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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
RALCORP HOLDINGS, INC.
(NAME OF ISSUER)
RALCORP HOLDINGS, INC.
(NAME OF PERSON(S) FILING STATEMENT)
PAR VALUE $.01 COMMON STOCK 751028-10-1
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES)
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R. W. LOCKWOOD
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
RALCORP HOLDINGS, INC.
800 MARKET ST., SUITE 2900
ST. LOUIS, MISSOURI 63101
(314) 877-7000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF PERSONS(S) FILING STATEMENT)
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COPIES TO:
ROBERT SCHUMER, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 373-3000
DECEMBER 16, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$80,000,000 $23,600
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* Calculated solely for the purpose of calculating the filing fee, based on the
purchase of 5,000,000 shares at $16.00 per share.
[ ] Check box if any part of the fee is offset as provided 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.
Amount Previously Paid: Not applicable Filing party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
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ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Ralcorp Holdings, Inc. (the
"Company"), and the address of its principal executive office is 800 Market
Street, Suite 2900, St. Louis, Missouri 63101.
(b) This Schedule 13E-4 relates to the offer (the "Offer") by the
Company purchase up to 5,000,000 shares of its $.01 par value common stock
(the "Shares") (including the associated Stock Purchase Rights issued pursuant
to the Shareholder Projection Rights Agreement, dated as of December 27, 1996,
between the Company and the Rights Agent named therein, as amended), at
prices not in excess of $14.00 nor less than $16.00 per Share in cash,
as specified by stockholders tendering their Shares, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 16,
1998 (the "Offer to Purchase"), and in the related Letter of Transmittal, copies
of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. Unless
the context otherwise requires, all references to the Shares shall include the
associated Rights. The Offer is being made to all holders of Shares, including
officers, directors and affiliates of the Company. However, Shares held through
the Company's Savings Investment Plan (a 401K Plan) are not permitted to be
tendered under the Offer to Purchase. The information set forth in the
Introduction to, and in Sections 1 and 10 of, the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in the Introduction to and in Section
7 of the Offer to Purchase is incorporated herein by reference.
(d) This statement is being filed by the Issuer.
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ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Introduction to and in Section
8 of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in the Introduction to and in Section
8 of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a-j) The information set forth in the Introduction to and in Section
2 of the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Section 10 of the Offer to Purchase and
the information set forth in Schedule A thereto, is incorporated herein by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in Section 10 of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a-b) The information set forth in Section 9 of the Offer to Purchase
is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not Applicable.
(b) The information set forth in Section 12 of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 11 of the Offer to
Purchase is incorporated herein by reference.
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(d) None.
(e) None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated October 16, 1998.
(a)(2) Form of Letter of Transmittal dated October 16, 1998, together
with Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of letter from Wasserstein Perella & Co., Inc. to Brokers,
Dealers, Commercial Banks, Trust Companies and other Nominees dated October 16,
1998.
(a)(5) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees dated October 16, 1998.
(a)(6) Form of letter to stockholders from Joe R. Micheletto, Chief
Executive Officer of the Company dated October 16, 1998.
(a)(7) Summary Advertisement dated October 16, 1998.
(a)(8) Press Release dated October 16, 1998.
(b)(1) Credit Agreement, dated January 31, 1997, by and among the
Company and the Lenders named therein and the First National Bank of Chicago, as
Agent, incorporated herein by reference to Exhibit 10.1 of the Company's Form
10-G filed for the period ending September 30, 1996.
(b)(2) Amendment dated October 16, 1998 to the Credit Agreement dated
January 31, 1997, buy and among the Company and the Lenders named therein and
the First National Bank of Chicago as agent.
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
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(g)(1) Audited Consolidated Financial Statements of the Company for the
years ended September 30, 1997 and September 30, 1996 (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended September 30,
1997)
(g)(2) Unaudited Consolidated Financial Statements for the period ended
June 30, 1998 and June 30, 1997 (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1998.)
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 16, 1998
RALCORP HOLDINGS, INC.
/s/ J. R. Micheletto
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(Name) J. R. Micheletto
(Title) Chief Executive Officer
<PAGE> 6
EXHIBIT INDEX
(a)(1) Form of Offer to Purchase dated October 16, 1998.
