurring
on or prior to May 2, 1998. The DCI Shareholders may request inclusion of up to
75,930 shares in such registration.
DCI, which is headquartered in Boise, Idaho, supplies telephone-based
automatic meter reading ("AMR") systems to electric utilities which include
features for outage detection and power quality monitoring and time-of-use and
hourly consumption reads. DCI has been providing outage detection and power
quality monitoring equipment to electric utilities since it was founded in 1990.
DCI systems are installed at close to 100 utilities worldwide. DCI's primary
product has been the Sentry family of low cost products designed to provide
comprehensive power quality information including power outages and under/over
voltage conditions. Recently, the Sentry product line was expanded to include an
AMR product, the Sentry Series 5. In addition to power quality features, the
Series 5 product line incorporates AMR capabilities, including consumption,
time-of-use, demand and interval metering.
Item 7: Exhibits
Exhibit
Number Description
2.2 Registration Rights Agreement, dated as of May 2, 1997,
by and among Itron, Inc. and the former shareholder of
Design Concepts, Inc.
The registrant agrees to furnish supplementally any omitted exhibits or
schedules to the Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has dully caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
ITRON, INC.
(Registrant)
By: /s/ David G. Remington
David G. Remington
Chief Financial Officer
(Authorized officer and
Principal Financial Officer)
Dated: May 27, 1997
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of May 2, 1997, among Itron, Inc., a Washington corporation (the "Company"),
and the Holders (as defined below).
RECITALS
A. The Company is entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), with ITR Acquisition Corporation
("Sub"), Design Concepts, Inc. ("DCI") and Steven L. Hodges, pursuant to which
Sub will merge with DCI (the "Merger"), which will become a wholly owned
subsidiary of the Company, and the Company will issue shares of its Common
Stock, no par value (the "Common Stock"), to the shareholders of DCI.
B. In consideration of DCI's execution of the Merger Agreement, the
Company has agreed to grant certain registration rights with respect to 10% of
the shares of Common Stock to be issued in the Merger.
C. The parties to this Agreement hereby agree that this Agreement will
become effective on and be dated as of the date of the closing of the
transactions contemplated by the Merger Agreement and will be of no force and
effect should such transactions not be consummated.
AGREEMENT
Now, therefore, for good and valuable consideration, the adequacy and
receipt of which is acknowledged, the parties hereto agree as follows:
Section 1. Certain Definitions
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Commission" shall mean the United States Securities and
Exchange Commission or any other United States federal agency at the time
administering the Securities Act.
(b) "Existing Agreement" shall mean the Amended and Restated
Registration Rights Agreement, dated March 25, 1996, among the Company and
certain holders of the Company's securities.
(c) "Holder" shall mean any of the parties listed on Schedule
A hereto that hold outstanding Registrable Securities which have not been sold
to the public.
(d) "Register," "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (the "Registration Statement"), and the
declaration or ordering of the effectiveness of such Registration Statement.
(e) "Registrable Securities" shall mean (i) a number of shares
of Common Stock owned by the Holders which is equal to 10% (rounded to the
nearest whole number) of the aggregate number of shares of Common Stock issued
in the Merger and (ii) all the Common Stock of the Company issued with respect
to such shares by reason of stock dividends, stock splits, or combinations,
recapitalizations or other similar corporate action; provided, however, in any
Registration, the Holders as a group shall be entitled only to sell that number
of Registrable Securities equal to the maximum number of shares eligible to be
sold pursuant to the Registration, and, absent an agreement among the Holders to
the contrary, each Holder shall be entitled only to sell that number of
Registrable Securities equal to such maximum number multiplied by a fraction
equal to the Registrable Securities held by such Holder divided by the number of
Registrable Securities held by all Holders at the time of the filing of such
Registration.
(f) "Registration Expenses" shall mean all expenses incurred
by the Company in complying with Section 2, including, without limitation, all
federal and state registration, qualification, and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(h) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities
pursuant to this Agreement.
Section 2. Piggyback Registration
2.1 Notice of Piggyback Registration and Inclusion of Registrable Securities
2.1.1 General Piggyback Rights
Subject to the remainder of this Agreement, in the event the Company
decides to Register any of its Common Stock (either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights) on a form that would be suitable for a registration
involving Registrable Securities, the Company will (i) promptly give each Holder
written notice thereof (which shall include a list of the jurisdictions in which
the Company then intends to attempt to qualify such securities under the
applicable "blue sky" or other state securities laws) and (ii) include in such
Registration (and any related qualification under state securities or "blue sky"
laws or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request delivered to the Company
by any Holder within 10 days after delivery of such written notice from the
Company.
