<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
Pursuant to Section 13(d)
of the Securities Exchange Act of 1934
----------------
CADE INDUSTRIES, INC.
(Name of Subject Company)
SPHERE CORPORATION
a wholly owned subsidiary of
UNITED TECHNOLOGIES CORPORATION
(Bidders)
Common Stock, Par Value $.001 Per Share
(including the associated rights to purchase common stock)
(Title of Class of Securities)
127382-10-9
(CUSIP Number of Class of Securities)
----------------
William H. Trachsel, Esq.
Senior Vice President, General Counsel and Secretary
United Technologies Corporation
One Financial Plaza
Hartford CT 06101
(860) 728-7000
(Name, Address and Telephone Number of Persons authorized to Receive Notices
and Communications on Behalf of Bidders)
Copies to:
Christopher E. Austin
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
----------------
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Transaction Valuation* Amount of Filing Fee**
- ----------------------------------------------------
<S> <C>
$116,038,657 $23,208
- ----------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
* For purposes of calculating the amount of the filing fee only. Based upon
22,977,952 shares of common stock, par value $.001 per share of Cade
Industries, Inc. (the "Common Stock"), including the associated rights to
purchase common stock (the "Rights" and together with the Common Stock, the
"Shares"), at a price per Share of $5.05 in cash.
** The filing fee, calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, is 1/50(th) of one percent of the aggregate
Transaction Valuation.
[_Check]box if any part of the fee is offset as provided for by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously
Paid: None
Form or
Registration No.: N/A
</TABLE>
<TABLE>
<S> <C>
Filing Party: N/A
Date Filed: N/A
</TABLE>
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- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 127382-10-9
Page 2 of 3
1.
Name of Reporting Person S.S. or I.R.S. Identification
No. of Person Above
Sphere Corporation
- -------------------------------------------------------------------------------
2.
Check the Appropriate Box if a member of a Group (a) [_]
(b) [_]
- -------------------------------------------------------------------------------
3.
SEC Use Only
- -------------------------------------------------------------------------------
4.
Sources of Funds
AF
- -------------------------------------------------------------------------------
5.
Check if Disclosure of Legal Proceedings is Required Pursuant to [_]
Items 2(e) or 2(f)
- -------------------------------------------------------------------------------
6.
Citizenship or Place of Organization
Wisconsin
- -------------------------------------------------------------------------------
7.
Aggregate Amount Beneficially Owned by Each Reporting
Person
6,088,723*
- -------------------------------------------------------------------------------
8.
Check Box if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
- -------------------------------------------------------------------------------
9.
Percent of Class Represented by Amount in Row (7)
Approximately 26.5%
- -------------------------------------------------------------------------------
10.
Type of Reporting Person
CO
- --------
* On October 21, 1999, Sphere Corporation ("Purchaser"), a wholly owned
subsidiary of United Technologies Corporation ("Parent"), entered into a
Shareholder Option Agreement with certain shareholders (the "Shareholders") of
Cade Industries, Inc., a Wisconsin corporation (the "Company"), who, in the
aggregate, own 6,088,723 shares of the common stock, par value $.001 per
share, of the Company, including the associated rights to purchase common
stock (the "Shares"). Pursuant to the Shareholder Option Agreement the
Shareholders have agreed to (i) tender in the Offer and not withdraw all the
Shares owned by the Shareholders, (ii) grant Purchaser an option to purchase
their Shares at an exercise price of $5.05 per Share (subject to adjustment in
certain circumstances) exercisable upon the occurrence of certain events
specified in the Shareholder Option Agreement and (iii) grant Purchaser the
power to direct the vote of the Shares and irrevocably grant to and appoint
Purchaser proxy and attorney in-fact to vote the Shares with respect to
certain matters. The Shareholder Option Agreement is described in Section 11
of the Offer to Purchase dated as of October 21, 1999 filed as Exhibit (a)(1)
to this Schedule 14D-1.
<PAGE>
CUSIP No. 127382-10-9
Page 3 of 3
1.
Name of Reporting Person S.S. or I.R.S. Identification
No. of Person Above
United Technologies Corporation
- -------------------------------------------------------------------------------
2.
Check the Appropriate Box if a member of a Group (a) [_]
(b) [_]
- -------------------------------------------------------------------------------
3.
SEC Use Only
- -------------------------------------------------------------------------------
4.
Sources of Funds
WC
- -------------------------------------------------------------------------------
5.
Check if Disclosure of Legal Proceedings is Required Pursuant to [_]
Items 2(e) or 2(f)
- -------------------------------------------------------------------------------
6.
Citizenship or Place of Incorporation
Delaware
- -------------------------------------------------------------------------------
7.
Aggregate Amount Beneficially Owned by Each Reporting
Person
6,088,723*
- -------------------------------------------------------------------------------
8.
Check Box if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
- -------------------------------------------------------------------------------
9.
Percent of Class Represented by Amount in Row (7)
Approximately 26.5%
- -------------------------------------------------------------------------------
10.
Type of Reporting Person
CO
- --------
* On October 21, 1999, Sphere Corporation ("Purchaser"), a wholly owned
subsidiary of United Technologies Corporation ("Parent"), entered into a
Shareholder Option Agreement with certain shareholders (the "Shareholders") of
Cade Industries, Inc., a Wisconsin corporation (the "Company"), who, in the
aggregate, own 6,088,723 shares of the common stock, par value $.001 per
share, of the Company, including the associated rights to purchase common
stock (the "Shares"). Pursuant to the Shareholder Option Agreement the
Shareholders have agreed to (i) tender in the Offer and not withdraw all the
Shares owned by the Shareholders, (ii) grant Purchaser an option to purchase
their Shares at an exercise price of $5.05 per Share (subject to adjustment in
certain circumstances) exercisable upon the occurrence of certain events
specified in the Shareholder Option Agreement and (iii) grant Purchaser the
power to direct the vote of the Shares and irrevocably grant to and appoint
Purchaser proxy and attorney in-fact to vote the Shares with respect to
certain matters. The Shareholder Option Agreement is described in Section 11
of the Offer to Purchase dated as of October 21, 1999 filed as Exhibit (a)(1)
to this Schedule 14D-1. Because Parent owns all of the capital stock of
Purchaser, Parent may be deemed to beneficially own the Shares subject to the
Shareholder Option Agreement.
<PAGE>
This Schedule 14D-1 Tender Offer Statement relates to the offer by Sphere
Corporation ("Purchaser"), a Wisconsin corporation and a wholly owned
subsidiary of United Technologies Corporation, a Delaware corporation
("Parent"), to purchase all outstanding shares of common stock, par value
$.001 per share (the "Common Stock"), including the associated rights to
purchase Common Stock (the "Rights" and, together with the Common Stock, the
"Shares"), of Cade Industries, Inc., a Wisconsin corporation (the "Company"),
at a purchase price of $5.05 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase and the related Letter of Transmittal (which together
constitute the "Offer") which are annexed to and filed with this Schedule 14D-
1 as Exhibits (a)(1) and (a)(2), respectively. This Schedule is being filed on
behalf of Purchaser and Parent.
This Statement also constitutes a Statement on Schedule 13D with respect
to the beneficial ownership of Shares resulting from the Shareholder Option
Agreement. The item numbers and the responses thereto are in accordance with
the requirements of Schedule 14D-1.
Item 1. Security and Subject Company.
(a) The name of the subject company is Cade Industries, Inc., a Wisconsin
corporation, whose principal executive offices are located at 2365 Woodlake
Drive, Suite 120, Okemos, Michigan 48864.
(b) Reference is hereby made to the information set forth in
"Introduction" and Section 1 ("Terms of the Offer") of the Offer to Purchase
which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) & (g) This Statement is being filed on behalf of Parent and
Purchaser for purposes of the Schedule 14D-1. Reference is hereby made to the
information set forth in "Introduction", Section 9 ("Certain Information
Concerning Purchaser and Parent") and Schedule A ("Directors and Executive
Officers of Parent and Purchaser") of the Offer to Purchase, which is
incorporated herein by reference.
(e)-(f) During the last five years, neither Purchaser nor Parent, nor, to
the best of their knowledge, any of their respective directors or executive
officers listed in Schedule A ("Directors and Executive Officers of Parent and
Purchaser") of the Offer to Purchase, which is incorporated herein by
reference, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which any such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws, or finding any violation with respect to
such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a)-(b) Reference is hereby made to the information set forth in
"Introduction", Section 9 ("Certain Information Concerning Purchaser and
Parent"), Section 10 ("Background of the Offer; Contacts with the Company"),
Section 11 ("Purpose of the Offer; Plans for the Company; the Merger
Agreement; the Shareholder Option Agreement; Executive Employment Agreements")
and Section 12 ("Rights Agreement") of the Offer to Purchase, which is
incorporated herein by reference.
1
<PAGE>
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(b) Reference is hereby made to the information set forth in Section
13 ("Source and Amount of Funds") of the Offer to Purchase, which is
incorporated herein by reference.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(g) Reference is hereby made to the information set forth in
"Introduction", Section 7 ("Possible Effect of the Offer on the Market for the
Shares; Nasdaq Listing; Margin Regulations and Exchange Act Registration"),
Section 10 ("Background of the Offer; Contacts with the Company"), Section 11
("Purpose of the Offer; Plans for the Company; the Merger Agreement; the
Shareholder Option Agreement; Executive Employment Agreements") and Section 12
("Rights Agreement") of the Offer to Purchase, which is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company.
(a)-(b) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Purchaser and Parent") and Section 11
("Purpose of the Offer; Plans for the Company; the Merger Agreement; the
Shareholder Option Agreement; Executive Employment Agreements") of the Offer
to Purchase, which is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
Reference is hereby made to the information set forth in "Introduction",
Section 9 ("Certain Information Concerning Purchaser and Parent"), Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose
of the Offer; Plans for the Company; the Merger Agreement; the Shareholder
Option Agreement; Executive Employment Agreements"), Section 12 ("Rights
Agreement") and Section 15 ("Certain Legal Matters") of the Offer to Purchase,
which is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
Reference is hereby made to the information set forth in Section 16 ("Fees
and Expenses") of the Offer to Purchase, which is incorporated herein by
reference.
Item 9. Financial Statements of Certain Bidders.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning Purchaser and Parent") of the Offer to
Purchase, which is incorporated herein by reference.
Item 10. Additional Information.
(a) Reference is hereby made to the information set forth in
"Introduction", Section 10 ("Background of the Offer; Contacts with the
Company"), Section 11 ("Purpose of the Offer; Plans for the Company; the
Merger Agreement; the Shareholder Option Agreement; Executive Employment
Agreements"), Section 12 ("Rights Agreement") and Section 14 ("Certain
Conditions of the Merger") of the Offer to Purchase, which is incorporated
herein by reference.
(b)-(c) Reference is hereby made to the information set forth in Section 1
("Terms of the Offer"), Section 11 ("Purpose of the Offer; Plans for the
Company; the Merger Agreement; the Shareholder Option
2
<PAGE>
Agreement; Executive Employment Agreements"), Section 14 ("Certain Conditions
of the Merger") and Section 15 ("Certain Legal Matters") of the Offer to
Purchase, which is incorporated herein by reference.
(d) Reference is hereby made to the information set forth in Section 7
("Possible Effect of the Offer on the Market for the Shares; Nasdaq Listing;
Margin Regulations and Exchange Act Registration") of the Offer to Purchase,
which is incorporated herein by reference.
(e) Reference is hereby made to Section 15 ("Certain Legal Matters") of
the Offer to Purchase, which is incorporated herein by reference.
(f) Reference is hereby made to the entire texts of the Offer to Purchase,
the related Letter of Transmittal, the Notice of Guaranteed Delivery, the
Agreement and Plan of Merger dated as of October 21, 1999, among Parent,
Purchaser and the Company, the Shareholder Option Agreement dated as of
October 21, 1999, among Purchaser and certain shareholders of the Company
named therein and the Confidentiality Agreement dated as of September 22,
1999, between the Company and Parent, copies of which are attached hereto as
exhibit (a)(1), (a)(2), (a)(3), (c)(1), (c)(2) and (c)(3) respectively, which
are incorporated herein by reference.
Item 11. Material to be filed as Exhibits.
See Exhibit Index attached hereto.
3
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: October 21, 1999
UNITED TECHNOLOGIES CORPORATION
/s/ William H. Trachsel
By: _________________________________
Name: William H. Trachsel
Title:Senior Vice President,
General Counsel and Secretary
SPHERE CORPORATION
/s/ Ari Bousbib
By: _________________________________
Name: Ari Bousbib
Title:President and Director
4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Name Number
------- ------------ ------
<C> <S> <C>
(a)(1) Offer to Purchase, dated October 21, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Text of press release issued by Parent and the Company on
October 21, 1999.
(a)(8) Summary Advertisement, published October 21, 1999.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of October 21, 1999,
among Parent, Purchaser and the Company.
(c)(2) Shareholder Option Agreement, dated as of October 21, 1999,
among Purchaser and certain shareholders of the Company named
therein.
(c)(3) Confidentiality Agreement, dated as of September 22, 1999,
between the Company and Parent.
(d) None.
(e) None.
(f) None.
</TABLE>
5
<PAGE>
EXHIBIT 99(a)(1)
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, NOVEMBER 19, 1999, UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE TIME OF EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES THAT, TOGETHER WITH ANY SHARES HELD BY OR ON BEHALF OF PARENT
(AS DEFINED HEREIN), REPRESENTS AT LEAST 75 PERCENT OF THE ISSUED AND
OUTSTANDING SHARES ON A FULLY DILUTED BASIS.
THE BOARD OF DIRECTORS OF CADE INDUSTRIES, INC. HAS UNANIMOUSLY APPROVED
THE MERGER AGREEMENT (AS DEFINED HEREIN), APPROVED THE OFFER AND THE MERGER,
DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE
HOLDERS OF SHARES AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
-----------
IMPORTANT
Shareholders desiring to tender all or any portion of their shares of
common stock, par value $.001 per share (the "Common Stock"), of Cade
Industries, Inc. (the "Company"), including the associated rights to purchase
common stock (the "Rights" and together with the Common Stock, the "Shares")
should either (1) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal,
including any required signature guarantees, and mail or deliver the Letter of
Transmittal or such facsimile with certificate(s) for the tendered Shares and
any other required documents to the Depositary (as defined herein), (2) follow
the procedure for book-entry tender of Shares set forth in Section 3 or (3)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. Shareholders
having Shares registered in the name of a broker, dealer, commercial bank,
trust company or other nominee are urged to contact such broker, dealer,
commercial bank, trust company or other nominee if they desire to tender
Shares so registered.
The Rights are presently evidenced by the certificates for the Common Stock
and a tender by shareholders of their shares of Common Stock will also
constitute a tender of the associated Rights. A shareholder who desires to
tender Shares and whose certificates for such Shares are not immediately
available, or who cannot comply with the procedure for book-entry transfer on
a timely basis, may tender such Shares by following the procedures for
guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase
and the Letter of Transmittal may be directed to the Information Agent or to
brokers, dealers, commercial banks or trust companies.
The Information Agent for the Offer is
Georgeson Shareholder Communications, Inc.
October 21, 1999
<PAGE>
<TABLE>
<S> <C>
INTRODUCTION............................................................... 1
THE TENDER OFFER........................................................... 3
1. Terms of the Offer..................................................... 3
2. Acceptance for Payment and Payment for Shares.......................... 4
3. Procedure for Tendering Shares......................................... 5
4. Withdrawal Rights...................................................... 7
5. Certain Federal Income Tax Consequences of the Offer................... 8
6. Price Range of Shares; Dividends....................................... 9
7. Possible Effects of the Offer on the Market for the Shares; Nasdaq
Listing; Margin Regulations and Exchange Act Registration.............. 10
8. Certain Information Concerning the Company............................. 11
9. Certain Information Concerning Purchaser and Parent.................... 13
10. Background of the Offer; Contacts with the Company..................... 16
11. Purpose of the Offer; Plans for the Company; the Merger Agreement; the
Shareholder Option Agreement; Executive Employment Agreements.......... 18
12. Rights Agreement....................................................... 29
13. Source and Amount of Funds............................................. 30
14. Certain Conditions of the Offer........................................ 30
15. Certain Legal Matters.................................................. 32
16. Fees and Expenses...................................................... 35
17. Miscellaneous.......................................................... 36
SCHEDULE A--Directors and Executive Officers of Parent and Purchaser....... 37
</TABLE>
<PAGE>
To the Holders of Shares
of Cade Industries, Inc.:
INTRODUCTION
Sphere Corporation, a Wisconsin corporation ("Purchaser") and a wholly
owned subsidiary of United Technologies Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all of the outstanding shares of common
stock, par value $.001 per share (the "Common Stock"), of Cade Industries,
Inc., a Wisconsin corporation (the "Company"), including the associated common
stock purchase rights (the "Rights"), issued pursuant to the Rights Agreement
(the "Rights Agreement"), dated as of August 4, 1998, as amended as of October
21, 1999, between the Company and Firstar Bank Milwaukee, N.A. (formerly named
Firstar Trust Company), as Rights Agent (the Common Stock and the Rights
together are referred to herein as the "Shares") at $5.05 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). Unless the context otherwise requires, all
references to Shares shall include the associated Rights.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares by Purchaser. Purchaser will pay all
charges and expenses of Citibank, N.A. (the "Depositary") and Georgeson
Shareholder Communications, Inc. (the "Information Agent").
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the time of expiration of the Offer that
number of Shares that, together with any Shares held by or on behalf of
Parent, represents at least 75 percent of the issued and outstanding Shares on
a fully diluted basis. The Offer is also subject to certain other terms and
conditions. The Offer will expire at 12:00 midnight, New York City time, on
Friday, November 19, 1999 unless extended. See Sections 1, 14 and 15.
The Board of Directors of the Company has unanimously approved the Merger
Agreement, approved the Offer and the Merger, determined that the Offer and
the Merger are in the best interests of the holders of Shares and unanimously
recommends that shareholders accept the Offer and tender their Shares pursuant
to the Offer.
Pursuant to its engagement by the Company, Robert W. Baird & Co.
Incorporated, ("Baird"), has delivered to the Board of Directors of the
Company its written opinion, dated October 20, 1999, to the effect that as of
such date and subject to the assumptions and qualifications therein, the
consideration to be received by holders of the Shares pursuant to the Offer
and the Merger was fair to such shareholders (other than Parent and its
Affiliates) from a financial point of view. A copy of the opinion of Baird is
contained in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9") filed with the U.S. Securities and Exchange
Commission (the "SEC") in connection with the Offer, a copy of which (without
certain exhibits) is being furnished to shareholders concurrently herewith.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of October 21, 1999, among the Company, Parent
and Purchaser, pursuant to which, after the completion of the Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with
and into the Company and the Company will be the surviving corporation, unless
Parent elects, in its sole discretion, to cause the Company to merge into
Purchaser with Purchaser continuing as the surviving corporation (the
"Merger"). On the effective date of the Merger, each outstanding Share (other
than Shares owned by Parent, Purchaser or any subsidiary of Parent, Purchaser
or the Company or held in the treasury of the Company or held by shareholders
who properly exercise dissenters' rights, if any), will by virtue of the
Merger and without action by the holder thereof be canceled and converted into
the right to receive an amount in cash equal to the per Share price paid
pursuant to the Offer (the "Merger Consideration") payable to the holder
thereof, without interest thereon, upon the surrender of the certificate
formerly respecting such Share. The Merger Agreement is more
<PAGE>
fully described in Section 11 below. Certain federal income tax consequences
of the sale of Shares pursuant to the Offer and the Merger, as the case may
be, are described in Section 5 below.
If the Minimum Tender Condition (as defined in Section 14) and the other
conditions to the Offer are satisfied and the Offer is consummated, Purchaser
will own a sufficient number of Shares to ensure that the Merger will be
approved. Under the Wisconsin Business Corporation Law (the "WBCL") if, after
consummation of the Offer, Purchaser owns at least 90 percent of the Shares
then outstanding, Purchaser, at its sole discretion, will be able to cause the
Merger to occur without a vote of the Company's shareholders but subject to
compliance with notice requirements. This Offer to Purchase constitutes such
notice to shareholders required under Section 180.1104 of the WBCL. If,
however, after consummation of the Offer Purchaser owns less than 90 percent
of the then outstanding Shares, a vote of the Company's shareholders will be
required under the WBCL to approve the Merger, and a significantly longer
period of time will be required to effect the Merger. Purchaser currently does
not intend to cause the Merger to occur without a vote of the Company's
shareholders unless, after consummation of the Offer, it owns more than 94
percent of the Shares then outstanding. See Section 11.
Concurrently with the execution of the Merger Agreement, Purchaser also
entered into a Shareholder Option Agreement with certain shareholders of the
Company (the "Shareholder Option Agreement"). Pursuant to the Shareholder
Option Agreement, each such shareholder of the Company agreed, among other
things, to (a) tender, in accordance with the terms of the Offer, all of the
Shares owned (beneficially or of record) by such shareholder, (b) vote all of
the Shares owned by such shareholder in favor of the Merger and against
certain other extraordinary transactions and (c) grant an option to Purchaser
to purchase the Shares held by such shareholder at $5.05 per Share (subject to
adjustment in certain circumstances). According to the information provided by
such shareholders, in the aggregate, approximately 6,088,723 Shares are
subject to the Shareholder Option Agreement, representing approximately 26.5
percent of the outstanding Shares on a fully diluted basis. See Section 11.
The Offer is conditioned upon, among other things, the Minimum Tender
Condition being satisfied, which is more fully described in Section 14 below.
The Company has informed Purchaser that, as of October 20, 1999, there were
21,606,207 Shares issued and outstanding and there were 1,371,745 Shares
subject to issuance pursuant to the Company's stock option and incentive
plans. Parent, Purchaser and their affiliates do not currently beneficially
own any Shares or rights to acquire Shares other than Purchaser's rights under
the Shareholder Option Agreement. See Section 11.
Based on the foregoing, and assuming no additional Shares (or warrants,
options or rights exercisable for, or securities convertible into, Shares)
have been issued (other than Shares issued pursuant to such options referred
to above) as of October 21, 1999, Purchaser believes there are approximately
22,977,952 Shares outstanding on a fully diluted basis. Accordingly, if all of
the Shares subject to the Shareholder Option Agreement are tendered into the
Offer and not withdrawn, Purchaser believes that the Minimum Tender Condition
would be satisfied if at least approximately 11,144,741 additional Shares are
validly tendered prior to the Expiration Date (as defined in Section 1) and
not withdrawn.
No appraisal rights are available in connection with the Offer; however,
shareholders may have appraisal rights in connection with the Merger. See
Section 11.
This Offer to purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is
made with respect to the Offer.
2
<PAGE>
THE TENDER OFFER
1. Terms of the Offer
Upon the terms and subject to the conditions set forth in the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), Purchaser will accept for payment, and pay for,
all Shares validly tendered on or prior to the Expiration Date (as herein
defined) and not withdrawn as permitted by Section 4. The term "Expiration
Date" means 12:00 Midnight, New York City time, on Friday, November 19, 1999,
unless and until Purchaser shall have extended the period for which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date on which the Offer, as so extended by Purchaser, shall expire.
The Offer is conditioned upon, among other things, expiration or
termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and the Minimum Tender
Condition being satisfied. The Offer is also subject to certain other
conditions set forth in Section 5.
Pursuant to the Merger Agreement, Purchaser may, without the consent of
the Company, elect to (a) extend the Offer if at the Expiration Date any of
the conditions to the Offer have not been satisfied or waived, (b) if less
than 90 percent of the Shares have been validly tendered and not properly
withdrawn pursuant to the Offer, extend the Offer from time to time (but in no
event beyond ten business days beyond the then scheduled expiration date of
the Offer) for the shortest period of time reasonably determined by Parent as
may be necessary to obtain the valid tender of 90% of the outstanding Shares,
(c) extend the Offer for any period required by any regulation, interpretation
or position of the SEC and (d) increase the per Share price to be paid in the
Offer and extend the Offer to the extent required by law in connection with
such increase.
Pursuant to the Merger Agreement, Purchaser has the right to modify the
terms of the Offer, except that Purchaser has agreed that it will not, without
the consent of the Company, (a) decrease or change the form of the
consideration payable in the Offer, (b) decrease the number of Shares sought
pursuant to the Offer, (c) impose additional conditions to the Offer, (d)
change the conditions to the Offer or (e) make any other change in the terms
or conditions of the Offer which is materially adverse to the holders of
Shares. Purchaser confirms that its reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 14e-1(c) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
requires that a tender offeror pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer.
Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof. In the
case of an extension, Rule 14e-1(d) under the Exchange Act requires that the
announcement be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change) and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the PR Newswire. The rights reserved by Purchaser in the
preceding paragraph are in addition to Purchaser's rights pursuant to Section
14.
Purchaser confirms that if it makes a material change in the terms of the
Offer or the information concerning the Offer, or if it waives a material
condition of the Offer, Purchaser will extend the Offer to the extent required
by Rules 14d-4(c) and 14d-6(d) under the Exchange Act.
If, prior to the Expiration Date, Purchaser shall decrease the percentage
of Shares being sought or the consideration offered to holders of Shares, such
decrease shall be applicable to all holders whose Shares are accepted for
payment pursuant to the Offer and, if at the time notice of any decrease is
first published, sent or
3
<PAGE>
given to holders of Shares, the Offer is scheduled to expire at any time
earlier than the tenth business day from and including the date that such
notice is first so published, sent or given, the Offer will be extended until
the expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New
York City time.
As of the date of this Offer, the Rights are evidenced by the certificates
for the Common Stock and do not trade separately. Accordingly, the tender by a
shareholder of shares of Common Stock will also constitute a tender of the
associated Rights. If, however, pursuant to the Rights Agreement or for any
other reason, the Rights detach and separate certificates representing Rights
are issued, shareholders will be required to tender one Right for each Share
of Common Stock tendered in order for Shares to be validly tendered. No
separate payment will be made by Purchaser for the Rights pursuant to the
Offer.
The Company has provided Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by Purchaser to record holders of
shares and will be furnished by Purchaser to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the securityholder lists or, if applicable, who are listed
as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. Acceptance for Payment and Payment for Shares
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will accept for payment, and will pay for,
Shares validly tendered and not properly withdrawn (in accordance with Section
4) prior to the Expiration Date as soon as practicable after the Expiration
Date. In addition, subject to applicable rules of the SEC, Purchaser expressly
reserves the right to delay acceptance for payment of or payment for Shares in
order to comply, in whole or in part, with any applicable law. See Sections 1
and 15. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a confirmation of a book-entry transfer of
such Shares into the Depositary's account at the Depository Trust Company (the
"Book-Entry Transfer Facility")), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other required documents.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment Shares validly tendered and not withdrawn if and when Purchaser gives
oral or written notice to the Depositary of its acceptance for payment of such
Shares pursuant to the Offer. Payment for Shares accepted for payment pursuant
to the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for the tendering shareholders for purpose
of receiving payments from Purchaser and transmitting such payments to the
tendering shareholders. Under no circumstances will interest be paid on the
purchase price for Shares, regardless of any delay in making such payment.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-
1(c) under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of tendering
shareholders promptly after the termination or withdrawal of the Offer.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased Shares
will be returned, without expense to the tendering shareholder (or, in the
case of Shares tendered by book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained with the Book-Entry Transfer Facility), as soon as practicable
following expiration or termination of the Offer.
4
<PAGE>
If, prior to the Expiration Date, Purchaser shall increase the
consideration offered to holders of Shares pursuant to the Offer, such
increased consideration shall be paid to all holders of Shares that are
purchased pursuant to the Offer, whether or not such Shares were tendered
prior to such increase in consideration.
Purchaser reserves the right to transfer or assign in whole or in part
from time to time to one or more direct or indirect subsidiaries of Parent the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer and will in no way prejudice the rights of
tendering shareholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
3. Procedure for Tendering Shares
Valid Tender.
To tender Shares pursuant to the Offer, either (a) a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) in accordance
with the instructions of the Letter of Transmittal, with any required
signature guarantees, certificates for the Shares to be tendered, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, (b) such Shares must be delivered
pursuant to the procedures for book-entry transfer described below (and a
confirmation of such delivery received by the Depositary, including an Agent's
Message (as defined below) if the tendering shareholder has not delivered a
Letter of Transmittal), prior to the Expiration Date or (c) the tendering
shareholder must comply with the guaranteed delivery procedures set forth
below. The term "Agent's Message" means a message, transmitted by the Book-
Entry Transfer Facility to, and received by, the Depositary and forming a part
of a Book-Entry Confirmation (as defined below), which states that the Book-
Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the Shares which are
the subject of such Book-Entry Confirmation that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
Until the close of business on the Separation Date (as defined in Section
12), the Rights will be transferred with and only with the certificates for
Common Stock and the surrender for transfer of any certificates for Common
Stock will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
Book-Entry Delivery.
The Depositary will establish an account with respect to the Shares at the
Book-Entry Transfer Facility for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that
is a participant in the Book-Entry Transfer Facility's systems may make book-
entry transfer of Shares by causing the Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with Book-
Entry Transfer Facility's procedures for such transfer. However, although
delivery of Shares may be effected through book-entry transfer, either the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message in lieu of the Letter of Transmittal, and any other required
documents, must, in any case, be transmitted to and received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
by the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-
entry transfer of Shares into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation". Delivery of documents to the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering
5
<PAGE>
shareholder. Delivery of all such documents will be deemed made only when
actually received by the Depositary (including, in the case of a book-entry
transfer, by Book-Entry Confirmation). If such delivery is by mail, it is
recommended that all such documents be sent by properly insured registered
mail with return receipt requested. In all cases, sufficient time should be
allowed to ensure timely delivery.
Signature Guarantees.
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is
a participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed
by the registered holder (which term, for purposes of this section, includes
any participant in any of the Book-Entry Transfer Facility's systems whose
name appears on a security position listing as the owner of the Shares) of
Shares tendered therewith and such registered holder has not completed the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal. If the certificates for Shares are registered in the
name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or certificates for Shares not tendered or not accepted
for payment or are to be returned to a person other than the registered holder
of the certificates surrendered, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
Guaranteed Delivery.
A shareholder who desires to tender Shares pursuant to the Offer and whose
certificates for Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the Expiration Date,
may tender such Shares by following all of the procedures set forth below:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, is received by the
Depositary (as provided below) prior to the Expiration Date; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or a Book-Entry Confirmation with respect to all such Shares), together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees (or, in the case
of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal), and any other required documents, are received by the
Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery. A "trading day" is any day on which the New
York Stock Exchange, Inc. is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Other Requirements.
Notwithstanding any provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message in lieu of the Letter of Transmittal) and (c) any other documents
required by the Letter of Transmittal.
6
<PAGE>
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. Under no circumstances will
interest be paid by Purchaser on the purchase price of the Shares, regardless
of any extension of the Offer or any delay in making such payment.
Tender Constitutes a Binding Agreement.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder
and Purchaser upon the terms and subject to the conditions of the Offer.
Appointment as Proxy.
By executing and delivering a Letter of Transmittal as set forth above,
the tendering shareholder irrevocably appoints designees of Purchaser as such
shareholder's proxies, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by Purchaser and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after October 21, 1999. All such proxies will be considered
coupled with an interest in the tendered Shares. Such appointment is effective
when, and only to the extent that, Purchaser deposits the payment for such
Shares with the Depositary. Upon the effectiveness of such appointment, all
prior powers of attorney, proxies and consents given by such shareholder will
be revoked, and no subsequent powers of attorney, proxies and consents may be
given (and, if given, will not be deemed effective). Purchaser's designees
will, with respect to the Shares for which the appointment is effective, be
empowered to exercise all voting and other rights of such shareholder as they,
in their sole discretion, may deem proper at any annual, special or adjourned
meeting of the shareholders of the Company, by written consent in lieu of any
such meeting or otherwise. Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon Purchaser's
payment for such Shares, Purchaser must be able to exercise full voting rights
to the extent permitted under applicable law with respect to such Shares.
Determination of Validity.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any tender of Shares will be determined by
Purchaser in its sole and absolute discretion, which determination will be
final and binding. Purchaser reserves the absolute right to reject any and all
tenders determined by it not to be in proper form or the acceptance for
payment of or payment for which may, in the opinion of Purchaser's counsel, be
unlawful. Purchaser also reserves the absolute right to waive any defect or
irregularity in the tender of any Shares of any particular shareholder whether
or not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made
until all defects and irregularities relating thereto have been cured or
waived. None of Parent, Purchaser, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and Instructions thereto) will be
final and binding.
4. Withdrawal Rights
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after December 19,
1999.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any notice of
withdrawal must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the names in which the
certificate(s) evidencing the Shares to be
7
<PAGE>
withdrawn are registered, if different from that of the person who tendered
such Shares. The signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of any Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer as set forth in Section 3, any notice
of withdrawal must specify the name and number of the account at the
Depository Institution to be credited with the withdrawn Shares. If
certificates have been delivered or otherwise identified to the Depositary,
the name of the registered holder and the serial numbers of the particular
certificates evidencing the Shares withdrawn must also be furnished to the
Depositary as aforesaid prior to the physical release of such certificates.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
which determination shall be final and binding. No withdrawal of Shares shall
be deemed to have been properly made until all defects and irregularities have
been cured or waived. None of Purchaser, Parent, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur a liability for failure to give such notification. Any Shares properly
withdrawn will be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
If Purchaser extends the Offer, is delayed in its acceptance for payment
of Shares or is unable to accept for payment Shares pursuant to the Offer for
any reason, then, without prejudice to Purchaser's rights under this Offer,
the Depositary may, nevertheless, on behalf of Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent that
tendering shareholders are entitled to withdrawal rights as set forth in this
Section 4.
5. Certain Federal Income Tax Consequences of the Offer
The following is a summary of the material United States Federal income
tax consequences of the sale of Shares pursuant to the Offer and the exchange
of Shares for cash pursuant to the Merger to the Company's shareholders. The
summary does not purport to be a description of all tax consequences that may
be relevant to the Company's shareholders, and assumes an understanding of tax
rules of general application. It does not address special rules which may
apply to the Company's shareholders based on their tax status, individual
circumstances or other factors unrelated to the Offer or the Merger.
Shareholders are encouraged to consult their own tax advisors regarding the
Offer and the Merger.
The receipt of cash in exchange for Shares pursuant to the Offer or the
Merger will be a taxable transaction for Federal income tax purposes, and may
also be taxable under applicable state, local, foreign and other tax laws. For
Federal income tax purposes, a shareholder whose Shares are purchased pursuant
to the Offer or who receives cash as a result of the Merger will realize gain
or loss equal to the difference between the adjusted basis of the Shares sold
or exchanged and the amount of cash received therefor. Such gain or loss will
be capital gain or loss if the Shares are held as capital assets by the
shareholder and will be long-term capital gain or loss if the shareholder's
holding period in such Shares for Federal income tax purposes is more than one
year at the time of the sale or exchange. Long-term capital gain of a non-
corporate shareholder is generally subject to a maximum tax rate of 20
percent. In addition, a shareholder's ability to use capital losses to offset
ordinary income is limited.
Backup Withholding.
Under the federal income tax backup withholding rules, unless an exemption
applies, Purchaser is required to and will withhold 31 percent of all payments
to which a shareholder is entitled pursuant to the Offer, unless such
shareholder provides a tax identification number and certifies under penalties
of perjury that the number is correct. If a shareholder is an individual, the
tax identification number is a social security number. If a shareholder is not
an individual, the tax identification number is an employer identification
number. Each shareholder should complete and sign the substitute Form W-9,
which will be included with the letter of transmittal to be returned to the
Depositary, in order to provide the information and certification necessary to
avoid backup withholding, unless an applicable exception exists and is proved
in a manner satisfactory to the Depositary. Certain shareholders including,
corporations and some foreign individuals, are not subject to these
8
<PAGE>
backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, however, he or she must submit a
Certificate of Foreign Status on Form W-8 attesting to his or her exempt
status. Any amounts withheld will be allowed as a credit against the holder's
federal income tax liability for that year.
The foregoing discussion may not apply to shareholders who acquired their
Shares pursuant to exercise of employee stock options or other compensation
arrangements with the Company, or who are not citizens or residents of the
United States or who are otherwise subject to special tax treatment. The tax
discussion above is based upon laws, regulations, rulings and decisions now in
effect, all of which are subject to change, possibly retroactively. Each
shareholder is urged to consult his, her or its own tax advisor with respect
to the tax consequences of the Offer and the Merger, including the application
and effect of state, local, foreign or other tax laws.
6. Price Range of Shares; Dividends
The Common Stock is listed on the Nasdaq National Market System
("Nasdaq/NMS") under the symbol "CADE". The following table sets forth, for
the calendar quarters indicated, the high and low sales prices for the Common
Stock on the Nasdaq/NMS and the amount of cash dividends paid per share, based
upon public sources:
<TABLE>
<CAPTION>
Cash
Dividends
Calendar Year High Low Paid
- ------------- -------- -------- ---------
<S> <C> <C> <C>
1997:
First Quarter....................................... $1 16/32 $1 7/32 --
Second Quarter...................................... $1 20/32 $1 9/32 --
Third Quarter....................................... $3 15/32 $1 15/32 --
Fourth Quarter...................................... $3 16/32 $2 8/32 --
1998:
First Quarter....................................... $3 5/32 $2 10/32 --
Second Quarter...................................... $4 4/32 $2 25/32 --
Third Quarter....................................... $3 15/32 $1 30/32 --
Fourth Quarter...................................... $2 22/32 $2 4/32 --
1999:
First Quarter....................................... $2 27/32 $2 1/8 --
Second Quarter...................................... $2 11/16 $2 1/32 --
Third Quarter....................................... $3 17/32 $2 35/64 --
Fourth Quarter (through October 20, 1999)........... $4 $3 9/32 --
</TABLE>
The Rights trade together with the Common Stock. On October 20, 1999, the
last full trading day prior to the public announcement of the terms of the
Offer and the Merger and commencement of the Offer, the reported closing price
on the Nasdaq/NMS was $3 7/8 per Share. Shareholders are urged to obtain a
current market quotation for the Shares.
7. Possible Effects of the Offer on the Market for the Shares; Nasdaq
Listing; Margin Regulations and Exchange Act Registration
Possible Effects of the Offer on the Market for the Shares
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Nasdaq Listing
The Shares are listed on the Nasdaq/NMS. Depending on the aggregate market
value and per share price of any Shares not purchased pursuant to the Offer,
the Shareholder Option Agreement or otherwise, the Shares
9
<PAGE>
may no longer meet the criteria of the National Association of Securities
Dealers, Inc. (the "NASD") for continued designation for the Nasdaq/NMS. The
maintenance of such designation requires that an issuer substantially meet one
of two maintenance standards. The issuer must have either (a) (i) at least
750,000 shares publicly held, (ii) at least 400 shareholders of round lots,
(iii) a market value of publicly held shares of at least $5 million, (iv) a
minimum bid price per share of $1, (v) at least two registered and active
market makers for its shares and (vi) net tangible assets of at least $4
million or (b) (i) at least 1.1 million publicly held shares, (ii) at least
400 shareholders of round lots, (iii) a market value of publicly held shares
of at least $15 million, (iv)(A) a market capitalization of at least $50
million or (B) total assets and total revenue of at least $50 million each
(for the most recently completed fiscal year or two of the last three most
recently completed fiscal years), (v) a minimum bid price per share of $5 and
(vi) at least four registered and active market makers for its shares. Shares
held directly or indirectly by directors, officers or beneficial owners of
more than 10 percent of the shares outstanding are not considered as being
publicly held for this purpose. As of October 20, 1999, there were 1,430
holders of record of shares of Common Stock and, as of such date, there were
21,606,207 shares of Common Stock issued and outstanding.