(a)(2) Form of Letter of Transmittal dated October 16, 1998, together
with Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(a)(3) Form of Notice of Guaranteed Delivery
(a)(4) Form of letter from Wasserstein Perella & Co., Inc. to Brokers,
Dealers, Commercial Banks, Trust Companies and other Nominees dated October 16,
1998.
(a)(5) Form of letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees dated October 16, 1998.
(a)(6) Form of letter to stockholders from Joe R. Micheletto, Chief
Executive Officer of the Company dated October 16, 1998.
(a)(7) Summary Advertisement dated October 16, 1998.
(a)(8) Press Release dated October 16, 1998.
(b)(1) Credit Agreement, dated January 31, 1997, by and among the
Company are the Lenders named therein and The First National Bank of Chicago, as
Agent, (incorporated by reference to Exhibit 10.1 of the Company's Form 10-K
filed for the period ending September 30, 1996).
(b)(2) Amendment dated October 16, 1998, to the Credit Agreement dated
January 31, 1997, by and among the Lenders named therein and the First National
Bank of Chicago as agent.
(g)(1) Audited Consolidated Financial Statements of the Company for the
years ended September 30, 1997 and September 30, 1996 (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended September 30,
1997)
(g)(2) Unaudited Consolidated Financial Statements for the period ended
June 30, 1998 and June 30, 1997 (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1998.)
<PAGE> 1
OFFER TO PURCHASE FOR CASH UP TO
5,000,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $16.00
NOR LESS THAN $14.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME ON FRIDAY, NOVEMBER 13, 1998,
UNLESS THE OFFER IS EXTENDED.
Ralcorp Holdings, Inc., a Missouri corporation (the "Company"), invites its
stockholders to tender shares of its $.01 par value Common Stock (the "Shares")
(including the associated Stock Purchase Rights (the "Rights") issued pursuant
to the Shareholder Protection Rights Agreement, dated December 27, 1996, between
the Company and the Rights Agent named therein, as amended), to the Company at
prices not in excess of $16.00 nor less than $14.00 per Share in cash, specified
by such stockholders upon the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal, which together constitute the
"Offer." Unless the context otherwise requires, all references to the Shares
shall include the associated Rights. The Company will determine the single per
Share price, not in excess of $16.00 nor less than $14.00 per Share, net to the
seller in cash (the "Purchase Price"), that it will pay for Shares properly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
Company will select the lowest Purchase Price that will allow it to buy
5,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $16.00 nor less than $14.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration provisions. All Shares acquired
in the Offer will be acquired at the Purchase Price. The Company reserves the
right, in its sole discretion, to purchase more than 5,000,000 Shares pursuant
to the Offer. See Section 14.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
The Shares are listed and traded on the New York Stock Exchange, Inc. (the
"NYSE") under the symbol "RAH." On October 15, 1998, the last full trading day
on the NYSE prior to the announcement and commencement of the Offer, the closing
per Share sales price as reported on the NYSE Composite Tape was $13.9375.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE
SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO
TENDER ANY SHARES PURSUANT TO THE OFFER.
<PAGE> 2
IMPORTANT
Any stockholder wishing to tender all or any part of his or her Shares
should either (a) complete and sign a Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal and
either mail or deliver it with any required signature guarantee and any other
required documents to First Chicago Trust Company of New York (the
"Depositary"), and either mail or deliver the stock certificates for such Shares
to the Depositary (with all such other documents) or tender such Shares pursuant
to the procedure for book-entry tender set forth in Section 3, or (b) request a
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Holders of Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee should contact
such person if they desire to tender their Shares. Any stockholder who desires
to tender Shares and whose certificates for such Shares cannot be delivered to
the Depositary or who cannot comply with the procedure for book-entry transfer
or whose other required documents cannot be delivered to the Depositary, in any
case, by the expiration of the Offer must tender such Shares pursuant to the
guaranteed delivery procedure set forth in Section 3.
TO PROPERLY TENDER SHARES, STOCKHOLDERS MUST VALIDLY COMPLETE THE LETTER OF
TRANSMITTAL INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH THEY ARE
TENDERING SHARES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent (as defined) or to the Dealer
Manager (as defined) at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be obtained from the Information Agent.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
October 16, 1998
2
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SUMMARY
This general summary is solely for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details in this Offer to Purchase.