2.1.2 Limitation of Piggyback Rights
The Holders shall not be provided the opportunity to participate in any
Registration effected after the date one year from the date of closing of the
Merger. In addition, the Company shall have no obligation to register any
Registrable Securities on behalf of the Holders pursuant to this subsection 2.1
unless such securities have a reasonably anticipated aggregate offering price to
the public equal to or greater than $100,000 (U.S.). In the event Registrable
Securities are registered during the period prior to the issuance of financial
statements reporting 30 days' combined operations of DCI and the Company (the
"Restricted Period"), the Holders may not sell any Registrable Securities until
the expiration of the Restricted Period. Except as required to comply with
applicable securities laws, Itron will take no action with the intention of
impeding the Holders' ability to sell Registrable Securities after the
expiration of the Restricted Period.
2.2 Underwriting in Piggyback Registration
2.2.1 Notice of Underwriting in Piggyback Registration
If the Registration of which the Company gives notice is for a
Registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to subsection
2.1. In such event the right of any Holder to Registration shall be conditioned
upon such underwriting and the inclusion of such Holder's Registrable Securities
in such underwriting to the extent provided in this Section 2. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and any other holders distributing their securities
through such underwriting) enter into an underwriting agreement with the
Underwriter's Representative for such offering.
2.2.2 Marketing Limitation in Piggyback Registration
In the event the Underwriter's Representative advises the Company that
market factors require a limitation of the number of shares to be underwritten,
the Underwriter's Representative may (subject to the allocation priority set
forth in subsection 2.2.3) exclude Registrable Securities from the Registration.
2.2.3 Allocation of Shares in Piggyback Registration
In the event that the Underwriter's Representative limits the number of
shares to be included in a Registration pursuant to subsection 2.2.2, the number
of shares to be included in such Registration shall be allocated (subject to
subsection 2.2.2) in the following manner. Except as provided in the Existing
Agreement, the shares (other than Registrable Securities) held by officers and
directors of the Company shall be excluded from such registration and
underwriting to the extent required by such limitation. If a limitation on the
number of shares is still required after such exclusion, the number of shares
that may be included in the Registration and underwriting shall be allocated
among all other holders thereof in proportion, as nearly as practicable, to the
respective amounts of securities (including Registrable Securities) which such
holders, absent any such limitation, would otherwise be entitled to include in
such Registration.
2.2.4 Withdrawal in Piggyback Registration
If any Holder of Registrable Securities, or a holder of other
securities entitled (upon request) to be included in such Registration
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company and the underwriter
delivered at least one day prior to the effective date of the Registration
Statement. The Registrable Securities so withdrawn shall also be withdrawn from
the Registration Statement.
2.3 Blue Sky in Piggyback Registration
In the event of any Registration of Registrable Securities pursuant to
this Section 2, the Company will exercise its best efforts to register and
qualify the securities covered by the Registration Statement under such other
securities or "blue sky" laws of such jurisdictions as shall be requested by the
Underwriter's Representative and reasonably appropriate for the distribution of
such securities; provided, however, that (i) the Company shall not be required
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions and (ii) notwithstanding anything in this
Agreement to the contrary, in the event any jurisdiction in which the securities
shall be qualified imposes a nonwaivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
shareholders, such expenses shall be payable pro rata by selling shareholders.
Section 3. Expenses of Registration
All Registration Expenses incurred in connection with all Registrations
pursuant to Section 2 shall be borne by the Company. All Selling Expenses shall
be borne by the Holders of the securities Registered pro rata on the basis of
the number of shares Registered; provided, however, that if Registrable
Securities are Registered pursuant to a shelf registration statement relating to
a non-underwritten offering, each Holder will be obligated solely for the
Selling Expenses incurred in connection with the sale of such Holder's
Registrable Securities in such offering.
Section 4. Registration Procedures
The Company will keep each Holder whose Registrable Securities are
included in any Registration pursuant to this Agreement advised as to the
initiation and completion of such Registration. At its expense the Company will:
(i) use its best efforts to keep such Registration effective for a period of 120
days or until the Holder or Holders have completed the distribution described in
the Registration Statement relating thereto, whichever first occurs; and (ii)
furnish such number of prospectuses (including preliminary prospectuses) and
other documents as a Holder from time to time may reasonably request.
Section 5. Information Furnished by Holder
It shall be a condition precedent to the Company's obligations under
this Agreement that each Holder of Registrable Securities included in any
Registration furnish to the Company such information regarding such Holder and
the distribution proposed by such Holder or Holders as the Company may
reasonably request.
Section 6. Indemnification
6.1 The Company's Indemnification of Holders
To the extent permitted by law, the Company will indemnify each Holder,
each of its officers, directors and constituent partners, each legal counsel and
independent accountant for such Holder, and each person controlling such Holder,
with respect to which qualification or compliance of Registrable Securities has
been effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter against all claims, losses, damages, and
liabilities (or actions in respect thereof) to the extent such claims, losses,
damages, or liabilities arise out of or are based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document or upon any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification,
or compliance. The Company will reimburse each such Holder, each of its
officers, directors and constituent partners, legal counsel and independent
accountants, each such underwriter, and each person who controls any such Holder
or underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action; provided, however, that the indemnity contained in this
subsection 6.1 shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability, or action if settlement is effected without the consent
of the Company (which consent shall not unreasonably be withheld) and provided,
further, that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by such Holder, underwriter, legal counsel, independent accountant or
controlling person and stated to be for use in connection with the offering of
securities of the Company; provided, however, that the obligations of the
Company hereunder shall be limited to an amount equal to the proceeds of the
Registrable Securities sold in such Registration, qualification or compliance.