If, as a result of the purchase of Shares pursuant to the Offer, the
Shareholder Option Agreement or otherwise, the Shares no longer meet the
criteria of the NASD for continued inclusion in the Nasdaq/NMS or in any other
tier of the Nasdaq Stock Market, and the Shares are no longer included in
Nasdaq/NMS or in any other tier of the Nasdaq Stock Market, the market for the
Shares could be adversely affected.
In the event the Shares no longer meet the criteria of the NASD for
continued inclusion in any tier of the Nasdaq Stock Market, it is possible
that Shares would continue to trade in the over-the-counter market and that
price quotations would be reported by other sources. The extent of the public
market for the Shares and the availability of such quotations would, however,
depend upon the number of shareholders and/or the aggregate market value of
the Shares remaining at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act and other factors.
Margin Regulation
The Shares are presently "margin securities" under the regulations of the
Federal Reserve Board, which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares. Depending upon
factors similar to those described above regarding listing and market
quotations, the Shares might no longer constitute "margin securities" for the
purposes of the Federal Reserve Board's margin regulations in which event the
Shares would be ineligible as collateral for margin loans made by brokers.
Exchange Act Regulation
The Shares are currently registered under the Exchange Act. Such
registration may be terminated by the Company upon application to the SEC if
the outstanding Shares are not listed on a national securities exchange and if
there are fewer than 300 holders of record of Shares. Termination of
registration of the Shares under the Exchange Act would reduce the information
required to be furnished by the Company to its shareholders and to the SEC and
would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirement of furnishing
a proxy statement in connection with shareholders' meetings pursuant to
Section 14(a) and the related requirement of furnishing an annual report to
shareholders, no longer applicable with respect to the Shares. Furthermore,
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
under the Securities Act of 1933, as amended, may be impaired or eliminated.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for Nasdaq reporting or for continued
inclusion on the Federal Reserve Board's list of "margin securities".
Purchaser intends to seek to cause the Company to apply for termination of
registration of the Shares as soon as possible after consummation of the Offer
if the requirements for termination of registration are met.
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<PAGE>
8. Certain Information Concerning the Company
The Company is a Wisconsin corporation with its principal executive
offices located at 2365 Woodlake Drive, Suite 120, Okemos, Michigan 48864.
The Company conducts its operations primarily through four operating
subsidiaries, Cade AutoAir, Inc., (formerly Auto-Air Composites, Inc.), Cade
Composites, Inc., Cade HAC, Inc. (formerly H.A.C. Corporation) and Cade Cenco,
Inc. (formerly Central Engineering Company).
The Company is engaged worldwide in the design, manufacture, and repair
and overhaul of high technology composite components and engine test
facilities for the aerospace, air transport and specialty industries,
principally through two segments.
The Company's core products include molded and bonded composite jet engine
components, metal fabricated and bonded composite airframe components and the
repair and overhaul of commercial and military gas turbine engine and airframe
components as well as flight nacelle structures ("Engine and Airframe Products
and Services") and engine test facilities, related computer software and data
acquisition systems, and associated equipment ("Test Facilities and
Equipment"). Engine and Airframe Products and Services include engine inlets
and cases, acoustical liners, fairings, auxiliary power unit enclosures,
various control surface products, access doors, wing tips, interior structures
and repair and overhaul services. Test Facilities and Equipment are used in
the ground testing and overhaul of major commercial jet engines and related
ground support equipment. These products are sold worldwide through the
Company's internal sales force and independent sales representatives to major
engine and airframe equipment manufacturers, airlines, U.S. Government and
overhaul facilities.
Set forth below is certain summary consolidated financial information for
the Company's last three fiscal years as contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 and for the six
months ended June 30, 1998 and June 30, 1999, as contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999. More
comprehensive financial information is included in such report (including
management's discussion and analysis of financial condition and results of
operation) and other documents filed by the Company with the SEC, and the
following summary is qualified in its entirety by reference to such report and
other documents and all of the financial information and notes contained
therein. Copies of such report and other documents may be examined at or
obtained from the SEC in the manner set forth below.
11
<PAGE>
CADE INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months
ended
Year ended December 31, June 30,
----------------------- ---------------
1998 1997 1996 1999 1998
------- ------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Statement of Income Data:
Sales................................. $95,792 $55,804 $34,867 $52,482 $46,012
Cost of sales......................... 74,478 43,481 26,705 40,405 35,390
Selling, general and administrative
expenses............................. 14,219 8,100 6,097 7,592 7,130
------- ------- ------- ------- -------
Income from operations................ 7,095 4,223 2,065 4,485 3,492
Interest expense--net................. 947 833 729 586 654
------- ------- ------- ------- -------
Income before income taxes............ 6,148 3,390 1,336 3,899 2,838
------- ------- ------- ------- -------
Net income............................ 4,242 2,353 1,058 2,703 1,998
======= ======= ======= ======= =======
Net income per common share:
Basic............................... 0.19 0.11 0.05 0.12 0.09
Fully Diluted....................... 0.19 0.11 0.05 0.12 0.09
<CAPTION>
At December 31, At June 30,
----------------------- ---------------
1998 1997 1996 1999 1998
------- ------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents............. $ 580 $ 1,093 $ 22 $ 581 $ 158
Working capital (current assets less
current liabilities)................. 11,487 11,435 7,999 13,977 12,081
Property and equipment, net........... 19,197 17,662 15,006 20,241 18,034
Total assets.......................... 62,275 54,570 35,304 65,366 57,439
Long-term debt, net of current
maturities........................... 8,313 10,683 4,839 9,430 9,526
Shareholders' equity.................. 27,054 23,333 20,683 29,295 25,461
</TABLE>
On October 21, 1999, the Company reported results for the third quarter
and nine months ended September 30, 1999. The following are the financial
highlights of such results, as reported by the Company.
CADE INDUSTRIES, INC.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
------------------------------------- -------------------------------------
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------ ------------------ ------------------ ------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Sales................... $26,113 $25,502 $78,595 $71,514
Net income.............. 1,499 1,113 4,202 3,111
Net income per share:
Basic................. 0.07 0.05 0.19 0.14
Diluted............... 0.07 0.05 0.19 0.14
</TABLE>
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase has been taken from or based upon
publicly available documents and records on file with the SEC and other public
sources and is qualified in its entirety by reference thereto. Although Parent
has no knowledge that would indicate that any statements contained herein
taken from or based on such documents and records are untrue, Parent cannot
take responsibility for the accuracy or completeness of the information
contained in such documents and records, or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to Parent.
12
<PAGE>
The Company is subject to the information and reporting requirements of
the Exchange Act and in accordance therewith is obligated to file reports and
other information with the SEC relating to its business, financial condition
and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and other matters
is required to be disclosed in proxy statements distributed to the Company's
shareholders and filed with the SEC. Such reports, proxy statements and other
information should be available for inspection at the public reference room at
the SEC's office 450 Fifth Street, N.W., Room 1024, Judiciary Plaza,
Washington, D.C., and also should be available for inspection and copying at
the following regional offices of the SEC: 7 World Trade Center, Suite 1300,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies may be obtained by mail, upon
payment of the SEC's customary charges, by writing to its principal office at
450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549.
Further information on the operation of the SEC's Public Reference Room in
Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC
also maintains an Internet worldwide web site that contains reports, proxy
statements and other information about issuers, such as the Company, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
During the discussions between the Company and Parent that led to
execution of the Merger Agreement, the Company provided Parent with certain
information relating to the Company that Parent and Purchaser believe is not
publicly available. This information included projections of operating
performance of the Company for 1999 developed by the Company. The projections
do not reflect consummation of the Offer or the Merger or any other
extraordinary transaction involving the Company. The projection included a
summary estimate, based upon six-months actual results for 1999 and projected
second half results, of sales for 1999 of $106.0 million and operating income
of $10.6 million. In addition, the Company later provided Parent with a
detailed budget for 1999 prepared as of October 1998, with estimated sales for
1999 of $99.5 million and operating income of $10.6 million. The information
also included an estimate of 1999 earnings per Share of $0.27. These
projections are based on a variety of estimates and assumptions which involve
judgements with respect to future economic and competitive conditions,
inflation rates and technology trends.
The Company has advised Parent and Purchaser that it does not as a matter
of course disclose projections as to future revenues, earnings or other income
statement data and the projections were not prepared with a view to public
disclosure. In addition, the projections were not prepared in accordance with
generally accepted accounting principles, or with a view to compliance with
the published guidelines of the SEC or the American Institute of Certified
Public Accountants regarding projections, which would require a more complete
presentation of the data than as shown above. The projections have not been
examined, reviewed or compiled by the Company's independent auditors, and
accordingly they have not expressed an opinion or provided any other assurance
on the data. The forecasted information is included herein solely because such
information was furnished to Parent and Purchaser prior to the Offer.
Accordingly, the inclusion of the projections in this Offer should not be
regarded as an indication that Parent, Purchaser or the Company or their
respective financial advisors or their respective officers and directors
consider such information to be accurate or reliable. In addition, because the
estimates and assumptions underlying the projections are inherently subject to
significant economic and competitive uncertainties and contingencies, which
are difficult or impossible to predict accurately and are beyond the control
of the Company, Parent or Purchaser, there can be no assurance that results
set forth in the above projections will be realized and it is expected that
there will be differences between actual and projected results, and actual
results may be materially higher or lower than those set forth above.
9. Certain Information Concerning Purchaser and Parent
Purchaser is a Wisconsin corporation and, to date, has engaged in no
activities other than those incident to its formation and the commencement of
the Offer. Purchaser is a wholly owned subsidiary of Parent. The principal
executive offices of Purchaser are located at One Financial Plaza, Hartford,
Connecticut 06101.
13
<PAGE>
Parent is a Delaware corporation. Parent and its consolidated subsidiaries
provide high technology products to aerospace and building systems customers
throughout the world. Parent and its consolidated subsidiaries conduct their
business within four principal operating segments. The operating units of
Parent and its consolidated subsidiaries are grouped based upon the operating
segment in which they participate. The units participating in each operating
segment and their respective principal products are as follows:
. Otis offers a wide range of elevators, escalators, moving walks and
shuttle systems and related installation, maintenance and repair
services; and modernization products and services for elevators and
escalators.
. Carrier provides heating, ventilating and air conditioning (HVAC)
equipment for commercial, industrial and residential buildings; HVAC
replacement parts and services; building controls; commercial,
industrial and transport refrigeration equipment; and aftermarket
service and components.
. Pratt & Whitney provides large and small commercial and military
turbofan (jet) and turboprop engines, spare parts and product support;
specialized engine maintenance and overhaul and repair services for
airlines, government and private fleets; and rocket engines and space
propulsion systems and industrial gas turbines.
. Flight Systems is made up of Sikorsky and Hamilton Sunstrand. Sikorsky
offers military and commercial helicopters and maintenance services.
Hamilton Sunstrand offers engine and flight controls; propellers;
environmental controls systems; space life support systems; electrical,
mechanical and power systems products for aircraft; rotary screw
compressors, power transmission equipment; pumps and other industrial
products.
Until recently, Parent conducted its business through a fifth operating
segment. The business of this segment, which was conducted through UT
Automotive, manufactured automotive electrical and electronic components,
automotive trim systems and insulation and acoustical materials and systems.
On May 4, 1999, Parent completed the sale of its UT Automotive unit to Lear
Corporation. Parent's financial statements for the three year period ending
December 31, 1998, have been restated to reflect UT Automotive as a
discontinued operation. These restated financial statements have been filed in
Parent's Current Report on Form 8-K filed on June 11, 1999.
On June 10, 1999, Parent completed the acquisition of Sundstrand
Corporation. Sundstrand Corporation was merged with a wholly owned subsidiary
of Parent, which was renamed Hamilton Sundstrand Corporation. Hamilton
Sundstrand Corporation is a leader in the design and manufacture of
proprietary, technology based components and subsystems for aerospace and
industrial markets.
Parent's principal executive offices are located at One Financial Plaza,
Hartford, Connecticut 06101.
Selected Financial Information. The following is selected consolidated
historical financial information included in Parent's Quarterly Report on Form
10-Q for the six months ended June 30, 1999 and in Parent's Annual Report on
Form 10-K for the year ended December 31, 1998 as restated by its Current
Report on Form 8-K filed on June 11, 1999 to reflect UT Automotive as a
discontinued operation. More comprehensive financial and other information is
included in such reports (including management's discussion and analysis of
financial condition and results of operations) and in other reports and
documents filed by Parent with the SEC. The financial information set forth
below is qualified in its entirety by reference to such reports and documents
filed with the SEC and the financial statements and related notes contained
therein. These reports and other documents may be examined and copies thereof
may be obtained as described below.
14
<PAGE>
UNITED TECHNOLOGIES CORPORATION
SELECTED FINANCIAL INFORMATION
(In millions, except per share data)
<TABLE>
<CAPTION>
Six months ended
Years ended December 31, June 30,
----------------------------- -------------------
1998 1997 1996 1999 1998
--------- --------- --------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues..................... US$22,809 US$21,288 US$19,872 US$11,483 US$11,139
Research and development..... 1,168 1,069 1,014 580 556
Income from continuing
operations before interest,
taxes and minority
interests................... 2,007 1,762 1,530 1,185 975
Interest expense............. 197 188 213 112 92
Income taxes................. 568 514 430 332 277
Income from:
Continuing Operations...... 1,157 962 788 695 562
Discontinued Operation..... 98 110 118 40 58
Gain on Sale of
Discontinued Operation.... -- -- -- 650 --
Net income................... 1,255 1,072 906 1,385 620
Earnings per share of Common
Stock
Basic
Continuing Operations...... 2.47 1.98 1.57 1.49 1.19
Discontinued Operation..... 0.21 0.24 0.24 0.09 0.13
Gain on Sale of
Discontinued Operation.... -- -- -- 1.43 --
Net earnings............... 2.68 2.22 1.81 3.01 1.32
Diluted
Continuing Operations...... 2.33 1.89 1.51 1.39 1.12
Discontinued Operation..... 0.20 0.21 0.23 0.08 0.12
Gain on Sale of
Discontinued Operation.... -- -- -- 1.31 --
Net earnings............... 2.53 2.10 1.74 2.78 1.24
Average number of shares
outstanding:
Basic....................... 456 469 483 455 459
Diluted..................... 495 507 517 497 498
</TABLE>
<TABLE>
<CAPTION>
At June 30,
At December 31, 1999
----------------------------- (unaudited)
1998 1997 1996 -----------
<S> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents........... US$ 550 US$ 655 US$ 998 US$ 885
Working capital (excluding net
investment in
discontinued operations through
1998).............................. 1,359 1,712 2,168 2,291
Total assets........................ 17,768 15,697 15,566 22,027
Long term debt (including current
maturities)........................ 1,669 1,389 1,506 2,195
Total debt.......................... 2,173 1,567 1,709 2,509
Shareowners' equity................. 4,378 4,073 4,306 7,317
</TABLE>
15
<PAGE>
Parent is subject to the information reporting requirements of the
Exchange Act and, in accordance therewith, files reports relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning Parent's directors and officers, their remuneration, stock
options and other matters, the principal holders of Parent's securities and
any material interest of such persons in transactions with Parent is required
to be disclosed in proxy statements distributed to Parent's shareholders and
filed with the SEC. Such reports, proxy statements and other information
should be available for inspection at the public reference room at the SEC's
office 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C.,
and also should be available for inspection and copying at the following
regional offices of the SEC: 7 World Trade Center, Suite 1300, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies may be obtained by mail, upon payment of the SEC's
customary charges, by writing to its principal office at 450 Fifth Street,
N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549. Further information
on the operation of the SEC's Public Reference Room in Washington, D.C. can be
obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an
Internet worldwide web site that contains reports, proxy statements and other
information about issuers, such as the Company, who file electronically with
the SEC. The address of that site is http://www.sec.gov.
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years of each of the directors
and executive officers of Parent and Purchaser are set forth in Schedule A to
this Offer to Purchase.
Neither Parent nor Purchaser (except in connection with the Shareholder
Option Agreement) nor, to the best of Parent's and Purchaser's knowledge, any
of the persons listed in Schedule A hereto or any associate or majority owned
subsidiary of Parent, beneficially owns or has a right to acquire any
securities of the Company or has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
securities of the Company, joint venture, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies, or has affected any transaction in the securities of
the Company during the past 60 days.
The Company has been a long time supplier of Pratt & Whitney Corporation,
a subsidiary of Parent, which accounts for approximately 25%, 25% and 18% of
the Company's 1996, 1997 and 1998 sales, respectively. The aggregate amount of
such sales was approximately $8,500,000, $14,000,000 and $17,000,000 for
fiscal years 1996, 1997 and 1998, respectively. Such transactions were
negotiated at arms' length. Except as set forth in this Offer to Purchase,
since January 1, 1996, neither Parent, Purchaser, any person acting jointly or
in concert with Purchaser nor, to the best of Parent's and Purchaser's
knowledge, any of the persons listed on Schedule A hereto nor any associate of
a person listed on Schedule A hereto, has had any transaction with the Company
or any of its executive officers, directors or affiliates that is required to
be reported under the rules and regulations of the SEC applicable to the
Offer. Except as set forth in this Offer to Purchase, since January 1, 1996,
there has been no contracts, negotiations or transactions between Parent, any
of its subsidiaries or, to the best of Parent's and Purchaser's knowledge, any
of the persons listed in Schedule A to this Offer to Purchase, on the one
hand, and the Company or its affiliates, on the other hand, concerning a
merger, consolidation or acquisition; a tender offer or other acquisition of
securities of any class of the Company, and election of directors of the
Company; or a sale or other transfer of a material amount of assets of the
Company or any of its subsidiaries.
10. Background of the Offer; Contacts with the Company
Beginning in 1998, representatives of Parent and the Company discussed a
potential joint venture between the parties with respect to certain products.
On December 10 and December 17, 1998 representatives of Parent and the Company
toured certain of the Company's facilities in connection with these
discussions.
On July 1, 1999 Mr. Mark Biagetti, Director of Strategic Planning of Pratt
& Whitney and Mr. Bill Montanile, Director, Component Repair, of Pratt &
Whitney, met with Mr. Richard A. Lund, President and Chief Executive Officer
of the Company, and Mr. Richard Joseph, the Company's Vice President, in
Lansing to discuss
16
<PAGE>
the potential acquisition of the Company by Parent. In that meeting, Mr. Lund
informed Messrs. Biagetti and Montanile that in order to continue discussions,
Parent should submit a letter to the Company indicating a value range for the
Company.
On July 22, 1999, Mr. Biagetti and Mr. Mike Groenhout, Manager, Strategic
Planning of Parent, met with Mr. Lund and Mr. Joseph in Lansing and presented
a letter dated July 21, 1999 from Mr. Louis R. Chenevert, President of Pratt &
Whitney, to Mr. Lund expressing a non-binding interest in exploring a
potential acquisition of all the outstanding Shares for cash (a
"Transaction"), indicating a price range per Share of $3.25-$3.75, subject to
customary conditions, including satisfactory completion of substantive due
diligence by Parent.
Between July 22, 1999 and July 28, 1999, representatives of Parent and the
Company discussed the proposed Transaction. During such discussions,
management of the Company provided Parent certain information with respect to
the Company's financial condition, results of operations and other
measurements of operating performance. Following such discussions and review
by Parent of the information provided, Mr. Chenevert on July 29, 1999 sent Mr.
Lund a revised non-binding expression of interest regarding a possible
Transaction indicating a price range per Share of $4.00-$4.85, subject to
similar customary conditions as in the July 21, 1999 letter. Following receipt
of the revised non-binding expression of interest, Mr. Lund indicated to
Parent that he would present it to the Company's Corporate Strategy Committee
or Board of Directors for consideration.
On August 2, 1999, the Company's Board of Directors met to discuss
Parent's non-binding indication of interest.
On August 4, 1999 Mr. Lund advised Mr. Biagetti that the Company was not
prepared to proceed with a transaction in the price range earlier indicated by
Parent.
On August 27, 1999, Mr. Biagetti verbally communicated to Mr. Lund that
Parent would be prepared to revise the value range indicated in its latest
non-binding expression of interest to $5.00 per Share plus assumption of all
debt.
On August 31, 1999, Mr. Biagetti and Mr. Edmund DiSanto, Vice President,
Business Development of Pratt & Whitney, met with Mr. Lund in Hartford,
Connecticut. At this meeting Mr. Lund indicated that the Company would not
accept the value of $5.00 per Share indicated by Parent.
On September 8, 1999, Messers DiSanto and Biagetti called Mr. Lund and
indicated that the top range of value to be considered by Parent would be
$5.00-5.10 per Share.
On September 10, 1999, Mr. Lund and Mr. Sandford, Chairman of the Board of
the Company, and Messrs. DiSanto and Biagetti discussed the indicated value on
the telephone. During that conversation, Parent agreed to increase the
indicated value to $5.10 per Share subject to the conditions indicated in
Parent's July 29, 1999 letter, including the results of Parent's due diligence
investigations of the Company.
On September 13, 1999 in discussions between representatives of Parent and
the Company, the Company agreed to permit Parent to conduct a due diligence
investigation of the Company. Representatives from each party also discussed
the process and timing of the proposed Transaction and agreed on procedure for
due diligence investigations by Parent.
On September 20, 1999, Mr. Chenevert sent Mr. Lund a revised non-binding
expression of interest regarding a possible Transaction on the same terms as
in the July 29, 1999 letter with a price of $5.10 per Share. On September 22,
1999, Parent and the Company entered into the Confidentiality Agreement.
17
<PAGE>
From September 27, 1999 through mid-October, 1999, representatives of
Parent and its advisors conducted a due diligence investigation of the
Company.
On October 1, 1999, Parent submitted to the Company a proposed Merger
Agreement and Shareholder Option Agreement and the parties and their legal
advisors began to negotiate the terms of the proposed Transaction.
On October 18, 1999, Mr. DiSanto met with Mr. Lund to discuss the material
terms and conditions of the proposed Transaction. Among other things, Mr.
DiSanto indicated that, in view of the results of Parent's due diligence
investigation, Parent believed that a reduction in the indicated value of
$5.10 per Share was appropriate.
On October 19 and 20, 1999, the parties and their legal advisors met in
New York to negotiate the terms of the Merger Agreement and related
agreements. The terms included an indicated price per Share of $5.05.
At a meeting on October 20, 1999, the Board unanimously approved the
Offer, the Merger, the Merger Agreement and the Shareholder Option Agreement
and resolved to recommend acceptance of the Offer by the Company's
shareholders.
On October 21, 1999 (i) the Company, Parent and Purchaser entered into the
Merger Agreement, (ii) each of the directors of the Company entered into the
Shareholder Option Agreement with Purchaser and (iii) the Company entered into
agreements with certain of its executive officers. The terms of each of these
agreement are set forth in Section 11. Before the opening of trading on
October 21, 1999, Parent and the Company issued a press release announcing the
execution of the Merger Agreement and the Shareholder Option Agreement and the
Offer was commenced.
11. Purpose of the Offer; Plans for the Company; the Merger Agreement; the
Shareholder Option Agreement; Executive Employment Agreements
(a) Purpose
The purpose of the Offer and the Merger is to acquire control of, and the
entire equity interest in the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding Shares. The purpose of the Merger is to acquire all of the capital
stock of the Company not purchased pursuant to the Offer or otherwise. If
Purchaser acquires 75 percent of the issued and outstanding Shares (on a fully
diluted basis) pursuant to the Offer, it will have the ability under Wisconsin
law to approve the Merger without the approval of the holders of any other
Shares.
(b) Plans for the Company
In connection with the Offer, Parent and Purchaser have reviewed, and will
continue to review various possible business strategies that they might
consider in the event that Purchaser acquires control of the Company, whether
pursuant to this Offer to Purchase, the Merger or otherwise. Such strategies
could include, among other things, changes in the Company's business,
corporate structure, capitalization or management.
The following is a summary of certain provisions of the Merger Agreement,
the Shareholder Option Agreement and the Confidentiality Agreement dated
September 22, 1999 between Parent and the Company (the "Confidentiality
Agreement"). This summary is qualified in its entirety by reference to the
Merger Agreement, the Shareholder Option Agreement and the Confidentiality
Agreement which are incorporated by reference and copies or forms of which
have been filed with the SEC as exhibits to the Schedule 14D-1 to which this
Offer to Purchase is an exhibit (the "Schedule 14D-1"). The Merger Agreement,
the Shareholder Option Agreement and the Confidentiality Agreement may be
examined and copies may be obtained as set forth in Section 8. Defined terms
used herein and not defined herein shall have the respective meanings assigned
to those terms in the Merger Agreement.
18
<PAGE>
(c) The Merger Agreement
The Offer. The Merger Agreement provides that Purchaser will commence the
Offer and that, upon the terms and subject to prior satisfaction or waiver of
the conditions of the Offer, as set forth in Section 14, Purchaser will
purchase all Shares validly tendered pursuant to the Offer. The Merger
Agreement provides that without the prior written consent of the Company,
Purchaser shall not decrease or change the consideration payable in the Offer,
decrease the number of Shares sought pursuant to the Offer, impose additional
conditions to the Offer, change the conditions to the Offer or make any other
change in the terms or conditions of the Offer which is materially adverse to
the holders of Shares. In addition, without limiting the foregoing, Purchaser
may, without the consent of the Company, (a) extend the Offer if on the
Expiration Date any of the Offer conditions have not been satisfied or waived,
(b) if less than 90% of the outstanding Shares have been validly tendered and
not properly withdrawn pursuant to the Offer, extend the Offer from time to
time (but in no event beyond ten business days beyond the then scheduled
expiration date of the Offer) for the shortest period of time reasonably
determined by Parent as may be necessary to obtain the valid tender of 90% of
the outstanding Shares and (c) extend the Offer for any period required by any
regulation, position or interpretation of the SEC. In addition, the Offer
Price may be increased and the Offer may be extended to the extent required by
law in connection with such increase, in each case without the consent of the
Company.
Directors. Pursuant to the Merger Agreement, after Purchaser has accepted
Shares for payment pursuant to the Offer or otherwise, which represent at
least a majority of the outstanding Shares, Purchaser has the right to have
persons designated by it become directors of the Company so that the total
number of such persons equals the number, rounded up to the next whole number,
which is the product of the total number of directors on the Board of
Directors of the Company and the percentage that such number of Shares so
purchased bears to the total number of Shares then outstanding. The Merger
Agreement provides that the Company will promptly take all actions necessary
to cause such Purchaser designees to be so elected, including, if necessary,
seeking the resignations of one or more existing directors. Following the
election or appointment of Purchaser designees and prior to the time the
Merger becomes effective (the "Effective Time") if any of the directors of the
Company then in office is a director of the Company on the date hereof (the
"Continuing Director"), any amendment of the Merger Agreement which requires
action by the Board of Directors of the Company, any extension of time for the
performance of any of the obligations or other acts of Parent or Purchaser
under the Merger Agreement and any waiver of compliance with any of the
provisions of the Merger Agreement for the benefit of the Company, will
require the concurrence of a majority of the Continuing Directors.
The Merger. The Merger Agreement provides that, promptly after the
purchase of Shares pursuant to the Offer and upon the terms and conditions of
the Merger Agreement Purchaser will be merged with and into the Company
unless, at Parent's election and in its sole discretion, the Company shall be
merged with and into Purchaser. Upon consummation of the Merger, each then
outstanding Share (other than Shares owned by Parent or its direct or indirect
Subsidiaries, held in the treasury of the Company, owned by any subsidiary of
the Company, or held by shareholders who exercise dissenters' rights under the
WBCL, if any) will be converted into the right to receive $5.05 in cash,
without interest (the "Merger Consideration")).
The Company has agreed pursuant to the Merger Agreement that, if required
by applicable law in order to consummate the Merger, it will (i) convene and
hold a special meeting of its shareholders as soon as practicable following
the consummation of the Offer for the purpose of adopting the plan of merger
contained in the Merger Agreement; (ii) prepare and file with the SEC a
preliminary proxy statement relating to the Merger Agreement, and use its
reasonable best efforts (A) to obtain and furnish the information required to
be included by the SEC in the Proxy Statement (as defined herein) and, after
consultation with Parent, to respond as soon as practicable to any comments
made by the SEC with respect to the preliminary proxy statement and to cause a
definitive proxy statement (the "Proxy Statement") to be mailed to its
shareholders and (B) to obtain the necessary approvals of the Merger and
adoption of the Merger Agreement by its shareholders; and (iii) include in the
Proxy Statement the recommendation of the Company Board of Directors that
shareholders of the Company vote in favor of the adoption of the plan of
merger set forth in the Merger Agreement. Each of Parent and Purchaser has
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agreed in the Merger Agreement that it will vote all of the Shares acquired by
it or any of its other Subsidiaries in favor of the approval of the Merger.
The Merger Agreement further provides that, notwithstanding the foregoing,
if Purchaser holds at least 90 percent of each class of capital stock of the
Company and Parent so elects, in its sole discretion, to consummate the Merger
in accordance with Section 180.1104 of the WBCL without a meeting of the
shareholders of the Company, but subject to providing shareholders with notice
of the meeting, the parties to the Merger Agreement will take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after the consummation of the Offer without a meeting of the
shareholders of the Company, in accordance with such Section. This Offer to
Purchase constitutes notice to shareholders required under Section 180.1104 of
the WBCL. Purchaser currently does not intend to cause the Merger to occur
without a vote of the Company's shareholders unless, after consummation of the
Offer, it owns more than 94 percent of the Shares then outstanding.
Charter, Bylaws, Directors and Officers. The Articles of Incorporation and
By-Laws of Purchaser in effect at the time of the Effective Time shall be the
Articles of Incorporation and By-Laws of the Surviving Corporation until
amended, subject to the provisions of the Merger Agreement which provide that
all rights to indemnification now existing in favor of directors and officers
of the Company and its Subsidiaries as provided in their respective charters
or by-laws shall survive the Merger and continue in effect for not less than
six years thereafter. The directors of Purchaser immediately prior to the
Effective Time will be the initial directors of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall be
the initial officers of the Surviving Corporation. Such officers and directors
will hold office until their respective successors are duly elected and
qualified, or their earlier death, permanent disability, resignation or
removal.
Conversion of Shares. Each Share issued and outstanding immediately prior
to the Effective Time (other than (i) any Shares held by Parent, Purchaser,
any Subsidiary of Parent, Purchaser or the Company or in the treasury of the
Company, which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, will be canceled and (ii) dissenting shares) will
be converted into the right to receive in cash an amount per Share (subject to
any applicable withholding tax) equal to the Offer Price, without interest
(the "Merger Consideration"), upon surrender of the certificate representing
such Share. At the Effective Time, each share of common stock of Purchaser,
par value $.01, issued and outstanding immediately prior to the Effective Time
will, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one share of common stock of the
Surviving Corporation.
The Merger Agreement provides that, prior to the consummation of the
Offer, the Company shall take all actions necessary or desirable (including
obtaining all required consents from optionees) to provide for the
cancellation, effective at the Effective Time, of all the outstanding stock
options (the "Existing Stock Options") granted under any stock option,
employment or similar plan or arrangement of the Company (the "Stock Option
Plans") or under any such similar plan or agreement which benefits any person
providing services to the Company or any subsidiary, without any payment
therefor except as otherwise discussed in this Section 11. At the Effective
Time (or such earlier time as Purchaser shall designate, each holder of an
Existing Stock Option will be entitled, in settlement therefor to an amount in
cash (subject to any applicable withholding taxes or as may apply to payments
made in connection with the performance of services) equal to the product of
(i) the excess of the Merger Consideration over the per share exercise or
purchase price of such Existing Stock Option and (ii) the number of shares
subject to such Existing Stock Option (the "Option Consideration"). The Stock
Option Plans terminate as of the Effective Time and any and all rights under
any provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any Subsidiary thereof shall be canceled. Notwithstanding the
foregoing, no holder of an Existing Stock Option will be entitled to any
payment with respect to any such Existing Stock Option under the Merger
Agreement or otherwise unless he or she delivers to Purchaser a consent to the
cancellation of such Existing Stock Option in a form to be prescribed by
Purchaser.
Prior to the Effective Time, the Merger Agreement provides that the
Company shall take all necessary and appropriate actions (including obtaining
all applicable consents) to provide that, upon the Effective Time, each
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then outstanding restricted stock award in respect of Shares and any other
stock based award (the "Stock Awards") which is subject to any vesting
requirement and which was issued pursuant to a Stock Option Plan or any other
plan or arrangement (other than any Existing Stock Option) shall, whether or
not then exercisable or vested, become 100 percent vested. At the Effective
Time, a holder of Shares underlying such Stock Award shall be entitled to
receive the Merger Consideration (subject to any applicable withholding tax or
as may apply to payments in connection with the performance of services), upon
the surrender of the certificate representing such Shares. Notwithstanding the
foregoing, no holder of a Stock Award will be entitled to any payment with
respect to such Stock Award under the Merger Agreement or otherwise unless he
or she delivers to Purchaser a consent to the cancellation of such Stock Award
in a form to be prescribed by Purchaser.
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and
Purchaser with respect to, among other matters, its organization and
qualification, capitalization, authority, consents and approvals, public
filings, financial statements, absence of any material adverse effect on the
Company, information to be included in the Offer Documents and the Proxy
Statement, brokers, employee benefit plans, litigation, tax matters,
compliance with law, environmental matters, intellectual property, real
property, year 2000, material contracts, related party transactions,
inapplicability of state take-over statutes, the Rights Agreement (as defined
herein) and the vote required by the Company shareholders to approve the
Merger. Each of Parent and Purchaser has made customary representations and
warranties to the Company with respect to, among other matters, its
organization, qualifications, authority, information to be included in the
Offer Documents and the Proxy Statement, consents and approvals and operations
of Purchaser.
Covenants. The Merger Agreement obligates the Company and its
Subsidiaries, from the date of the Merger Agreement until the date on which
the majority of the Company's directors are designees of Parent or Purchaser,
to conduct their operations only in the ordinary and usual course of business
consistent with past practice and obligates the Company and its Subsidiaries
to use all best efforts to preserve intact their business organizations, to
keep available the services of their present officers and employees and to
preserve the good will of and maintain good business relationships with those
having business relationships with the Company and its Subsidiaries. The
Company is obligated to promptly advise Parent and Purchaser in writing of any
change in its or any of its Subsidiaries condition (financial or otherwise).
The Merger Agreement also contains specific restrictive covenants as to
certain activities of the Company prior to the date on which the majority of
the Company's directors are designees of Parent or Purchaser, which provide
that the Company will not (and will not permit any of its Subsidiaries to)
take certain actions without the prior written consent of Parent including,
among other things and subject to certain exceptions, issuing or selling its
securities, redeeming or repurchasing securities, changing its capital
structure, making material acquisitions or dispositions, incurring
indebtedness, increasing compensation or adopting of new benefit plans, taking
any action that may result in the Offer conditions not being satisfied and
permitting certain other material events or transactions.
No Solicitation. The Merger Agreement requires the Company, its
Subsidiaries and its and their respective officers, directors, employees,
representatives, agents or affiliates not to, directly or indirectly,
encourage, solicit, initiate or participate in any way in any discussions or
negotiations with, or provide any information to, or afford any access to the
properties, books or records of the Company or any of its Subsidiaries, or
otherwise take any other action to assist or facilitate, any Person or group
concerning any offer or proposal, or any indication of interest in making an
offer or proposal which is structured to permit such Person or group to
acquire beneficial ownership of any material portion of the assets of, or at
least 5 percent of the equity interest in, or businesses of, the Company
pursuant to a merger, consolidation or other business combination, sale of
shares of capital stock, sale of assets, tender offer or exchange offer or
similar transaction, including any single or multi-step transaction or series
of related transactions, in each case other than the Offer and the Merger
("Acquisition Proposal"). Notwithstanding the foregoing and subject to the
Company notifying Parent and Purchaser to that effect and to the prior
execution by such Person or group of a confidentiality agreement substantially
in the form of the Confidentiality Agreement, the Company may furnish
information to or enter into discussions or negotiations with any Person or
entity that makes an unsolicited written bona fide Acquisition Proposal which
the Board of Directors of the Company has reasonably determined in good faith,
after consulting
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with and receiving the advice of its independent financial advisors to such
effect, that the Person or entity making such inquiry ("Potential Acquiror")
has the financial wherewithal to consummate such Acquisition Proposal without
having to obtain new financing, and after receiving the advice of its
independent financial advisors to such effect, that such Acquisition Proposal
would involve consideration that is superior to the consideration under the
Offer and the Merger and after consulting with and receiving the advice of its
outside counsel and independent financial advisors to such effect, that such
Acquisition Proposal is reasonably likely to be consummated without undue
delay ("Superior Proposal"), if, and only to the extent that, the Board of
Directors of the Company, after consultation with outside legal counsel to the
Company, determines in good faith that failure to do so would result in a
breach of the fiduciary duty of the Board of Directors of the Company to the
shareholders of the Company under applicable law. The Merger Agreement also
requires the Company to promptly (and in any event within 48 hours) notify
Parent and Purchaser, orally and in writing, if any such information is
requested or any such negotiations or discussions are sought to be initiated
and to promptly communicate to Parent and Purchaser the identity of the
Potential Acquiror. If the Company (or any of its Subsidiaries or its or their
respective officers, directors, employees, representatives, agents or
affiliates) participates in discussions or negotiations with, or provides
information to, a Potential Acquiror, the Company is obligated to keep Parent
advised on a current basis of any developments with respect thereto. The
Merger Agreement requires the Company and its Subsidiaries and its and their
respective officers, directors, employees, representatives, agents and
affiliates to, immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons other than Parent,
Purchaser or any of their respective affiliates or associates conducted prior
to the date of the Merger Agreement with respect to any Acquisition Proposal.
The Merger Agreement provides that unless and until the Merger Agreement
has been terminated, the Company shall not withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or Purchaser,
the approval or recommendation of the Offer or the Merger, approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal, release any third party from any confidentiality or standstill
agreement to which the Company is a party or fail to enforce to the fullest
extent possible any such agreement, redeem the Rights or amend or waive, or
take any other action with respect to, the Rights Agreement to facilitate any
Acquisition Proposal or enter into any letter of intent, agreement in
principle, acquisition agreement or other agreement related to any Acquisition
Proposal. Any withdrawal or modification by the Company of the approval or
recommendation of the Offer or the Merger shall not have any effect on the
approvals of the Company for the purpose of causing take-over laws and the
Rights Agreement to be inapplicable to the Merger Agreement or the Shareholder
Option Agreement.