Purchase Price................ The Company will select a single Purchase Price
which will be not more than $16.00 nor less
than $14.00 per Share. All Shares purchased by
the Company will be purchased at the Purchase
Price even if tendered at or below the Purchase
Price. Each stockholder desiring to tender
Shares must specify in the Letter of
Transmittal the minimum price (not more than
$16.00 nor less than $14.00 per Share) at which
such stockholder is willing to have his or her
Shares purchased by the Company.
Number of Shares to be
Purchased..................... 5,000,000 Shares (or such lesser number of
Shares as are properly tendered at prices not
in excess of $16.00 nor less than $14.00 per
share).
How to Tender Shares.......... See Section 3. Call the Information Agent,
Georgeson & Company Inc., at (800) 223-2064,
the Dealer Manager, Wasserstein Pellera & Co.,
Inc., at (212) 969-2700 or consult your broker
for assistance.
Brokerage Commissions......... None for registered stockholders who tender
their Shares directly to the Depositary.
Stockholders holding Shares through brokers or
banks are urged to consult such brokers or
banks to determine whether transaction costs
are applicable if stockholders tender Shares
through such brokers or banks and not directly
to the Depositary.
Stock Transfer Tax............ None, if payment is made to the registered
holder.
Expiration and Proration
Dates......................... Friday, November 13, 1998, at 12:00 Midnight,
New York City time, unless extended by the
Company.
Payment Date.................. As soon as practicable after the termination of
the Offer.
Position of the Company and
its Directors................. Neither the Company nor its Board of Directors
makes any recommendation to stockholders as to
whether to tender or refrain from tendering
their Shares. Each stockholder must make the
decision whether to tender Shares and, if so,
how many Shares and at what price or prices
Shares should be tendered. The Company has been
advised that none of its directors or executive
officers intends to tender any Shares pursuant
to the Offer.
Withdrawal Rights............. Tendered Shares may be withdrawn at any time
until 12:00 Midnight, New York City time, on
Friday, November 13, 1998 unless the Offer is
extended by the Company, and, unless previously
purchased, after 12:00 Midnight, New York City
time, on Monday, December 14, 1998. See Section
4.
Odd Lots...................... There will be no proration of Shares tendered
by any stockholder owning beneficially or of
record less than 100 Shares as of the close of
business on October 15, 1998 and as of the
Expiration Date, if such stockholder tenders
all such Shares at or below the Purchase Price
prior to the Expiration Date and checks the
"Odd Lots" box in the Letter of Transmittal.
See Section 1.
Lost or Destroyed
Certificates.................. Contact the Depositary at (800) 446-2617
immediately for assistance. Also see Section 3
for instructions for tendering lost, destroyed
or misplaced certificates.
3
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
INTRODUCTION................................................ 5
THE OFFER................................................... 7
1. Number of Shares; Proration........................... 7
2. Purpose of the Offer; Certain Effects of the Offer.... 8
3. Procedures for Tendering Shares....................... 10
4. Withdrawal Rights..................................... 13
5. Purchase of Shares and Payment of Purchase Price...... 14
6. Certain Conditions of the Offer....................... 15
7. Price Range of Shares; Dividends...................... 16
8. Source and Amount of Funds............................ 17
9. Certain Information Concerning the Company............ 17
10. Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares......................... 22
11. Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act.................... 25
12. Certain Legal Matters; Regulatory Approvals........... 25
13. Certain United States Federal Income Tax
Consequences........................................... 25
14. Extension of Offer; Termination; Amendment............ 27
15. Fees and Expenses..................................... 28
16. Miscellaneous......................................... 29
SCHEDULE A -- Certain Transactions Involving Shares......... A-1
</TABLE>
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this document, and
sometimes are preceded by, followed by or include the words "intends,"
"believes," "expects," "anticipates," "should" or similar expressions. The
Company's results of operations and liquidity status may differ materially from
those in the forward-looking statements. Such statements are based on
management's current view and assumptions, and involve risks and uncertainties
that could affect expected results. For example any of the following factors
cumulatively or individually may affect expected results:
(i) If the Company is unable to maintain a meaningful price gap between its
private label products and the branded products of its competitors,
successfully introduce new products or successfully manage costs across
all parts of the Company, then the Company's private label businesses
could incur operating losses;
(ii) Consolidation among members of the grocery trade may lead to increased
wholesale price pressure from larger grocery trade customers and could
result in the loss of key accounts if the surviving entities are not
customers of the Company;
(iii) Significant increases in the cost of certain raw materials used in the
Company's products, to the extent not reflected in the price of the
Company's products, could adversely impact the Company's results. For
example, the cost of wheat can change significantly;
(iv) In light of its significant ownership interest in Vail Resorts, Inc., the
Company's non-cash earnings can be adversely affected by Vail's
unfavorable performance;
(v) The Company's businesses compete in mature segments with competitors
having large percentages of segment sales; and
(vi) The Company's disclosure under the heading "INFORMATION SYSTEMS
DEVELOPMENTS AND YEAR 2000 ISSUES" in its Form 10-Q for the period ended
June 30, 1998 includes cautionary statements regarding the Company's
ability to successfully address Year 2000 compliance issues, and such
statements are incorporated herein.
