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): October 13, 2008
SCOTT'S LIQUID GOLD-INC.
(Exact name of Registrant as specified in its charter)
Colorado 001-13458 84-0920811
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
4880 Havana Street, Denver, CO 80239
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 373-4860
Check the appropriate box below if the Form 8-K 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 October 13, 2008, Scott's Liquid Gold-Inc. (the "Company") entered
into a Board Observer Agreement and a related Confidentiality Agreement
with Value Fund Advisors, LLC ("VFA"). The Board Observer Agreement
provides for the role of a Board Observer of VFA and sets forth
standstill requirements applicable to VFA.
The Board Observer Agreement results from the mutual discussions of
the Company and VFA as to ways in which the Company can receive advice
and views of VFA about Company matters. The Company is interested in
such advice and views as part of, among other things, the efforts to
become profitable. The Company's Board of Directors, including the
independent directors, unanimously approved of the Board Observer
Agreement. The person currently designated as the Observer of VFA is
Charles Gillman. Mr. Gillman is the manager of VFA. According to a
Schedule 13D as amended of VFA, VFA (as general manager of Boston
Avenue Capital LLC and Yorktown Avenue Capital, LLC) beneficially owns
approximately 15% of the Company's common stock.
Pursuant to the Agreement, the Company has granted the right to VFA to
have a non-voting Observer at meetings of the Board of Directors of the
Company. The Observer must be mutually acceptable to the Company and
VFA. The Observer receives no compensation. The Observer will receive
the same materials as the Board of Directors unless the materials
pertain to VFA. The Board Observer role ceases (a) 30 days after
written notice by either party that the party in its sole discretion
chooses to terminate this role or (b) when and if VFA is no longer the
beneficial owner of at least 75% of the total shares of Company common
stock beneficially owned by VFA at the commencement of the Agreement.
While the Agreement is in effect, VFA will not, and will cause its
Advisory Clients and Affiliates not to, take various actions, including
any of the following, unless approved by a majority of the Board of
Directors of the Company: (a) Acquire any voting securities of the
Company (except by stock dividend or transfers between Affiliates);
(b) acquire assets of the Company or its subsidiaries; (c) make any
tender or exchange offer, or engage in a merger or other business
combination, involving the Company or any of its subsidiaries;
(d) consummate any restructuring or liquidation with respect to the
Company or any of its Affiliates; (e) participate in any proxy
contest; (f) except for any existing group disclosed in a Schedule 13D
or with any future controlled Affiliates or Advisory Clients,
participate in a group with respect to voting securities of the
Company; (g) disclose any other plan inconsistent with these
restrictions; or (h) subject any Company voting securities to any
arrangement or agreement except those existing on the date of the
Agreement and shown in a Schedule 13D and except the grant of any
irrevocable proxies to the Company's Board of Directors. VFA, its
Advisory Clients and its Affiliates are to be present at the meetings
of the shareholders of the Company so that they can be counted as
part of the quorum.
The Agreement ceases to be in effect, therefore ending standstill
requirements, on the earlier of: One year after the right of VFA to
an Observer is terminated or relinquished; or the 10th anniversary of
the Agreement.
The Confidentiality Agreement requires that information only be used
for purposes of providing comments to the Company, having an Observer
at the Board meetings and considering the investment of VGA and its
Affiliates. The Confidentiality Agreement prohibits any trades in
shares of the Company or derivatives relating to the Company's shares
while VFA is aware of material, non-public information about the Company.
The Board Observer Agreement and the Confidentiality Agreement are
exhibits to this Report. The summary of the above terms of the Board
Observer Agreement and Confidentiality Agreement are subject to, and
qualified in their entirety by reference to, such exhibits.
Item 9.01. Financial Statements and Exhibits
Exhibits.
The following exhibit accompanies this Report:
Exhibit No. Document
10.1 Board Observer Agreement, dated October 13, 2008,
between the Company and Value Fund Advisors, LLC.
10.2 Confidentiality Agreement, dated October 13, 2008,
between the Company and Value Fund Advisors, LLC.
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.
SCOTT'S LIQUID GOLD-INC.
(Registrant)
Date: October 15, 2008 /s/ Jeffry B. Johnson
By: Jeffry B. Johnson
Chief Financial Officer and
Treasurer
Exhibit Index
Exhibit No. Document
10.1 Board Observer Agreement, dated October 13, 2008,
between the Company and Value Fund Advisors, LLC.
10.2 Confidentiality Agreement, dated October 13, 2008,
between the Company and Value Fund Advisors, LLC.