Access to Information. The Merger Agreement provides that from and after
the date of the Merger Agreement, the Company will, and will cause its
Subsidiaries to, give Parent and Purchaser and their representatives full
access, during normal business hours, to the offices and other facilities and
to the books and records of the Company and its Subsidiaries, subject to
applicable confidentiality requirements.
Efforts. Subject to the terms and conditions provided in the Merger
Agreement, each of the Company, Parent and Purchaser agrees to use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
action and to do or cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective in the
most expeditious manner practicable the transactions contemplated by the
Merger Agreement except that Parent and Purchaser are not obligated to extend
the Offer except as provided herein.
Each of the parties also has agreed to use its reasonable best efforts to
make promptly any required submissions under the HSR Act, cooperate in
determining whether any filings should be made or consents from any
Governmental Entity are required, promptly make such filings and seek to
obtain timely any consents, permits, authorizations, approval or waivers.
Nothing in the Merger Agreement shall obligate Parent, Purchaser or any of
their respective Subsidiaries or affiliates to agree (a) to limit in any
manner whatsoever or not to exercise any rights of ownership of any securities
(including the Shares), or to divest, dispose of or hold separate any
securities or all or a material portion
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of their respective businesses, assets or properties or of the business,
assets or properties of the Company or any of its Subsidiaries or (b) to limit
in any material manner whatsoever the ability of such entities (A) to conduct
their respective businesses or own such assets or properties or to conduct the
businesses or own the properties or assets of the Company and its Subsidiaries
or (B) to control their respective businesses or operations or the businesses
or operations of the Company and its Subsidiaries.
Indemnification; Directors' and Officers' Insurance. Pursuant to the
Merger Agreement, Parent and Purchaser have agreed that all rights to
indemnification existing in favor of the present or former directors, officers
and employees of the Company or any of its Subsidiaries as provided in the
Company's Articles of Incorporation or Bylaws, or the articles of
organization, bylaws or similar documents of any of the Company's Subsidiaries
as in effect at the date of the Merger Agreement with respect to matters
occurring prior to the Effective Time shall survive the Merger and continue in
full force and effect for a period of not less than the statutes of
limitations applicable to such matters, and Parent agreed to cause the
Surviving Corporation to comply fully with these obligations. The Merger
Agreement further provides that the Surviving Corporation will cause to be
maintained in effect for a period of six years after the Effective Time, in
respect of acts or omissions occurring prior to the Effective Time (but only
in respect thereof), policies of directors' and officers' liability insurance
covering the persons covered by the Company's existing directors' and
officers' liability insurance policies at the date of the Merger Agreement and
providing substantially similar coverage to such existing policies; provided,
that the Surviving Corporation will not be required in order to maintain such
directors' and officers' liability insurance policies to pay an annual premium
in excess of 200 percent of the aggregate annual amounts paid by the Company
at the date of the Merger Agreement to maintain the existing policies; and
provided further that, if equivalent coverage cannot be obtained, or can be
obtained only by paying an annual premium in excess of 200 percent of such
amount, the Surviving Corporation shall only be required to obtain as much
coverage as can be obtained by paying an annual premium equal to 200 percent
of such amount.
Employee Benefit Arrangements. The Merger Agreement provides that, prior
to the Effective Time, except as set forth below, the Company will, and will
cause its Subsidiaries to, and from and after the Effective Time, Parent will,
and will cause the Surviving Corporation to, honor, in accordance with their
terms all existing employment and severance agreements between the Company or
any of its Subsidiaries and any officer, director or employee of the Company
or any of its Subsidiaries to the extent disclosed in connection with the
Merger Agreement. The Merger Agreement also provides that the Company shall
take, or cause to be taken, all action necessary, as promptly as reasonably
practicable, to amend any plan maintained by the Company or any of its
Subsidiaries to eliminate, as of the date of the signing of the Merger
Agreement, all provisions for the purchase of Shares directly from the Company
or any of its Subsidiaries or securities of any Subsidiary and also requires
that Parent and the Surviving Corporation cause service rendered by employees
of the Company and its Subsidiaries prior to the Effective Time to be taken
into account for vesting and eligibility purposes under employee benefit plans
of Parent, the Surviving Corporation and its Subsidiaries, to the same extent
as such service was taken into account under the corresponding plans of the
Company and its Subsidiaries for those purposes. The Merger Agreement also
provides that employees of the Company and its Subsidiaries will not be
subject to any pre-existing condition limitation under any health plan of
Parent, the Surviving Corporation or its Subsidiaries for any condition for
which they would have been entitled to coverage under the corresponding plan
of the Company or its Subsidiaries in which they participated prior to the
Effective Time and that Parent will, and will cause the Surviving Corporation
and its Subsidiaries to, give such employees credit under such plans for co-
payments made and deductibles satisfied prior to the Effective Time.
Take-over Laws. The Merger Agreement provides that the Company will, upon
the request of Parent or Purchaser, take all reasonable steps to exclude the
applicability of, or to assist in any challenge by Parent or Purchaser to the
validity or applicability to the Offer, the Merger or any other transaction
contemplated by the Merger Agreement, the Shareholder Option Agreement of, any
Take-over laws.
Notification of Certain Matters. Parent and the Company have agreed to
promptly notify each other of the occurrence or non-occurrence of any event
the occurrence or non-occurrence of which is likely (i) to cause any
representation or warranty contained in the Merger Agreement to be untrue or
inaccurate in any material
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respect at or prior to the Effective Time or (ii) to result in any material
failure of such party, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Merger Agreement;
provided, however, that such notification will not affect the remedies
available under the Merger Agreement to the parties receiving such
notification.
Subsequent Filings. In the Merger Agreement the Company agreed that until
the Effective Time it will timely file with the SEC each form, report and
document required to be filed by the Company under the Exchange Act and will
promptly deliver to Parent and Purchaser copies of each such report filed with
the SEC. The Company further agreed that as of their respective dates, none of
such reports shall contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading and that the audited consolidated financial statements and
unaudited interim financial statements of the Company included in such reports
shall be prepared in accordance with generally accepted accounting principles
in the United States and shall fairly present the financial position of the
Company and its consolidated Subsidiaries as at the dates thereof.
Public Announcements. The Merger Agreement provides that the Company, on
the one hand, and Parent and Purchaser, on the other hand, will consult with
each other prior to issuing any press release or otherwise making any public
statements with respect to the Offer, the Merger or the Merger Agreement and
will not issue any such press release or make any such public statement prior
to such consultation, unless required by applicable law or stock exchange
regulations.
Conditions to the Consummation of the Merger. Pursuant to the Merger
Agreement, the respective obligations of Parent, Purchaser and the Company to
consummate the Merger are subject to the satisfaction or waiver, where
permissible, before the Effective Time of the following conditions: (i) the
plan of merger contained in the Merger Agreement shall have been adopted by
the affirmative vote of the shareholders of the Company required by applicable
law, (ii) all necessary waiting periods under the HSR Act applicable to the
Merger and any non-United States competition or antitrust laws which Purchaser
determines, in its reasonable discretion, are applicable to the Merger
Agreement and the transactions contemplated thereby shall have expired or been
terminated, (iii) the consummation of the Merger is not prohibited, restricted
or made illegal by any statute, rule, regulation, executive order, judgment,
decree or injunction of a court or any Governmental Entity (provided that each
party agreed to use all commercially reasonable efforts to have such
prohibition lifted) and (iv) Purchaser shall have accepted for payment and
paid for Shares tendered pursuant to the Offer.
Termination. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding approval
thereof by the shareholders of the Company (with any termination by Parent
also being an effective termination by Purchaser):
(a) by the mutual written consent of the Company and Parent;
(b) by Parent or the Company if any court of competent jurisdiction or
other Governmental Entity shall have issued an order, decree or ruling, or
taken any other action restraining, enjoining or otherwise prohibiting any
of the transactions contemplated by the Merger Agreement or the Shareholder
Option Agreement and such order, decree, ruling or other action shall have
become final and non-appealable;
(c) by the Company if (i) Purchaser fails to commence the Offer by
October 27, 1999, (ii) Purchaser has not accepted for payment and paid for
Shares pursuant to the Offer in accordance with the terms of the Offer on
or before January 10, 2000 or (iii) Purchaser fails to purchase validly
tendered Shares in violation of the terms of the Merger Agreement;
(d) by Parent if due to an occurrence or circumstance which would result
in a failure to satisfy any of the conditions of the Offer, Purchaser shall
have (i) not commenced the Offer by October 27, 1999, (ii) terminated the
Offer without purchasing any Shares pursuant to the Offer or (iii) failed
to accept for payment Shares pursuant to the Offer prior to January 10,
2000;
(e) by the Company, prior to the purchase of Shares pursuant to the
Offer, if (i) the Company has complied with its obligations under the
Merger Agreement not to solicit competing transactions, (ii) the
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Company has given Parent and Purchaser at least three business days advance
notice of its intention to accept or recommend a Superior Proposal and of
all of the terms and conditions of such Superior Proposal, (iii) the
Company's Board of Directors, after taking into account any modifications
to the terms of the Offer and the Merger proposed by Parent and Purchaser
after receipt of such notice, continues to believe such Acquisition
Proposal constitutes a Superior Proposal and (iv) the Board of Directors of
the Company, after consultation with outside legal counsel to the Company,
determines in good faith that failure to do so would result in a breach of
the fiduciary duty of the Board of Directors of the Company to the
shareholders of the Company under applicable law; provided that such
termination shall not be effective unless and until the Company shall have
paid to Parent all of the fees and expenses described in Section 8.02 of
the Merger Agreement, including, without limitation, the Termination Fee;
or
(f) by Parent, prior to the purchase of Shares pursuant to the Offer, if
the Company breaches any of its covenants in the Merger Agreement discussed
above under "Nonsolicitation" or the Board of Directors shall have resolved
to effect any of the actions referred to in the second paragraph of such
discussion (and such resolution shall be made public).
Effect of Termination. In the event that the Merger Agreement is
terminated in accordance with its terms and the Merger is abandoned, the
Merger Agreement will become void and have no effect, without any liability on
the part of any party or its directors, officers or shareholders, other than
the provisions relating to the payment of certain fees and expenses, including
the Termination Fee, which shall survive any such termination; provided that
no party would be relieved from liability for any breach of the Merger
Agreement.
Fees and Expenses. Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated by the Merger Agreement
will be paid by the party incurring such expenses. In the event that the
Merger Agreement is terminated pursuant to (a) subparagraph (e) or (f) under
"Termination" above or (b) paragraphs (b), (c)(ii) or (d) under "Termination"
above and (in the case of clause (b) only) either (i) prior to such
termination an Acquisition Proposal shall have been made or publicly announced
or (ii) within 12 months thereafter an Acquisition Proposal shall have been
consummated, then the Company will reimburse Parent for the out-of-pocket fees
and expenses of Parent and Purchaser (including printing fees, filing fees and
fees and expenses of its legal and financial advisors) related to the Offer,
the Merger Agreement, the transactions contemplated thereby and any related
financing up to a maximum of $750,000 (collectively "Expenses") and pay Parent
a termination fee of $4 million (the "Termination Fee") in immediately
available funds by wire transfer to an account designated by Parent. If such
amounts become payable pursuant to clause (a) or (b)(i) they will be payable
simultaneously with such termination (in the case of a termination by the
Company) or within one business day thereafter (in the case of a termination
by Parent). If such amounts become payable pursuant to clause (b)(ii) they
shall be payable simultaneously with completion of such Acquisition Proposal.
Without limiting other remedies available to Parent or Purchaser under the
Merger Agreement or otherwise, in the event the Merger Agreement is terminated
pursuant to subparagraph (c)(ii) or (d) under "Termination" as a result of the
failure to satisfy the conditions set forth in paragraph (f) of Section 14
hereof, then the Company will promptly (and in any event with one business day
after such termination) reimburse Parent for Expenses in immediately available
funds by wire transfer to an account designated by Parent. The prevailing
party in any legal action undertaken to enforce the provisions of the Merger
Agreement will be entitled to recover from the other party the costs and
expenses (including attorneys' and expert witness fees) incurred in connection
with such action.
Amendment. To the extent permitted by applicable law, the Merger Agreement
may be amended by action taken by or on behalf of the Boards of Directors of
the Company, Parent and Purchaser, subject in the case of the Company to the
approval of the Continuing Directors as described under "Directors" above, at
any time before or after adoption of the Merger Agreement by the shareholders
of the Company but, after any such shareholder approval, no amendment may be
made which decreases the Merger Consideration or which adversely affects the
rights of the Company's shareholders hereunder without the approval of the
shareholders of the Company. Any amendment to the Merger Agreement must be in
writing.
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Extension; Waiver. At any time prior to the Effective Time, the parties
hereto may, by action taken by or on behalf of their respective Boards of
Directors subject in the case of the Company, to the approval of the
Continuing Directors as described under "Directors" above and in writing (i)
extend the time for the performance of any of the obligations or other acts of
any other party to the Merger Agreement to, (ii) waive any inaccuracies in the
representations and warranties contained therein of any other party thereto or
in any document, certificate or writing delivered pursuant to the Merger
Agreement by any other party thereto, or (iii) waive compliance with any of
the agreements of any other party or with any conditions to its own
obligations. Any agreement on the part of any party to such extension or
waiver must be in writing and signed by such party.
(d) The Shareholder Option Agreement
In order to induce Parent and Purchaser to enter into the Merger
Agreement, pursuant to the Shareholder Option Agreement each of the directors
of the Company (each a "Shareholder" and collectively the "Shareholders"), who
own in the aggregate approximately 26.5 percent of the outstanding Shares on a
fully diluted basis, have agreed to validly tender in the Offer and not
withdraw all Shares beneficially owned by such Shareholder on the date of the
Shareholder Option Agreement or subsequently acquired by such Shareholder.
Each Shareholder has granted Purchaser an irrevocable option to purchase
all Shares owned by such Shareholder (the "Option Shares") at $5.05 per Share,
exercisable at any time in whole or in part after (i) the occurrence of any
event as a result of which the Parent is entitled to receive a Termination Fee
under the Merger Agreement or (ii) such Shareholder shall have breached
certain specified agreements contained in the Shareholder Option Agreement.
Each such option shall be exercisable until the later of (i) the date that is
90 days after the date such option became exercisable, and (ii) the date that
is ten days after the date that all waiting periods under the HSR Act or any
non-United States competition or antitrust laws which Purchaser, in its sole
discretion determines are required for the purchase of such Shares have
expired or been terminated. In the event that any person (other than Purchaser
or any of its affiliates or any Shareholder or any of its affiliates) acquires
a majority of the outstanding Shares, prior to the termination of the
Shareholder Option Agreement, in a tender offer or exchange offer by such
person to acquire, or a merger involving the acquisition of, all outstanding
Shares at a consideration per Share in excess of $5.05, the exercise price for
the Option Shares shall be increased by 50% of the amount of such excess. If
an Option has been exercised and the Option Shares acquired from a Shareholder
by Purchaser prior to such an acquisition, Purchaser shall, within ten days
following such date, pay to such Shareholder an amount in cash equal to the
amount of such excess multiplied by the number of such Option Shares. If the
consideration in such tender or exchange offer or merger includes securities,
such securities shall be deemed to have a value equal to the amount that would
actually have been received in an orderly sale of such securities commencing
on the first business day following actual receipt of such securities, in the
written opinion of an investment banking firm of national reputation selected
by Purchaser and reasonably satisfactory to the Shareholder.
Each Shareholder has agreed that at any meeting of the shareholders of the
Company or in connection with any written consent of the shareholders of the
Company, such Shareholder will vote (or cause to be voted) all Shares held of
record or owned by such Shareholder (i) in favor of the Merger and the Merger
Agreement and the Shareholder Option Agreement and (ii) against any
Acquisition Proposal and against any action or agreement that would impede or
frustrate the Shareholder Option Agreement or result in a breach in any
respect of any obligation or agreement of the Company under the Merger
Agreement or which would result in any of the conditions described in
subparagraph (c) above or in Section 14 not being fulfilled. Each such
Shareholder irrevocably granted to and appointed Purchaser as such
Shareholder's proxy and attorney-in-fact to vote the Shares owned by such
Shareholder, or grant a consent or approval in respect of such Shares, in the
manner specified above.
Each Shareholder has agreed that, except as provided by the Merger
Agreement and the Shareholder Option Agreement, such Shareholder will not (i)
offer to transfer, transfer or consent to any transfer, (ii) enter
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into any contract, option or other agreement or understanding with respect to
any transfer, (iii) grant any proxy, power-of-attorney or other authorization
or (iv) deposit into a voting trust or enter into a voting agreement or
arrangement, each with respect to any or all Shares beneficially owned by such
Shareholder.
Each Shareholder has agreed that such Shareholder shall not encourage,
solicit, initiate or participate in any way in any discussion or negotiation
with, or provide information or otherwise take any action to assist or
facilitate, any person concerning any Acquisition Proposal. Each Shareholder
has agreed to cease any such existing activities and to immediately
communicate to Purchaser the terms of any Acquisition Proposal.
Each Shareholder has waived any rights of appraisal or rights to dissent
from the Merger.
The Shareholder Option Agreement with respect to each Shareholder shall
terminate upon the earliest of (i) the Effective Time of the Merger, (ii)
April 30, 2000 or, if the Option is exercisable at April 30, 2000, such later
date as the Option shall no longer be exercisable, and (iii) termination of
the Merger Agreement, unless either (A) Parent is or may be entitled to
receive a Termination Fee under the Merger Agreement following such
termination or (B) prior to such termination such Shareholder has breached
certain specified agreements contained in the Shareholder Option Agreement.
(e) Confidentiality Agreement
Pursuant to the Confidentiality Agreement, Parent and its representatives
agreed to keep confidential certain information received from the Company (the
"Evaluation Material"). The Confidentiality Agreement contains a standstill
provision pursuant to which, until the earliest of (a) September 22, 2000, (b)
the date upon which the Company publicly announces that it has entered, or
that it has agreed to enter into a business combination with a third party and
(c) the date upon which a third party publicly announces a definitive proposal
or an offer for a business combination with the Company, or publicly announces
an agreement to enter into a business combination with the Company, Parent
agreed not to (i) acquire, or agree to acquire any securities or property of
the Company unless such action shall have been expressly first approved by the
Company's board of directors, (ii) solicit proxies from shareholders of the
Company or otherwise seek to influence or control the management or policies
of the Company or (iii) assist any other person in doing any of the foregoing.
Also pursuant to the standstill provision, if, prior to September 22, 2000,
the Company invites any other person or entity to submit a definitive proposal
regarding a business combination that is to be considered at a meeting of the
board of directors of the Company, or a meeting of the board of directors of
the Company is called to consider any uninvited proposal for a business
combination, the Company agreed to give Parent reasonable notice of such
action and that Parent may make a proposal for a business combination, which
proposal will be considered at the same meeting of the board of directors of
the Company.
Pursuant to the Confidentiality Agreement, Parent and its representatives
agreed, prior to September 22, 2000, not to solicit or cause to be solicited
for employment any employee of the Company identified through the Evaluation
Material.
(f) Dissenters' Rights
Sections 180.1301 through 180.1331 of the WBCL may provide holders of
record and beneficial owners of Shares the right to object to the Merger and
demand payment of the "fair value" of their Shares in cash ("dissenters'
rights"), if they properly exercise such dissenters' rights in connection with
the consummation of the Merger in accordance with the provisions of the WBCL.
Such dissenters' rights will not be available if the Shares are registered on
a national securities exchange or quoted in the National Association of
Securities Dealers, Inc. automated quotations system on the record date fixed
to determine the shareholders of the Company entitled to notice of a
shareholders meeting at which shareholders are to vote on the Merger, unless
the Merger would be a "business combination" as defined in Section 180.1130(3)
of the WBCL. The Merger would not be a business combination if, among other
things, it was consummated as a merger of the Company into Purchaser without a
vote of shareholders of the Company pursuant to Section 180.1104 of the WBCL,
or the Company is
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not a "resident domestic corporation" (see Section 15) that has a class of
voting stock that is registered or traded on a national securities exchange or
that is registered under section 12(g) of the Exchange Act. "Fair value" of
the Shares would be determined immediately before the consummation of the
Merger, excluding any appreciation or depreciation in anticipation of the
Merger unless such exclusion would be inequitable; provided, that if such
Merger is a business combination, "fair value" will be determined pursuant to
Section 180.1130(9)(a) of the WBCL with reference to the public market price
of the Shares, if available or, if not available, by a good faith
determination of the Company's Board of Directors. The "fair value", as so
determined, could be more or less than the value per Share to be paid pursuant
to the Offer and the Merger.
The foregoing summary of the dissenters' rights does not purport to be a
complete statement of the procedures to be followed by shareholders desiring
to exercise their dissenters' rights in connection with the Merger.
(g) Executive Employment Agreements
The Company has entered into letter agreements with certain of its
managers, including Messrs. Robert Spring and John Scanlon, providing for the
continued employment of such persons by the Company after completion of the
Offer and , among other matters, for certain severance payments (generally six
months of such manager's then current base salary) if the manager's employment
with the Company terminates for any reason other than "cause" prior to the
three year anniversary of the Effective Time. These severance payments will
not be required to be paid in the event that the manager terminates his or her
employment with the Company voluntarily. For these purposes, "cause" means (a)
the manager is convicted of a crime involving moral turpitude, (b) the
commission of an act of fraud upon the Company or misappropriation of funds or
property of the Company, (c) a material violation of the Company's policy
concerning conflicts of interest or business ethics or (d) the result of gross
negligence or dereliction in the performance of the manager's job
responsibilities. In addition, the Company advised the managers that Parent
intends to grant an aggregate of options to purchase up to 7,000 shares of
Parent common stock to such managers.
The Company and Richard Lund (the Company's President and Chief Executive
Officer), and the Company and Edward Stephens (the Company's Chief Financial
Officer), respectively, have entered into an amendment (the "Change in Control
Amendment") to each such executive's existing change in control agreement with
the Company. Messrs. Lund and Stephens agreed in the Change in Control
Amendment to certain noncompetition and non- solicitation restrictions, and
also agreed not to terminate their employment voluntarily with the Company at
any time prior to January 31, 2000. The Company and Messrs. Lund and Stephens
also agreed in the Change in Control Amendment that neither Mr. Lund nor Mr.
Stephens would be entitled to any other severance payment or benefit or any
other payment or benefit conditioned on or related to any change in control of
the Company other than the payments and benefits expressly prescribed by each
such executive's existing change in control agreement, as amended by the
Change in Control Amendment.
(h) "Going Private" Transactions
Rule 13e-3 under the Exchange Act is applicable to certain "going private"
transactions and may under certain circumstances be applicable to the Merger.
However, Rule 13e-3 would be inapplicable if (i) the Shares are deregistered
under the Exchange Act prior to the Merger or other business combination or
(ii) the Merger or other business combination is consummated within one year
after the purchase of the Shares pursuant to the Offer and the amount paid per
Share in the Merger or other business combination is at least equal to the
amount paid per Shares in the Offer. If applicable, Rule 13e-3 requires, among
other things, that certain financial information concerning the Company and
certain information relating to the fairness of the proposed transaction and
the consideration offered to minority shareholders of the Company therein, be
filed with the SEC and disclosed to shareholders of the Company prior to
consummation of the transaction. Purchaser does not believe that Rule 13e-3
will be applicable to any subsequent acquisition transaction contemplated
herein.
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12. Rights Agreement
Set forth below is a summary description of the Rights, as filed with the
Company's Registration Statement on Form 8-A, dated August 4, 1998, relating
to the Rights.
On August 4, 1998, the Board of Directors of the Company authorized and
declared a dividend of one Right for each outstanding share of Common Stock.
The dividend was payable to Shareholders at the close of business on August 7,
1998 (the "Record Date") and with respect to all shares of Common Stock that
become outstanding after the Record Date and prior to the earliest of the
Separation Date (as defined below) the redemption of the Rights, the exchange
of the Rights and the expiration of the Rights. Each Right entitles the
registered holder of a share of Common Stock to purchase from the Company one
share of Common Stock at a price of $15.00 per share, subject to adjustment to
prevent dilution (the "Purchase Price").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (other than the Company, subsidiary of the Company, an
employee benefit plan of the Company or subsidiary, Molly F. Cade, or
affiliate, provided her ownership does not exceed 25 percent, or certain other
holders) (an "Acquiring Person") has acquired, or obtained the right to
acquire beneficial ownership of 15 percent or more of the outstanding shares
of Common Stock (the "Stock Acquisition Date") and (ii) 10 days following
commencement or disclosure of an intention to commence a tender offer or
exchange offer by a person (other than the Company, a subsidiary of the
Company, an employee benefit plan of the Company or a subsidiary, Molly F.
Cade, or affiliate, provided her ownership does not exceed 25 percent, or
certain other holders) the consummation of which would result in the
beneficial ownership by a person or group together with persons affiliated or
associated with it of 50 percent or more of the outstanding shares of Common
Stock (the earlier of such dates being the "Separation Date").
The Rights Agreement provides that, until the Separation Date (or earlier
redemption or expiration of the Rights), the Rights are only transferable with
shares of the Common Stock, and the surrender for transfer of any certificates
for shares of the Common Stock will also constitute the transfer of the Rights
associated with the shares represented by such certificate. Following the
Separation Date, separate certificates will evidence the Rights.
The Rights will first become exercisable on the Separation Date (unless
sooner redeemed). The Rights will expire at the close of business on August 3,
2008, unless the Rights are earlier redeemed or exchanged by the Company.
In the event that any person becomes an Acquiring Person (a "Flip In
Event"), each holder of a Right (except as provided below) will thereafter
generally have the right to purchase, upon exercise of the Right for the then-
current Purchase Price, that number of shares of Common Stock having a market
value of two times the then-current Purchase Price.
In the event that, following the Separation Date, the Company is acquired
in a merger or other business combination in which the Common Stock does not
remain outstanding or is changed or 50 percent or more of its consolidated
assets is sold, leased, exchanged, mortgaged, pledged or otherwise transferred
or disposed of (in one transaction or a series of transactions) (a "Flip Over
Event"), each holder of a Right (except as provided below) will thereafter
generally have the right to purchase upon the exercise of the Rights at the
then-current Purchase Price, that number of shares of Common Stock of the
acquiring company (or, in certain circumstances, one of its affiliates) which
at the time of such transaction would have a market value of two times the
Purchase Price.
Any "Flip In Event" or "Flip Over Event" is referred to herein as a
"Triggering Event".
Notwithstanding any of the foregoing, any Rights beneficially owned at any
time on or after the Separation Date by an Acquiring Person or an affiliate or
associate of an Acquiring Person (whether or not such ownership
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is subsequently transferred) will become null and void upon the occurrence of
the earlier of the Board of Directors' decision to exchange the Rights and a
Triggering Event, and any holder of such Rights will have no right to exercise
the Rights.
At any time prior to the earlier of (i) the closing of business on the
tenth day following the time that it becomes public that an Acquiring Person
has become such (with the possibility for the Board of Directors to extend
this time for an additional time) and (ii) the Expiration Date, the Company
may redeem the Rights in whole, but not in part, at a price of $.0001 per
Right. Immediately upon the action of the Company's Board of Directors
electing to redeem the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights thereafter will be to receive the
applicable redemption price.
At any time any person becomes an Acquiring Person and prior to such time
as such person, together with its affiliates and associates becomes the
beneficial owner of at least 50 percent of the Company's outstanding Common
Stock, the Company may, provided that all necessary regulatory approvals have
been obtained, exchange the Rights (other than Rights owned by the Acquiring
Person which become null and void), in whole or in part, at a ratio of one
share of Common Stock per Right, subject to adjustment.
In connection with the Company entering into the Merger Agreement, the
Company has amended the Rights Agreement, (i) to render the Rights Agreement
inapplicable to the Merger Agreement, the Shareholder Option Agreement, the
Offer and the Merger, (ii) to ensure that (A) Parent and Purchaser, or either
of them or their respective affiliates or Subsidiaries, are not deemed to be
an Acquiring Person pursuant to the Rights Agreement and (B) neither a
Separation Date nor a Stock Acquisition Date occur by reason of the execution
and delivery of the Merger Agreement, the Shareholder Option Agreement or by
the announcement or consummation of the Offer or the Merger (C) no Rights
shall separate from the shares of Common Stock or otherwise become exercisable
and (D) so that the Company will have no obligations under the Rights or the
Rights Agreement (in connection with the Offer and the Merger) and the
shareholders of the Company will have no rights, remedy or claim, whether
legal or equitable, under the Rights or the Rights Agreement (in connection
with the Offer and the Merger).
13. Source and Amount of Funds
Parent and Purchaser estimate that the total amount of funds required to
purchase all of the outstanding Shares pursuant to the Offer and the Merger
and to pay related fees and expenses will be approximately $117,338,000.
Purchaser will obtain such funds from Parent. Parent currently intends to
obtain such funds from available cash on hand at the time of completion of the
Offer.
14. Certain Conditions of the Offer
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment, purchase or pay for any Shares tendered in
connection with the Offer and may terminate or, subject to the terms of the
Merger Agreement, amend the Offer, if (i) there shall not be validly tendered
and not properly withdrawn prior to Expiration Date that number of Shares
which, together with any Shares beneficially owned by Purchaser or Parent
(including Shares which Purchaser has the immediate right to acquire under the
Shareholder Option Agreement), represents at least 75 percent of the total
number of outstanding Shares on a fully diluted basis, (ii) any applicable
waiting period under the HSR Act shall not have expired or been terminated or
(iii) at any time on or after the date of the Merger Agreement and prior to
the Expiration Date, any of the following conditions exist:
(a) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction,
proposed, sought, promulgated, enacted, entered, enforced, issued, amended
or deemed applicable to Parent, Purchaser, the Company, any other affiliate
of Parent or the Company, the Offer or the Merger, that is reasonably
likely, directly or indirectly, to (1) make the acceptance for payment of,
or payment for or purchase of some or all of the Shares pursuant to the
Offer illegal, or otherwise restrict or prohibit or make materially more
costly the consummation of the Offer or the Merger, (2) result in a
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significant delay in or restrict the ability of Purchaser to accept for
payment, pay for or purchase some or all of the Shares pursuant to the
Offer or to effect the Merger, (3) render Purchaser unable to accept for
payment or pay for or purchase some or all of the Shares pursuant to the
Offer, (4) impose material limitations on the ability of Parent, Purchaser
or any of their respective Subsidiaries or affiliates to acquire or hold,
transfer or dispose of, or effectively to exercise all rights of ownership
of, some or all of the Shares including the right to vote the Shares
purchased by it pursuant to the Offer on an equal basis with all other
Shares on all matters properly presented to the shareholders of the
Company, (5) require the divestiture by Parent, Purchaser or any of their
respective Subsidiaries or affiliates of any Shares, or require Purchaser,
Parent, the Company, or any of their respective Subsidiaries or affiliates
to dispose of or hold separate all or any material portion of their
respective businesses, assets or properties or impose any material
limitations on the ability of any of such entities to conduct their
respective businesses or own such assets, properties or Shares or on the
ability of Parent or Purchaser to conduct the business of the Company and
its Subsidiaries and own the assets and properties of the Company and its
Subsidiaries, (6) impose any material limitations on the ability of Parent,
Purchaser or any of their respective Subsidiaries or affiliates effectively
to control the business or operations of the Company, Parent, Purchaser or
any of their respective Subsidiaries or affiliates or (7) otherwise
materially adversely affect Parent, Purchaser, the Company or any of their
respective Subsidiaries or affiliates, or their business, assets,
liabilities, condition (financial or otherwise), results of operations or
prospects, or the value of the Shares or otherwise make consummation of the
Offer or the Merger unduly burdensome;
(b) there shall have been threatened, instituted or pending any action,
proceeding or counterclaim by or before any Governmental Entity,
challenging the making of the Offer or the acquisition by Purchaser of the
Shares pursuant to the Offer or the consummation of the Merger, or seeking
to obtain any material damages, or seeking to, directly or indirectly,
result in any of the consequences referred to in clauses (1) through (7) of
paragraph (a) above;
(c) there shall have occurred (1) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over-the-counter market in the United States, (2) the
declaration of any banking moratorium or any suspension of payments in
respect of banks or any limitation (whether or not mandatory) on the
extension of credit by lending institutions in the United States, (3) the
commencement of a war, armed hostilities or any other international or
national calamity involving the United States or (4) in the case of any of
the foregoing existing at the time of the execution of the Merger
Agreement, a material acceleration or worsening thereof;
(d) any Person or "group" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than Parent, Purchaser or the Option Grantors or
any of their respective affiliates shall have become the beneficial owner
(as that term is used in Rule 13d-3 under the Exchange Act) of more than 25
percent of the outstanding Shares;
(e) there shall have occurred any change, condition, event or
development that, individually or in the aggregate, has had or is
reasonably likely to have, a Material Adverse Effect;
(f) the Company shall have breached or failed to comply in any material
respect with any of its obligations, covenants, or agreements under the
Merger Agreement or any representation or warranty of the Company contained
in the Merger Agreement that is qualified as to materiality shall not be
true and correct, or any such representation or warranty that is not so
qualified shall not be true and correct, and has had or is reasonably
likely to have a material adverse effect on the Company, in each case
either as of when made or at and as of any time thereafter; or
(g) the Merger Agreement shall have been terminated pursuant to its
terms or shall have been amended pursuant to its terms to provide for such
termination or amendment of the Offer;
which, in the good faith judgment of Parent or Purchaser, in any case, and
regardless of the circumstances (excluding any direct action or inaction by
Parent or Purchaser or any of their affiliates which to Parent's and
Purchaser's knowledge is reasonably likely to cause any of the above
conditions to exist) giving rise to any such condition, makes it inadvisable
to proceed with the Offer or with acceptance for payment or payment for
Shares.
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The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted regardless of the circumstances (excluding any direct
action or inaction by Parent or Purchaser or any of their affiliates which to
Parent's and Purchaser's knowledge is reasonably likely to cause any of the
above conditions to exist) or waived by Parent or Purchaser in whole or in
part at any time or from time to time in its reasonable discretion subject to
the terms and conditions of the Merger Agreement. The failure of Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time. Any
determination by Parent or Purchaser concerning the events described above
will be final and binding on all parties.
Notwithstanding the fact that Purchaser reserves the right to assert the
occurrence of a condition following acceptance for payment but prior to
payment in order to delay payment or cancel its obligation to pay for properly
tendered Shares, Purchaser will either promptly pay for such Shares or
promptly return such Shares.
15. Certain Legal Matters
General.
Except as otherwise disclosed herein, Parent and Purchaser are not aware
of any licenses or other regulatory permits which appear to be material to the
business of the Company and which might be adversely affected by the
acquisition of Shares by Purchaser pursuant to the Offer or of any approval or
other action by any governmental, administrative or regulatory agency or
authority which would be required for the acquisition or ownership of Shares
by Purchaser pursuant to the Offer. Should any such approval or other action
be required, it is currently contemplated that such approval or action would
be sought or taken. There can be no assurance that any such approval or
action, if needed, would be obtained or, if obtained, that it will be obtained
without substantial conditions or that adverse consequences might not result
to the Company's or Parent's business or that certain parts of the Company's
or Parent's business might not have to be disposed of in the event that such
approvals were not obtained or such other actions were not taken, any of which
could cause Purchaser to elect to terminate the Offer without the purchase of
the Shares thereunder. Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 14.
Antitrust Compliance.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may be consummated following the expiration or
earlier termination of a 15-calendar-day waiting period following the filing
by Purchaser of a Notification and Report Form with respect to the Offer,
unless Purchaser receives a request for additional information or documentary
material from the Antitrust Division of the U.S. Department of Justice (the
"Antitrust Division") or the U.S. Federal Trade Commission (the "FTC").
Purchaser expects to make its filing with the Antitrust Division and the FTC
on or about October 25, 1999. If, within the initial 15-day waiting period,
either the Antitrust Division or the FTC requests additional information or
documentary material from Purchaser, the waiting period will be extended and
would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by Purchaser with such request. Only
one extension of the waiting period pursuant to a request for additional
information is authorized by the HSR Act. Thereafter, such waiting period may
be extended only by court order or with the consent of Purchaser. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, at the sole discretion of Purchaser, be
extended and, in any event, the purchase of and any payment for Shares will be
deferred until the Expiration Date. Unless the Offer is extended, any
extension of the waiting period may not give rise to any additional withdrawal
rights. See Section 4.
In practice, complying with a request for additional information or
documentary material can take significant amount of time. In addition, if the
Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant
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governmental agency concerning possible means of addressing those issues and
may agree to delay consummation of the transaction while such negotiations
continue.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of
the Company. At any time before or after Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the Merger or seeking the divestiture of Shares acquired by Purchaser
or the divestiture of substantial assets of Purchaser or its Subsidiaries, or
of the Company or its Subsidiaries. Private parties may also bring legal action
under the antitrust laws under certain circumstances. If any such action by the
FTC, the Antitrust Division or any other person should be threatened or
commenced, Purchaser believes that consummation of the Offer would not violate
any antitrust laws; there can be no assurance, however, that a challenge to the
Offer on antitrust grounds will not be made or, if a challenge is made, what
the result will be.
Although the parties to the Merger Agreement are required to cooperate and
use their commercially reasonable efforts to defend vigorously against any
action, suit proceeding or investigation relating to the Merger Agreement,
Parent, Purchaser and their Subsidiaries or affiliates are not obligated to
agree to limit their ownership rights of the Shares or to hold separate or
divest any of the businesses, assets or properties of the Company or limit in
material manner their or the Company's or its Subsidiaries' ability to conduct
their respective businesses or own such assets or properties or the assets or
businesses of the Company and its Subsidiaries or to control their respective
businesses or operations or those of the Company and its Subsidiaries.
State Take-over Laws.
A number of states have adopted laws and regulations applicable to offers
to acquire securities of corporations which are incorporated in such states
and/or which have substantial assets, shareholders, principal executive offices
or principal places of business therein. In Edgar v. Mite Corporation, the
Supreme Court of the United States held that the Illinois Business Takeover
Statute, which made the takeover of certain corporations more difficult,
imposed a substantial burden on interstate commerce and was therefore
unconstitutional. In CTS Corporation v. Dynamics Corporation of America, the
Supreme Court held that as a matter of corporate law, and in particular, those
laws concerning corporate governance, a state may constitutionally disqualify a
potential acquirer from voting on the affairs of a target corporation without
prior approval of the remaining shareholders, provided that such laws were
applicable only under certain conditions, in particular, that the corporation
has a substantial number of shareholders in the state and is incorporated
there.
A number of takeover provisions of the WBCL apply only to "resident
domestic corporations". A resident domestic corporation is defined as a
Wisconsin corporation that as of a relevant date satisfies any of the following
four tests:
1. Its principal offices are located in the State of Wisconsin.
2. It has significant business operations located in the State of
Wisconsin.
3. More than 10 percent of the holders of record of its shares are
residents of the State of Wisconsin.
4. More than 10 percent of its shares are held of record by residents of
the State of Wisconsin.