4
<PAGE> 5
To the Holders of Common Stock of Ralcorp Holdings, Inc.:
INTRODUCTION
Ralcorp Holdings, Inc., a Missouri corporation (the "Company"), invites its
stockholders to tender shares of its $.01 par value Common Stock (the "Shares")
(including the associated Stock Purchase Rights (the "Rights") issued pursuant
to the Shareholder Protection Rights Agreement, dated December 27, 1996, between
the Company and the Rights Agent named therein, as amended), to the Company at
prices not in excess of $16.00 nor less than $14.00 per Share in cash, specified
by such stockholders upon the terms and subject to the conditions set forth
herein and in the related Letter of Transmittal, which together constitute the
"Offer." Unless the context otherwise requires, all references to the Shares
shall include the associated Rights. The Company will determine the single per
Share price, not in excess of $16.00 nor less than $14.00 per Share, net to the
seller in cash (the "Purchase Price"), that it will pay for Shares properly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
Company will select the lowest Purchase Price that will allow it to buy
5,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $16.00 nor less than $14.00 per Share). All Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
will be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration provisions. All Shares acquired
in the Offer will be acquired at the Purchase Price. The Company reserves the
right, in its sole discretion, to purchase more than 5,000,000 Shares pursuant
to the Offer. See Section 14.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE COMPANY
HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO
TENDER ANY SHARES PURSUANT TO THE OFFER.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 5,000,000 Shares (or such greater number of
Shares as the Company may elect to purchase) are properly tendered at or below
the Purchase Price and not withdrawn, the Company will buy Shares first from all
Odd Lot Holders (as defined in Section 1) who properly tender all their Shares
at or below the Purchase Price and then on a pro rata basis from all other
stockholders who properly tender Shares at prices at or below the Purchase Price
(and, in each case, do not withdraw them prior to the expiration of the Offer).
The Company will return at its own expense all Shares not purchased pursuant to
the Offer. See Section 1.
The Purchase Price will be paid net to the tendering stockholder in cash
for all Shares purchased. Tendering stockholders who are registered holders will
not be obligated to pay brokerage commissions, solicitation fees or, subject to
Instruction 7 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by the Company. Stockholders holding Shares through brokers or banks
are urged to consult such brokers or banks to determine whether transaction
costs are applicable if stockholders tender Shares through such brokers or banks
and not directly to the Depositary. HOWEVER, ANY TENDERING STOCKHOLDER OR OTHER
PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE DEPOSITARY THE SUBSTITUTE
FORM W-9 THAT IS INCLUDED AS PART OF THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO
REQUIRED UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS
PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTION 3. The Company will pay all fees and expenses of Wasserstein Perella &
Co., Inc. ("Wasserstein Perella" or the
5
<PAGE> 6
"Dealer Manager"), First Chicago Trust Company of New York (the "Depositary")
and Georgeson & Company Inc. (the "Information Agent") incurred in connection
with the Offer. See Section 15.