6.2 Holder's Indemnification of the Company
To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
Registration, qualification or compliance is being effected pursuant to this
Agreement, indemnify the Company, each of its directors and officers, each legal
counsel and independent accountant of the Company, each underwriter, if any, of
the Company's securities covered by such a Registration Statement, each person
who controls the Company or such underwriter within the meaning of the
Securities Act, and each other such Holder, each of its officers, directors, and
constituent partners and each person controlling such other Holder, against all
claims, losses, damages, and liabilities (or actions in respect thereof) to the
extent such claims, losses, damages or liabilities arise out of or are based
upon any untrue statement (or alleged untrue statement) of a material fact
contained in any such Registration Statement, prospectus, offering circular, or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, persons, law and accounting firms, underwriters,
or control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission (or alleged
omission) is made in such Registration Statement, prospectus, offering circular,
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use in
connection with the offering of securities of the Company; provided, however,
that the obligations of such Holders hereunder shall be limited to an amount
equal to the proceeds to each such Holder of Registrable Securities sold in such
Registration, qualification or compliance.
6.3 Indemnification Procedure
Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof
and generally summarize such action. The indemnifying party shall have the right
to participate in and to assume the defense of such claim; provided, however,
that the indemnifying party shall be entitled to select counsel for the defense
of such claim with the approval of any parties entitled to indemnification,
which approval shall not be unreasonably withheld. In the event that the
indemnifying party elects to assume the defense of any such suit and retain such
counsel and if the indemnified party reasonably determines that a conflict
exists between the indemnifying party and the indemnified party in such defense,
the indemnifying party shall pay the reasonable fees and expenses of one
additional counsel with respect to each such suit retained by the indemnified
party selected by the indemnified party (which selection shall be made by a
majority in interest of the indemnifying Holders in the case of the Holders) and
reasonably satisfactory to the indemnifying party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to the ability of the indemnifying party to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 6, but the omission so to notify the indemnifying party will
not relieve such party of any liability that such party may have to any
indemnified party otherwise than under this Section 6.
Section 7. Transfer and Termination of Registration Rights
The rights to cause the Company to Register securities granted by the
Company under this Agreement to the Holders are not transferable. The rights of
the Holders to cause the Company to Register Registrable Securities under this
Agreement shall terminate in all respects one year from the date of closing of
the Merger.
Section 8. Successors and Assigns
This Agreement shall bind and inure to the benefit of the Company and
its successors and assigns.
Section 9. Entire Agreement
This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior arrangements and
understandings with respect thereto.
Section 10. Notices
All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written instrument
delivered in person or duly sent by first class registered or certified mail,
postage prepaid, addressed to such party at the address set forth below, or such
other address as may hereafter be designated in writing by the addressee to the
addressor listing all parties:
(a) If to the Company:
Itron, Inc.
2818 N. Sullivan Rd.
P.O. Box 15288
Spokane, WA 99215
Attention: President
(b) If to the Holders, at their respective addresses set
forth on Schedule A hereto.
Section 11. Changes
The terms and provisions of this Agreement may not be modified or
amended, or any of the provisions hereof waived, temporarily or permanently,
except pursuant to the written consent of the Company and the Holders of a
majority of the Registrable Securities then outstanding.
Section 12. Counterparts
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
Section 13. Headings
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
Section 14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington.
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date set forth above.
ITRON, INC.
/s/ Johnny M. Humphreys
Johnny M. Humphreys, President
HOLDERS
/s/ Steven L. Hodges
Steven L. Hodges
/s/ Donald Grundhauser
Donald Grundhauser
/s/ Alan Poole
Alan Poole
/s/ Eldon Hattervig
Eldon Hattervig
/s/ Brian Schumacher
Brian Schumacher
/s/ Ronald Van Auker
Ronald Van Auker
/s/ Ralph Langer
Ralph Langer
/s/ Victoria Stagi
Victoria Stagi
/s/ Val Burton
Val Burton
SCHEDULE A
Steven L. Hodges
9573 Atmore Dr.
Boise, ID 83704
Donald Grundhauser
3270 Agate Ct.
Boise, ID 83705
Alan Poole
363 Ranch Dr.
Eagle, ID 83616
Eldon Hattervig
1401 Wall Dr.
Wake Forest, NC 25787
Brian Schumacher
485 S.W. 6th St.
Gresham, OR 97080
Ronald Van Auker
16801 Meadowlane
Nampa, ID 83687
Ralph Langer
10448 Garverdale Ct.
Boise, ID 83704
Victoria Stagi
5025 Ponder
Boise, ID 83705
Val Burton
3009 N. Five Mile Road
No. 103
Boise, ID 83713