For purposes of determining each of item 3 and 4, the relevant date is the
most recent record date of the corporation before the date the person becomes
an "interested stockholder" (as defined in the WBCL). The Company does not have
its principal offices in the State of Wisconsin and does not have significant
business operations located in the State of Wisconsin. However, the Company has
advised Purchaser that as of the relevant record date, the first percentage of
residence test was met. As a result, the provisions of the WBCL described below
purport to apply to the Offer and the Merger.
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Sections 180.1140 to 180.1144 of the WBCL (the "Wisconsin Business
Combination Statute") regulate a broad range of "business combinations"
between a "resident domestic corporation" and an "interested stockholder". The
Wisconsin Business Combination Statute defines a "business combination" to
include a merger or share exchange with an interested stockholder or a
corporation which is, or after such merger or share exchange would be, an
affiliate or associate of an interested stockholder, or the sale, lease,
exchange, mortgage, pledge, transfer or other disposition of assets equal to
at least 5 percent of the aggregate market value of the stock or assets of the
company or 10 percent of its earning power, or issuance of stock or rights to
purchase stock with a market value equal to at least 5 percent of the
aggregate market value of all of the outstanding stock, adoption of a plan of
liquidation and certain other transactions, all involving an interested
stockholder or an affiliate or associate of an interested stockholder. An
"interested stockholder" is defined as a person who beneficially owns 10
percent of the voting power of the outstanding voting stock of a corporation
or who is an affiliate or associate of the corporation and beneficially owned
10 percent of the voting power of the then outstanding voting stock of a
corporation within the last three years. The Wisconsin Business Combination
Statute prohibits a corporation from engaging in a business combination (other
than a business combination of a type specifically excluded from the coverage
of the statute) with an interested stockholder for a period of three years
following the date such person becomes an interested stockholder, unless the
board of directors of the corporation approved the business combination or the
acquisition of stock that resulted in a person becoming an interested
stockholder before such acquisition. Business combinations after the three-
year period following the stock acquisition date are permitted only if (i) the
board of directors approved the acquisition of the stock prior to the date on
which the interested stockholder became such; (ii) the business combination is
approved by a majority of the outstanding voting stock not beneficially owned
by the interested stockholder; (iii) the consideration to be received by
shareholders meets certain requirements of the statute with respect to form
and amount; or (iv) the business combination is of a type excluded from the
Wisconsin Business Combination Statute. The Wisconsin Business Combination
Statute's prohibition on business combinations applies for three years after
the acquisition of at least 10 percent of the outstanding shares without
regard to the percentage of shares owned by the interested stockholder and
cannot be avoided by subsequent action of the board of directors or
shareholders. The Company's Board of Directors approved Purchaser's
acquisitions of Shares in the Offer and pursuant to the Shareholder Option
Agreement in connection with entering into the Merger Agreement and,
therefore, the Wisconsin Business Combination Statute will not apply to the
Merger.
Sections 180.1130 to 180.1132 of the WBCL provide that "business
combinations" involving a resident domestic corporation and a "significant
shareholder" or an affiliate of a significant shareholder are subject to a
supermajority vote of shareholders (the "Wisconsin Fair Price Statute"), in
addition to any approval otherwise required. The Wisconsin Fair Price Statute
defines a "business combination" to include a merger or share exchange (except
for certain mergers or share exchanges, including a subsidiary merger without
shareholder approval pursuant to Section 180.1104 of the WBCL) with a
significant shareholder or a corporation which is, or after such merger or
share exchange would be, an affiliate or associate of a significant
shareholder or the sale, lease, exchange or other disposition involving all or
substantially all of the property and assets of a corporation to a significant
shareholder or an affiliate of a significant shareholder. A "significant
shareholder" is defined as a person who beneficially owns 10 percent or more
of the voting power of the outstanding voting shares of a corporation or an
affiliate of the corporation which beneficially owned 10 percent or more of
the power of the outstanding voting shares of the corporation within the last
two years. Business combinations subject to the Wisconsin Fair Price Statute
must be approved by 80 percent of the voting power of the corporation's stock
and at least two-thirds of the voting power of the corporation's stock not
beneficially owned by the significant shareholder who is party to the business
combination or an affiliate or associate of a significant shareholder who is a
party to the business combination, in each case, voting together as a single
group. The supermajority voting provisions do not apply if the following fair
price standards have been met: (i) the aggregate value of the per share
consideration to be received by shareholders in the business combination is
equal to the highest of (A) the highest price paid for any common shares of
the corporation by the significant shareholder in the transaction in which it
became a significant shareholder or within two years before the date of the
business combination, whichever is higher; (B) the market value of the
corporation's shares on the date of commencement of any tender offer initiated
by the significant shareholder, the date on which the person became a
significant shareholder or
34
<PAGE>
the date of the first public announcement of the proposed business
combination, whichever is higher or (C) the highest preferential liquidation
or dissolution distribution to which holders of the shares would be entitled;
and (ii) either cash, or the form of consideration used by the significant
shareholder to acquire the largest number of shares previously acquired by it,
is offered. The amount to be paid for each Share in the Merger satisfies each
of the conditions of the Wisconsin Fair Price Statute. Accordingly, the
restrictions contained in such statute are not applicable to the Merger.
Under Section 180.1150 of the WBCL (the "Wisconsin Control Share
Statute"), unless the articles of incorporation otherwise provide, the voting
power of shares, including shares issuable upon conversion of convertible
securities or exercise of options or warrants, of a resident domestic
corporation held by any person or persons acting as a group in excess of 20
percent of the voting power in the election of directors is limited to 10
percent of the full voting power of those shares. The effect of the Wisconsin
Control Share Statute is to require any person seeking to acquire a majority
of the voting power of such corporation to own at least 75 percent of the
issued and outstanding shares of such corporation. This restriction does not
apply to shares acquired directly from the resident domestic corporation,
shares acquired in certain specified transactions, or shares which have had
their full voting power restored by the vote of a majority of the corporation.
Chapter 552 of the Wisconsin Statutes (the "Wisconsin Corporate Take-Over
Law") regulates a broad range of "take-over offers", making it unlawful to
make a take-over offer involving a "target company" in Wisconsin or to acquire
any equity securities of such target company pursuant to the take-over offer
unless a registration statement has been filed with the Wisconsin division of
securities 10 days prior to the commencement of the takeover offer, or such
takeover offer is exempted. A "target company" as defined in the Wisconsin
Corporate Take-Over Law means a corporation (a) which is organized under the
laws of Wisconsin or which has its principal office in Wisconsin, (b) that has
substantial assets located in Wisconsin, (c) whose equity securities are
registered under Section 12 of the Exchange Act, and (d) which either has (i)
at least 100 record holders who are residents of Wisconsin or (ii) at least 5
percent of the corporation's securities are held by residents of Wisconsin.
The Company has represented to Purchaser that it does not have substantial
assets located in Wisconsin. Accordingly the Wisconsin Corporate Take-Over Law
will not apply to the Offer and Merger.
The Wisconsin Administrative Code Section DFI-Section 6.05 (the "Wisconsin
Going Private Rule") provides that an issuer, or any affiliated person of an
issuer, is deemed to employ a "device, scheme or artifice" to defraud holders
of securities, or to engage in an "act, practice or course of business which
operates or would operate as a fraud or deceit" of the holders within the
meaning of Section 551.41 of the Wisconsin Statutes, if the issuer or
affiliated person enters into any transaction involving a purchase of any
equity securities of the issuer, other than an arm's length purchase by a
person not affiliated with the issuer, which transaction has, or may have, the
effect of (i) causing a class of equity securities of the issuer to be subject
to delisting from a national securities exchange registered under the Exchange
Act or cease to be authorized to be quoted on Nasdaq or (ii) causing a class
of equity securities of the issuer to be eligible for termination of
registration, or suspension of reporting requirements under the Exchange Act.
The Wisconsin Going Private Rule applies to any issuer whose equity securities
of any class are registered under Section 12 of the Exchange Act, and which
has 100 or more record holders of the securities in the State of Wisconsin
(which number constitutes 20 percent or more of the total number of record
holders of the securities) on the date of the initial offer, notice or
solicitation relating to the proposed transaction. Based on previous no-action
letters issued by the Securities Division of the Wisconsin Department of
Financial Institutions and recent discussions between Purchaser's counsel and
representatives of the Division, Purchaser has concluded that the Wisconsin
Going Private Rule does not apply to the Offer or the Merger.
16. Fees and Expenses
Purchaser has retained Citibank, N.A. as Depository and Georgeson
Shareholder Communications, Inc. as Information Agent. Citibank, N.A. and
Georgeson will receive customary compensation and reimbursement for reasonable
out-of-pocket expenses, as well as indemnification against certain liabilities
in connection with the Offer, including liabilities under applicable
securities laws.
35
<PAGE>
Except as set forth above, Purchaser will not pay any fees or commissions
to any broker or dealer or other person for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will upon request be reimbursed by Purchaser for customary mailing and
handling expenses incurred by them in forwarding the offering material to
their customers.
17. Miscellaneous
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. However, Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction.
Purchaser and Parent have filed with the SEC a Statement on Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer and may file amendments thereto. Such Statement and
any amendments thereto, including exhibits, may be examined and copies may be
obtained from the principal office of the SEC in Washington, D.C. in the
manner set forth in Section 8.
No person has been authorized to give any information or make any
representation on behalf of Parent or Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been
authorized.
SPHERE CORPORATION
36
<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER
Parent. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
offices or employment for the past five years of each director and executive
officer of Parent. The business address of each such person is One Financial
Plaza, Hartford, CT 06101. Unless otherwise indicated, each such person is a
citizen of the United States and has held his or her present position as set
forth below for the past five years. Directors of Parent are indicated by an
asterisk.
<TABLE>
<CAPTION>
Name, Citizenship and Present Principal Occupation or Employment;
Current Business Address Age Material Positions Held During the Past Five Years
- ------------------------ --- ----------------------------------------------------
<S> <C> <C>
Dean C. Borgman......... 58 President, Sikorsky Aircraft Corp.; previously
Senior Vice President, The Boeing Company
(helicopter unit); former President, McDonnell
Douglas' helicopter business
Ari Bousbib............. 38 Vice President, Strategic Planning of Parent since
Citizenship: 1997; previously Managing Director, the Strategic
French/Portuguese Partners Group; Partner, Booz, Allen & Hamilton
William L. Bucknall, 56 Senior Vice President, Human Resources &
Jr..................... Organization, of Parent since 1992
John F. Cassidy, Jr .... 55 Senior Vice President, Science and Technology, of
Parent since 1998; previously Vice President, United
Technologies Research Center
Antonia Handler 70 Director of Parent since 1981; Senior Advisor and
Chayes*................ Board Member of Conflict Management Group (CMG);
Senior Consultant to JAMS/ENDISPUTE; Adjunct
Lecturer at the Kennedy School of Government and Co-
Director of the Project on International Compliance
and Dispute Settlement at the Program on Negotiation
at Harvard Law School; member of the American Law
Institute and the Council on Foreign Relations
Louise Chenevert........ 42 President, Pratt & Whitney since 1999; Executive
Vice President, Pratt & Whitney for operations,
worldwide purchasing, and aftermarket business from
June 1998-1999; Executive Vice President for
operations of Pratt & Whitney from January 1997-
1998; joined Pratt & Whitney Canada in 1993
Kevin Conway............ 51 Vice President, Taxes, of Parent since 1995;
previously Director of Taxes, United Technologies
Corporation
George David*........... 57 Director of Parent since 1992; Chairman of Parent
since 1997; Chief Executive Officer of Parent since
1994; President of Parent from 1992 to 1999; member
of The Business Roundtable; Chairman and President
of the Boards of the Graduate School of Business
Administration at the University of Virginia, the
National Minority Supplier Development Council and
the U.S.--ASEAN Business Council
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship and Present Principal Occupation or Employment;
Current Business Address Age Material Positions Held During the Past Five Years
- ------------------------ --- ----------------------------------------------------
<S> <C> <C>
David J. Fitzpatrick.... 45 Senior Vice President and Chief Financial Officer of
Parent since 1998; previously Vice President and
Controller, Eastman Kodak Co.; Finance Director,
Cadillac Luxury Car Division, Chief Accounting
Officer, General Motors Corp.
Jean-Pierre Garnier, 51 Director of Parent since 1997; Chief Operating
Ph.D.*................. Officer and Executive Member of the Board of
Directors of SmithKline Beecham plc, Philadelphia,
PA (pharmaceuticals) since 1995; Chairman,
SmithKline Beecham plc, Pharmaceuticals from 1994-
1995; Director of the Eisenhower Exchange Fellowship
Jay L. Haberland........ 48 Vice President-Controller of Parent since 1996;
previously Acting Chief Financial Officer, Director
of Internal Auditing of Parent; Vice President,
Finance, Commercial & Industrial Group, The Black &
Decker Corporation
Ruth R. Harkin.......... 55 Senior Vice President, International Affairs and
Government Relations of Parent since 1997;
previously President and Chief Executive Officer,
Overseas Private Investment Corporation
Karl J. Krapek*......... 50 Director of Parent since 1997; President and Chief
Operating Officer of Parent since 1999. Previously
Executive Vice President of Parent; President, Pratt
& Whitney; Chairman of the Board of Directors of the
Connecticut Capitol Region Growth Council; Chairman
of the MetroHartford Millennium Management Group;
Vice Chairman of the Board of Trustees of the
Connecticut State University System; member of the
Director's Advisory Board of the Yale Cancer Center;
Director of Saint Francis Care, Inc. and will serve
as 1999 General Campaign Chairman for the United Way
and Combined Health Appeal Community Campaign in
Hartford area
Charles R. Lee*......... 59 Director of Parent since 1994; Chairman and Chief
Executive Officer of GTE Corporation, Irving, Texas
(telecommunications); Director of The Procter &
Gamble Company; Director of the USX Corporation;
member of The Business Roundtable and The Business
Council; Trustee of the Board of Trustees of Cornell
University; Director of the New American Schools
Development Corporation; member of The Conference
Board; Harvard Business School's Board of Directors
of the Associates; Director of the Stamford Hospital
Foundation
John R. Lord............ 55 President, Carrier Corporation since 1995;
previously President, Carrier NAO
Richard D. McCormick*... 59 Director of Parent since February, 1999; Chairman U
S WEST, Inc., Denver, Colorado (telecommunications).
Previously Chairman, President and Chief Executive
Officer of former parent company, also known as U S
WEST, Inc.; Director of United Airlines; Director of
Wells Fargo and Company; Director of Concept Five
Technologies; Chairman of the United States Council
for International Business; Vice President of the
International Chamber of Commerce; Chairman of
Creighton University; member of the Business
Council; Trustee of the Denver Art Museum; Board
Member of the American Indian College Fund
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship and Present Principal Occupation or Employment;
Current Business Address Age Material Positions Held During the Past Five Years
- ------------------------ --- ----------------------------------------------------
<S> <C> <C>
Ronald F. McKenna....... 59 President, Hamilton Sundstrand since June 21, 1999;
Executive Vice President and Chief Operating Officer
of Hamilton Sundstrand, Aerospace, May 6, 1996 to
June 21, 1996; Vice President of Business
Development, Sunstrand Aerospace, January, 1995 to
May, 1996; Vice President and General Manager of
Sunstrand Aerospace Electric Power, December,
1989 to January, 1995
Angelo J. Messina....... 46 Vice President, Financial Planning and Analysis of
Parent since 1998; previously Director, Financial
Planning and Analysis, of Parent; Vice President,
Strategic Planning, Pratt & Whitney; Director,
Investor Relations, of Parent
Stephen F. Page......... 59 Executive Vice President of Parent and President and
Chief Executive Officer, Otis Elevator since 1997;
previously Executive Vice President and Chief
Financial Officer of Parent
William J. Perry*....... 72 Director of Parent since 1997; Michael and Barbara
Berberian Professor at Stanford University, with a
joint appointment in the Department of Engineering-
Economic Systems & Operations Research and the
Institute for International Studies; Fellow at the
Hoover Institute; co-director of the Stanford-
Harvard Preventive Defense Project; previously
Secretary of Defense for the United States; Chairman
of Global Technology Partners; Director of Hambrecht
& Quist, LLC; The Boeing Company; and Cylink
Corporation
Frank P. Popoff*........ 63 Director of Parent since 1996; Chairman, The Dow
Chemical Company, Midland, Michigan; Director of
American Express Company; U S West, Inc.; Chemical
Financial Corporation; and Michigan Molecular
Institute; member of the Business Council for
Sustainable Development; The Business Council; the
Council for Competitiveness; the American Chemical
Society; and director emeritus of the Indiana
University Foundation
Gilles A.H. Renaud...... 53 Vice President-Treasurer of Parent since 1996;
previously Vice President and Chief Financial
Officer, Carrier Corporation
William H. Trachsel..... 56 Senior Vice President, General Counsel and Secretary
of Parent since 1998; previously Vice President,
Secretary and Deputy General Counsel of Parent
Andre Villeneuve*....... 54 Director of Parent since 1997; Executive Director of
Reuters Holdings PLC, London, England; member of
Reuters' Board of Directors; Chairman of Instinet
Corp., Reuters' electronic brokerage subsidiary;
Director of CGU plc
Harold Wagner*.......... 63 Director of Parent since 1994; Chairman and Chief
Executive Officer, Air Products and Chemicals, Inc.,
Allentown, Pennsylvania; previously Chairman,
President and Chief Executive Officer, Air Products
and Chemicals, Inc.; Director of CIGNA Corporation;
Daido-Hoxan; Member of The Business Council; the
Policy Committee of The Business Roundtable; Member
of the Pennsylvania Business Roundtable; has served
on the Board of Trustees of Lehigh University
</TABLE>
39
<PAGE>
Purchaser. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
offices or employment for the past five years of the directors and executive
officers of Purchaser. Except as otherwise noted, the business address of such
person is One Financial Plaza, Hartford, CT 06101. Unless otherwise indicated,
such person is a citizen of the United States.
<TABLE>
<CAPTION>
Name, Citizenship and Present Principal Occupation or Employment;
Current Business Address Age Material Positions Held During the Past Five Years
- ------------------------ --- ----------------------------------------------------
<S> <C> <C>
Ari Bousbib............. 38 Director of Purchaser since October 1999; President
Citizenship: of Purchaser since October 1999; Vice President,
French/Portuguese Strategic Planning of Parent since 1997; previously
Managing Director, the Strategic Partners Group;
Partner, Booz, Allen & Hamilton
Lawrence V. Mowell...... 51 Director of Purchaser since October, 1999; Associate
General Counsel of Parent since 1998; Vice President
and General Counsel, UT Finance 1992-1998
</TABLE>
40
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal, certificates for the Shares and any other required documents
should be sent by each shareholder of the Company or such Shareholder's
broker-dealer, commercial bank, trust company or other nominee to the
Depositary as follows:
The Depositary For The Offer Is:
Citibank, N.A.
By Mail: By Hand: By Courier:
Citibank, N.A. Citibank, N.A. 915 Broadway, 5th Floor
P.O. Box 685 Corporate Trust Window New York, NY 10010
Old Chelsea 111 Wall Street, 5th Floor
Station New York, NY 10043
New York, NY
10113
By Facsimile Transmission:
(for Eligible Institutions only)
(212) 505-2248
Confirm Facsimile Transmission
By Telephone Only
(800) 270-0808
Any questions or requests for assistance or additional copies of the Offer to
Purchase and the Letter of Transmittal may be directed to the Information
Agent at its telephone number and location listed below. You may also contact
your broker, dealer, commercial bank or trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, New York 10004
Banks and brokers call collect: (212) 440-9800
All others call toll free: (888) 223-2064
<PAGE>
EXHIBIT (a)(2)
Letter of Transmittal
To Tender Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 19, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Citibank, N.A.
By Mail: By Hand: By Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
P.O. Box 685 Corporate Trust 915 Broadway, 5th
Old Chelsea Station Window Floor
New York, NY 10113 111 Wall Street, 5th New York, NY 10010
Floor
New York, NY 10043
Facsimile for Eligible Institutions:
(212) 505-2248
To Confirm Facsimile Transmission:
by Telephone:
(800) 270-0808
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and address(es) of
Registered Owner(s)
(Please fill in, if blank,
Exactly as Name(s) Appear(s) Shares Tendered
on Certificate(s)) (Attach Additional List if Necessary)
- -----------------------------------------------------------------------------------
Total Number of
Shares
Certificate Represented By Number of Shares
Number(s)(*) Certificate(s)(*) Tendered(**)
----------------------------------------------------
<S> <C> <C> <C>
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Total shares
- -----------------------------------------------------------------------------------
</TABLE>
(*)Need not be completed by Book-Entry Shareholders.
(**) Unless otherwise indicated, it will be assumed that all Shares
described above are being tendered. See Instruction 4.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
<PAGE>
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 3 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary (as defined in the Introduction to the
Offer to Purchase) at the Book-Entry Transfer Facility (as defined in Section
2 of the Offer to Purchase) pursuant to the procedures set forth in Section 3
of the Offer to Purchase. Shareholders who deliver Shares by book-entry
transfer are referred to herein as "Book-Entry Shareholders" and other
shareholders are referred to herein as "Certificate Shareholders."
Shareholders whose certificates for Shares are not immediately available or
who cannot comply with the procedure for book-entry transfer on a timely
basis, or who cannot deliver all required documents to the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase), may
tender their Shares in accordance with the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of
documents to the Book-Entry Transfer Facility in accordance with the Book-
Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-
ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY FINANCIAL
INSTITUTIONS THAT ARE PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: _________________________________________
Account Number: ________________________________________________________
Transaction Code Number: _______________________________________________
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owner(s) _________________________________________
Date of Execution of Notice of Guaranteed Delivery _____________________
Name of Institution which Guaranteed Delivery __________________________
Account Number _________________________________________________________
Transaction Code Number ________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Sphere Corporation, a Wisconsin
corporation ("Purchaser") and a wholly owned subsidiary of United Technologies
Corporation, a Delaware corporation ("Parent"), the above-described shares of
common stock, par value $.001 per share (the "Common Stock"), including the
associated rights to purchase Common Stock (the "Rights" and, together with
the Common Stock, the "Shares"), of Cade Industries, Inc., a Wisconsin
corporation (the "Company"), pursuant to the Offer to Purchase, dated October
21, 1999 (the "Offer To Purchase"), at a price of $5.05 per Share, net to the
seller in cash, on the terms and subject to the conditions set forth in the
Offer to Purchase, receipt of which is hereby acknowledged, and this Letter of
Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, from time to time, in whole or in part, to one or more of
its affiliates, the right to purchase the Shares tendered herewith.
On the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), subject to, and effective upon, acceptance for payment of, and
payment for, the Shares tendered herewith in accordance with the terms of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the
order of, Purchaser, all right, title and interest in and to all of the Shares
being tendered hereby and any and all cash dividends, distributions, rights,
other Shares or other securities issued or issuable in respect of such Shares
on or after October 21, 1999 (collectively, "Distributions"), and appoints
Citibank, N.A. (the "Depositary") the true and lawful agent and attorney-in-
fact of the undersigned with respect to such Shares (and any Distributions)
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to the fullest extent of such
shareholder's rights with respect to such Shares (and any Distributions) (a)
to deliver such Share Certificates (as defined below) (and any Distributions)
or transfer ownership of such Shares (and any Distributions) on the account
books maintained by the Book-Entry Transfer Facility, together, in either such
case, with all accompanying evidence of transfer and authenticity, to or upon
the order of Purchaser, (b) to present such Shares (and any Distributions) for
transfer on the books of the Company and (c) to receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares (and any
Distributions), all in accordance with the terms and the conditions of the
Offer.
The undersigned hereby irrevocably appoints the designees of Purchaser,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to the full extent of such shareholder's
rights with respect to the Shares tendered hereby which have been accepted for
payment and with respect to any Distributions. The designees of Purchaser
will, with respect to the Shares (and any associated Distributions) for which
the appointment is effective, be empowered to exercise all voting and any
other rights of such shareholder, as they, in their sole discretion, may deem
proper at any annual, special or adjourned meeting of the Company's
shareholders, by written consent in lieu of any such meeting or otherwise.
This proxy and power of attorney shall be irrevocable and coupled with an
interest in the tendered Shares. Such appointment is effective when, and only
to the extent that, Purchaser deposits the payment for such Shares with the
Depositary. Upon the effectiveness of such appointment, without further
action, all prior powers of attorney, proxies and consents given by the
undersigned with respect to such Shares (and any associated Distributions)
will be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given (and, if given, will not be deemed effective).
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Shares, Purchaser must be able to exercise full voting rights, to the extent
permitted under applicable law, with respect to such Shares (and any
associated Distributions), including voting at any meeting of shareholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby and, when the same are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and the same will not be subject to any adverse claim. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
3
<PAGE>
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares (and any Distributions) tendered hereby.
In addition, the undersigned shall promptly remit and transfer to the
Depositary for the account of Purchaser any and all Distributions in respect
of the Shares tendered hereby, accompanied by appropriate documentation of
transfer and, pending such remittance or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by Purchaser in its
sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall not be affected by, and shall survive, the death or
incapacity of the undersigned and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to
one of the procedures described in Section 3 of the Offer to Purchase will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered owner(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered owner(s) appearing under
"Description of Shares Tendered". In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or issue any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered owner thereof if Purchaser does not accept for
payment any of the Shares so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 And 7) (See Instructions 1, 5 And 7)
To be completed ONLY if certifi- To be completed ONLY if certifi-
cate(s) for Shares not tendered cate(s) for Shares not tendered
or not accepted for payment or not accepted for payment
and/or the check for the purchase and/or the check for the purchase
price of Shares accepted for pay- price of Shares accepted for pay-
ment are to be issued in the name ment are to be sent to someone
of someone other than the under- other than the undersigned or to
signed. the undersigned at an address
other than that shown above.
Issue: [_] Check and/or [_] Cer-
tificates to: Deliver: [_] Check and/or
[_] Certificates to:
Name: ____________________________
(Please Print) Name: ____________________________
(Please Print)
Address: _________________________
Address: _________________________
__________________________________
(Include Zip Code) __________________________________
(Include Zip Code)
__________________________________
(Tax Identification or Social __________________________________
Security Number) (Tax Identification or Social
Security Number)
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IMPORTANT -- SIGN HERE
(Please Complete Substitute Form W-9 Below)
----------------------------------------------------------------------------
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(Signature(s) of Holder(s))
Dated: _______________________, 1999
(Must be signed by registered owner(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered owner(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please set forth
full title and see Instruction 5.)
Name(s):____________________________________________________________________
(Please Print)
Capacity (full title): _____________________________________________________
Address:____________________________________________________________________
____________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ____________________________________________
Tax Identification or
Social Security No.: _______________________________________________________
GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5)
Authorized Signature: ______________________________________________________
Name: ______________________________________________________________________
(Please Type or Print)
Address: ___________________________________________________________________
________________________________________________________________________
(Include Zip Code)
Name of Firm: ______________________________________________________________
Dated: _______________________, 1999
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INSTRUCTIONS
Forming Part of The Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations
and brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution"). Signatures on this Letter of Transmittal need not be guaranteed
(a) if this Letter of Transmittal is signed by the registered owner(s) (which
term, for purposes of this document, includes any participant in any of the
Book-Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered herewith and
such registered owner has not completed the box titled "Special Payment
Instructions" or the box titled "Special Delivery Instructions" on this Letter
of Transmittal or (b) if such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates or Book-Entry
Confirmations. This Letter of Transmittal is to be used either if certificates
are to be forwarded herewith or, unless an Agent's Message is utilized, if
tenders are to be made pursuant to the procedures for tender by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Certificates for all
physically tendered Shares ("Share Certificates"), or confirmation of any
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered by book-entry transfer ("Book Entry
Confirmation"), as well as this Letter of Transmittal properly completed and
duly executed with any required signature guarantees, unless an Agent's
Message in the case of a book-entry transfer is utilized, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase).
Shareholders whose certificates for Shares are not immediately available
or who cannot deliver all other required documents to the Depositary on or
prior to the Expiration Date or who cannot comply with the procedures for
book-entry transfer on a timely basis, may nevertheless tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form provided by Purchaser
must be received by the Depositary prior to the Expiration Date; and (c) Share
Certificates for all tendered Shares, in proper form for transfer (or a Book
Entry Confirmation with respect to such Shares), as well as a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed with
any required signature guarantees (unless, in the case of a book-entry
transfer, an Agent's Message is utilized), and all other documents required by
this Letter of Transmittal, must be received by the Depositary within three
New York Stock Exchange Inc. trading days after the date of execution of such
Notice of Guaranteed Delivery.
A properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery of Share Certificates to the
Depositary.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. DELIVERY OF ALL SUCH
DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT
BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto and separately signed on each page thereof in the
same manner as this Letter of Transmittal is signed.
4. Partial Tenders (Applicable to Certificate Shareholders Only). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares which are to be tendered in the box titled
"Number of Shares Tendered". In such cases, new certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) but not
tendered will be sent to the registered owner, unless otherwise provided in
the appropriate box on this Letter of Transmittal, as soon as practicable
after the Expiration Date. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise
indicated.
5. Signatures On Letter Of Transmittal; Stock Powers And Endorsements. If
this Letter of Transmittal is signed by the registered owner(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without alteration, enlargement or any other
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
in the name of, a person other than the registered owner(s). Signatures on
such certificates or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by the appropriate stock powers, in either case,
signed exactly as the name or names of the registered owner(s) or holder(s)
appear(s) on the certificate(s). Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or to its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or (in
the circumstances permitted hereby) if certificates for Shares not tendered or
accepted for payment are to be registered in the name of, any person other
than the registered owner(s), or if tendered certificates are registered in
the name of any person other than the person signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered owner(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price if satisfactory evidence of
the payment of such taxes, or exemption therefrom, is not submitted.
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<PAGE>
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates listed in this
Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or accepted for
payment are to be issued or returned to, a person other than the signer(s) of
this Letter of Transmittal or if a check and/or such certificates are to be
mailed to a person other than the signer(s) of this Letter of Transmittal or
to an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed.
8. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to the Information Agent at its address set forth
below or from your broker, dealer, commercial bank or trust company.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery and other tender offer materials may be obtained
from the Information Agent as set forth below, and will be furnished at
Purchaser's expense.
9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"),
generally the shareholder's social security or federal employer identification
number, on Substitute Form W-9 below. Failure to provide the information on
the form may subject the tendering shareholder to 31 percent federal income
tax backup withholding on the payment of the purchase price. The tendering
shareholder may write "Applied For" in Part I of the Form if the tendering
shareholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the Shareholder has written "Applied
for" in Part I of the Form, the shareholder must also complete the Certificate
of Awaiting Taxpayer Identification Number. Notwithstanding that "Applied For"
is written in Part I of the Substitute Form W-9 and that the shareholder has
completed the Certificate of Awaiting Taxpayer Identification Number, the
Depositary will withhold 31 percent of all payments of the purchase price
thereafter until a TIN is provided to the Depositary. See Important Tax
Information below.
10. Lost, Destroyed, Mutilated or Stolen Certificates. If any
certificate(s) representing Shares has been lost, destroyed, mutilated or
stolen, the shareholder should promptly notify the Company's stock transfer
agent, Firstar Bank Milwaukee, N.A. (formerly named Firstar Trust Company) at
Corporate Trust Services, 1555 North River Center Drive, Suite 301, Milwaukee,
Wisconsin 53212, Att: Rick Mitchell, Telephone 414-905-5007, Fax 414-276-4226.
The shareholder will then be instructed as to the steps that must be taken in
order to replace the certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost,
mutilated or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF) OR AN
AGENT'S MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR BOOK-ENTRY CONFIRMATION
OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND
ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO
THE EXPIRATION DATE.
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<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary with such
shareholder's correct TIN on Substitute Form W-9 below and to certify that
such TIN is correct (or that such shareholder is awaiting a TIN) or otherwise
establish a basis for exemption from backup withholding. If such shareholder
is an individual, the TIN is his or her social security number. If a
shareholder fails to provide a correct TIN to the Depositary, such shareholder
may be subject to a $50.00 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31
percent.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that shareholder must generally submit a Form W-8, signed
under penalties of perjury, attesting to that individual's exempt status. A
Form W-8 can be obtained from the Depositary.
If backup withholding applies, the Depositary is required to withhold 31
percent of any payments made to the shareholder or payee. Backup withholding
is not an additional tax. Rather, the federal income tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service.
If "Applied for" is written in Part I of the Substitute Form W-9 and the
Shareholder has completed the Certificate of Awaiting Taxpayer Identification
Number, the Depositary will retain 31 percent of any payment of the purchase
price for tendered Shares during the 60-day period following the date of the
Substitute Form W-9. If a shareholder's TIN is provided to the Depositary
within 60 days of the date of the Substitute Form W-9, payment of such
retained amounts will be made to such shareholder. If a shareholder's TIN is
not provided to the Depositary within such 60-day period, the Depositary will
remit such retained amounts to the Internal Revenue Service as backup
withholding and shall withhold 31 percent of any payment of the purchase price
for the tendered Shares made to such shareholder thereafter unless such
shareholder furnishes a TIN to the Depositary prior to such payment.
Purpose of Substitute Form W-9
To prevent backup withholding on payments made to a shareholder whose
tendered Shares are accepted for purchase, the shareholder should complete and
sign the Substitute Form W-9 included in this Letter of Transmittal and
provide the shareholder's correct TIN and certify, under penalties of perjury,
that the TIN provided on such Form is correct (or that such shareholder is
awaiting a TIN) and that (i) such shareholder is exempt from backup
withholding; (ii) such shareholder has not been notified by the Internal
Revenue Service that such shareholder is subject to backup withholding as a
result of failure to report all interest or dividends; or (iii) the Internal
Revenue Service has notified the shareholder that the shareholder is no longer
subject to backup withholding. The shareholder must sign and date the
Substitute Form W-9 where indicated, certifying that the information on such
Form is correct.
What Number to Give the Depositary
The shareholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
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TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
(See Instruction 9)
PAYER: CITIBANK, N.A.
Name:
SUBSTITUTE Address:
Form W-9
Department of the TreasuryCheck appropriate box:
Internal
Revenue
Service
Individual[_] Corporation [_]
Partnership[_] Other
(specify) [_]
Request for Taxpayer Identification Number (TIN) and Certification
- --------------------------------------------------------------------------------
SSN:
Part I. Please provide your taxpayer or
identification number in the space at
right. If awaiting TIN, write "Applied EIN:
For" in space at right and complete the
Certificate of Awaiting Taxpayer
Identification Number below.
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Part II. For Payees exempt from backup withholding, see the enclosed
"Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" and complete as instructed therein.
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Part III. CERTIFICATION
Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or, as indicated, I am waiting for a number to be issued to me);
and
(2) I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the IRS that I am
subject to backup withholding as a result of a failure to report all
interests or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting of interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out item (2).
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Signature __________________ Date ______________, 1999
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART
I OF THIS SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that, notwithstanding the information I provided in Part III of
the Substitute Form W-9 (and the fact that I have completed this Certificate
of Awaiting Taxpayer Identification Number), all reportable payments made to
me hereafter will be subject to a 31 percent backup withholding tax until I
provide a properly certified taxpayer identification number.
_________________________ _________________________
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLD-
ING OF 31 PERCENT OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICA-
TION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
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The Depositary for the Offer is:
Citibank, N.A.
By Mail:
By Hand:
By Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
P.O. Box 685 Corporate Trust 915 Broadway, 5th
Old Chelsea Station Window Floor
New York, NY 10113 111 Wall Street, New York, NY 10010
5th Floor
Facsimile for Eligible Institutions:
New York, NY 10043
(212) 505-2248
To Confirm Facsimile Transmission:
by Telephone:
(800) 270-0808
The Information Agent for the Offer is:
Georgeson Shareholder Communications, Inc.
17 State Street
10th Floor
New York, New York 10004
Banks and brokers call collect: (212) 440-9800
All others call toll free: (888) 223-2064
October 21, 1999
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EXHIBIT 99(a)(3)
Notice of Guaranteed Delivery
for
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form, or a form substantially equivalent to this form, must be used to accept
the Offer (as defined below) if the certificates representing shares of common
stock, par value $.001 per share, of Cade Industries, Inc., a Wisconsin
corporation (the "Company"), including the associated common stock purchase
rights issued pursuant to the Rights Agreement, dated as of August 4, 1998, as
amended as of October 21, 1999, between the Company and Firstar Bank
Milwaukee, N.A. (formerly named Firstar Trust Company), as Rights Agent (the
"Shares"), are not immediately available or time will not permit all required
documents to reach Citibank, N.A. (the "Depositary") prior to the Expiration
Date (as defined in the Offer to Purchase) or the procedures for book-entry
transfer cannot be completed on a timely basis. Such form may be delivered by
hand or transmitted by facsimile transmission or mailed to the Depositary and
must include a guarantee by an Eligible Institution (as defined in the Offer
to Purchase). See Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
Citibank, N.A.
By Mail: By Hand: By Courier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
P.O. Box 685 Corporate Trust Window 915 Broadway, 5th
Old Chelsea Station 111 Wall Street, 5th Floor Floor
New York, NY 10113 New York, NY 10043 New York, NY 10010
Facsimile
for Eligible Institutions:
(212) 505-2248
To Confirm Facsimile Transmission
By Telephone: (800) 270-0808
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Sphere Corporation, a Wisconsin
corporation ("Purchaser") and a wholly owned subsidiary of United Technologies
Corporation, a Delaware corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 21, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, as amended
or supplemented from time to time, together constitute the "Offer"), receipt
of which is hereby acknowledged, the number of Shares indicated below pursuant
to the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
Number of Shares:__________________ Name(s) of Record Holder(s):
Share Certificate Numbers (if ___________________________________
available):
___________________________________
___________________________________ Please Type or Print
___________________________________ Address(es):_______________________
If Shares will be delivered by Zip Code___________________________
book-entry transfer:
___________________________________
Account Number:____________________
Telephone Number:
Date: , 1999 ___________________________________
Area Code
Signature(s):
___________________________________
___________________________________
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"), hereby
guarantees that either the certificates representing the Shares tendered
hereby in proper form for transfer or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry
Transfer Facility (as defined in and pursuant to procedures set forth in
Section 3 of the Offer to Purchase), together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase)) and any other documents
required by the Letter of Transmittal, will be received by the Depositary at
one of its addresses set forth above within three (3) New York Stock Exchange
Inc. trading days after the date of execution hereof.
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<PAGE>
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal,
certificates for Shares and/or any other required documents to the Depositary
within the time period shown above. Failure to do so could result in a
financial loss to such Eligible Institution.
Name of Firm: _________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
Zip Code
Area Code and Telephone Number: _______________________________________________
Authorized Signature
Name: _________________________________________________________________________
Please Type or Print
Title: ________________________________________________________________________
Dated: __________________________________________________________________, 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES ARE TO BE DELIVERED WITH THE LETTER OF
TRANSMITTAL.
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<PAGE>
EXHIBIT 99(a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 19, 1999, UNLESS THE OFFER IS EXTENDED.