The Board of Directors has determined that the Company's financial
condition and outlook and current market conditions, including recent trading
prices of Shares, make this an attractive time to repurchase a significant
portion of the outstanding Shares. In the view of the Board of Directors, the
Offer represents an attractive investment that should benefit the Company and
its stockholders over the long term. In particular, the Board of Directors
believes that the purchase of Shares at this time is consistent with the
Company's long term corporate goal of seeking to increase stockholder value.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $16.00 nor less than $14.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without, where Shares are tendered by the
registered owner thereof directly to the Depositary, the usual transaction costs
associated with market sales. In addition, stockholders owning fewer than 100
Shares whose Shares are purchased pursuant to the Offer and who tender directly
not only will avoid the payment of brokerage commissions but also will avoid any
applicable odd-lot discounts payable on a sale of their Shares in a NYSE
transaction. The Offer also allows stockholders to sell a portion of their
Shares while retaining a continuing equity interest in the Company. Stockholders
who determine not to accept the Offer will realize a proportionate increase in
their relative equity interest in the Company, and thus in the Company's future
earnings and assets subject to the Company's right to issue additional Shares
and other equity securities in the future.
As of October 15, 1998, the Company had issued and outstanding 31,711,317
Shares and had reserved 2,891,924 Shares for the granting of stock-based awards,
including the issuance of shares upon exercise of outstanding stock options
("Options") under the Company's Incentive Stock Plan (the "Incentive Stock
Plan"). The 5,000,000 Shares that the Company is offering to purchase pursuant
to the Offer represent approximately 15.8% of the Company's Shares outstanding
on October 15, 1998 (approximately 15.8% assuming exercise of outstanding
exercisable Options). The Shares are listed and traded on the NYSE under the
symbol "RAH." On October 15, 1998, the last full trading day on the NYSE prior
to the announcement and commencement of the Offer, the closing per Share sales
price as reported on the NYSE Composite Tape was $13.9375. STOCKHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7.
6
<PAGE> 7
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase 5,000,000 Shares or such lesser number of Shares as are properly
tendered (and not withdrawn in accordance with Section 4) prior to the
Expiration Date (as defined below) at prices not in excess of $16.00 nor less
than $14.00 per Share in cash.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, November 13, 1998 unless and until the Company, in its sole discretion,
shall have extended the period of time during which the Offer will remain open,
in which event the term "Expiration Date" shall refer to the latest time and
date at which the Offer, as so extended by the Company, shall expire. See
Section 14 for a description of the Company's right to extend, delay, terminate
or amend the Offer. The Company reserves the right to purchase more than
5,000,000 Shares pursuant to the Offer. In accordance with applicable
regulations of the Securities and Exchange Commission (the "Commission"), the
Company may purchase pursuant to the Offer an additional amount of Shares not to
exceed 2% of the outstanding Shares as of the date hereof without amending or
extending the Offer. See Section 14. In the event of an over-subscription of the
Offer as described below, Shares tendered at or below the Purchase Price prior
to the Expiration Date will be subject to proration, except for Odd Lots as
explained below. The proration period also expires on the Expiration Date.
The Company will select the lowest Purchase Price that will allow it to buy
5,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $16.00 nor less than $14.00 per Share and not
withdrawn). All Shares properly tendered at prices at or below the Purchase
Price and not withdrawn will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the proration provisions.
All Shares purchased in the Offer will be purchased at the Purchase Price.
THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES,
BUT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, stockholders
desiring to tender Shares must specify the price, not in excess of $16.00 nor
less than $14.00 per Share, at which they are willing to sell their Shares to
the Company. As promptly as practicable following the Expiration Date, the
Company will, in its sole discretion, determine the Purchase Price that it will
pay for Shares properly tendered pursuant to the Offer and not withdrawn, taking
into account the number of Shares tendered and the prices specified by tendering
stockholders. All Shares tendered and not purchased pursuant to the Offer,
including Shares tendered at prices in excess of the Purchase Price and Shares
not purchased because of proration, will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
If the number of Shares validly tendered and not withdrawn on or prior to
the Expiration Date is less than or equal to 5,000,000 Shares (or such greater
number of shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all shares so tendered.
PRIORITY OF PURCHASES. Upon the terms and subject to the conditions of the
Offer, if more than 5,000,000 Shares (or such greater number of Shares as the
Company may elect to purchase) have been properly tendered at prices at or below
the Purchase Price and not withdrawn prior to the Expiration Date, the Company
will purchase properly tendered Shares on the basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined below) who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder at a
price at or below the Purchase Price (tenders of less than all Shares owned
by such stockholder will not qualify for this preference); and
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(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and
(b) second, after purchase of all of the foregoing Shares, all other Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
prior to the Expiration Date, on a pro rata basis (with appropriate adjustments
to avoid purchases of fractional Shares) as described below.
ODD LOTS. For purposes of the Offer, the term "Odd Lots" shall mean all
Shares properly tendered prior to the Expiration Date at prices at or below the
Purchase Price and not withdrawn by any person (an "Odd Lot Holder") who owned,
beneficially or of record, as of the close of business on October 15, 1998 and
as of the Expiration Date, an aggregate of fewer than 100 Shares and so
certified in the appropriate place on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. In order to qualify for this
preference, an Odd Lot Holder must tender all such Shares in accordance with the
procedures described in Section 3. As set forth above, Odd Lots will be accepted
for payment before proration, if any, of the purchase of other tendered Shares.
This preference is not available to partial tenders or to beneficial or record
holders of an aggregate of 100 or more Shares, even if such holders have
separate accounts or certificates representing fewer than 100 Shares. By
accepting the Offer, an Odd Lot Holder would not only avoid the payment of
brokerage commissions but also would avoid any applicable odd lot discounts in a
sale of such holder's Shares. Any stockholder wishing to tender all of such
stockholder's Shares pursuant to this Section should complete the box captioned
"Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery.
PRORATION. In the event that proration of tendered Shares is required, the
Company will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each stockholder tendering Shares, other than Odd
Lot Holders, shall be based on the ratio of the number of Shares properly
tendered and not withdrawn by such stockholder to the total number of Shares
properly tendered and not withdrawn by all stockholders, other than Odd Lot
Holders, at or below the Purchase Price. Because of the difficulty in
determining the number of Shares properly tendered (including Shares tendered by
guaranteed delivery procedures, as described in Section 3) and not withdrawn,
and because of the odd lot procedure, the Company does not expect that it will
be able to announce the final proration factor or commence payment for any
Shares purchased pursuant to the Offer until approximately five NYSE trading
days after the Expiration Date. The preliminary results of any proration will be
announced by press release as promptly as practicable after the Expiration Date.
Stockholders may obtain such preliminary information from the Information Agent
or the Dealer Manager and may be able to obtain such information from their
brokers.
As described in Section 13, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and, therefore, may be relevant
to a stockholder's decision whether or not to tender Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
stockholder 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.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or prices
(not in excess of $16.00 nor less than $14.00 per Share) at which they are
willing to sell their Shares and, subject to the terms and conditions of the
Offer, to sell those Shares for cash without, where Shares are tendered by the
registered owner thereof directly to the Depositary, the usual transaction costs
associated with market sales. In addition, Odd Lot Holders whose Shares are
purchased pursuant to the Offer not only will avoid the payment of brokerage
commissions but also will avoid any applicable odd lot discounts payable on a
sale of their Shares in a NYSE transaction. The Offer also allows stockholders
to sell a portion of their Shares while retaining a continuing equity interest
in the Company. Stockholders who determine not to accept the Offer will realize
a proportionate increase in their
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<PAGE> 9
relative equity interest in the Company, and thus in the Company's future
earnings and assets, subject to the Company's right to issue additional Shares
and other equity securities in the future.
The Board of Directors has determined that the Company's financial
condition and outlook and current market conditions, including recent trading
prices of Shares, make this an attractive time to repurchase a significant
portion of the outstanding Shares. In the view of the Board of Directors, the
Offer represents a significant acceleration and expansion of what would
otherwise have been a continuing share repurchase program and an attractive
investment that should benefit the Company and its stockholders over the long
term. In particular, the Board of Directors believes that the purchase of Shares
at this time is consistent with the Company's long term corporate goal of
seeking to increase stockholder value. The funds required to complete the Offer
and pay related expenses will be provided from the Company's $100 million credit
facility and cash existing from operations, if any. See Section 8.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES AND
NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. STOCKHOLDERS
ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH TO
TENDER. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company may in the future purchase additional Shares on the open
market, in private transactions, through tender offers or otherwise, subject to
the approval of the Board of Directors. The Company, with the approval of the
Board, has previously purchased 1,300,000 Shares. Presently the Company does not
have a stock repurchase authorization other than an authorization for this
Offer. Rule 13e-4 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prohibits the Company and its affiliates from purchasing any
Shares, other than pursuant to the Offer, until at least ten business days after
the Expiration Date. Any possible future purchases by the Company will depend on
many factors, including the market price of the Shares, the results of the
Offer, the Company's business and financial position and general economic and
market conditions.