October 21, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by Sphere Corporation, a Wisconsin corporation
("Purchaser") and a wholly owned subsidiary of United Technologies
Corporation, a Delaware corporation ("Parent"), to act as Information Agent in
connection with its offer to purchase all of the outstanding shares of common
stock, par value $.001 per share, of Cade Industries, Inc., a Wisconsin
corporation (the "Company"), including the associated common stock purchase
rights issued pursuant to the Rights Agreement, dated as of August 4, 1998, as
amended as of October 21, 1999, between the Company and Firstar Bank
Milwaukee, N.A. (formerly named Firstar Trust Company), as Rights Agent (the
"Shares"), at $5.05 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October
21, 1999 (the "Offer to Purchase") of Purchaser and in the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whom you hold Shares registered in your name or in
the name of your nominee.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the time of expiration of the Offer that
number of Shares that, together with any Shares held by or on behalf of
Parent, represents at least 75 percent of the issued and outstanding shares on
a fully diluted basis and (ii) any waiting period applicable under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or
terminated.
Enclosed herewith are the following documents:
1. Offer to Purchase, dated October 21, 1999;
2. Letter of Transmittal to be used by shareholders of the Company in
accepting the Offer;
3. Notice of Guaranteed Delivery;
4. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9;
<PAGE>
5. Letter to shareholders of the Company from the President and Chief
Executive Officer of the Company, accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
6. A printed form of a letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard
to the Offer; and
7. Return envelope addressed to Citibank, N.A., the Depositary.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of October 21, 1999, by and among the Company,
Parent and Purchaser, pursuant to which, after completion of the Offer,
Purchaser will be merged with and into the Company and the Company will be the
surviving corporation, unless Parent elects, in its sole discretion, to cause
the Company to merge into Purchaser with Purchaser continuing as the surviving
corporation (the "Merger") and each issued and outstanding Share (other than
Shares owned by Parent, Purchaser or any subsidiary of Parent, Purchaser or
the Company or held in the treasury of the Company or held by shareholders who
properly exercise dissenters' rights under Wisconsin law, if any) shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and represent the right to receive the price per Share paid
by Purchaser in the Offer, without interest.
The Board of Directors of the Company has unanimously approved the Merger
Agreement, approved the Offer and the Merger, determined that the Offer and
the Merger are in the best interests of the holders of Shares and unanimously
recommends that shareholders accept the Offer and tender their Shares pursuant
to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will be deemed to have accepted for
payment, and will pay for, all Shares validly tendered and not properly
withdrawn by the Expiration Date (as defined in the Offer to Purchase) as, if
and when Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of the tenders of such Shares for payment pursuant to
the Offer. Payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates for (or a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to) such Shares, (ii) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or, in the case of a book-entry transfer,
an Agent's Message (as defined in the Offer to Purchase) and (iii) any other
documents required by the Letter of Transmittal. Accordingly, tendering
shareholders may be paid at different times depending upon when certificates
for Shares or Book-Entry Confirmations with respect to Shares are actually
received by the Depositary. Under no circumstances will interest be paid on
the purchase price for Shares, regardless of any extension of the Offer or any
delay in making payment pursuant to the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction. An envelope
in which to return your instructions to us is enclosed. If you authorize
tender of your Shares, all such Shares will be tendered unless otherwise
indicated in such instruction form. Please forward your instructions to us as
soon as possible to allow us ample time to tender Shares on your behalf prior
to the expiration of the Offer.
In order to tender Shares pursuant to the Offer, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (in the case of any book-entry
transfer), and any other documents required by the Letter of Transmittal,
should be sent to the Depositary, and either certificates representing the
tendered Shares should be delivered or such Shares must be delivered to the
Depositary pursuant to the procedures for book-entry transfers, all in
accordance with the instructions set forth in the Letter of Transmittal and
the Offer to Purchase.
2
<PAGE>
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or other person (other than the Information Agent and the Depositary
as described in the Offer to Purchase) in connection with the solicitation of
tenders of Shares pursuant to the Offer. You will be reimbursed upon request
for customary mailing and handling expenses incurred by you in forwarding the
enclosed offering materials to your clients.
Your prompt action is requested. We urge you to contact your clients as
promptly as possible. The Offer and withdrawal rights will expire at 12:00
midnight, New York City time, on Friday November 19, 1999, unless the Offer is
extended.
Any inquiries you may have with respect to the Offer may be addressed to the
undersigned at the address and telephone numbers set forth on the back cover
page of the Offer to Purchase. Additional copies of enclosed materials may be
obtained from the Information Agent and will be furnished at Purchaser's
expense.
Very truly yours,
GEORGESON SHAREHOLDER
COMMUNICATIONS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU
OR ANY PERSON THE AGENT OF PURCHASER, PARENT, THE COMPANY, ANY AFFILIATE
OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY REPRESENTATION ON
BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER
TO PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99(a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 19, 1999, UNLESS THE OFFER IS EXTENDED.
October 21, 1999
To Holders of Common Stock of Cade Industries, Inc.:
Enclosed for your information is an Offer to Purchase, dated October 21,
1999 ("Offer to Purchase"), and the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer"),
relating to the Offer by Sphere Corporation, a Wisconsin corporation
("Purchaser") and a wholly owned subsidiary of United Technologies
Corporation, a Delaware corporation ("Parent"), to purchase all of the
outstanding shares of common stock, par value $.001 per share, of Cade
Industries, Inc. (the "Company"), including the associated common stock
purchase rights issued pursuant to the Rights Agreement, dated as of August 4,
1998, as amended as of October 21, 1999, between the Company and Firstar Bank
Milwaukee, N.A. (formerly named Firstar Trust Company), as Rights Agent (the
"Shares"), at $5.05 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer. Also enclosed is a letter to
shareholders of the Company from the President and Chief Executive Officer of
the Company, accompanied by the Company's Solicitation/Recommendation
Statement on Schedule 14D-9.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal accompanying this letter is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $5.05 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions of the
Offer.
2. The Offer is being made for all of the outstanding Shares.
<PAGE>
3. The Offer is being made pursuant to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of October 21, 1999, by and among
Company, Parent and Purchaser, pursuant to which, after completion of
the Offer, Purchaser will be merged with and into the Company and the
Company will be the surviving corporation, unless Parent elects, in
its sole discretion, to cause the Company to merge into Purchaser with
Purchaser continuing as the surviving corporation (the "Merger"), and
each issued and outstanding Share (other than Shares owned by Parent,
Purchaser or any subsidiary of Parent, Purchaser or the Company or
held in the treasury of the Company or Shares which are held by
shareholders who properly exercise dissenters' rights under Wisconsin
law, if any) shall, by virtue of the Merger, and without any action on
the part of the holder thereof, be converted into and represent the
right to receive the price per Share paid by Purchaser in the Offer,
without interest.
4. The Board of Directors of the Company has unanimously approved the
Merger Agreement, approved the Offer and the Merger, determined that
the Offer and the Merger are in the best interests of the holders of
Shares and unanimously recommends that shareholders accept the Offer
and tender their Shares pursuant to the Offer.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares which together with
Shares held by or on behalf of Parent represents at least 75 percent
of the then issued and outstanding Shares on a fully diluted basis
(the "Minimum Tender Condition"). Subject to the terms of the Merger
Agreement, the Offer is also subject to other terms and conditions,
including receipt of certain regulatory approvals, set forth in the
Offer to Purchase. Any or all conditions to the Offer may be waived by
Purchaser.
6. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, November 19, 1999, unless the Offer is
extended.
7. Any stock transfer taxes applicable to the sale of Shares to Purchaser
pursuant to the Offer will be paid by Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing and returning to us
the instruction form set forth below. Please forward your instructions to us
in ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer. If you authorize the tender of your Shares, all such
Shares will be tendered unless otherwise specified on the instruction form set
forth below.
Payment for Shares accepted for payment pursuant to the Offer will be in
all cases made only after timely receipt by Citibank, N.A. (the "Depositary"),
of (a) certificates for (or a timely Book-Entry Confirmation (as defined in
the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to the
procedure set forth in Section 3 of the Offer to Purchase, an Agent's Message
(as defined in the Offer to Purchase) and (c) any other documents required by
the Letter of Transmittal. Accordingly, tendering shareholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
Under no circumstances will interest be paid on the purchase price for Shares,
regardless of any extension of the Offer or any delay in making payment
pursuant to the Offer.
The Offer is not being made to (nor will tenders be accepted from, or on
behalf of) holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed made on behalf of Purchaser by the registered brokers or dealers that
are licensed under the laws of such jurisdiction. An envelope in which to
return your instructions to us is enclosed.
2
<PAGE>
Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
a wholly owned subsidiary of
United Technologies Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 21, 1999, and the related Letter of
Transmittal, in connection with the offer by Sphere Corporation, a Wisconsin
corporation ("Purchaser") and a wholly owned subsidiary of United Technologies
Corporation, a Delaware corporation ("Parent"), to purchase for cash all of
the outstanding shares of common stock, par value $.001 per share, of Cade
Industries, Inc., a Wisconsin corporation (the "Company"), including the
associated common stock purchase rights issued pursuant to the Rights
Agreement, dated as of August 4, 1998, as amended as of October 21, 1999,
between the Company and Firstar Bank Milwaukee, N.A. (formerly named Firstar
Trust Company), as Rights Agent (the "Shares") at $5.05 per Share, net to the
seller in cash, upon the terms and conditions set forth in the Offer.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer and the related Letter of Transmittal.
Dated: , 1999
NUMBER OF SHARES TO BE TENDERED:
SHARES*
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signature(s)
- -------------------------------------------------------------------------------
Please Print Name(s)
- -------------------------------------------------------------------------------
Please Print Address(es)
- -------------------------------------------------------------------------------
Area Code and Telephone Number(s)
- -------------------------------------------------------------------------------
Tax Identification or Social Security Number(s)
- --------
* Unless otherwise indicated, it will be assumed that all your Shares are to
be tendered.
3
<PAGE>
EXHIBIT 99(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines For Determining The Proper Name And Identification Number To Give
The Payer.--Social Security numbers have nine digits separated by two hyphens:
I.E., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: I.E., 00-0000000. The table below will help determine the
name and number to give the payer.
- ----------------------------------- -----------------------------------
<TABLE>
<CAPTION>
Give the name and
SOCIAL SECURITY
For this type of account: number of--
- ---------------------------------------------
<S> <C>
1. An individual account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one
of the
individuals(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4.a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
5. Sole proprietorship The owner(3)
account
</TABLE>
<TABLE>
<CAPTION>
Give the name and
EMPLOYER
IDENTIFICATION
For this type of account: number of--
--
<S> <C>
6. A valid trust, estate, The legal
or pension trust entity(4)
7. Corporate account The corporation
8. Association, club, The organization
religious, charitable,
educational or other
tax-exempt
organization account
9. Partnership The partnership
10. A broker or registered The broker or
nominee nominee
11. Account with the The public
Department of entity
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
--
</TABLE>
- -----------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your Social Security Number or
Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the identifying number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
Note: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
OBTAINING A NUMBER
If you don't have a taxpayer
identification number or you don't
know your number, obtain Form SS-5,
Application for a Social Security
Number Card (for individuals), Form
W-7, Application for an ITIN (for
individuals who are not eligible to
obtain an SSN but who must furnish a
TIN), or Form SS-4, Application for
Employer Identification Number (for
businesses and all other entities),
at the local office of the Social
Security Administration or the
Internal Revenue Service and apply
for a number.
Payees Exempt From Backup Withholding
The following is a list of payees specifically exempted from backup
withholding depending upon the type of payment (see below):
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(3) The United States or any agency or instrumentality thereof.
(4) A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
(5) A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
(6) An international organization or any agency or instrumentality thereof.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
For interest and dividends, all listed payees are exempt except item (9).
For broker transactions, payees listed in items (1) through (13) and a person
registered under the Investment Advisers Act of 1940 who regularly acts as a
broker are exempt.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND
RETURN IT TO THE PAYER. If you are a nonresident alien or a foreign entity not
subject to backup withholding, give the payer a completed Form W-8,
Certificate of Foreign Status.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers of payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31
percent of taxable interest, dividend, and certain other payments to a payee
who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Failure To Furnish Taxpayer Identification Number.--If you fail to
furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) Civil Penalty For False Information With Respect To Withholding.--If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty For Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
<PAGE>
EXHIBIT (a)(7)
<PAGE>
Contact: Peter Dalpe/UTC FOR IMMEDIATE RELEASE
(860) 728-7912 Internet: www.utc.com
Gary Minor/Pratt & Whitney
(860) 565-4009
UTC TO ACQUIRE CADE INDUSTRIES INC. FOR $5.05 PER SHARE
Hartford, Conn., and Okemos, Mich., Oct. 21, 1999 -- United Technologies
Corp. (NYSE: UTX) today announced that it has entered into an agreement to
acquire Cade Industries, Inc. (NASDAQ: CADE). Under terms of the agreement
approved by Cade's board of directors, UTC has today commenced a tender offer to
acquire all outstanding common stock of Cade for $5.05 per share in cash. UTC
will also assume about $20 million of Cade's debt for a total transaction value
of approximately $129 million.
Holders of 26 percent of Cade's outstanding shares have agreed to tender
their shares and to grant UTC an option to acquire such shares. The tender
offer is scheduled to expire at midnight, Friday, November 19, 1999.
"Pratt & Whitney is committed to expanding the range of services
available to our airline customers. The purchase of Cade expands our customer
support network and our range of aftermarket products and services and lowers
the cost of owning and operating Pratt propulsion systems," said Pratt & Whitney
President Louis Chenevert.
Cade will be integrated into Pratt & Whitney Engine Services (PWES), the
engine service operations of UTC's Pratt & Whitney unit.
Cade President Richard A. Lund said, "I am very pleased with the
transaction and believe that it is in the best interest of the shareholders of
Cade and that it will create numerous opportunities for all of our employees.
Our high level of customer service and responsiveness will continue and will be
expanded as part of the Pratt family."
<PAGE>
Cade, which had 1998 revenues of $96 million, designs, develops,
manufactures, overhauls and repairs high technology composite components for the
aerospace and air transport industries, and is a global leader in the design,
manufacture and service of jet engine test facilities and related ground testing
equipment. The company's operating subsidiaries are located in Lansing, Mich.;
San Diego, Calif.; Grand Prairie, Texas; and Minneapolis, Minn.
Pratt & Whitney Engine Services offers complete engine overhauls at
facilities in Connecticut, Georgia, Texas and Singapore, and provides component
repair capabilities in over 20 locations throughout the United States,
Singapore, Ireland, Taiwan, and the Ukraine. PWES also offers materials
management and fleet management programs, including spare engine and spare parts
support for both airlines and military customers.
United Technologies Corporation, based in Hartford, Conn., provides a broad
range of high technology products and support services to the building systems
and aerospace industries.
Certain statements in this press release, including statements concerning
expected savings, revenues, earnings per share and debt levels, are "forward-
looking statements" as defined under securities law. UTC's operations, products,
and markets are subject to a number of risk factors, which may cause actual
results to vary materially from those anticipated in the forward-looking
statements. UTC's SEC filings, as updated from time to time, contain important
information identifying a number of these risk factors, including economical,
political, climatic, currency, regulatory, technological, competitive and other
important factors. This information can be found in the Business section of
UTC's Annual Report on Form 10-K under the headings "Description of Business by
Operating Segment" and "Other Matters Relating to the Corporation's Business as
a Whole", as updated by UTC's other SEC filings from time to time.
Any forward-looking statements should be evaluated in light of these
important risk factors.
<PAGE>
EXHIBIT (a)(8)
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase, dated October 21, 1999, and the related Letter of
Transmittal and any amendments or supplements thereto, and is being made
to all holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf
of Purchaser (as defined below) by one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
Notice Of Offer To Purchase For Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Common Stock)
of
Cade Industries, Inc.
at
$5.05 Net Per Share
by
Sphere Corporation
A Wholly Owned Subsidiary of
United Technologies Corporation
Sphere Corporation, a Wisconsin corporation ("Purchaser") and a wholly owned
subsidiary of United Technologies Corporation, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of common stock, par
value $.001 per share, of Cade Industries, Inc., a Wisconsin corporation (the
"Company"), including the associated common stock purchase rights issued
pursuant to the Rights Agreement, dated as of August 4, 1998, as amended (the
"Rights Agreement"), between the Company and Firstar Bank Milwaukee,
N.A.(formerly named Firstar Trust Company), as Rights Agent (the "Shares"), at
$5.05 per Share, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 21,
1999, and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, together constitute the "Offer"). Tendering
shareholders will not be obligated to pay brokerage fees or commissions or,
except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by Purchaser pursuant to the Offer. The purpose
of the Offer is to acquire for cash as many outstanding Shares as possible as a
first step in acquiring the entire equity interest in the Company. Following the
consummation of the Offer, Purchaser intends to effect the Merger (as defined
below).
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 19, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) that there are
validly tendered and not withdrawn prior to the time of expiration of the Offer
that number of Shares that, together with any Shares held by or on behalf of
Parent, represents at least 75 percent of the then issued and outstanding Shares
on a fully diluted basis and (2) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations thereunder
applicable to the purchase of Shares pursuant to the Offer having expired or
been terminated. Certain other conditions to the Offer are described in Section
14 of the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of October 21, 1999, among the Company, Parent and
Purchaser, pursuant to which, after completion of the Offer and the satisfaction
or waiver of certain conditions, Purchaser will be merged with and into the
Company and the Company will be the surviving corporation, unless Parent elects,
in its sole discretion, to cause the Company to merge into Purchaser with
Purchaser continuing as the surviving corporation (the "Merger") and each issued
and outstanding Share (other than Shares owned by Parent, Purchaser or any
subsidiary of Parent, Purchaser or the Company or held in the treasury of the
Company or Shares which are held by shareholders who properly exercise
dissenters' rights pursuant to Sections 180.1301 to 180.1331 of the Wisconsin
Business Corporation Law) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be canceled and converted into the right to
receive an amount in cash, without interest, equal to the price paid for each
Share pursuant to the Offer. The Merger Agreement is more fully described in the
Offer to Purchase. The Company has amended the Rights Agreement to make the
Rights Agreement inapplicable to the Offer, the Merger, the Merger Agreement and
the Shareholder Option Agreement referred to below.
Concurrently with the execution and delivery of the Merger Agreement,
Purchaser executed a Shareholder Option Agreement, dated as of October 21, 1999,
with certain shareholders of the Company named therein, pursuant to which such
shareholders have agreed, among other things, to validly tender (and not
withdraw) approximately 26 percent of the outstanding Shares on a fully diluted
basis in the Offer, to vote the Shares owned by such shareholders in favor of
the Merger and against certain other extraordinary transactions and to grant an
option to Purchaser to purchase the Shares held by such shareholders at $5.05
per Share (subject to adjustment in certain circumstances).
The Board of Directors of the Company has unanimously approved the Merger
Agreement, approved the Offer and the Merger, determined that the Offer and the
Merger are in the best interests of the holders of Shares and unanimously
recommends that shareholders accept the Offer and tender their Shares pursuant
to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when Purchaser gives oral or written notice to Citibank, N.A.(the
"Depositary") of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for the
tendering shareholders for the purpose of receiving payments from Purchaser and
transmitting such payments to the tendering shareholders. Under no circumstances
will interest be paid on the purchase price for Shares, regardless of any
extension of the Offer or any delay in making such payment.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (a)
certificates for such Shares or timely conformation of the book-entry transfer
of such Shares into the Depositary's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (b) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message (as
defined in Section 3 of the Offer to Purchase) in lieu of the Letter of
Transmittal) and (c) any other documents required by the Letter of Transmittal.
Tenders of Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after December
19, 1999. The term "Expiration Date"means 12:00 midnight, New York City time, on
Friday, November 19, 1999, unless and until Purchaser, in its sole discretion
(subject to the terms of the Merger Agreement), shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date on which the Offer, as so extended by
Purchaser, shall expire. Subject to the terms of the Merger Agreement and the
applicable rules and regulations of the Securities and Exchange Commission,
Purchaser expressly reserves the right, in its sole discretion, at any time or
from time to time, to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary. Any such
extension will be followed as promptly as practicable by public announcement
thereof, such announcement to be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled expiration date of
the Offer. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the right of a tendering
shareholder to withdraw such shareholder's Shares.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and (if certificates for such
Shares have been tendered) the names in which the certificate(s) evidencing the
Shares to be withdrawn are registered, if different from that of the person who
tendered such Shares. The signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to
Purchase), unless such Shares have been tendered for the account of any Eligible
Institution. If Shares have been tendered pursuant to the procedures for book-
entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with the Book-Entry Transfer Facility's procedures. If certificates for Shares
to be withdrawn have been delivered or otherwise identified to the Depositary,
the name of the registered holder and the serial numbers shown on such
certificates must also be furnished to the Depositary as aforesaid prior to the
physical release of such certificates. All questions as to the form and validity
(including time of receipt) of any notice of withdrawal will be determined by
Purchaser, in its sole discretion, which determination shall be final and
binding. None of Parent, Purchaser, the Depositary, the Information Agent
(listed below), or any other person will be under any duty to give notification
of any defects or irregularities in any notice of withdrawal or incur any
liability for failure to give such notification. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will be deemed
not to have been validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by following one of the procedures described in Section
3 of the Offer to Purchase at any time prior to the Expiration Date.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided Purchaser with the Company's shareholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the Letter of Transmittal and, if required,
other relevant materials, will be mailed by Purchaser to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the Company's shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Requests for
additional copies of the Offer to Purchase and the related Letter of Transmittal
may be directed to the Information Agent or to brokers, dealers, commercial
banks or trust companies. Such additional copies will be furnished at
Purchaser's expense. Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[LOGO] GEORGESON
SHAREHOLDER
COMMUNICATION INC.
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers call collect:(212) 440-9800
All others call toll-free (800) 223-2064
October 21, 1999
<PAGE>
EXHIBIT 99(c)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
UNITED TECHNOLOGIES CORPORATION,
SPHERE CORPORATION
and
CADE INDUSTRIES, INC.
Dated as of October 21, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE OFFER
SECTION 1.01 The Offer............................................. 1
SECTION 1.02 Company Actions....................................... 3
SECTION 1.03 Shareholder Lists..................................... 3
SECTION 1.04 Directors............................................. 4
ARTICLE II
THE MERGER
SECTION 2.01 The Merger............................................ 4
SECTION 2.02 Consummation of the Merger............................ 5
SECTION 2.03 Effects of the Merger................................. 5
SECTION 2.04 Articles of Incorporation and Bylaws.................. 5
SECTION 2.05 Directors and Officers................................ 5
SECTION 2.06 Conversion of Shares.................................. 5
SECTION 2.07 Conversion of Common Stock of Purchaser............... 5
SECTION 2.08 Shareholders' Meeting................................. 5
SECTION 2.09 Merger Without Meeting of Shareholder................. 6
SECTION 2.10 Withholding Taxes..................................... 6
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES; OPTIONS
SECTION 3.01 Dissenting Shares..................................... 6
SECTION 3.02 Payment for Shares.................................... 7
SECTION 3.03 Closing of the Company's Transfer Books............... 8
SECTION 3.04 Existing Stock Options................................ 8
SECTION 3.05 Other Equity Based Awards............................. 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01 Organization and Qualification........................ 9
SECTION 4.02 Capitalization........................................ 9
SECTION 4.03 Authority for this Agreement.......................... 10
SECTION 4.07 Consents and Approvals; No Violation.................. 11
SECTION 4.05 Reports; Financial Statements......................... 11
SECTION 4.04 Absence of Certain Changes............................ 12
SECTION 4.07 Schedule 14D-9; Offer Documents and Proxy Statement... 13
SECTION 4.08 Brokers............................................... 13
SECTION 4.09 Employee Benefit Matters.............................. 14
SECTION 4.10 Litigation, etc....................................... 17
SECTION 4.11 Tax Matters........................................... 17
i
<PAGE>
SECTION 4.12 Compliance with Law; No Default....................... 18
SECTION 4.13 Environmental Matters................................. 19
SECTION 4.14 Intellectual Property................................. 20
SECTION 4.15 Real Property......................................... 21
SECTION 4.16 Year 2000............................................. 21
SECTION 4.17 Material Contracts.................................... 21
SECTION 4.18 Related Party Transactions............................ 22
SECTION 4.19 State Takeover Statutes Inapplicable.................. 22
SECTION 4.20 Rights Agreement...................................... 23
SECTION 4.21 Required Vote of Company Shareholders................. 23
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01 Organization and Qualification........................ 23
SECTION 5.02 Authority for this Agreement.......................... 23
SECTION 5.03 Offer Documents; Proxy Statement...................... 24
SECTION 5.04 Consents and Approvals; No Violation.................. 24
SECTION 5.05 Operations of Purchaser............................... 24
SECTION 5.06 Brokers............................................... 25
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company.................... 25
SECTION 6.02 No Solicitation....................................... 27
SECTION 6.03 Access to Information................................. 29
SECTION 6.04 Reasonable Best Efforts............................... 29
SECTION 6.05 Indemnification and Insurance......................... 30
SECTION 6.06 Employee Matters...................................... 31
SECTION 6.07 Takeover Laws......................................... 31
SECTION 6.08 Proxy Statement....................................... 31
SECTION 6.09 Notification of Certain Matters....................... 32
SECTION 6.10 Subsequent Filings.................................... 32
SECTION 6.11 Press Releases........................................ 32
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect
the Merger........................................... 33
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01 Termination........................................... 33
SECTION 8.02 Effect of Termination................................. 34
SECTION 8.03 Fees and Expenses..................................... 34
SECTION 8.04 Amendment............................................. 35
ii
<PAGE>
SECTION 8.05 Extension; Waiver; Remedies........................... 35
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Survival of Representations and Warranties............ 36
SECTION 9.02 Entire Agreement; Assignment.......................... 36
SECTION 9.03 Jurisdiction.......................................... 36
SECTION 9.04 Validity.............................................. 36
SECTION 9.05 Notices............................................... 37
SECTION 9.06 Governing Law......................................... 38
SECTION 9.07 Descriptive Headings.................................. 38
SECTION 9.08 Parties in Interest................................... 38
SECTION 9.09 Counterparts.......................................... 38
SECTION 9.10 Certain Definitions................................... 38
EXHIBIT A...........................................................A-1
iii
<PAGE>
Glossary of Defined Terms
-------------------------
Defined Terms Defined in Section
- ------------- ------------------
Acquisition Proposal Section 6.02(f)
Agreement Opening Paragraph
Authorizations Section 4.13(a)(ii)
Baird Section 1.02
Certificates Section 3.02(b)
Closing Section 2.02
Code Section 2.10
Common Stock Section 1.01(a)
Company Permits Section 4.12(a)
Company SEC Reports Section 4.05(a)
Company Securities Section 4.02(a)
Company Opening Paragraph
Company Benefits Plans Section 4.09(f)
Confidentiality Agreement Section 1.02(a)
Continuing Directors Section 1.04(b)
Copyrights Section 4.14(d)(ii)
Disclosure Letter Article IV
Dissenting Shares Section 3.01
Effective Time Section 2.02
Environmental Disclosure Requirements Section 4.13(h)
Environmental Law Section 4.13(e)
ERISA Section 4.09(f)
Exchange Act Section 1.01(a)
Existing Stock Option Section 3.04
Expenses Section 8.03(b)
Expiration Date Exhibit A
FAA Section 4.12(b)
Governmental Entity Section 4.04
Hazardous Substance Section 4.13(f)
HSR Act Section 4.04
Legal Requirements Section 4.04
Material Adverse Effect Section 9.10
Material Contract Section 4.17
Merger Agreement Exhibit A
Merger Consideration Section 2.06
Merger Section 2.01
Offer Section 1.01(a)
Offer Conditions Section 1.01(a)
Offer Documents Section 1.01(b)
Offer Price Section 1.01(a)
iv
<PAGE>
Option Consideration Section 3.04
Option Recitals
Parent Opening Paragraph
Paying Agent Section 3.02(a)
Payment Fund Section 3.02(a)
Person Section 9.10
Plan Section 4.09(f)
Potential Acquiror Section 6.02(b)
Preferred Stock Section 4.02(a)
Preliminary Proxy Statement Section 6.08
Proceeding Section 4.10
Proprietary Rights Section 4.14
Proxy Statement Section 4.07(b)
Purchaser Opening Paragraph
Real Property Leases Section 4.15(b)
Release Section 4.13(g)
Rights Section 1.01(a)
Rights Agreement Section 1.01(a)
Schedule 14D-1 Section 1.01(b)
Schedule 14D-9 Section 1.02(b)
SEC Section 1.01(a)
Shares Section 1.01(a)
Shareholder Option Agreement Recitals
Special Meeting Section 2.08
Stock Awards Section 3.05
Stock Option Plans Section 3.04
Subsidiary Section 9.10
Subsidiary Securities Section 4.02(b)
Superior Proposal Section 6.02(f)
Surviving Corporation Section 2.01
Takeover Laws Section 1.02(a)
Tax Section 4.11(b)
Tax Returns Section 4.11(b)
Termination Fee Section 8.03(b)
Year 2000 Compliant Section 4.16
WBCL Recitals
v
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October
---------
21, 1999, among United Technologies Corporation, a Delaware corporation
("Parent"), Sphere Corporation, a Wisconsin corporation and a wholly owned
------
subsidiary of Parent ("Purchaser"), and Cade Industries, Inc., a Wisconsin
---------
corporation (the "Company").
-------
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the Company have
each determined that this Agreement and the transactions contemplated hereby,
including the Merger (as defined in Section 2.01), are advisable and fair to,
and in the best interests of, their respective shareholders;
WHEREAS, the Board of Directors of the Company has unanimously adopted
resolutions approving the acquisition of the Company by Parent, this Agreement
and the transactions contemplated hereby and the Shareholder Option Agreement
(as defined below), and has agreed to recommend that the Company's shareholders
approve the plan of merger (as such term is used in Section 180.1101 of the
Wisconsin Business Corporation Law (the "WBCL")) contained in this Agreement and
----
the transactions contemplated hereby and tender their Shares (as defined below)
in the Offer (as defined below);
WHEREAS, concurrently with the execution hereof and in order to induce
Parent and Purchaser to enter into this Agreement, Purchaser is entering into a
Shareholder Option Agreement dated as of the date hereof (the "Shareholder
-----------
Option Agreement") with the shareholders of the Company named therein under
- ----------------
which each such shareholder is, among other things, agreeing to tender all of
such shareholder Shares in the Offer and granting Parent an irrevocable option
(the "Option") to purchase all of such shareholder's Shares upon the terms and
------
conditions specified therein; and
WHEREAS, Parent, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
---------
(a) (i) Provided that this Agreement shall not have been terminated
in accordance with Section 8.01 and that none of the events set forth in clause
(iii) of Exhibit A hereto shall have occurred or be existing, Purchaser shall,
and Parent shall cause Purchaser to, as promptly as practicable (but in no event
later than five business days following the public announcement of the terms of
this Agreement) commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) an offer to
------------
<PAGE>
purchase all outstanding shares of common stock of the Company, par value $0.001
per share (the "Common Stock"), including the associated Common Stock purchase
------------
rights (the "Rights") issued pursuant to the Rights Agreement dated as of August
------
4, 1998 (the "Rights Agreement") between the Company and Firstar Bank Milwaukee,
----------------
N.A. (formerly named Firstar Trust Company), as Rights Agent (the Common Stock
and the Rights are hereinafter referred to as the "Shares"), at a price (such
------
price, or any higher price as may be paid in the Offer, the "Offer Price") of
-----------
$5.05 per Share, net to the seller in cash (the "Offer"). The obligation of
-----
Purchaser to consummate the Offer and to accept for payment and to pay for any
Shares tendered pursuant thereto shall be subject to only those conditions set
forth in Exhibit A hereto (the "Offer Conditions"), any of which may be waived
----------------
by Purchaser in its sole discretion. The initial expiration date of the Offer
shall be the twenty first business day following the commencement of the Offer
(determined in accordance with Rule 14d-1(e)(6) under the Exchange Act).
Purchaser expressly reserves the right to modify the terms of the Offer, except
that, without the prior written consent of the Company, Purchaser shall not (A)
decrease or change the form of the consideration payable in the Offer, (B)
decrease the number of Shares sought pursuant to the Offer, (C) impose
additional conditions to the Offer, (D) change the conditions to the Offer or
(E) make any other change in the terms or conditions of the Offer which is
materially adverse to the holders of Shares.
(ii) Subject to the terms and conditions of this Agreement and to the
satisfaction or waiver of the Offer Conditions as of any scheduled expiration of
the Offer, Purchaser shall accept for payment and pay for Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
such expiration. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (A) extend the Offer if at any scheduled expiration of
the Offer any of the Offer Conditions have not been satisfied or waived, (B) if
less than 90% of the outstanding Shares have been validly tendered and not
properly withdrawn pursuant to the Offer, extend the Offer from time to time
(but in no event beyond ten business days beyond the then scheduled expiration
date of the Offer) for the shortest period of time reasonably determined by
Parent as may be necessary to obtain the valid tender of 90% of the outstanding
Shares and (C) extend the Offer for any period required by any regulation,
interpretation or position of the Securities and Exchange Commission (the "SEC")
---
or the staff thereof applicable to the Offer. In addition, the Offer Price may
be increased and the Offer may be extended to the extent required by law in
connection with such increase in each case without the consent of the Company.
(b) On the date of commencement of the Offer, Parent and Purchaser
shall file or cause to be filed with the SEC a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer which shall contain the offer to
- ---------------
purchase and related letter of transmittal and other ancillary Offer documents
and instruments pursuant to which the Offer will be made (collectively with any
supplements or amendments thereto, the "Offer Documents"). The Company and its
---------------
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents prior to their filing with the SEC. Parent and Purchaser agree
to provide the Company with, and to consult with the Company regarding, any
comments that may be received from the SEC or its staff with respect to the
Offer Documents promptly after receipt thereof. Parent, Purchaser and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have become false or
misleading in any material respect and Parent and Purchaser further agree to
take all steps necessary to cause the Offer
2
<PAGE>
Documents as so corrected to be filed with the SEC and be disseminated to
holders of Shares, in each case, as and to the extent required by applicable
law.
SECTION 1.02 Company Actions. (a) The Company hereby consents to
---------------
the Offer and represents and warrants that (i) the making of any offer and
proposal and the taking of any other action by Parent or Purchaser in connection
with this Agreement and the Shareholder Option Agreement and the transactions
contemplated hereby and thereby have been consented to by the Board of Directors
of the Company in accordance with the terms and provisions of the
Confidentiality Agreement, dated September 22, 1999 between Parent and the
Company (the "Confidentiality Agreement"), (ii) its Board of Directors (at a
-------------------------
meeting or meetings duly called and held prior to the date hereof) has
unanimously (A) determined that the Offer and the Merger (as hereinafter
defined) are advisable and fair to and in the best interests of, the
shareholders of the Company, (B) resolved to recommend acceptance of the Offer
and approval and adoption of a plan of merger (as such term is used in Section
180.1101 of the WBCL) contained in this Agreement by the shareholders of the
Company, (C) irrevocably taken, if and to the extent applicable, all necessary
steps to render Sections 180.1130 to 180.1150 of the WBCL inapplicable to the
Merger, the Shareholder Option Agreements and the acquisition of Shares pursuant
to the Offer and the Option and (D) irrevocably resolved to elect, to the extent
permitted by law, not to be subject to any "moratorium", "control share
acquisition", "business combination", "fair price" or other form of anti-
takeover laws and regulations (collectively, "Takeover Laws") of any
-------------
jurisdiction that may purport to be applicable to this Agreement or the
Shareholder Option Agreement and (iii) Robert W. Baird & Co. Incorporated
("Baird"), the Company's independent financial advisor, has advised the
Company's Board of Directors that, in its opinion, the consideration to be paid
in the Offer and the Merger to the Company's shareholders is fair, from a
financial point of view, to such shareholders.
(b) Upon commencement of the Offer, the Company shall file with the
SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing the
--------------
recommendations of its Board of Directors described in Section 1.02(a) and
hereby consents to the inclusion of such recommendations in the Offer Documents
and to the inclusion of a copy of the Schedule 14D-9 with the Offer Documents
mailed or furnished to the Company's shareholders. Parent, Purchaser and their
counsel shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its filing with the SEC. The Company agrees to provide
Parent and Purchaser with, and to consult with Parent and Purchaser regarding,
any comments that may be received from the SEC or its staff with respect to the
Schedule 14D-9 promptly upon receipt thereof. Parent, Purchaser and the Company
each agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect and the Company further agree to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and be disseminated to holders of Shares, in each case, as and to the extent
required by applicable law.
SECTION 1.03 Shareholder Lists. In connection with the Offer, the
-----------------
Company shall promptly furnish Parent and Purchaser with mailing labels,
security position listings and any available listing or computer file containing
the names and addresses of the record holders of the Shares as of the latest
practicable date and shall furnish Parent and Purchaser with such information
and assistance (including periodic updates of such information) as Parent or
3
<PAGE>
Purchaser or their agents may reasonably request in communicating the Offer to
the record and beneficial holders of the Shares.
SECTION 1.04 Directors. (a) Promptly upon the purchase by Purchaser
---------
pursuant to the Offer or otherwise of such number of Shares as represents at
least a majority of the outstanding Shares, and from time to time thereafter,
Purchaser shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as will give
Purchaser representation on the Board of Directors of the Company equal to the
product of the number of directors on the Board of Directors of the Company and
the percentage that such number of Shares so purchased bears to the number of
Shares outstanding, and the Company shall, upon request by Purchaser, promptly
increase the size of the Board of Directors of the Company or use its best
efforts to secure the resignations of such number of directors as is necessary
to provide Purchaser with such level of representation and shall cause
Purchaser's designees to be so elected. The Company will also use its best
efforts to cause persons designated by Purchaser to constitute the same
percentage as is on the entire Board of Directors of the Company to be on (i)
each committee of the Board of Directors of the Company and (ii) each Board of
Directors and each committee thereof of each Subsidiary of the Company. The
Company's obligations to appoint designees to its Board of Directors shall be
subject to Section 14(f) of the Exchange Act. At the request of Purchaser, the
Company shall take all actions necessary to effect any such election or
appointment of Purchaser's designees, including mailing to its shareholders the
information required by Section 14(f) of the Exchange Act and Rule 14f-l
promulgated thereunder which, unless Purchaser otherwise elects, shall be so
mailed together with the Schedule 14D-9. Parent and Purchaser will promptly
supply to the Company all information with respect to themselves and their
respective officers, directors and affiliates required by such Section and Rule.
(b) Following the election or appointment of Purchaser's designees
pursuant to Section 1.04(a) and prior to the Effective Time (as defined below),
and so long as there shall be at least one Continuing Director (as defined
below), any amendment of this Agreement requiring action by the Board of
Directors of the Company, any extension of time for the performance of any of
the obligations or other acts of Parent or Purchaser under this Agreement and
any waiver of compliance with any of the agreements or conditions under this
Agreement for the benefit of the Company will require the concurrence of a
majority of the directors of the Company then in office who are directors of the
Company on the date hereof (the "Continuing Directors").