Shares the Company acquires pursuant to the Offer will be held in the
Company's treasury (unless and until the Company determines to retire such
Shares) and will be available for the Company to issue without further
stockholder action (except as required by applicable law or the rules of the
NYSE or any other securities exchange on which the Shares are listed) for
purposes including, but not limited to, the acquisition of other businesses, the
raising of additional capital for use in the Company's business and the
satisfaction of obligations under existing or future employee benefit plans. The
Company has no current plans for issuance of the Shares repurchased pursuant to
the Offer except in connection with existing stock plan awards. Except as
disclosed in this Offer to Purchase, the Company currently has no plans or
proposals that relate to or would result in (a) the acquisition by any person of
additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any or all of its
subsidiaries; (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company; (e) any material change in the present
dividend rate or policy, or indebtedness or capitalization of the Company; (f)
any other material change in the Company's corporate structure or business; (g)
any material change in the Company's Articles of Incorporation or By-Laws or any
actions which may impede the acquisition of control of the Company by any
person; (h) a class of equity security of the Company being delisted from a
national securities exchange; (i) a class of equity security of the Company
becoming eligible for termination of registration pursuant to Section 12(g)(4)
at the Exchange Act; or (j) the suspension of the Company's obligation to file
reports pursuant to Section 15(d) of the Exchange Act.
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Pursuant to the Company's Bylaws, no person shall be eligible for election
as a Director if such person's 70th birthday falls on a date prior to the
commencement of a new term. Thus, Dr. William H. Danforth will not be eligible
to be re-elected to the Board of Directors after his term expires at the
Company's 1999 Annual Meeting of Shareholders. Presently, the Board of Directors
plans on reducing the size of the Board from six to five members upon the
expiration of Dr. Danforth's current term.
3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) including any required signature guarantees
and any other documents required by the Letter of Transmittal, must be received
prior to 12:00 Midnight, New York City time, on the Expiration Date by the
Depositary at its address set forth on the back cover of this Offer to Purchase
or (b) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below. IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF
TRANSMITTAL, STOCKHOLDERS DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST
PROPERLY INDICATE IN THE SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE (IN
MULTIPLES OF $.125) AT WHICH THEIR SHARES ARE BEING TENDERED. ALTERNATIVELY,
STOCKHOLDERS MAY ELECT TO HAVE THEIR PER SHARE PRICE DETERMINED BY THE COMPANY
IN ACCORDANCE WITH THE TERMS OF THE OFFER BY CHECKING THE BOX UNDER THE SECTION
CAPTIONED "SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER."
Stockholders who desire to tender Shares at more than one price must complete a
separate Letter of Transmittal for each price at which Shares are tendered,
provided that the same Shares cannot be tendered (unless properly withdrawn
previously in accordance with the terms of the Offer) at more than one price. TO
PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE
APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
IN ADDITION, ODD LOT HOLDERS WHO TENDER ALL SUCH SHARES MUST COMPLETE THE
BOX CAPTIONED "ODD LOTS" ON THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, ON THE
NOTICE OF GUARANTEED DELIVERY, TO QUALIFY FOR THE PREFERENTIAL TREATMENT
AVAILABLE TO ODD LOT HOLDERS AS SET FORTH IN SECTION 1.