--------------------
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the conditions
----------
hereof, and in accordance with the relevant provisions of the WBCL, Purchaser
shall be merged with and into the Company (the "Merger") as soon as practicable
------
following the satisfaction or waiver, if permissible, of the conditions set
forth in Article VII hereof. The Company shall be the surviving corporation in
the Merger (the "Surviving Corporation") and shall continue its existence under
---------------------
the laws of Wisconsin. In connection with the Merger, the separate corporate
existence of Purchaser shall cease. Upon the election of Parent, the Merger may
be structured so that the Company shall be merged with and into Purchaser, with
Purchaser continuing as the
4
<PAGE>
Surviving Corporation; provided, however, that the Company shall be deemed not
-------- -------
to have breached any of its representations, warranties or covenants herein if
and to the extent such breach would have been attributable solely to such
election.
SECTION 2.02 Consummation of the Merger. Subject to the provisions of
--------------------------
this Agreement, Purchaser and the Company shall cause the Merger to be
consummated by filing with the Department of Financial Institutions of the State
of Wisconsin a duly executed and verified articles of merger, as required by the
WBCL, and shall take all such other and further actions as may be required by
law to make the Merger effective. Prior to the filing referred to in this
Section, a closing (the "Closing") will be held at the offices of Cleary,
-------
Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New York (or such other
place as the parties may agree) for the purpose of confirming all the matters
contained herein. The time the Merger becomes effective in accordance with
applicable law is referred to as the "Effective Time."
--------------
SECTION 2.03 Effects of the Merger. The Merger shall have the
---------------------
effects set forth herein and in the applicable provisions of the WBCL.
SECTION 2.04 Articles of Incorporation and Bylaws. The Articles of
------------------------------------
Incorporation and the Bylaws of Purchaser, in each case as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation and Bylaws
of the Surviving Corporation.
SECTION 2.05 Directors and Officers. The directors of Purchaser
----------------------
immediately prior to the Effective Time and the officers of the Company
immediately prior to the Effective Time shall be the directors and officers,
respectively, of the Surviving Corporation until their death, permanent
disability, resignation or removal or until their respective successors are duly
elected and qualified.
SECTION 2.06 Conversion of Shares. Each Share issued and outstanding
--------------------
immediately prior to the Effective Time (other than Shares owned by Parent,
Purchaser or any Subsidiary of Parent, Purchaser or the Company or held in the
treasury of the Company, all of which shall be canceled without consideration
being exchanged therefor, and other than Dissenting Shares, as defined in
Section 3.01 hereof) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted at the Effective Time into the
right to receive in cash an amount per Share (subject to any applicable
withholding tax specified in Section 2.10 hereof) equal to the Offer Price,
without interest (the "Merger Consideration"), upon the surrender of the
--------------------
certificate representing such Shares as provided in Section 3.02. At the
Effective Time, each Existing Stock Option (as defined below) shall be converted
into the right to receive the Existing Stock Option Consideration (as defined
below) pursuant to Section 3.04 hereof.
SECTION 2.07 Conversion of Common Stock of Purchaser. Each share of
---------------------------------------
common stock, $0.01 par value, of Purchaser issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and become one share
of common stock of the Surviving Corporation.
SECTION 2.08 Shareholders' Meeting'. Unless the Merger is
---------------------
consummated in accordance with Section 180.1104 of the WBCL as contemplated by
Section 2.09, and subject to
5
<PAGE>
applicable law, the Company, acting through its Board of Directors, shall, in
accordance with applicable law, duly call, give notice of, convene and hold a
special meeting (the "Special Meeting") of its shareholders as soon as
---------------
practicable following the consummation of the Offer for the purpose of adopting
the plan of merger (within the meaning of Section 180.1101 of the WBCL) set
forth in this Agreement; and include in the Proxy Statement (as defined below)
the recommendation of its Board of Directors that shareholders of the Company
vote in favor of the adoption of the plan of merger set forth in this Agreement.
Parent and Purchaser each agree that, at the Special Meeting, all of the Shares
acquired pursuant to the Offer, the Option or otherwise by Parent or Purchaser
or any of their affiliates will be voted in favor of the Merger.
SECTION 2.09 Merger Without Meeting of Shareholders. If Purchaser,
--------------------------------------
or any other direct or indirect Subsidiary of Parent, shall hold at least 90
percent of the outstanding shares of each class of capital stock of the Company
and Parent elects, in its sole discretion, to consummate the Merger in
accordance with Section 180.1104 of the WBCL without a meeting of shareholders
of the Company, each of Parent, Purchaser and the Company shall take all
necessary and appropriate action to cause the Merger to become effective, as
soon as practicable after the consummation of the Offer, without a meeting of
shareholders of the Company, in accordance with such Section.
SECTION 2.10 Withholding Taxes. Parent, Purchaser and the Surviving
-----------------
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable to a holder of Shares pursuant to the Offer or the Merger any
stock transfer taxes and such amounts as are required to be withheld under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
----
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or Purchaser, such withheld amounts shall be treated for all
purposes of this Agreement and the Offer as having been paid to the holder of
the Shares in respect of which such deduction and withholding was made by Parent
or Purchaser.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES; OPTIONS
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
-----------------
Agreement to the contrary and unless the Merger is consummated in accordance
with Section 180.1104 of the WBCL, Shares which are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
exercising appraisal rights available under Sections 180.1301 to 180.1331 of the
WBCL (the "Dissenting Shares") shall not be converted into or be exchangeable
-----------------
for the right to receive the Merger Consideration, unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal under the WBCL. Dissenting Shares shall be treated in
accordance with Subchapter XIII of the WBCL, if and to the extent applicable.
If any such holder shall have failed to perfect or shall have effectively
withdrawn or lost such right to appraisal, such holder's Shares shall thereupon
be converted into and become exchangeable only for the right to receive, as of
the Effective Time, the Merger Consideration without any interest thereon. The
Company shall give Parent and Purchaser (a) prompt notice of any written demands
for appraisal of any Shares, attempted withdrawals of such demands, and any
other instruments served pursuant to the WBCL and received by the Company
relating to rights to be paid the "fair value" of Dissenting Shares, as provided
in
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Sections 180.1301 to 180.1331 of the WBCL and (b) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
WBCL. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisals of
capital stock of the Company, offer to settle or settle any demands or approve
any withdrawal of any such demands.
SECTION 3.02 Payment for Shares.
------------------
(a) Prior to the Effective Time, Parent will cause Purchaser to make
available to a bank or trust company designated by Parent (the "Paying Agent")
------------
sufficient funds to make the payments pursuant to Section 2.06 hereof on a
timely basis to holders (other than Parent or Purchaser or any of their
respective Subsidiaries) of Shares that are issued and outstanding immediately
prior to the Effective Time (such amounts being hereinafter referred to as the
"Payment Fund"). The Paying Agent shall, pursuant to irrevocable written
- -------------
instructions, make the payments provided for in the preceding sentence out of
the Payment Fund. The Payment Fund shall not be used for any other purpose,
except as provided in this Agreement.
(b) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall cause the Paying Agent to mail to each record
holder, as of the Effective Time, of an outstanding certificate or certificates
which immediately prior to the Effective Time represented Shares (the
"Certificates"), a form of letter of transmittal (which shall specify that
- -------------
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the Certificate and receiving
payment therefor. Following surrender to the Paying Agent of a Certificate,
together with such letter of transmittal duly executed, the holder of such
Certificate shall be paid in exchange therefor cash in an amount (subject to any
applicable withholding tax as specified in Section 2.10 hereof) equal to the
product of the number of Shares represented by such Certificate multiplied by
the Merger Consideration, and such Certificate shall forthwith be canceled. No
interest will be paid or accrued on the cash payable upon the surrender of the
Certificates. If payment is to be made to a Person (as defined below) other
than the Person in whose name the Certificate surrendered is registered, it
shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that the Person
requesting such payment pay any transfer or other taxes required by reason of
the payment to a Person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. From and after the Effective Time
and until surrendered in accordance with the provisions of this Section 3.02,
each Certificate (other than Certificates representing Shares owned by Parent or
Purchaser or any of their respective Subsidiaries, and certificates representing
Dissenting Shares) shall represent for all purposes solely the right to receive,
in accordance with the terms hereof, the Merger Consideration in cash multiplied
by the number of Shares evidenced by such Certificate, without any interest
thereon.
(c) Any portion of the Payment Fund (including the proceeds of any
investments thereof) that remains unclaimed by the former shareholders of the
Company for six months after the Effective Time shall be repaid to the Surviving
Corporation. Any former shareholders of the Company who have not complied with
Section 3.01 hereof prior to the end of such six-month period shall thereafter
look only to the Surviving Corporation (subject to abandoned property,
7
<PAGE>
escheat or other similar laws) but only as general creditors thereof for payment
of their claim for the Merger Consideration, without any interest thereon.
Neither Parent nor the Surviving Corporation shall be liable to any holder of
Shares for any monies delivered from the Payment Fund or otherwise to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to six years after the
Effective Time (or such earlier date as shall be immediately prior to such date
as such unclaimed funds would otherwise become subject to any abandoned
property, escheat or similar law), unclaimed funds payable with respect to such
certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any Person previously entitled thereto.
SECTION 3.03 Closing of the Company's Transfer Books. At the
---------------------------------------
Effective Time, the stock transfer books of the Company shall be closed and no
transfer of Shares shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged for cash as provided in this Article III, subject to applicable
law in the case of Dissenting Shares.
SECTION 3.04 Existing Stock Options. Prior to the consummation of
----------------------
the Offer, the Company shall take all actions necessary or desirable (including
obtaining all required consents from optionees) to provide for the cancellation,
effective at the Effective Time, of all of the outstanding stock options (the
"Existing Stock Options") heretofore granted under any stock option, employment
- -----------------------
or similar plan or arrangement of the Company or any such similar plan or
agreement which benefits any person providing services to the Company or any
Subsidiary (the "Stock Option Plans"), without any payment therefor except as
------------------
otherwise provided in this Section 3.04. At the Effective Time (or at such
earlier time as Purchaser shall designate), each holder of an Existing Stock
Option shall, in settlement thereof, be entitled to receive from the Surviving
Corporation, an amount (subject to any applicable withholding tax as specified
in Section 2.10 hereof or as may apply to payments made in connection with the
performance of services) in cash equal to the product of (i) the excess of the
Merger Consideration over the per share exercise or purchase price of such
Existing Stock Option and (ii) the number of Shares subject to such Existing
Stock Option (such amount being hereinafter referred to as the "Option
------
Consideration"). Except as otherwise agreed to by the parties, as of the
- -------------
Effective Time, the Stock Option Plans shall terminate and any and all rights
under any provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any Subsidiary thereof shall be canceled. Notwithstanding the
foregoing, no holder of an Existing Stock Option shall be entitled to any
payment hereunder unless he or she delivers to Purchaser a consent to the
cancellation of such Existing Stock Option in a form to be prescribed by
Purchaser.
SECTION 3.05 Other Equity Based Awards. Prior to the Effective Time,
-------------------------
the Company shall take all necessary and appropriate actions (including
obtaining all applicable consents) to provide that, upon the Effective Time,
each then outstanding restricted stock award in respect of Shares and any other
stock based awards (collectively, the "Stock Awards") which is subject to any
------------
vesting requirement and which was issued pursuant to a Stock Option Plan or any
other plan or arrangement shall, whether or not then exercisable or vested,
become 100% vested. At the Effective Time, a holder of Shares underlying such
Stock Award shall be entitled to receive the Merger Consideration (subject to
any applicable withholding tax as specified in
8
<PAGE>
Section 2.10 hereof or as may apply to payments made in connection with the
performance of services), upon the surrender of the certificate representing
such Shares as provided in Section 3.02. Notwithstanding the foregoing, no
holder of a Stock Award shall be entitled to any payment hereunder unless he or
she delivers to Purchaser a consent to the cancellation of such Stock Award in a
form to be prescribed by Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the Company SEC Reports (as defined below)
filed and available prior to the date of this Agreement or, with respect to any
Section of this Article IV, as set forth in the section of the disclosure letter
concurrently delivered by the Company to Parent with respect to this Agreement
(the "Disclosure Letter") that specifically relates to such Section, the Company
-----------------
represents and warrants to Parent and Purchaser as follows:
SECTION 4.01 Organization and Qualification. The Company and each of
------------------------------
its Subsidiaries is a duly organized and validly existing corporation in good
standing under the laws of its jurisdiction of incorporation, with all corporate
power and authority to own its properties and conduct its business as currently
conducted and is duly qualified and in good standing as a foreign corporation
authorized to do business in each of the jurisdictions in which the character of
the properties owned or held under lease by it or the nature of the business
transacted by it makes such qualification necessary, except where the failure to
be so qualified and in good standing, individually or in the aggregate, would
not have a Material Adverse Effect. The Company has heretofore made available
to Parent and Purchaser accurate and complete copies of the Articles of
Incorporation and Bylaws (or similar governing documents) as currently in effect
of the Company and its Subsidiaries. Neither the Company nor any of its
Subsidiaries, directly or indirectly, owns any interest in any Person other than
in the Company's Subsidiaries.
SECTION 4.02 Capitalization. (a) The authorized capital stock of
--------------
the Company consists of One Hundred Million (100,000,000) shares of Common Stock
and Five Hundred (500) shares of 10% cumulative, non-voting Preferred Stock,
stated value $300 per share (the "Preferred Stock"). As of the close of
---------------
business on the day immediately preceding the date hereof: 21,606,207 Shares
were issued and outstanding, no shares of Preferred Stock were issued and
outstanding and 742,652 Shares were held in the Company's treasury. In
addition, as of such date, there were outstanding Existing Stock Options to
purchase an aggregate of 1,312,000 Shares and up to 59,745 Shares were
potentially issuable as Stock Awards. Since such date, the Company has not
issued any Shares other than upon the exercise of Existing Stock Options
outstanding on such date, has not granted any options, warrants or rights or
entered into other agreements or commitments to purchase Shares (under the Stock
Option Plans or otherwise) and has not split, combined or reclassified any of
its shares of capital stock. All of the outstanding Shares have been duly
authorized and validly issued and are fully paid and nonassessable, except as
provided in Section 180.0622 of the WBCL, and are free of preemptive rights.
Section 4.02(a) of the Disclosure Letter contains a true, accurate and complete
list, as of the date hereof, of the name of each Existing Stock Option holder,
the number of outstanding Existing Stock Options held by such holder, the grant
date of each such Existing Stock Option,
9
<PAGE>
the number of Shares such holder is entitled to receive upon the exercise of
each Existing Stock Option and the corresponding exercise price. Except for the
Existing Stock Options and the Rights, there are no outstanding (i) securities
of the Company convertible into or exchangeable for shares of capital stock or
voting securities or ownership interests in the Company, (ii) options, warrants,
rights or other agreements or commitments to acquire from the Company, or
obligations of the Company to issue, any capital stock, voting securities or
other ownership interests in (or securities convertible into or exchangeable for
capital stock or voting securities or other ownership interests in) the Company,
(iii) obligations of the Company to grant, extend or enter into any
subscription, warrant, right, convertible or exchangeable security or other
similar agreement or commitment relating to any capital stock, voting securities
or other ownership interests in the Company (the items in clauses (i), (ii) and
(iii), together with the capital stock of the Company, being referred to
collectively as "Company Securities") or (iv) obligations by the Company or any
------------------
of its Subsidiaries to make any payments based on the price or value of the
Shares. There are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities.
There are no voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party with respect to the voting of
capital stock of the Company or any of its Subsidiaries.
(b) The Company or another Subsidiary is the record and beneficial
owner of all the outstanding shares of capital stock of each Company Subsidiary,
free and clear of any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind, and there are no irrevocable proxies with respect to
any such shares. There are no outstanding (i) securities of the Company or any
of its Subsidiaries convertible into or exchangeable for shares of capital stock
or other voting securities or ownership interests in any Subsidiary of the
Company, (ii) options, warrants, rights or other agreements or commitments to
acquire from the Company or any of its Subsidiaries (or obligations of the
Company or any of its Subsidiaries to issue) any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, any of its Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment
relating to any capital stock, voting securities or other ownership interests in
any of the Company's Subsidiaries (the items in clauses (i), (ii) and (iii),
together with the capital stock of such Subsidiaries, being referred to
collectively as "Subsidiary Securities") or (iv) obligations of the Company or
---------------------
any of its Subsidiaries to make any payment based on the value of any shares of
any Subsidiary. There are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
SECTION 4.03 Authority for this Agreement. The Company has all
----------------------------
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of the Company and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated, other than, with respect to the Merger, the
approval and adoption of the plan of merger (as such term is used in Section
180.1101 of the WBCL) contained in this Agreement by the holders of a majority
of the outstanding Shares prior
10
<PAGE>
to the consummation of the Merger (unless the Merger is consummated pursuant to
Section 180.1104 of the WBCL). This Agreement has been duly and validly executed
and delivered by the Company and constitutes a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms.
SECTION 4.04 Consents and Approvals; No Violation. Neither the
------------------------------------
execution and delivery of this Agreement by the Company nor the consummation of
the transactions contemplated hereby will (a) conflict with or result in any
breach of any provision of the respective Articles of Incorporation or Bylaws
(or other similar governing documents) of the Company or any of its
Subsidiaries, (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any foreign, federal, state or local government
or subdivision thereof, or governmental, judicial, legislative, executive,
administrative or regulatory authority, agency, commission, tribunal or body (a
"Governmental Entity") except as may be required under the Hart-Scott-Rodino
-------------------
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the Exchange Act
-------
and the WBCL, (c) require any consent, waiver or approval or result in a default
(or give rise to any right of termination, cancellation, modification or
acceleration) under any of the terms, conditions or provisions of any note,
license, agreement, contract, indenture or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective assets may be bound, (d)
result in the creation or imposition of any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind on any asset of the Company or any
of its Subsidiaries or (e) violate any order, writ, injunction, judgment,
decree, law, statute, rule, ordinance or regulation ("Legal Requirements")
------------------
applicable to the Company or any of its Subsidiaries or by which any of their
respective assets are bound, except in the case of (b), (c) and (d) for any of
the foregoing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
ability of the parties to consummate the Offer or the Merger.
SECTION 4.05 Reports; Financial Statements.
-----------------------------
(a) Since January 1, 1997 the Company has timely filed all forms,
reports and documents required to be filed by it with the SEC, all of which have
complied as of their respective filing dates in all material respects with all
applicable requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder. True and correct copies of all filings made by the
Company with the SEC since such date and prior to the date hereof (the "Company
-------
SEC Reports"), whether or not required under applicable laws, rules and
- -----------
regulations and including any registration statement filed by the Company under
the Securities Act of 1933, as amended, have been furnished to Parent and
Purchaser. None of the SEC Reports, including any financial statements or
schedules included or incorporated by reference therein, at the time filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The audited and unaudited consolidated financial statements of
the Company included (or incorporated by reference) in the Company SEC Reports
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis and fairly present the
consolidated financial position of the Company and its Subsidiaries
11
<PAGE>
as of their respective dates, and the consolidated income, shareholders equity,
results of operations and changes in consolidated financial position or cash
flows for the periods presented therein.
(c) Except as reflected or reserved against or disclosed in the
financial statements of the Company included in the Company SEC Reports, and
except as incurred in the ordinary course of business consistent with past
practice since December 31, 1998, neither the Company nor any of its
Subsidiaries has any liabilities of any nature, whether accrued, absolute,
fixed, contingent or otherwise, whether due or to become due and whether or not
required to be recorded or reflected on a balance sheet under United States
generally accepted accounting principles. Since December 31, 1998, neither the
Company nor any of its Subsidiaries has incurred any such liabilities other than
liabilities that (i) have been incurred in the ordinary course of business
consistent with past practice and (ii) have not had and are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 4.06 Absence of Certain Changes. Since January 1, 1999, (a)
--------------------------
the Company and its Subsidiaries have not suffered any Material Adverse Effect
or any change, condition, event or development that could reasonably be expected
to have a Material Adverse Effect, (b) the Company and its Subsidiaries have
conducted their respective businesses in all material respects only in the
ordinary course consistent with past practice, except for the negotiation and
execution and delivery of this Agreement and (c) there has not been (i) any
declaration, setting aside or payment of any dividend or other distribution in
respect of the Shares or any repurchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any outstanding shares of capital stock or
other securities in, or other ownership interests in, the Company or any of its
Subsidiaries or any amendment (or agreement to amend) the terms of any such
shares, securities or ownership interests, (ii) any entry into any employment,
change in control, deferred compensation or severance agreement with, or any
significant increase in the rate or terms (including any acceleration of the
right to receive payment) of compensation payable or to become payable by the
Company or any of its Subsidiaries to, their respective directors, officers or
employees, except increases to employees who are not officers or directors
occurring in the ordinary course of business, (iii) any increase in the rate or
terms (including any acceleration of the right to receive payment) of any Plan
(as defined below) or any other bonus, severance, insurance, change in control,
deferred compensation, pension or other employee benefit plan, payment or
arrangement made to, for or with any such directors, officers or employees, (iv)
any action by the Company which, if taken after the date hereof, would
constitute a breach of any of the clauses of Section 6.01 hereof, (v) any change
by the Company in accounting methods, principles or practices except as required
by changes in United States generally accepted accounting principles, (vi) any
material labor dispute or other material employment related problem, other than
routine individual grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any
Subsidiary, which employees were not then subject to a collective bargaining
agreement or any lockouts, strikes, slowdowns, work stoppages or threats thereof
by or with respect to such employees, (vii) any revaluation by the Company or
any of its Subsidiaries of any of their respective assets, including write-downs
of inventory or of accounts receivable other than in the ordinary course of
business consistent with past practice or (viii) except by contracts entered
into in the ordinary course of business consistent with past practice,
12
<PAGE>
any entry into any agreement, commitment or transaction by the Company which is
material to the Company and its Subsidiaries taken as a whole.
SECTION 4.07 Schedule 14D-9; Offer Documents and Proxy Statement-.
---------------------------------------------------
(a) None of the information supplied or to be supplied by or on
behalf of the Company or any affiliate of the Company for inclusion in the Offer
Documents will, at the times such documents are filed with the SEC and are
mailed to shareholders of the Company, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, or to correct any statement made in any
communication with respect to the Offer previously filed with the SEC or
disseminated to the shareholders of the Company. The Schedule 14D-9 will not,
at the time the Schedule 14D-9 is filed with the SEC and at all times prior to
the purchase of Shares by Purchaser pursuant to the Offer, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to information
supplied in writing by Parent, Purchaser or an affiliate of Parent or Purchaser
expressly for inclusion therein. The Schedule 14D-9 will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations of the SEC thereunder.
(b) The Proxy Statement, and any other schedule or document required
to be filed by the Company in connection with the Merger, will not, at the time
the Proxy Statement is first mailed and at the time of the Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, or to
correct any statement made in any earlier communication with respect to the
solicitation of any proxy or approval for the Merger in connection with which
the Proxy Statement shall be mailed, except that no representation or warranty
is made by the Company with respect to information supplied in writing by
Parent, Purchaser or an affiliate of Parent or Purchaser expressly for inclusion
therein. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder. The letter to shareholders, notice of meeting, proxy
statement and form of proxy, or the information statement, as the case may be,
that may be provided to shareholders of the Company in connection with the
Merger (including any amendments or supplements), and any schedules required to
be filed with the SEC in connection therewith, as from time to time amended or
supplemented, are collectively referred to as the "Proxy Statement."
---------------
SECTION 4.08 Brokers. No Person or entity (other than Baird, a true
-------
and complete copy of whose engagement letter as in effect has been furnished to
Parent and Purchaser) is entitled to receive any brokerage, finder's or other
fee or commission in connection with this Agreement or the transactions
contemplated hereby based upon agreements made by or on behalf of the Company,
any of its Subsidiaries or any of their respective officers, directors or
employees.
13
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SECTION 4.09 Labor and Employee Benefit Matters.
----------------------------------
(a) (i) The employees employed by the Company and its Subsidiaries are
not represented by any labor union or other labor representative, (ii) there are
no collective bargaining agreements or other similar arrangements in effect with
respect to such employees and (iii) there are no other Persons attempting to
represent or organize or purporting to represent for bargaining purposes any
employees employed by the Company or any of its Subsidiaries.
(b) (i) Since January 1, 1996 there has not occurred or been
threatened any strikes, slow downs, picketing, work stoppages, concerted
refusals to work or other similar labor activities with respect to employees
employed by the Company or any of its Subsidiaries and (ii) no material
grievance or arbitration or other Proceeding arising out of or under any
collective bargaining agreement relating to the Company or any of its
Subsidiaries is pending or threatened.
(c) The Company and each Subsidiary are in compliance in all material
respects with all Legal Requirements relating to the employment or termination
of employment of all former, current, and prospective employees, independent
contractors and "leased employees" (within the meaning of Section 414(n) of the
Code) of the Company and each Subsidiary.
(d) No individual has been treated by the Company or any Subsidiary as
a "leased employee" (within the meaning of Section 414(n) of the Code). There
are no material complaints, charges or claims against the Company or any
Subsidiary pending or threatened to be brought by or filed with any Governmental
Entity based on, arising out of, in connection with or otherwise relating to the
employment or termination of employment by the Company or any Subsidiary of any
individual involved in the business of the Company or any Subsidiary, including
individuals classified by the Company or any Subsidiary as independent
contractors or "leased employees" (within the meaning of Section 414(n) of the
Code), or the failure to employ any individual, including, without limitation,
any claim relating to employment discrimination, equal pay, employee safety and
health, immigration, wages and hours or workers' compensation.
(e) There are no material liabilities, whether absolute or contingent,
to any employees employed by the Company or any Subsidiary relating to workers
compensation benefits that are not fully insured against by a bona fide third-
party insurance carrier. All premiums required to have been paid to date under
the insurance policy or fund with respect to each workers' compensation
arrangement that is funded wholly or partially through an insurance policy or
public or private fund, have been paid, all premiums required to be paid under
the insurance policy or fund through the Closing will have been paid on or
before the Closing and, as of the Closing, there will be no material liability
of the Company or any Subsidiary under any such insurance policy, fund or
ancillary agreement with respect to such insurance policy or fund in the nature
of a retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring prior
to the Closing.
(f) "Company Benefit Plans" shall mean such employee or director
benefit or compensation plan, arrangement or agreement, including, without
limitation, pension, savings, retirement, welfare, insurance, severance,
executive compensation, profit-sharing, deferred compensation, incentive, bonus,
stock-option, stock purchase, and long-term performance plans,
14
<PAGE>
arrangements or agreements, that are maintained, or contributed to, as of the
date of this Agreement by the Company or any of its Subsidiaries or by any trade
or business, whether or not incorporated (an "ERISA Affiliate"), all of which
---------------
together with the Company would be deemed a "single employer" within the meaning
of Section 4001 of the Employee Retirement Income Security Act of 1974 ("ERISA")
-----
or Section 414(b), (c), (m) or (o) of the Code, or to which the Company or any
Subsidiary has any obligation to contribute, or with respect to which the
Company or any Subsidiary has any liability. Set forth in Section 4.09(f) of the
Company Disclosure Letter is a list of the material Company Benefit Plans and
the Company shall, within fifteen (15) days following the date hereof, provide
Purchaser with a list of all Company Benefit Plans. The Company has heretofore
delivered or made available to Purchaser true and complete copies of each
material Company Benefit Plan and the following related documents: (i) the
actuarial report and Form 5500 for such Company Benefit Plan (if applicable) for
each of the last two years, (ii) the most recent determination letter from the
Internal Revenue Service (if applicable) for such Company Benefit Plan and (iii)
the most recent summary plan description , including financial statements and
actuarial valuations, for such Company Benefit Plan. There is no legally binding
arrangement or commitment to create any additional Company Benefit Plans or
intent to modify or change any existing Company Benefit Plans.
(g) (i) Each of the Company Benefit Plans has been operated and
administered in accordance with its terms and with applicable Legal
Requirements, including, but not limited to, ERISA and the Code, except where
the failure to so operate and administer would not individually or in the
aggregate result in a Material Adverse Effect on the Company, (ii) each of the
Company Benefit Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a determination letter from the Internal Revenue
Service stating that it is so qualified, and, to the knowledge of the Company,
there are no existing circumstances or any events that have occurred that would
reasonably be expected to adversely affect the qualified status of any such
Company Benefit Plan, and the consummation of the transactions contemplated
hereby will not adversely affect the qualified status of any such Company
Benefit Plan (iii) with respect to each Company Benefit Plan that is subject to
Title IV of ERISA, the present value of accrued benefits under such plan, based
upon the actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such plan's actuary with respect to such plan, did
not, as of its latest valuation date, exceed the then current value of the
assets of such plan allocable to such accrued benefits and, to the knowledge of
the Company no adverse change in such funded status has occurred, (iv) no
Company Benefit Plan provides benefits, including, without limitation, death or
medical benefits (whether or not insured), with respect to current or former
employees or directors of the Company or its Subsidiaries beyond their
retirement or other termination of service, other than (A) coverage mandated by
applicable Legal Requirements, (B) death benefits or retirement benefits under
any "employee pension plan" (as such term is defined in Section 3(2) of ERISA),
(C) deferred compensation benefits accrued as liabilities on the books of it or
its Subsidiaries or (D) benefits the full cost of which is borne by the current
or former employee or director (or his or her beneficiary), (v) (A) no liability
under Title IV or ERISA or Section 412 of the Code has been incurred by the
Company, its Subsidiaries or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a risk to the Company, its
Subsidiaries or any ERISA Affiliate of incurring a liability thereunder, except
where such liability would not reasonably be expected to have a Material Adverse
Effect on the Company, (B) no "reportable event" (as defined in section 4043 of
ERISA) has occurred with respect to any Company Benefit Plan, (C) no Company
Benefit
15
<PAGE>
Plan which is subject to Section 302 of ERISA or Section 412 of the Code has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code, respectively), whether or not waived and (D)
the transactions contemplated hereby will not result in any event described in
section 4062(e) of ERISA, (vi) no Company Benefit Plan is a "multiemployer
pension plan" (as such term is defined in Section 3(37) of ERISA), (vii) all
contributions or other amounts payable by the Company or its Subsidiaries as of
the Effective Time with respect to each Company Benefit Plan in respect of
current or prior plan years have been paid or accrued in accordance with
Generally Accepted Accounting Principles in the United States and Section 412 of
the Code and have been adequately accurately reflected in the audited and
unaudited consolidated financial statements of the Company included (or
incorporated by reference) in the Company SEC Reports, (viii) neither the
Company nor its Subsidiaries has engaged in a transaction in connection with
which the Company or its Subsidiaries reasonably could be subject to either a
civil penalty assessed pursuant to Section 406, 409, 502(i), 502(l) or 4069 of
ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code, except
where any such penalty or tax would not, individually or in the aggregate, have
a Material Adverse Effect on the Company, (ix) to the knowledge of the Company,
there are no pending, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against the Company with any of the
Company Benefit Plans or any trusts related thereto, and neither the Company,
any Subsidiary nor any Company Benefit Plan is under audit or, to the knowledge
of the Company, is the subject of an audit or investigation by any federal or
state governmental agency (including, without limitation, by the Internal
Revenue Service, the Department of Labor or the Pension Guarantee Benefit
Corporation), nor, to the knowledge of the Company, is any such audit or
investigation pending or threatened and (x) no Company Benefit Plan maintained
outside of the United States has assets or book reserves that are less than the
accrued liabilities under such plans, and all Company Benefit Plans maintained
outside of the United States have been operated and administered in accordance
with applicable Legal Requirements, except where the failure to so fund or
provide book reserves for such plans or to so operate and administer such plans
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or its Subsidiaries.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby (either alone or in
conjunction with any other event) will (A) result in any payment (including,
without limitation, severance, unemployment compensation, "excess parachute
payment" (within the meaning of Section 280G of the Code) whether or not such
payment could be considered to be reasonable compensation for services rendered,
forgiveness of indebtedness or otherwise) becoming due to any current or former
director or employee of the Company or any of its Subsidiaries (or any group of
such current or former directors or employees) under any Company Benefit Plan or
otherwise, (B) increase any benefits otherwise payable under any Company Benefit
Plan or (C) result in any acceleration of the time of payment or vesting of any
such benefits. No deduction for U.S. Federal income tax purposes has been or
is expected by the Company or any Subsidiary to be disallowed for remuneration
paid by the Company or any of its Subsidiaries by reason of Section 162(m) of
the Code including by reason of the transactions contemplated hereby.
(i) With respect to each Company Benefit Plan, all material payments
due from the Company or any Subsidiary to the date hereof have been made and all
amounts properly accrued to the date hereof, or as of the Effective Date, as
liabilities of the Company or any
16
<PAGE>
Subsidiary that have not been paid have been properly recorded on the books of
the Company. All liabilities with respect to any current or former employee of
the Company or any Subsidiary, whether contingent or otherwise, that the
Purchaser will assume by reason of this Agreement or by operation of law are
accurately reflected in the audited and unaudited consolidated financial
statements of the Company included (or incorporated by reference) in the Company
SEC Reports.
(j) Except as provided on Schedule 4.09(j) of the Company Disclosure
Letter, neither the Company nor any Subsidiary maintains any plan, program or
arrangement or is a party to any contract that provides any benefits or provides
for payments to any Person in, based on or measured by the value of, any equity
security of, or interest in, the Company or any Subsidiary.
SECTION 4.10 Litigation, etc. There is no claim suit, action or
---------------
legal, administrative or arbitration proceeding (including any citations,
complaints, consent orders, compliance schedules or other similar enforcement
orders) or, any governmental investigation ("Proceeding") pending or, to the
----------
knowledge of the Company, threatened against or relating to the Company or any
of its Subsidiaries that involve a claim against the Company or any of its
Subsidiaries in excess of $250,000 or that, individually or in the aggregate, if
adversely determined could reasonably be expected to have a Material Adverse
Effect or that in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the Offer or the Merger or any of the other transactions
contemplated hereby. Neither the Company nor any Subsidiary of the Company is
subject to any outstanding order, writ, injunction or decree that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.11 Tax Matters.
-----------
(a) Each of the Company and its Subsidiaries has duly and timely filed all
Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate in all respects, except to the extent that any failure to
have filed such Tax Returns or any inaccuracies in such Tax Returns would not
reasonably be expected to have a Material Adverse Effect on the Company. The
Company and each of its Subsidiaries has paid all Taxes required to be paid by
it and has paid all Taxes that it was required to withhold from amounts owing to
any employee, creditor or third party except to the extent that the failure to
pay or withhold Taxes in the aggregate would not reasonably be expected to have
a Material Adverse Effect on the Company. There are no pending or threatened
audits, examinations, investigations, deficiencies, claims or other Legal
Proceedings in respect of Taxes relating to the Company or any Subsidiary,
except for those relating to Taxes which, if adversely determined, would not in
the aggregate reasonably be expected to have a Material Adverse Effect on the
Company. There are no liens for Taxes upon the assets of the Company or any
Subsidiary other than liens for current Taxes not yet due, liens for Taxes that
are being contested in good faith by appropriate proceedings, and liens for
Taxes which in the aggregate would not reasonably be expected to have a Material
Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries
has requested any extension of time within which to file any Tax Returns in
respect of any taxable year which have not since been filed, nor made any
request for waivers of the time to assess any Taxes that are pending or
outstanding, except where such requests or waivers would not reasonably be
expected to have a Material Adverse Effect on the Company. Neither the Company
nor any of its
17
<PAGE>
Subsidiaries has made an election under Section 341(f) of the Code. The
consolidated federal income Tax Returns of the Company and its Subsidiaries have
been examined and closed, or the statute of limitations has closed, with respect
to all taxable years through and including 1992. Neither the Company nor any of
its Subsidiaries has any liability for Taxes of any person (other than the
Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
comparable provision of state, local or foreign law). Neither the Company nor
any Subsidiary of the Company is a party to any agreement (with any person other
than the Company or its Subsidiaries) relating to the allocation or sharing of
Taxes.
(b) For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added, and (ii) "Tax Return" means any return, report or
similar statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
SECTION 4.12 Compliance with Law; No Default. (a) Neither the
-------------------------------
Company nor any of its Subsidiaries is in conflict with, in default with respect
to or in violation of, (i) any Legal Requirement applicable to the Company or
any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries, or any property or
asset of the Company or any of its Subsidiaries, is bound or affected, in each
case except for any such conflicts, defaults or violations that have not had and
are not reasonably expected to have a Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the Offer or the
Merger. The Company and its Subsidiaries have all permits, licenses,
authorizations, consents, approvals and franchises from Governmental Entities
required to conduct their businesses as currently conducted (the "Company
-------
Permits"), except for such permits, licenses, authorizations, consents,
- -------
approvals and franchises the absence of which, individually or in the aggregate,
have not had and are not reasonably expected to have a Material Adverse Effect
or a material adverse effect on the ability of the parties to consummate the
Offer or the Merger. The Company and its Subsidiaries are in compliance with the
terms of the Company Permits, except where the failure so to comply in the
aggregate has not had and is not reasonably expected to have a Material Adverse
Effect or a material adverse effect on the ability of the parties to consummate
the Offer or the Merger.
(b) Without limiting the generality of the foregoing Section 4.12(a),
the Company and its Subsidiaries are in compliance with, and have received no
notice of non-compliance with, the applicable regulations of any applicable
aviation authorities (including the FAA). The Company and its Subsidiaries
have, and the Surviving Corporation and the Subsidiaries will at the Effective
Time have, all permits currently required by any applicable rule or regulation
of any applicable aviation authorities (including the FAA). "FAA" means the U.S.
---
Federal Aviation Administration (and any successor thereof).
18
<PAGE>
SECTION 4.13 Environmental Matters.
---------------------
(a) (i) The Company and each of its Subsidiaries have been at all
times and are in compliance in all material respects with all applicable
Environmental Laws (as defined below).
(ii) The Company and each of its Subsidiaries have obtained all
permits, licenses, consents, approvals, waivers, variances and other
authorizations ("Authorizations") that are required with respect to the
--------------
operation of its business, property and assets under the Environmental Laws
and all such Authorizations are in full force and effect.
(iii) None of Company nor any of its Subsidiaries has received any
notice, request for information, complaint or administrative or judicial
order, and there is no investigation, action, suit or proceeding pending
nor to the knowledge of the Company, threatened, alleging or asserting
material liability or potential material liability against the Company or
any of its Subsidiaries under any Environmental Law or arising from or
related to a Release or threatened Release.
(iv) To the knowledge of the Company and each of its Subsidiaries,
there are no past or present conditions or circumstances at, or arising out
of, the operations of the Company or any of its Subsidiaries, including but
not limited to on-site or off-site Release, which are reasonably likely to
result in: (A) material liabilities or obligations for any cleanup,
remediation or corrective action under any Environmental Law, (B) material
claims arising under any Environmental Law for personal injury, property
damage, or damage to natural resources, or (C) material fines or penalties
arising under any Environmental Law.
(b) The Company has given Parent and Purchaser access to all records
and files in its possession at both its corporate headquarters and its
facilities currently owned, operated, leased, managed, used or controlled by the
Company, or any of its Subsidiaries, including all reports, studies, analyses,
tests or monitoring results, pertaining to Hazardous Substances, any Release or
any environmental concerns relating to facilities or real property owned or
operated (including leased) by the Company or any of its Subsidiaries or
concerning compliance with or liability under any Environmental Laws.
(c) For purposes of this Section 4.13, the definition of the Company
shall include, to the knowledge of the Company, all of the Company's former
Subsidiaries.
(d) Prior to the Effective Time, the Company has made all
notifications, registrations, and filings required under and have taken all
other necessary steps to effect the timely transfer of all Authorizations and to
comply with all Environmental Disclosure Requirements (as defined below)
applicable to its assets and the assets of its Subsidiaries and will provide a
copy of any such notification, registration, or filing to Purchaser prior to the
Effective Time.
(e) For purposes of this Agreement, "Environmental Law" means any
-----------------
statute, law (including common law), ordinance, rule, regulation, order,
judgment or decree applicable to the Company or any of its Subsidiaries relating
to (i) the protection or preservation of the
19
<PAGE>
environment, worker health and safety, human health as it relates to the
environment or natural resources, (ii) Releases or threatened Releases, (iii)
the management (including use, treatment, handling, storage, disposal,
transportation, recycling or remediation) of any Hazardous Substance; and (iv)
the physical structure or condition, or appropriate use of a building, facility,
fixture or other structure.
(f) For purposes of this Agreement, "Hazardous Substance" means any
-------------------
substance, pollutant, contaminant, chemical or other material (including
petroleum or any fraction thereof, asbestos or asbestos-containing-material,
polychlorinated biphenyls, urea formaldehyde foam insulation) or waste that is
identified or regulated under any Environmental Law.
(g) For purposes of this Agreement, "Release" means any spill,
-------
discharge, leak, emission, disposal, injection, escape, dumping, leaching,
dispersal, emanation, migration or release of any kind whatsoever of any
Hazardous Substance or noxious noise or odor, at, in, on, into or onto the
environment.
(h) For the purposes of this Agreement, "Environmental Disclosure
------------------------
Requirements" means any laws requiring notification of the buyer of real
- ------------
property, or notification, registration, or filing with any governmental agency,
prior to the sale of any real property or transfer of control of an
establishment, of the actual or threatened presence or Release into the
environment, or the use, disposal, or handling of Hazardous Substance on, at,
under, or near the real property to be sold or the establishment for which
control is to be transferred.
SECTION 4.14 Intellectual Property.
---------------------
Except to the extent the inaccuracy of any of the following, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company, the Company and each of its Subsidiaries owns or
possesses adequate licenses or other legal rights to use all patents,
trademarks, trade names, trade dress, copyrights, service marks, trade secrets,
software, mailing lists, mask works, know-how and other proprietary rights and
information, including all applications with respect thereto (collectively,
"Proprietary Rights") used or held for use in connection with the business of
------------------
the Company and its Subsidiaries as currently conducted or as contemplated to be
conducted by the Company, and the Company is unaware of any assertion or claim
challenging the validity or enforceability of or the Company's and its
Subsidiaries' right to use any of the foregoing. To the knowledge of the
Company, after due inquiry for such purpose, the conduct of the business of the
Company and its Subsidiaries as currently conducted and as contemplated to be
conducted did not, does not and will not infringe or violate in any way any
Proprietary Rights of any third party that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the Company.
To the knowledge of the Company, after due inquiry for such purposes, there are
no infringements or violations of any Proprietary Rights owned by or licensed by
or to the Company or any of its Subsidiaries that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
Company.
20
<PAGE>
SECTION 4.15 Real Property.
-------------
(a) Section 4.15(a) of the Disclosure Letter sets forth a true,
correct and complete list of all of the real property owned in fee by the
Company and its Subsidiaries. Each of the Company and its Subsidiaries has good
and marketable title to each parcel of real property owned by it free and clear
of all mortgages, pledges, liens, encumbrances and security interests, except
(i) those reflected or reserved against in the balance sheet of the Company
dated as of June 30, 1999 and included in the SEC Reports, (ii) Taxes and
general and special assessments not in default and payable without penalty and
interest and (iii) other liens, mortgages, pledges, encumbrances and security
interests which do not materially interfere with the Company's or such
Subsidiary's use and enjoyment of such real property.
(b) Section 4.15(b) of the Disclosure Letter sets forth a true,
correct and complete list of all leases, subleases and other agreements under
which the Company or any of its Subsidiaries uses or occupies or has the right
to use or occupy, now or in the future, any real property (the "Real Property
-------------
Leases"). The Company has heretofore delivered to Parent and Purchaser true,
- ------
correct and complete copies of all Real Property Leases (including all
modifications, amendments, supplements, waivers and side letters thereto). Each
Real Property Lease is valid, binding and in full force and effect, all rent and
other sums and charges payable by the Company and its Subsidiaries as tenants
thereunder are current, and no termination event or condition or uncured default
of a material nature on the part of the Company or any such Subsidiary exists
under any Real Property Lease. Each of the Company and its Subsidiaries has a
good and valid leasehold interest in each parcel of real property leased by it
free and clear of all mortgages, pledges, liens, encumbrances and security
interests, except (i) those reflected or reserved against in the balance sheet
of the Company dated as of September 30, 1999, (ii) Taxes and general and
special assessments not in default and payable without penalty and interest, and
(iii) other liens, mortgages, pledges, encumbrances and security interests which
do not materially interfere with the Company's use and enjoyment of such real
property or materially detract from or diminish the value thereof.
SECTION 4.16 Year 2000. As of December 31, 1999, all internal
---------
computer systems that are material to the business, finances or operations of
the Company will be (a) able to receive, record, store, process, calculate,
manipulate and output dates from and after January 1, 2000, time periods that
include January 1, 2000 and information that is dependent on or relates to such
dates or time periods, in the same manner and with the same accuracy,
functionality, data integrity and performance as when dates or time periods
prior to January 1, 2000 are involved and (b) able to store and output date
information in a manner that is unambiguous as to century ("Year 2000
---------
Compliant"). To the knowledge of the Company and its Subsidiaries and upon
reasonable investigation, as of the Effective Time the systems of the Company's
and its Subsidiaries' material suppliers are Year 2000 Compliant.
SECTION 4.17 Material Contracts. The Company has made available to
------------------
Parent and Purchaser true, correct and complete copies of all contracts,
agreements, commitments, arrangements, leases (including with respect to
personal property) and other instruments to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its Subsidiaries or any
of their respective assets is bound which (a) involves or could involve
aggregate payments of more than $500,000, (b) involves or could involve
aggregate revenues of
21
<PAGE>
more than $500,000 and which contains provisions relating to change of control
or restrictions on assignment, (c) is with any of the Company's officers,
directors or affiliates, (d) is or could reasonably be expected to be material
to the Company and its Subsidiaries taken as a whole, (e) is a confidentiality,
standstill or similar agreement or (f) contains covenants limiting the freedom
to engage in any line of business or compete with any Person or operate at any
location (each, a "Material Contract"). Neither the Company nor any of its
-----------------
Subsidiaries is, or has received any notice or has any knowledge that any other
party is, in default in any material respect under any Material Contract, and
there has not occurred any event that with the lapse of time or the giving of
notice or both would constitute such a material default, except for such
defaults, individually or in the aggregate, that have not had and are not
reasonably expected to have a Material Adverse Effect or a material adverse
effect on the ability of the parties to consummate the Offer or the Merger.
SECTION 4.18 Related Party Transactions. No director, officer,
--------------------------
partner, employee, affiliate or associate of the Company or any of its
Subsidiaries (a) has borrowed any monies from or has outstanding any
indebtedness or other similar obligations to the Company or any of its
Subsidiaries, (b) owns any direct or indirect interest of any kind (other than
the ownership of less than 5% of the stock of a publicly traded company) in, or
is a director, officer, employee, partner, affiliate or associate of, or
consultant or lender to, or borrower from, or has the right to participate in
the management, operations or profits of, any Person or entity which is (i) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of the Company of any of its Subsidiaries, (ii) engaged in a business related to
the business of the Company or any of its Subsidiaries or (iii) participated in
any transaction to which the Company or any of its Subsidiaries is a party; or
(c) is otherwise a party to any contract, arrangement or understanding with the
Company or any of its Subsidiaries.
SECTION 4.19 State Takeover Statutes Inapplicable. (a) Sections
------------------------------------
180.1140 to 180.1145 of the WBCL are inapplicable to the Offer, the Merger, this
Agreement and the Shareholder Option Agreement and the transactions contemplated
hereby and thereby.
(b) Upon Purchaser's acquisition of at least seventy-five percent (75%) of
the outstanding Shares, Purchaser will (i) possess a majority of all the votes
entitled to be cast at such time on the plan of merger (as such term is defined
in Section 180.1103 of the WBCL) and (ii) have the sole power to approve such
plan of merger without the vote of any other shareholder of the Company,
provided, that, in the case of clause (ii), Purchaser complies with Sections
180.1104(3) and (4) and 180.1132(1) of the WBCL, as applicable.
(c) No vote by the Company shareholders under Section 180.1131 of the WBCL
will be required to approve the Merger except for the vote generally required
under Section 180.1103 of the WBCL, provided that this Agreement, the Offer and
the Shareholder Option Agreement are first publicly announced and the Offer is
commenced (within the meaning of Rule 14d-2 promulgated under the Exchange Act)
on the same day.
(d) The Company is not a "target company" which has "substantial assets
located in Wisconsin", as determined under Section 552.01(6)(b) of the Wisconsin
Statutes.
22
<PAGE>
SECTION 4.20 Rights Agreement. The Company has irrevocably taken all
----------------
necessary action, including, without limitation, amending the Rights Agreement
with respect to all of the outstanding Rights issued pursuant to the Rights
Agreement, (a) to render the Rights Agreement inapplicable to this Agreement,
the Shareholder Option Agreement, the Offer, the Merger and the specific
transactions contemplated hereby and thereby, (b) to ensure that (i) Parent and
Purchaser, or either of them, are not deemed to be an Acquiring Person (as
defined in the Rights Agreement) pursuant to the Rights Agreement and (ii) no
Triggering Event (as such term is defined in the Rights Agreement) occur by
reason of the execution and delivery of this Agreement, the Shareholder Option
Agreement or the consummation of the Offer, the Merger or transactions
contemplated by this Agreement or the Shareholder Option Agreement and (c) so
that the Company will have no obligations under the Rights or the Rights
Agreement in connection with the Offer and the Merger and the holders of Shares
will have no rights under the Rights or the Rights Agreement in connection with
the Offer and the Merger. The Rights Agreement, as so amended to comply with
this Section, has not been further amended or modified. Copies of all such
amendments to the Rights Agreement have been previously provided to Purchaser.
SECTION 4.21 Required Vote of Company Shareholders. Unless the
-------------------------------------
Merger is consummated in accordance with Section 180.1104 of the WBCL as
contemplated by Section 2.09, the only vote of the shareholders of the Company
required to adopt the plan of merger contained in this Agreement and approve the
Merger is the affirmative vote of the holders of not less than a majority of the
outstanding Shares. No other vote of the shareholders of the Company is
required by law, the Articles of Incorporation or Bylaws of the Company as
currently in effect or otherwise to adopt the plan of merger contained in this
Agreement and approve the Merger. Purchaser will have full voting power with
respect to any Shares purchased pursuant to the Offer or the Options to the
extent allowed under Section 180.1150 of the WBCL.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
SECTION 5.01 Organization and Qualification. Each of Parent and
------------------------------
Purchaser is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction of its organization. All of the issued and
outstanding capital stock of Purchaser is owned directly or indirectly by
Parent.
SECTION 5.02 Authority for this Agreement. Each of Parent and
----------------------------
Purchaser has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Parent and Purchaser and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate proceedings on the part of Parent and
Purchaser. This Agreement has been duly and validly executed and delivered by
Parent and Purchaser and constitutes a legal, valid and binding agreement of
each of Parent and Purchaser, enforceable against each of Parent and Purchaser
in accordance with its terms.
23
<PAGE>
SECTION 5.03 Offer Documents; Proxy Statement.
--------------------------------
(a) None of the Offer Documents will, at the times such documents are
filed with the SEC and are mailed to the shareholders of the Company, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by Parent or Purchaser with
respect to information supplied in writing by the Company or an affiliate of the
Company expressly for inclusion therein. The Offer Documents will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations of the SEC thereunder.
(b) None of the information supplied by Parent, Purchaser or any
affiliate of Parent or Purchaser specifically for inclusion in the Proxy
Statement or the Schedule 14D-9 will, at the date of filing with the SEC, and,
in the case of the Proxy Statement, at the time the Proxy Statement is mailed
and at the time of the Special Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
SECTION 5.04 Consents and Approvals; No Violation. Neither the
------------------------------------
execution and delivery of this Agreement by Parent or Purchaser nor the
consummation of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the respective Certificates of
Incorporation or Bylaws (or other similar governing documents) of Parent or
Purchaser, (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) as may be
required under the HSR Act, any non-United States competition, antitrust and
investment laws, the Exchange Act, the WBCL, Chapter 552 of the Wisconsin
Statute and the "takeover" or "blue sky" laws of various states or (ii) where
the failure to obtain such consent, approval, authorization or permit, or to
make such filing or notification, would not, individually or in the aggregate,
have a material adverse effect on the ability of Parent or Purchaser to
consummate the transactions contemplated hereby, (c) require any consent, waiver
or approval or result in a default (or give rise to any right of termination,
cancellation, modification or acceleration) under any of the terms, conditions
or provisions of any note, license, agreement, contract, indenture or other
instrument or obligation to which Parent or Purchaser or any of their respective
Subsidiaries is a party or by which Parent or any of its Subsidiaries or any of
their respective assets may be bound, except for such defaults (or rights of
termination, cancellation, modification or acceleration) as to which requisite
waivers or consents have been obtained or which would not in the aggregate have
a material adverse effect on the ability of Parent or Purchaser to consummate
the transactions contemplated hereby or (d) violate any Legal Requirement
applicable to Parent, Purchaser or any of their respective Subsidiaries or by
which any of their respective assets are bound, except for violations which
would not, individually or in the aggregate, have a material adverse effect on
the ability of Parent or Purchaser to consummate the transactions contemplated
hereby.
SECTION 5.05 Operations of Purchaser. Purchaser was formed solely
-----------------------
for the purpose of engaging in the transactions contemplated hereby, has engaged
in no other business activities and has conducted and will conduct its
operations only as contemplated hereby.
24
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SECTION 5.06 Brokers. No Person or entity is entitled to receive any
-------
brokerage, finder's or other fee or commission in connection with this Agreement
or the transactions contemplated hereby based upon agreements made by or on
behalf of Parent, Purchaser or any of their Subsidiaries or any of their
respective officers, directors or employees.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as expressly
----------------------------------
contemplated by this Agreement, during the period from the date of this
Agreement to the date on which a majority of the Company's directors are
designees of Parent or Purchaser, the Company will conduct and will cause each
of its Subsidiaries to conduct its operations according to its ordinary and
usual course of business and consistent with past practice, and the Company will
use and will cause each of its Subsidiaries to use its commercially reasonable
efforts to preserve intact its business organization, to keep available the
services of its current officers and employees and to preserve the goodwill of
and maintain satisfactory relationships with those Persons and entities having
business relationships with the Company and its Subsidiaries, and the Company
will promptly advise Parent and Purchaser in writing of any material change in
the Company's or any of its Subsidiaries' condition (financial or otherwise),
properties, customer or supplier relationships, assets, liabilities, business
prospects or results of operations. Without limiting the generality of the
foregoing and except as otherwise expressly provided in or contemplated by this
Agreement or the Disclosure Letter, during the period specified in the preceding
sentence, without the prior written consent of Parent which shall not be
unreasonably withheld, the Company will not and will not permit any of its
Subsidiaries to:
(a) issue, sell, grant options, restricted shares or rights to
purchase, pledge, or authorize or propose the issuance, sale, grant of
options, restricted shares or rights to purchase or pledge of (i) any
Company Securities (including any Existing Stock Option or Stock Award) or
Subsidiary Securities, or grant or accelerate any right to convert or
exchange any Company Securities or Subsidiary Securities, other than Shares
issuable upon exercise of the Existing Stock Options or Stock Award or (ii)
any other securities in respect of, in lieu of or in substitution for
Shares outstanding on the date hereof or any other right the value of which
is based on the value of Company Securities or Subsidiary Securities;
(b) acquire or redeem, directly or indirectly, or amend any Company
Securities or Subsidiary Securities;
(c) split, combine or reclassify its capital stock or declare, set
aside, make or pay any dividend or distribution (whether in cash, stock or
property) on any shares of its capital stock (other than cash dividends
paid to the Company by its wholly-owned Subsidiaries with regard to their
capital stock);
(d) (i) make or offer to make any acquisition, by means of a merger or
otherwise, of assets or securities, or any sale, lease, encumbrance or
other disposition of assets or securities, in each case involving the
payment or receipt of consideration of $250,000 or
25
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more, except for purchases of inventory made in the ordinary course of
business and consistent with past practice or (ii) except in the ordinary
course consistent with past practice, enter into a Material Contract or
amend any Material Contract or grant any release or relinquishment of any
rights under any Material Contract;
(e) incur or assume any long-term debt or short-term debt except for
short-term debt incurred in the ordinary course of business consistent with
past practice;
(f) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other Person except wholly-owned Subsidiaries of the
Company;
(g) make any loans, advances or capital contributions to, or
investments in, any other Person (other than wholly-owned Subsidiaries of
the Company);
(h) change any of the accounting principles or practices used by it;
(i) make any Tax election or settle or compromise any material federal,
state or local income Tax liability;
(j) propose or adopt any amendments to its Articles of Incorporation or
Bylaws (or similar documents);
(k) grant any stock-related, performance or similar awards or bonuses;
(l) forgive any loans to employees, officers, consultants or directors
or any of their respective affiliates or associates;
(m) enter into any new, or amend any existing, employment, severance,
consulting, retention, change in control, deferred compensation or salary
continuation agreements with or for the benefit of any current or former
officers, directors, employees or consultants, or grant any increases in
the compensation, wages, salaries, fringe benefits, perquisites or benefits
to any current or former officers, directors and employees (other than
normal increases to persons who are not officers or directors in the
ordinary course of business consistent with past practices and that do not
result in a material increase in benefits or compensation expense of the
Company);
(n) make any deposits or contributions of cash or other property to or
take any other action to fund or in any other way secure the payment of
compensation or benefits under the Plans or agreements subject to the Plans
or any other plan, agreement, contract or arrangement of the Company
(except for any matching contributions to the Company's 401(k) plan which
are consistent with past practice);
(o) enter into, amend, or extend any collective bargaining or other
labor agreement;
(p) adopt, amend or terminate any Plan or any other bonus, severance,
insurance pension or other employee benefit plan or arrangement;
26
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(q) settle or agree to settle any suit, action, claim, proceeding or
investigation (including any suit, action, claim, proceeding or
investigation relating to this Agreement or the transactions contemplated
hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy
any claim, liability or obligation (absolute or accrued, asserted or
unasserted, contingent or otherwise) other than the payment, discharge or
satisfaction of liabilities reflected or reserved against in full in the
financial statements as at June 30, 1999, incurred in the ordinary course
of business subsequent to June 30, 1999 or are less than $25,000 in the
aggregate;
(r) except as specifically permitted by Section 6.02, take, or agree to
commit to take, or fail to take any action that would result or is
reasonably likely to result in any of the Offer Conditions or any of the
conditions to the Merger set forth in Article VII not being satisfied, or
would make any representation or warranty of the Company contained herein
inaccurate in any material respect at, or as of any time prior to, the
Effective Time, or that would impair the ability to consummate the Offer or
the Merger in accordance with the terms hereof or materially delay such
consummation;
(s) convene any regular or special meeting (or any adjournment thereof)
of the shareholders of the Company other than the meeting contemplated by
Section 2.08 of this Agreement; or
(t) except as provided above, agree in writing or otherwise to take any
of the foregoing actions.
SECTION 6.02 No Solicitation. (a) The Company shall not, and shall
---------------
cause its Subsidiaries and its and their respective officers, directors,
employees, representatives (including investment bankers, attorneys and
accountants), agents or affiliates not to, directly or indirectly, encourage,
solicit, initiate or participate in any way in any discussions or negotiations
with, or provide any information to, or afford any access to the properties,
books or records of the Company or any of its Subsidiaries to, or otherwise take
any other action to assist or facilitate, any Person or group (other than Parent
or Purchaser or any affiliate or associate of Parent or Purchaser) concerning
any Acquisition Proposal (as defined below) or the possible making of an
Acquisition Proposal. Notwithstanding the foregoing and subject to compliance
with Section 6.02(b) and the prior execution by such Person or group of a
confidentiality agreement substantially in the form of the Confidentiality
Agreement, the Company may furnish information to or enter into discussions or
negotiations with any Person or entity that has made an unsolicited bona fide
Acquisition Proposal that the Board of Directors of the Company determines is a
Superior Proposal (as defined below) if, and only to the extent that, the Board
of Directors of the Company, after consultation with outside legal counsel to
the Company, determines in good faith that failure to do so would result in a
breach of the fiduciary duty of the Board of Directors of the Company to the
shareholders of the Company under applicable law.
(b) The Company will promptly (and in any event within 48 hours)
notify Parent and Purchaser, orally and in writing, if any such information is
requested or any such negotiations or discussions are sought to be initiated and
will promptly communicate to Parent and Purchaser the identity of the Person or
group making such request or inquiry (the "Potential Acquiror") and any other
------------------
terms of such request, inquiry or Acquisition Proposal. Such
27
<PAGE>
notification shall include copies of any written communications received from
the Potential Acquiror. If the Company (or any of its Subsidiaries or its or
their respective officers, directors, employees, representatives, agents or
affiliates) participates in discussions or negotiation with, or provides
information to, a Potential Acquiror, the Company will keep Parent advised on a
current basis of any developments with respect thereto.
(c) The Company will, and will cause its Subsidiaries and its and
their respective officers, directors, employees, representatives, agents and
affiliates to, immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons other than Parent,
Purchaser or any of their respective affiliates or associates conducted prior to
the date hereof with respect to any Acquisition Proposal.
(d) Unless and until this Agreement has been terminated in accordance
with Section 8.01, the Company shall not (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer or the Merger as set forth in Section
1.02(a), (ii) approve or recommend, or propose publicly to approve or recommend,
any Acquisition Proposal, (iii) release any third party from any confidentiality
or standstill agreement to which the Company is a party or fail to enforce to
the fullest extent possible, or grant any waiver or request or consent to any
Acquisition Proposal under any such agreement, (iv) redeem the Rights or amend,
or take any other action with respect to, the Rights Agreement to facilitate any
Acquisition Proposal or (v) enter into any letter of intent, agreement in
principle, acquisition agreement or other agreement related to any Acquisition
Proposal. Without limiting any other rights of Parent and Purchaser under this
Agreement in respect of any such action, any withdrawal or modification by the
Company of the approval or recommendation of the Offer or the Merger shall not
have any effect on the approvals of, and other actions referred to herein for
the purpose causing Takeover Laws and the Rights Agreement to be inapplicable
to, this Agreement and the Shareholder Option Agreement and the transactions
contemplated hereby and thereby, which approvals and actions are irrevocable.
(e) Nothing contained in this Section 6.02 shall prohibit the Company
or its Board of Directors from taking and disclosing to the Company's
Shareholders a position with respect to a tender offer by a third party pursuant
to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act.
(f) For purposes of this Agreement, (i) "Acquisition Proposal" means
--------------------
any offer or proposal, or any indication of interest in making an offer or
proposal, made by a Person or group at any time which is structured to permit
such Person or group to acquire beneficial ownership of any material portion of
the assets of, or at least 5% of the equity interest in, or businesses of, the
Company pursuant to a merger, consolidation or other business combination, sale
of shares of capital stock, sale of assets, tender offer or exchange offer or
similar transaction, including any single or multi-step transaction or series of
related transactions, in each case other than the Offer and the Merger and (ii)
"Superior Proposal" means any unsolicited, bona fide Acquisition Proposal made
-----------------
in writing in respect of which the Board of Directors of the Company has
reasonably determined in good faith (A) after consulting with and receiving the
advice of its independent financial advisors to such effect, that the Potential
Acquiror has the financial wherewithal to consummate such Acquisition Proposal
without having to obtain new financing,
28
<PAGE>
(B) after receiving the advice of its independent financial advisors to such
effect, that such Acquisition Proposal would involve consideration that is
superior to the consideration under the Offer and the Merger and (C) after
consulting with and receiving the advice of its outside counsel and independent
financial advisors to such effect, that such Acquisition Proposal is reasonably
likely to be consummated without undue delay.
SECTION 6.03 Access to Information.
---------------------
(a) From and after the date of this Agreement, the Company will (i)
give Parent and Purchaser and their authorized accountants, investment bankers,
counsel and other representatives complete access (during regular business hours
upon reasonable notice) to all employees, plants, offices, warehouses and other
facilities and to all books, contracts, commitments and records (including Tax
returns) of the Company and its Subsidiaries and cause the Company's and its
Subsidiaries' independent public accountants to provide access to their work
papers and such other information as Parent or Purchaser may reasonably request,
(ii) permit Parent and Purchaser to make such inspections as they may require,
(iii) cause its officers and those of its Subsidiaries to furnish Parent and
Purchaser with such financial and operating data and other information with
respect to the business, properties and personnel of the Company and its
Subsidiaries as Parent or Purchaser may from time to time request and (iv)
furnish promptly to Parent and Purchaser a copy of each report, schedule and
other document filed or received by the Company during such period pursuant to
the requirements of the federal or state securities laws.
(b) Information obtained by Parent or Purchaser pursuant to Section
6.03(a) shall be subject to the provisions of the Confidentiality Agreement, the
terms of which are incorporated herein by reference.
SECTION 6.04 Reasonable Best Efforts.
-----------------------
(a) Subject to the terms and conditions herein provided for, each of
the parties hereto agrees to use its commercially reasonable efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement; provided, however, that nothing in
-------- -------
this Agreement (other than as expressly provided for in Section 1.01) shall
obligate Parent or Purchaser to keep the Offer open beyond the expiration date
set forth in the Offer (as it may be extended from time to time). Without
limiting the foregoing, (i) each of the Company, Parent and Purchaser shall use
its commercially reasonable efforts to make promptly any required submissions
under the HSR Act which the Company or Parent determines should be made, in each
case, with respect to the Offer, the Merger, this Agreement or the Shareholder
Option Agreement and the transactions contemplated hereby and thereby and (ii)
Parent, Purchaser and the Company shall cooperate with one another (A) in
promptly determining whether any filings are required to be or should be made or
consents, approvals, permits or authorizations are required to be or should be
obtained under any other federal, state or foreign law or regulation or whether
any consents, approvals or waivers are required to be or should be obtained from
other parties to loan agreements or other contracts or instruments material to
the Company's business in connection with the consummation of the transactions
contemplated by
29
<PAGE>
this Agreement and (B) in promptly making any such filings, furnishing
information required in connection therewith and seeking to obtain timely any
such consents, permits, authorizations, approvals or waivers. In case at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of
each party to this Agreement shall take all such necessary action.
(b) In the event that any action, suit, proceeding or investigation
relating hereto or to the transactions contemplated hereby is commenced, whether
before or after the Effective Time, the parties hereto agree to cooperate and
use their commercially reasonable efforts to defend vigorously against it and
respond thereto.
(c) Nothing in this Agreement shall obligate Parent, Purchaser or any
of their respective Subsidiaries or affiliates to agree (i) to limit in any
manner whatsoever or not to exercise any rights of ownership of any securities
(including the Shares), or to divest, dispose of or hold separate any securities
or all or a material portion of their respective businesses, assets or
properties or of the business, assets or properties of the Company or any of its
Subsidiaries or (ii) to limit in any material manner whatsoever the ability of
such entities (A) to conduct their respective businesses or own such assets or
properties or to conduct the businesses or own the properties or assets of the
Company and its Subsidiaries or (B) to control their respective businesses or
operations or the businesses or operations of the Company and its Subsidiaries.
SECTION 6.05 Indemnification and Insurance.
-----------------------------
(a) Parent and Purchaser agree that all rights to indemnification
existing in favor of the present or former directors, officers and employees of
the Company or any of its Subsidiaries as provided in the Company's Articles of
Incorporation or Bylaws, or the articles of organization, bylaws or similar
documents of any of the Company's Subsidiaries as in effect as of the date
hereof with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect for a period of
not less than the statutes of limitations applicable to such matters, and Parent
agrees to cause the Surviving Corporation to comply fully with its obligations
hereunder and thereunder.
(b) The Surviving Corporation will cause to be maintained in effect
for a period of six years after the Effective Time, in respect of acts or
omissions occurring prior to the Effective Time (but only in respect thereof),
policies of directors' and officers' liability insurance covering the persons
currently covered by the Company's existing directors' and officers' liability
insurance policies and providing substantially similar coverage to such existing
policies; provided, however, that the Surviving Corporation will not be required
-------- -------
in order to maintain such directors' and officers' liability insurance policies
to pay an annual premium in excess of 200% of the aggregate annual amounts
currently paid by the Company to maintain the existing policies (which amount is
not more than $50,000); and provided further that, if equivalent coverage cannot
----------------
be obtained, or can be obtained only by paying an annual premium in excess of
200% of such amount, the Surviving Corporation shall only be required to obtain
as much coverage as can be obtained by paying an annual premium equal to 200% of
such amount.
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<PAGE>
(c) This Section 6.05 shall survive the consummation of the Merger
and is intended to benefit, and shall be enforceable, by any Person or entity
entitled to be indemnified hereunder (whether or not parties to this Agreement).
SECTION 6.06 Employee Matters
----------------
(a) Prior to the Effective Time, except as set forth below, the
Company will, and will cause its Subsidiaries to, and from and after the
Effective Time, Parent will, and will cause the Surviving Corporation to, honor,
in accordance with their terms all existing employment and severance agreements
between the Company or any of its Subsidiaries and any officer, director or
employee of the Company or any of its Subsidiaries specified in Section 4.09(f)
of the Disclosure Letter.
(b) The Company shall take, or cause to be taken, all action
necessary, as promptly hereafter as reasonably practicable, to amend any plan
maintained by the Company or any of its Subsidiaries to eliminate, as of the
date hereof, all provisions for the purchase of Shares directly from the Company
or any of its Subsidiaries or securities of any Subsidiary.
(c) Parent will, and will cause the Surviving Corporation to, cause
service rendered by employees of the Company and its Subsidiaries prior to the
Effective Time to be taken into account for vesting and eligibility purposes
under employee benefit plans of Parent, the Surviving Corporation and its
Subsidiaries, to the same extent as such service was taken into account under
the corresponding plans of the Company and its Subsidiaries for those purposes.
Employees of the Company and its Subsidiaries will not be subject to any pre-
existing condition limitation under any health plan of Parent, the Surviving
Corporation or its Subsidiaries for any condition for which they would have been
entitled to coverage under the corresponding plan of the Company or its
Subsidiaries in which they participated prior to the Effective Time. Parent
will, and will cause the Surviving Corporation and its Subsidiaries, to give
such employees credit under such plans for co-payments made and deductibles
satisfied prior to the Effective Time.
(d) No later than two business days prior to its distribution, the
Company and its Subsidiaries shall provide Parent and Purchaser with a copy of
any communication intended to be made to any of their respective employees
relating to the transactions contemplated hereby, and will provide an
opportunity for Parent and Purchaser to make reasonable revisions thereto.
SECTION 6.07 Takeover Laws. The Company shall, upon the request of
-------------
Parent or Purchaser, take all reasonable steps to exclude the applicability of,
or to assist in any challenge by Parent or Purchaser to the validity, or
applicability to the Offer, the Merger or any other transaction contemplated by
this Agreement or the Shareholder Option Agreement of, any Takeover Laws.
SECTION 6.08 Proxy Statement. Unless the Merger is consummated in
---------------
accordance with Section 180.1104 of the WBCL as contemplated by Section 2.09,
the Company shall prepare and file with the SEC, subject to the prior review and
approval of Parent and Purchaser (which approval shall not be unreasonably
withheld), as soon as practicable after the consummation of the Offer, a
preliminary proxy or information statement (the "Preliminary Proxy Statement")
---------------------------
relating to the Merger as required by the Exchange Act and the rules and
31
<PAGE>
regulations thereunder, with respect to the transactions contemplated hereby.
The Company shall obtain and furnish the information required to be included in
the Preliminary Proxy Statement, shall provide Parent and Purchaser with, and
consult with Parent and Purchaser regarding, any comments that may be received
from the SEC or its staff with respect thereto, shall, subject to the prior
review and approval of Parent and Purchaser (which approval shall not be
unreasonably withheld), respond promptly to any such comments made by the SEC or
its staff with respect to the Preliminary Proxy Statement, shall cause the Proxy
Statement to be mailed to the Company's shareholders at the earliest practicable
date and shall use its commercially reasonable efforts to obtain the necessary
approval of the Merger by its shareholders.
SECTION 6.09 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Parent and Purchaser, and Parent or Purchaser, as the case may
be, shall give prompt notice to the Company, of the occurrence, or non-
occurrence, of any event the occurrence, or non-occurrence, of which is likely
(a) to cause any representation or warranty of such party contained in this
Agreement (disregarding any materiality qualification contained therein) to be
untrue or inaccurate in any material respect at or prior to the Effective Time
and (b) to result in any material failure of such party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
hereunder (including the conditions set forth in Exhibit A); provided, however,
-------- -------
that the delivery of any notice pursuant to this Section 6.09 shall not limit or
otherwise affect the remedies available hereunder to any of the parties
receiving such notice.
SECTION 6.10 Subsequent Filings. Until the Effective Time, the
------------------
Company will timely file with the SEC each form, report and document required to
be filed by the Company under the Exchange Act and will promptly deliver to
Parent and Purchaser copies of each such report filed with the SEC. As of their
respective dates, none of such reports shall contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of the Company included in
such reports shall be prepared in accordance with generally accepted accounting
principles in the United States applied on a consistent basis (except as may be
indicated in the notes thereto) and shall fairly present the financial position
of the Company and its consolidated Subsidiaries as at the dates thereof and the
results of their operations and changes in financial position for the periods
then ended.
SECTION 6.11 Press Releases. Parent, Purchaser and the Company will
--------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Offer or the Merger or this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation (and affording the other party or parties an opportunity to
comment thereon), except as may be required by applicable law or the rules and
regulations of The Nasdaq Stock Market, the New York Stock Exchange or other
securities stock exchange or other quotation system on which the securities of
Parent or the Company are listed or quoted as the case may be.
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<PAGE>
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger'. The respective obligations of each party to effect the Merger are
- ------
subject to the satisfaction or waiver, where permissible, prior to the proposed
Effective Time, of the following conditions:
(a) unless the Merger is consummated pursuant to Section 180.1104 of
the WBCL as contemplated by Section 2.09, the plan of merger (as such term
is used in Section 180.1101 of the WBCL) contained in this Agreement shall
have been adopted by the affirmative vote of the shareholders of the
Company required by and in accordance with applicable law;
(b) all necessary waiting periods under (i) the HSR Act applicable to
the Merger and (ii) any non-United States competition or antitrust laws
which Purchaser determines, in its reasonable discretion, are applicable to
this Agreement and the transactions contemplated hereby, shall have expired
or been terminated;
(c) no statute, rule, regulation, executive order, judgment, decree
or injunction shall have been enacted, entered, issued, promulgated or
enforced by any court or Governmental Entity against Parent, Purchaser or
the Company and be in effect that prohibits or restricts the consummation
of the Merger or makes such consummation illegal (each party agreeing to
use all commercially reasonable efforts to have such prohibition lifted);
and
(d) Purchaser shall have accepted for purchase and paid for the
Shares tendered pursuant to the Offer in accordance with the terms of this
Agreement (as the same may be amended from time to time).
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
-----------
Merger may be abandoned at any time (notwithstanding approval thereof by the
shareholders of the Company) prior to the Effective Time (with any termination
by Parent also being an effective termination by Purchaser):
(a) by mutual written consent of the Company and Parent;
(b) by Parent or the Company if any court of competent jurisdiction
or other Governmental Entity shall have issued an order, decree or ruling,
or taken any other action restraining, enjoining or otherwise prohibiting
any of the transactions contemplated by this Agreement or the Shareholder
Option Agreement and such order, decree, ruling or other action shall have
become final and non-appealable;
33
<PAGE>
(c) by the Company if (i) Purchaser fails to commence the Offer in
violation of Section 1.01 hereof, (ii) Purchaser shall not have accepted
for payment and paid for Shares pursuant to the Offer in accordance with
the terms thereof on or before January 10, 2000 or (iii) Purchaser fails to
purchase validly tendered Shares in violation of the terms of this
Agreement;
(d) by Parent if due to an occurrence or circumstance which would
result in a failure to satisfy any of the Offer Conditions, Purchaser shall
have (i) not commenced the Offer within the time required by Regulation 14D
under the Exchange Act, (ii) terminated the Offer without purchasing any
Shares pursuant to the Offer or (iii) failed to accept for payment Shares
pursuant to the Offer prior to January 10, 2000;
(e) by the Company, prior to the purchase of Shares pursuant to the
Offer, if (i) the Company has complied with its obligations under Section
6.02, (ii) the Company has given Parent and Purchaser at least three
business days advance notice of its intention to accept or recommend a
Superior Proposal and of all of the terms and conditions of such Superior
Proposal, (iii) the Company's Board of Directors, after taking into account
any modifications to the terms of the Offer and the Merger proposed by
Parent and Purchaser after receipt of such notice, continues to believe
such Acquisition Proposal constitutes a Superior Proposal and (iv) the
Board of Directors of the Company, after consultation with outside legal
counsel to the Company, determines in good faith that failure to do so
would result in a breach of the fiduciary duty of the Board of Directors of
the Company to the shareholders of the Company under applicable law;
provided that the termination described in this Section 8.01(e) shall not
--------
be effective unless and until the Company shall have paid to Parent all of
the fees and expenses described in Section 8.02 including, without
limitation, the Termination Fee; or
(f) by Parent, prior to the purchase of Shares pursuant to the Offer,
if the Company breaches any of its covenants in Sections 6.02 or the Board
of Directors shall have resolved to effect any of the actions referred to
in Section 6.02(d).
SECTION 8.02 Effect of Termination. If this Agreement is terminated
---------------------
and the Merger is abandoned pursuant to Section 8.01 hereof, this Agreement,
except for the provisions of Sections 6.03(b), 8.02, 8.03 and Article IX hereof,
shall forthwith become void and have no effect, without any liability on the
part of any party or its directors, officers, employees or shareholders.
Nothing in this Section 8.02 shall relieve any party to this Agreement of
liability for any breach of this Agreement.
SECTION 8.03 Fees and Expenses. (a) Whether or not the Merger is
-----------------
consummated, except as otherwise specifically provided herein, all costs and
expenses incurred in connection with the Offer, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(b) In the event that this Agreement is terminated pursuant to (i)
Section 8.01(e) or 8.01(f) or (ii) Section 8.01(b), 8.01(c)(ii) or 8.01(d) and
(in the case of clause (ii) only) either (A) prior to such termination an
Acquisition Proposal shall have been made or publicly announced or (B) within 12
months thereafter an Acquisition Proposal shall have been
34
<PAGE>
consummated, then the Company shall reimburse Parent for the out-of-pocket fees
and expenses of Parent and the Purchaser (including printing fees, filing fees
and fees and expenses of its legal and financial advisors) related to the Offer,
this Agreement, the transactions contemplated hereby and any related financing
up to a maximum of $750,000 (seven hundred and fifty thousand dollars)
(collectively "Expenses") and pay Parent a termination fee of $4,000,000 million
--------
(four million dollars) (the "Termination Fee") in immediately available funds by
---------------
wire transfer to an account designated by Parent. If such amounts become payable
pursuant to clause (i) or (ii)(A) of this Section 8.03(b), they shall be payable
simultaneously with such termination (in the case of a termination by the
Company) or within one business day thereafter (in the case of a termination by
Parent). If such amounts become payable pursuant to clause (ii)(B) of this
Section 8.03(b), they shall be payable simultaneously with completion of such
Acquisition Proposal.
(c) Without limiting other remedies available to Parent or Purchaser
under this Agreement or otherwise, in the event this Agreement is terminated
pursuant to Section 8.01(c)(ii) or Section 8.01(d) as a result of the failure to
satisfy the conditions set forth in paragraph (f) of Exhibit A, then the Company
shall promptly (and in any event with one business day after such termination)
reimburse Parent for Expenses in immediately available funds by wire transfer to
an account designated by Parent.
(d) The prevailing party in any legal action undertaken to enforce
this Agreement or any provision hereof shall be entitled to recover from the
other party the costs and expenses (including attorneys' and expert witness
fees) incurred in connection with such action.
SECTION 8.04 Amendment. To the extent permitted by applicable law,
---------
this Agreement may be amended by action taken by or on behalf of the Boards of
Directors of the Company, Parent and Purchaser, subject in the case of the
Company to Section 1.04(b), at any time before or after adoption of this
Agreement by the shareholders of the Company but, after any such shareholder
approval, no amendment shall be made which decreases the Merger Consideration or
which adversely affects the rights of the Company's shareholders hereunder
without the approval of the shareholders of the Company. This Agreement may not
be amended, changed, supplemented or otherwise modified except by an instrument
in writing signed on behalf of all of the parties.
SECTION 8.05 Extension; Waiver; Remedies. (a) At any time prior to
---------------------------
the Effective Time, the parties hereto, by action taken by or on behalf of the
respective Boards of Directors of the Company, Parent and Purchaser, subject in
the case of the Company to Section 1.04(b), may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any
35
<PAGE>
other such right, power or remedy by such party. The failure of any party hereto
to exercise any rights, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties made in Articles IV and V shall not survive
beyond the Effective Time. This Section 9.01 shall not limit any covenant or
agreement of the parties hereto which by its terms contemplates performance
after the Effective Time.
SECTION 9.02 Entire Agreement; Assignment. This Agreement, together
----------------------------
with the Disclosure Letter and the Confidentiality Agreement, constitutes the
entire agreement between the parties with respect to subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to subject matter hereof. The Agreement shall
not be assigned by any party by operation of law or otherwise without the prior
written consent of the other parties, provided, that Parent or Purchaser may
--------
assign any of their respective rights and obligations to any direct or indirect
Subsidiary of Parent, but no such assignment shall relieve Parent or Purchaser,
as the case may be, of its obligations hereunder.
SECTION 9.03 Jurisdiction. Each of the parties hereto (a) consents
------------
to submit itself to the personal jurisdiction of any New York state court
located in the Borough of Manhattan, City of New York or any Federal court
located in such Borough in the event any dispute arises out of this Agreement or
any transaction contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (c) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court and (d) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
transaction contemplated by this Agreement. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York located in the Borough of
Manhattan, City of New York or in any Federal court located in such Borough, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
SECTION 9.04 Validity. Whenever possible, each provision or portion
--------
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction such
invalidity, illegality or unenforceability will not affect any other provision
or
36
<PAGE>
portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 9.05 Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be given (and shall be deemed to have been
duly received if given) by hand delivery in writing or by facsimile transmission
with confirmation of receipt, as follows:
if to Parent or Purchaser:
United Technologies Corporation
United Technologies Building
1 Financial Plaza
Hartford, Connecticut 06101
Attention: General Counsel
Facsimile: 860-728-7862
and to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Christopher E. Austin
Facsimile: 212-225-3999
if to the Company:
Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Attention: Richard A. Lund
Facsimile: 517-347-6185
With a copy to:
Quarles & Brady LLP
411 E. Wisconsin Avenue
Milwaukee, WI 53202-4497
Attention: Conrad G. Goodkind
Facsimile: 414-271-3552
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
37
<PAGE>
SECTION 9.06 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, except in so far
as mandatory provisions of the WBCL apply to the Merger.
SECTION 9.07 Descriptive Headings. The descriptive headings herein
--------------------
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.08 Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this Agreement
except for Section 6.05 (which is intended to be for the benefit of the Persons
referred to therein, and may be enforced by any such Persons).
SECTION 9.09 Counterparts. This Agreement may be executed in
------------
counterparts (by facsimile or otherwise), each of which shall be deemed to be an
original, but all of which, taken together, shall constitute one and the same
agreement.
SECTION 9.10 Certain Definitions.
-------------------
(a) "beneficially owned" or "beneficial ownership" with respect to
------------------ --------------------
any securities shall mean having "beneficial ownership" of such securities as
determined pursuant to Rule 13d-3 under the Exchange Act.
(b) "Material Adverse Effect" shall mean any material and adverse
-----------------------
effect on any of the condition (financial or otherwise), business, properties,
assets, liabilities, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
(c) "Person" shall mean any individual, corporation, limited
------
liability company, partnership, association, trust, estate or other entity or
organization.
(d) "Subsidiary" shall mean, when used with reference to an entity,
----------
any other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions, or a majority of the outstanding voting
securities of which, are owned directly or indirectly by such entity.
(e) The term "affiliate" shall have the meaning given to such term in
---------
Rule 12b-2 under the Exchange Act.
(f) The term "associate" shall have the meaning given to such term in
---------
Rule 12b-2 under the Exchange Act.
(g) The term "hereby" shall be deemed to refer to this Agreement in
------
its entirety, rather than to any Article, Section, or other portion of this
Agreement.
(h) The term "including" shall be deemed to be followed by the phrase
---------
"without limitation."
38
<PAGE>
(i) The term "the transactions contemplated hereby" shall include the
------------------------------------
making and consummation of the Offer, the execution of the Shareholder Option
Agreement and the exercise by Parent and Purchaser of the Option and the
acquisition of Shares pursuant thereto and the exercise by Parent or Purchaser
of any other rights thereunder, and consummation of the Merger.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
39
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all at or
on the day and year first above written.
UNITED TECHNOLOGIES CORPORATION
By: /s/ KARL J. KRAPEK
----------------------------
Name: Karl J. Krapek
Title: President & Chief Operating Officer
SPHERE CORPORATION
By: /s/ ARI BOUSBIB
----------------------------
Name: Ari Bousbib
Title: President and Director
CADE INDUSTRIES, INC.
By: /s/ RICHARD A. LUND
----------------------------
Name: Richard A. Lund
Title: President and Chief Executive Officer
40
<PAGE>
EXHIBIT A
---------
CONDITIONS TO THE OFFER
-----------------------
Capitalized terms used in this Exhibit A and not otherwise defined
herein shall have the meanings assigned to them in the Agreement to which it is
attached (the "Merger Agreement").
----------------
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment, purchase or pay for any Shares tendered in
connection with the Offer and may terminate or, subject to the terms of the
Merger Agreement, amend the Offer, if (i) there shall not be validly tendered
and not properly withdrawn prior to the expiration date for the Offer (the
"Expiration Date") that number of Shares which, together with any Shares
- ----------------
beneficially owned by Purchaser or Parent (including Shares which Purchaser has
the immediate right to acquire under the Shareholder Option Agreement),
represents at least 75% of the total number of outstanding Shares on a fully
diluted basis, (ii) any applicable waiting period under the HSR Act shall not
have expired or been terminated, or (iii) at any time on or after the date of
the Merger Agreement and prior to the Expiration Date, any of the following
conditions exist:
(a) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction,
proposed, sought, promulgated, enacted, entered, enforced, issued, amended
or deemed applicable to Parent, Purchaser, the Company, any other affiliate
of Parent or the Company, the Offer or the Merger, that is reasonably
likely, directly or indirectly, to (1) make the acceptance for payment of,
or payment for or purchase of some or all of the Shares pursuant to the
Offer illegal, or otherwise restrict or prohibit or make materially more
costly the consummation of the Offer or the Merger, (2) result in a
significant delay in or restrict the ability of Purchaser to accept for
payment, pay for or purchase some or all of the Shares pursuant to the
Offer or to effect the Merger, (3) render Purchaser unable to accept for
payment or pay for or purchase some or all of the Shares pursuant to the
Offer, (4) impose material limitations on the ability of Parent, Purchaser
or any of their respective Subsidiaries or affiliates to acquire or hold,
transfer or dispose of, or effectively to exercise all rights of ownership
of, some or all of the Shares including the right to vote the Shares
purchased by it pursuant to the Offer on an equal basis with all other
Shares on all matters properly presented to the Shareholders of the
Company, (5) require the divestiture by Parent, Purchaser or any of their
respective Subsidiaries or affiliates of any Shares, or require Purchaser,
Parent, the Company, or any of their respective Subsidiaries or affiliates
to dispose of or hold separate all or any material portion of their
respective businesses, assets or properties or impose any material
limitations on the ability of any of such entities to conduct their
respective businesses or own such assets, properties or Shares or on the
ability of Parent or Purchaser to conduct the business of the Company and
its Subsidiaries and own the assets and properties of the Company and its
Subsidiaries, (6) impose any material limitations on the ability of Parent,
Purchaser or any of their respective Subsidiaries or affiliates effectively
to control the business or operations of the Company, Parent, Purchaser or
any of their respective Subsidiaries or affiliates or (7) otherwise
materially adversely affect Parent, Purchaser, the Company or any of their
respective Subsidiaries or affiliates, or their business, assets,
liabilities, condition (financial or otherwise), results of operations or
A-1
<PAGE>
prospects, or the value of the Shares or otherwise make consummation of the
Offer or the Merger unduly burdensome;
(b) there shall have been threatened, instituted or pending any
action, proceeding or counterclaim by or before any Governmental Entity,
challenging the making of the Offer or the acquisition by Purchaser of the
Shares pursuant to the Offer or the consummation of the Merger, or seeking
to obtain any material damages, or seeking to, directly or indirectly,
result in any of the consequences referred to in clauses (1) through (7) of
paragraph (a) above;
(c) there shall have occurred (1) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over-the-counter market in the United States, (2) the
declaration of any banking moratorium or any suspension of payments in
respect of banks or any limitation (whether or not mandatory) on the
extension of credit by lending institutions in the United States, (3) the
commencement of a war, armed hostilities or any other international or
national calamity involving the United States or (4) in the case of any of
the foregoing existing at the time of the execution of the Merger
Agreement, a material acceleration or worsening thereof;
(d) any Person or "group" (as such term is used in Section 13(d)(3)
of the Exchange Act) other than Parent, Purchaser or the Option Grantors or
any of their respective affiliates shall have become the beneficial owner
(as that term is used in Rule 13d-3 under the Exchange Act) of more than
25% of the outstanding Shares;
(e) there shall have occurred any change, condition, event or
development that, individually or in the aggregate, has had or is
reasonably likely to have, a Material Adverse Effect;
(f) the Company shall have breached or failed to comply in any
material respect with any of its obligations, covenants, or agreements
under the Merger Agreement or any representation or warranty of the Company
contained in the Merger Agreement that is qualified as to materiality shall
not be true and correct, or any such representation or warranty that is not
so qualified shall not be true and correct and has had or is reasonably
likely to have a Material Adverse Effect, in each case either as of when
made or at and as of any time thereafter; or
(g) the Merger Agreement shall have been terminated pursuant to its
terms or shall have been amended pursuant to its terms to provide for such
termination or amendment of the Offer;
which, in the good faith judgment of Parent or Purchaser, in any case, and
regardless of the circumstances (excluding any direct action or inaction by
Parent or Purchaser or any of their affiliates which to Parent's and Purchaser's
knowledge is reasonably likely to cause any of the above conditions to exist)
giving rise to any such condition, makes it inadvisable to proceed with the
Offer or with acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be asserted regardless of the circumstances (excluding any
direct action or inaction by Parent or
A-2
<PAGE>
Purchaser or any of their affiliates which to Parent's or Purchaser's knowledge
is reasonably likely to cause such condition to exist) or waived by Parent or
Purchaser in whole or in part at any time or from time to time in its reasonable
discretion subject to the terms and conditions of the Merger Agreement. The
failure of Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by Parent or Purchaser concerning the events described
above will be final and binding on all parties.
A-3
<PAGE>
EXHIBIT 99(c)(2)
EXECUTION COPY
--------------
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of October 21, 1999 (the
"Agreement"), among Sphere Corporation, a Wisconsin corporation ("Purchaser"),
- ---------- ---------
and the persons listed on Schedule I hereto (each a "Shareholder" and,
-----------
collectively, the "Shareholders").
------------
R E C I T A L S:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Purchaser, United Technologies Corporation, a Delaware corporation
("Parent"), and Cade Industries, Inc., a Wisconsin corporation (the "Company"),
- -------- -------
are entering into an Agreement and Plan of Merger (the "Merger Agreement"),
----------------
which provides, among other things, for the acquisition of the Company by Parent
by means of a cash tender offer (the "Offer") by Purchaser for all outstanding
-----
shares of Common Stock, par value $0.001 per share, of the Company (the "Common
------
Stock") and for the subsequent merger of Purchaser with the Company (the
- -----
"Merger"), all on the terms and subject to the conditions set forth in the
------
Merger Agreement;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent and Purchaser have required that the Shareholders agree, and
each Shareholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this
Agreement and the transactions contemplated hereby prior to the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Terms used and not defined herein, but defined in
-----------
the Merger Agreement, shall have the respective meanings ascribed to them in the
Merger Agreement.
2. Tender of Shares; Agreement to Sell.
-----------------------------------
(a) In order to induce Parent and Purchaser to enter into the Merger
Agreement, each Shareholder hereby agrees to validly tender (or cause the record
owner of such shares to validly tender), and not to withdraw, pursuant to and in
accordance with the terms of the Offer, not later than the tenth business day
after commencement of the Offer, the number of shares of Common Stock set forth
opposite such Shareholder's name on Schedule I hereto (the "Existing Shares"
---------------
and, together with any shares of Common Stock acquired by such Shareholder in
any capacity after the date hereof and prior to the termination of this
Agreement by means of purchase, dividend, distribution, exercise of options,
warrants or other rights to acquire Common Stock or in any other way, the
"Shares"), all of which are beneficially owned by Shareholder. If a Shareholder
- -------
acquires beneficial ownership of Shares after the date hereof and prior to
termination of this Agreement, such Shareholder shall tender such Shares on such
tenth business day or, if later, on the second business day after such
acquisition.
<PAGE>
(b) Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable hereunder to a holder of Shares such amounts as
are required to be withheld under the Internal Revenue Code of 1986, as amended
(the "Code"), or any applicable provision of state, local or foreign tax law, as
----
specified in the Offer Documents. To the extent that amounts are so withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by Purchaser.
(c) Each Shareholder hereby permits Parent and Purchaser to publish
and disclose in the Offer Documents and, if approval of the Company's
shareholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC), such Shareholder's identity and
ownership of the Shares and the nature of such Shareholder's commitments,
arrangements and understandings under this Agreement; provided that such
--------
Shareholder shall have a right to review and comment on such disclosure a
reasonable time before it is publicly disclosed.
3. Option. (a) In order to induce Parent and Purchaser to enter
------
into the Merger Agreement, each Shareholder hereby grants to Purchaser an
irrevocable option (each, an "Option") to purchase the Shares beneficially owned
------
by such Shareholder (the "Option Shares") at a price equal to $5.05 per Share.
-------------
Each Option granted by a Shareholder may be exercised in whole at any time prior
to the termination of this Agreement and after (i) the occurrence of any event
as a result of which Parent is entitled to receive a Termination Fee under the
Merger Agreement or (ii) such time as such Shareholder shall have breached in
any material respect any of its agreements in Section 2(a), 4(a), 4(b) or 4(d).
In the event that any Person (other than Purchaser or any of its affiliates or
any Shareholder or any of its affiliates) acquires a majority of the outstanding
Shares, prior to the termination of this Agreement, in a tender offer or
exchange offer by such Person to acquire, or a merger involving the acquisition
of, all outstanding Shares at a consideration per Share in excess of $5.05 , the
exercise price for the Option Shares shall be increased by 50% of the amount of
such excess. If an Option has been exercised and the Option Shares acquired
from a Shareholder by Purchaser prior to such an acquisition, Purchaser shall,
within ten days following such date, pay to such Shareholder an amount in cash
equal to the amount of such excess multiplied by the number of such Option
Shares. If the consideration in such tender or exchange offer or merger
includes securities, such securities shall be deemed to have a value equal to
the amount that would actually have been received in an orderly sale of such
securities commencing on the first business day following actual receipt of such
securities, in the written opinion of an investment banking firm of national
reputation selected by Purchaser and reasonably satisfactory to the Shareholder.
(b) Each Option that becomes exercisable under Section 3(a) shall
remain exercisable until the later of (i) the date that is 90 days after the
date such Option becomes exercisable and (ii) the date that is ten days after
the date that all waiting periods under the HSR Act required for the purchase of
the Shares upon such exercise shall have expired or been terminated; provided,
--------
that if at the expiration of such period there shall be in effect any injunction
or other order issued by any Governmental Entity prohibiting the exercise of
such Option, the exercise period shall be extended until ten days after the date
that no such injunction or order is in effect. In the event that Purchaser
wishes to exercise an Option, Purchaser shall send a written notice to the
applicable Shareholder identifying the place and date (not less than
2
<PAGE>
two (2) nor more than ten (10) business days from the date of the notice) for
the closing of such purchase.
4. Additional Agreements.
---------------------
(a) Each Shareholder shall, at any meeting of the shareholders of the
Company, however called, or in connection with any written consent of the
shareholders of the Company, vote (or cause to be voted) all Shares then held of
record or beneficially owned by such Shareholder, (i) in favor of the Merger,
the execution and delivery by the Company of the Merger Agreement and the
Company Option Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement, the Company Option Agreement
and this Agreement and any actions required in furtherance thereof and hereof
and (ii) against any proposal relating to an Acquisition Proposal and against
any action or agreement that would impede, frustrate, prevent or nullify this
Agreement, or result in a breach in any respect of any covenant, representation
or warranty or any other obligation or agreement of the Company under the Merger
Agreement or the Company Option Agreement or which would result in any of the
conditions set forth in Exhibit A to the Merger Agreement or set forth in
Article VII of the Merger Agreement not being fulfilled.
(b) Each Shareholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, it shall not (i) offer
to transfer (which term shall include, without limitation, any sale, tender,
gift, pledge, assignment or other disposition), transfer or consent to any
transfer of, any or all of the Shares beneficially owned by such Shareholder or
any interest therein without the prior written consent of Purchaser, such
consent not to be unreasonably withheld in the case of a gift or similar estate
planning transaction (it being understood that Purchaser may decline to consent
to any such transfer if the Person acquiring such Shares does not agree to take
such Shares subject to the terms of this Agreement), (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of such Shares or any interest therein, (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
such Shares, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect in any material respect or in any way
restrict, limit or interfere in any material respect with the performance of its
obligations hereunder or the transactions contemplated hereby or by the Merger
Agreement or the Company Option Agreement.
(c) Each Shareholder hereby irrevocably grants to, and appoints,
Purchaser and any designee of Purchaser, and each of them individually, such
Shareholder's proxy and attorney-in-fact (with full power of substitution), for
and in the name, place and stead of such Shareholder, to vote the Shares
beneficially owned by such Shareholder, or grant a consent or approval in
respect of such Shares, in the manner specified in Section 4(a). Each
Shareholder represents that any proxies heretofore given in respect of Shares
beneficially owned by such Shareholder are not irrevocable and that any such
proxies are hereby revoked. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
execution of the Merger Agreement and that such irrevocable proxy is given to
secure the performance of the duties of such Shareholder under this Agreement.
Each Shareholder hereby
3
<PAGE>
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Each Shareholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Without limiting the generality of the foregoing, such irrevocable proxy
is executed and intended to be irrevocable in accordance with the provisions of
Section 180.0722 of the WBCL.
(d) Subject to Section 8, each Shareholder hereby agrees that such
Shareholder shall not, directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any Person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. Upon execution of this Agreement, each Shareholder will immediately
cease any existing activities, discussions or negotiations conducted heretofore
with respect to any Acquisition Proposal. Each Shareholder will immediately
communicate to Purchaser the terms of any Acquisition Proposal (or any
discussion, negotiation or inquiry with respect thereto) and the identity of the
Person making such Proposal or inquiry which it may receive.
(e) Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement. Each party shall promptly consult
with the other and provide any necessary information and material with respect
to all filings made by such party with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
(f) Each Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that it may have.
5. Representations and Warranties of each Shareholder. Each
--------------------------------------------------
Shareholder hereby represents and warrants, severally and not jointly, to
Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
Existing Shares set forth opposite its name on Schedule I. Such Existing Shares
constitute all of the Shares owned of record or beneficially owned by such
Shareholder on the date hereof. Such Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in Sections 2,
3 and 4 hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Existing Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Such Shareholder has the power and authority to enter into and
perform all of such Shareholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust
4
<PAGE>
of which such Shareholder is a trustee, or any party to any other agreement or
arrangement, whose consent is required for the execution and delivery of this
Agreement or the consummation by such Shareholder of the transactions
contemplated hereby.
(c) Except for filings under the HSR Act and the Exchange Act (i) no
filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution and delivery of this
Agreement by such Shareholder, the consummation by such Shareholder of the
transactions contemplated hereby and the compliance by such Shareholder with the
provisions hereof and (ii) none of the execution and delivery of this Agreement
by such Shareholder, the consummation by such Shareholder of the transactions
contemplated hereby or compliance by such Shareholder with any of the provisions
hereof, except in cases in which any conflict, breach, default or violation
described below would not interfere with the ability of such Shareholder to
perform such Shareholder's obligations hereunder, shall (A) conflict with or
result in any breach of any organizational documents applicable to such
Shareholder, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under,
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind, including, without
limitation, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust, to which such Shareholder is a party or
by which it or any of its properties or assets may be bound or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Shareholder or any of its properties or assets.
(d) Except as permitted by this Agreement, the Existing Shares
beneficially owned by such Shareholder and the certificates representing such
shares are now, and at all times during the term hereof will be, held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by such Shareholder of
the Shares to Purchaser in the Offer or hereunder shall pass to and
unconditionally vest in Purchaser good and valid title to all Shares, free and
clear of all liens, proxies, voting trusts or agreements, understandings or
arrangements or any other rights whatsoever.
(e) No broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of such Shareholder.
6. Stop Transfer. Each Shareholder shall request that the Company
-------------
not register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares beneficially owned by
such Shareholder, unless such transfer is made in compliance with this
Agreement.
7. Termination. This Agreement shall terminate with respect to any
-----------
Shareholder upon the earliest of (a) the Effective Time, (b) April 30, 2000 or,
if the Option is exercisable at
5
<PAGE>
April 30, 2000, such later date as the Option shall no longer be exercisable in
accordance with Section 3(b) and (c) the termination of the Merger Agreement
(unless, in the case of this clause (c), Parent is or may be entitled to receive
a Termination Fee under the Merger Agreement following such termination or prior
to such termination such Shareholder has breached in any material respect
Section 2(a), 4(a), 4(b) or 4(d)).
8. No Limitation. Notwithstanding any other provision hereof,
-------------
nothing in this Agreement shall be construed to prohibit a Shareholder, or any
officer or affiliate of a Shareholder who is or has designated a member of the
Board of Directors of the Company, from taking any action solely in his or her
capacity as a member of the Board of Directors of the Company or from exercising
his or her fiduciary duties as a member of such Board of Directors to the extent
specifically permitted by the Merger Agreement.
9. Miscellaneous. (a) This Agreement constitutes the entire
-------------
agreement between the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of each Shareholder (in the case of
any assignment by Purchaser) or Purchaser (in the case of an assignment by a
Shareholder), provided that Purchaser may assign its rights and obligations
--------
hereunder to Parent or any direct or indirect Subsidiary of Parent, but no such
assignment shall relieve Purchaser of its obligations hereunder.
(c) Without limiting any other rights Purchaser may have hereunder in
respect of any transfer of Shares, each Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shares beneficially owned by
such Shareholder and shall be binding upon any Person to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Shareholder's heirs, guardians,
administrators or successors.
(d) This Agreement may not be amended, changed, supplemented or
otherwise modified with respect to a Shareholder except by an instrument in
writing signed on behalf of such Shareholder and Purchaser.
(e) All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly received if given) by hand delivery or by facsimile transmission with
confirmation of receipt, as follows:
If to a Shareholder:
At the addresses and facsimile numbers set forth on Schedule I
hereto.
With a copy to:
6
<PAGE>
Quarles & Brady LLP
411 E. Wisconsin Avenue
Milwaukee, WI 53202-4497
Attention: Conrad G. Goodkind
Facsimile: 414-271-3552
If to Parent or Purchaser:
United Technologies Corporation
United Technologies Building
1 Financial Plaza
Hartford, Connecticut 06101
Attention: General Counsel
Facsimile No.: 860-728-7862
With a Copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Christopher E. Austin
Facsimile No.: (212) 225-3999
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
(h) The failure of any party hereto to exercise any rights, power or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
7
<PAGE>
(i) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
(k) The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any New York state court located in the Borough of
Manhattan, City of New York or any Federal court located in such Borough, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (A) consents to submit itself
to the personal jurisdiction of any New York state court located in the Borough
of Manhattan, City of New York or any Federal court located in such Borough in
the event any dispute arises out of this Agreement or any transaction
contemplated by this Agreement, (B) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (C) agrees that it will not bring any action relating to this
Agreement or any transaction contemplated by this Agreement in any court other
than any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in the courts of the
State of New York located in the Borough of Manhattan, City of New York or in
any Federal court located in such Borough, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
(l) The descriptive headings used herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
(m) This Agreement may be executed in counterparts (by fax or
otherwise), each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
(n) Except as otherwise provide herein, each party shall pay its, his
or her own expenses incurred in connection with this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
8
<PAGE>
IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
SPHERE CORPORATION
By: /S/ ARI BOUSBIB
----------------------------
Name: Ari Bousbib
Title: President and Director
9
<PAGE>
IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
/s/ MOLLY F. CADE
-------------------------------------
Molly F. Cade
/s/ CONRAD G. GOODKIND
-------------------------------------
Conrad G. Goodkind
/s/ WILLIAM T. GROSS
-------------------------------------
William T. Gross
/s/ RICHARD A. LUND
-------------------------------------
Richard A. Lund
/s/ JOSEPH R. O'GORMAN
-------------------------------------
Joseph R. O'Gorman
/s/ TERRELL L. RUHLAM
-------------------------------------
Terrell L. Ruhlman
/s/ JOHN W. SANFORD
-------------------------------------
John W. Sanford
10
<PAGE>
SCHEDULE I
NAME, FACSIMILE NUMBER AND NUMBER OF SHARES OF COMMON STOCK
ADDRESS OF SHAREHOLDER BENEFICIALLY OWNED
- --------------------------- --------------------------------
Molly F. Cade 4,727,742
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Facsimile: 517-347-6185
Conrad G. Goodkind 355,300
Quarles & Brady LLP
411 E. Wisconsin Avenue
Milwaukee, WI 53202-4497
Facsimile: 414-271-3552
William T. Gross 60,000
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Facsimile: 517-347-6185
Richard A. Lund 381,184
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Facsimile: 517-347-6185
Joseph R. O'Gorman 70,000
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Facsimile: 517-347-6185
Terrell L. Ruhlman 318,000
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864
Facsimile: 517-347-6185
John W. Sandford 176,970
c/o Cade Industries, Inc.
2365 Woodlake Drive, Suite 120
Okemos, MI 48864 ---------
Facsimile: 517-347-6185 6,088,723
<PAGE>
EXHIBIT 99.(c)(3)
September 22, 1999
United Technologies Corporation
400 Main Street
East Hartford, CT 06108
Dear Sirs or Madams:
You have requested information from Cade Industries, Inc. and its
subsidiaries (the "Company") and affiliates in connection with your
consideration of a possible negotiated strategic transaction between you and the
Company (the "Transaction"). As a condition to the Company furnishing such
information to you, we are requiring that you agree, as set forth below, to
treat confidentially such information and any other information that the
Company, its agents or representatives (including attorneys and financial
advisors) furnish to you or your directors, officers, employees, agents,
advisors, prospective bank or institutional lenders, affiliates or
representatives of you agents, advisors or prospective lenders (all of the
foregoing collectively referred to as "Representatives"), furnished after the
date of this letter, and all notes, analyses, compilations, studies, files or
other documents or material, whether prepared by you or others, which contain or
otherwise reflect such information (collectively, the "Evaluation Material").
The terms "Evaluation Material" does not include information which (i)
was in the public domain at the time of disclosure hereunder or becomes
generally available to the public other than as a result of a disclosure by you
or your Representatives in violation of this Agreement, (ii) was available to
you on a non-confidential basis prior to its disclosure to you by the Company,
its representatives or its agents, (iii) becomes available to you on a non-
confidential basis from a source other than the Company, its representatives or
its agents, provided that such source is not to your knowledge bound by a
confidentiality agreement with the Company, its representatives or its agents or
otherwise prohibited from transmitting the information to you or your
Representatives by a contractual, legal or fiduciary obligation; or (iv) is
independently developed by you without use of the Evaluation Materials.
It is understood that you may disclose any of the Evaluation Material
to those of your Representatives who require such material for the purpose of
evaluating a possible Transaction provided that such Representatives shall be
informed by you of the confidential nature of the Evaluation Material and
provided further that you shall not disclose the Evaluation Material to any of
your Representatives who are employed by Pratt & Whitney Engine Services, except
you may disclose the Evaluation Material to such employees who are directly
involved in review of a possible transaction on a need to know basis only, so
long as all competition-sensitive information on customers and pricing is
deleted from the materials they receive. You
<PAGE>
United Technologies Corporation
September 22, 1999
Page 2
agree that the Evaluation Material will be kept confidential by you and your
Representatives and, except with the specific prior written consent of the
Company or as expressly otherwise permitted by the terms hereof, will not be
disclosed by you or your Representatives. You further agree that you and your
Representatives will not use any of the Evaluation Material for any reason or
purpose other than to evaluate a possible Transaction. You shall be deemed to
have satisfied the above obligations by using the same degree of care that you
use to protect your own information of like nature, provided that such degree of
care is at least reasonable care.
Without the other party's prior written consent, neither party (i.e.,
neither the Company and its agents nor you and your Representatives) will
disclose to any person (subject to the preceding paragraph) (1) the fact that
the Evaluation Material has been made available to you or that you have
inspected any portion of the Evaluation Material, (2) the fact that any
discussions or negotiations are taking place concerning a possible Transaction,
or (3) any of the terms, conditions or other facts with respect to any possible
Transaction, including the status thereof, unless and only to the extent that
such disclosure (after making reasonable efforts to avoid such disclosure and,
to the extent practicable, after advising and consulting with the Company about
your intent to make, and the proposed contents of, such disclosure) is, in the
written opinion of your counsel, required by applicable United States securities
laws. The term "person" as used in this letter shall be broadly interpreted to
include without limitation any corporation, company, partnership and individual.
In the event that you or any of your Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any of the Evaluation Material, it is agreed that you or such Representative, as
the case may be, will, to the extent practicable, provide the Company with
prompt notice of such request(s) so that it may seek an appropriate protective
order or other appropriate remedy and/or waive your or such Representative's
compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that the Company grants a
waiver hereunder, you or such Representative may furnish that portion (and only
that portion) of the Evaluation Material which, in the written opinion of your
counsel, you are legally compelled to disclose and will exercise your best
efforts to obtain reliable assurance that confidential treatment will be
accorded any Evaluation Material so furnished.
In addition, you hereby acknowledge that you are aware (and that your
Representatives who are apprised of this matter have been or will be advised)
that the United States securities laws restrict persons with material non-public
information about a company obtained directly or indirectly from that company
from purchasing or selling securities of such company, or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities.
In view of the fact that the Evaluation Material consists of
confidential and non-public information, you agree that for a period from the
date of this Agreement to the earliest of (i) one year from the date of this
Agreement, (ii) the date upon which the Company publicly
<PAGE>
United Technologies Corporation
September 22, 1999
Page 3
announces its intention to enter into a Business Combination (as defined below)
with a third party or publicly announces an agreement to enter into a Business
Combination with a third party, and (iii) the date upon which a third party
publicly announces a definitive proposal for or an offer for a Business
Combination with the Company or publicly announces an agreement to enter into a
Business Combination with the Company, neither you nor any of your affiliates,
alone or with others, will in any manner (1) acquire, agree to acquire, or make
any proposal (or request permission to make any proposal) to acquire any
securities (or direct or indirect rights, warrants or options to acquire any
securities) or property of the Company (other than property transferred in the
ordinary course of the Company's business), unless such acquisition, agreement
or making of a proposal shall have been expressly first approved (or in the case
of a proposal, expressly first invited) by the Company's Board of Directors, (2)
solicit proxies from shareholders of the Company or otherwise seek to influence
or control the management or policies of the Company or (3) assist (including by
knowingly providing or arranging financing for that purpose) any other person in
doing any of the foregoing.
If the Company (i) has in effect on the date hereof any agreement, or
within one year of the date hereof enters into or amends any agreement, relating
to the provision of information in connection with a possible merger or sale of
all or a substantial portion of its assets or a majority of its outstanding
stock, or any form of significant business combination involving the Company or
any of its significant subsidiaries (a "Business Combination") or (ii) provides
such information in the absence of such an agreement, and such agreement or the
provision of such information does not contain a term substantially identical to
the preceding paragraph or includes a shorter time period or terms that are
otherwise less restrictive than those applicable to you hereunder, then the
preceding paragraph shall automatically be amended with respect to each such
agreement or amendment or provision of information so that such shorter time
period and less restrictive terms (or the absence of any such terms) are
applicable to you. The Company agrees to notify you promptly of the occurrence
and terms of any such automatic amendment. In addition, in the event that at
any time within one year of the date hereof (i) the Company invites or
authorizes any other person or entity to submit a definitive proposal with
respect to a Business Combination, which proposal is to be considered at a
meeting of the board of the directors of the Company or (ii) a meeting of the
board of directors of the Company is called to consider any uninvited or
unauthorized definitive proposal for a Business Combination, the Company agrees,
with respect to each party other than you who submits such a definitive
proposal, to give you reasonably prompt notice of the date of the relevant
meeting as circumstances dictate (which notice shall be no later than three
business days before such a meeting if you and the Company at the time of such a
meeting are engaged in active negotiations with respect to the Transaction) and
agrees that you may make a proposal for a Business Combination, which proposal
will be considered at the same meeting of the board of directors of the Company.
Without the prior consent of the Chief Executive Officer or Treasurer,
(1) neither you nor those of your Representatives who are aware of the
Evaluation Material and/or the possibility of a Transaction will initiate or
cause any communications with any employee of the
<PAGE>
United Technologies Corporation
September 22, 1999
Page 4
Company other than the Chief Executive Officer or Treasurer of the Company
concerning the Evaluation Material or any possible Transaction and (2) none of
your officers or employees who are aware of the Evaluation Material and/or the
possibility of a Transaction will, for the one-year period from the date of this
letter agreement, solicit or cause to be solicited the employment of any
employee of the Company identified through the Evaluation Materials; provided,
however, that the foregoing provision will not prevent you from employing any
such person (i) who initiates contact with you without any direct or indirect
solicitations by or encouragement from any such officer or employee or (ii) who
responds to a general advertisement or solicitation.
If you decide that you do not wish to proceed with a Transaction, you
will promptly inform the Chief Executive Officer of the Company of that
decision. In that case, or upon our written request, you will promptly deliver
to the Company all documents or other matter furnished by the Company to you or
your Representatives constituting Evaluation Material, together with all copies
thereof in the possession of you or your Representatives. In the event of such
decision or request, all other documents or other matter constituting Evaluation
Material in your possession or that of your Representatives will be destroyed,
with any such destruction confirmed by you in writing to the Company.
Although you understand that the Company has endeavored to include in
the Evaluation Material information known to it and which it believes to be
relevant for the purpose of your investigation, you understand that neither the
Company nor its agents or its representatives makes any representation or
warranty as to the accuracy or completeness of the Evaluation Material. Only
those representations and warranties that may be made to you or your affiliates
in a definitive written agreement for a Transaction, when, as and if executed
and subject to such limitations and restrictions as may be specified therein,
shall have any legal effect, and you agree that if you determine to engage in a
Transaction such determination will be based solely on the terms of such written
agreement and on your own investigation, analysis and assessment of the business
to be acquired. Moreover, unless and until such a definitive written agreement
is entered into, neither the Company nor you will be under any legal obligation
of any kind whatsoever with respect to such a Transaction except for the matters
specifically agreed to in this Agreement. The agreements set forth in this
Agreement may be modified or waived only by a separate writing signed by the
Company and you expressly so modifying or waiving such agreements.
The Company and you agree to indemnify and hold harmless the other
party from any damage, loss, cost or liability (including legal fees and the
cost of enforcing this indemnity) arising out of or resulting from any breach of
this agreement. The Company and you acknowledge that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement
and that any such breach would cause the other party irreparable harm.
Accordingly, each party agrees that in the event of any breach or threatened
breach of this Agreement, the other party, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement of
posting a bond or other security, to equitable relief, including injunctive
relief and specific performance.
<PAGE>
United Technologies Corporation
September 22, 1999
Page 5
It is understood and agreed that no failure or delay by you or the
Company in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
You agree and consent to personal jurisdiction, service and venue in
any federal or state court within the State of Wisconsin having subject matter
jurisdiction, for the purposes of any action, suit or proceeding arising out of
or relating to this Agreement. This Agreement shall be governed by and
construed in accordance with the substantive provisions of the corporate
statutory laws of the State of Wisconsin and, as such law supplement s but does
not conflict with the corporate statutory laws of the State of Wisconsin, the
laws of the Sate of New York.
<PAGE>
United Technologies Corporation
September 22, 1999
Page 6
If you are in agreement with the foregoing, please sign and return one
copy of this letter, which thereupon will constitute our Agreement with respect
to the subject matter hereof.
Very truly yours,
Richard A. Lund
President and Chief Executive Officer
Confirmed and agreed to as of
the date first above written:
United Technologies Corporation
By: /S/ ARI BOUSBIB
-----------------------------
-----------------------------
Its: Vice President
-----------------------------