STOCKHOLDERS WHO HOLD SHARES THROUGH BROKERS OR BANKS ARE URGED TO CONSULT
SUCH BROKERS OR BANKS TO DETERMINE WHETHER TRANSACTION COSTS ARE APPLICABLE IF
STOCKHOLDERS TENDER SHARES THROUGH SUCH BROKERS OR BANKS AND NOT DIRECTLY TO THE
DEPOSITARY.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required: (i) if the Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this Section 3, shall include any
participant in The Depository Trust Company (the "Book-Entry Transfer Facility")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith and such holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal; or (ii) if Shares are tendered for
the account of a member in good standing of the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each such entity being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal. If a certificate for Shares is registered in the name of
a person other than the person executing a Letter of Transmittal, or if payment
is to be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, then the certificate must be endorsed or
accompanied by an appropriate stock power, in either case, signed exactly as the
name of the registered holder appears on the certificate, or stock power
guaranteed by an Eligible Institution.
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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 timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. IF
DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer Shares into the Depositary's account in accordance with the
Book-Entry Transfer Facility's procedures for transfer. Although delivery of
Shares may be effected through a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, either (i) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Depositary at its address set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or (ii) the guaranteed delivery procedure described below must be followed.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Internal Revenue Service ("IRS"), unless the stockholder or
other payee provides its taxpayer identification number (employer identification
number or social security number) to the Depositary (as payor) and certifies
under penalties of perjury that such number is correct. Therefore, each
tendering stockholder should complete and sign the Substitute Form W-9 included
as part of the Letter of Transmittal so as to provide the information and
certification necessary to avoid backup withholding, unless such stockholder
otherwise establishes to the satisfaction of the Depositary that it is not
subject to backup withholding. If the Depositary is not provided with the
correct taxpayer identification number, the United States Holder (as defined in
Section 13 herein) also may be subject to a penalty imposed by the IRS. If
withholding results in an overpayment of taxes, a refund may be obtained.
Certain "exempt recipients" (including, among others, all corporations and
certain Non-United States Holders (as defined in Section 13 herein)) are not
subject to these backup withholding and information reporting requirements. In
order for a Non-United States Holder to qualify as an exempt recipient, that
stockholder must submit an IRS Form W-8 or a Substitute Form W-8, signed under
penalties of perjury, attesting to that stockholder's exempt status. Such
statements can be obtained from the Depositary. See Instruction 13 of the Letter
of Transmittal.
TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO THE
OFFER, EACH STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
BACKUP WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE STOCKHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF
TRANSMITTAL.
For a discussion of certain United States federal income tax consequences
to tendering stockholders, see Section 13.
WITHHOLDING FOR NON-UNITED STATES HOLDERS. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a Non-United States Holder or his agent unless the
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Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. In order to obtain a reduced rate of withholding
pursuant to a tax treaty, a Non-United States Holder must deliver to the
Depositary before the payment a properly completed and executed IRS Form 1001.
In order to obtain an exemption from withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a Non-United States Holder must
deliver to the Depositary a properly completed and executed IRS Form 4224. The
Depositary will determine a stockholder's status as a Non-United States Holder
and eligibility for a reduced rate of, or exemption from, withholding by
reference to any outstanding certificates or statements concerning eligibility
for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or
IRS Form 4224) unless facts and circumstances indicate that such reliance is not
warranted. A Non-United States Holder may be eligible to obtain a refund of all
or a portion of any tax withheld if such Non-United States Holder meets the
"complete termination," "substantially disproportionate" or "not essentially
equivalent to a dividend" test described in Section 13 or is otherwise able to
establish that no tax or a reduced amount of tax is due. Backup withholding
generally will not apply to amounts subject to the 30% or a treaty-reduced rate
of withholding. Non-United States Holders are urged to consult their own tax
advisors regarding the application of United States federal income tax
withholding, including eligibility for a withholding tax reduction or exemption,
and the refund procedure. See Instruction 13 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date, such
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives by hand, mail, overnight carrier, telegram or
facsimile transmission, prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form the
Company has provided with this Offer to Purchase (specifying the price at which
the Shares are being tendered), including (where required) a signature guarantee
by an Eligible Institution; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile thereof)
and any required signature guarantees or other documents required by the Letter
of Transmittal, are received by the Depositary within three NYSE trading days
after the date of receipt by the Depositary of such Notice of Guaranteed
Delivery.
RETURN OF TENDERED SHARES. If any tendered Shares are not purchased, or if
less than all Shares evidenced by a stockholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case of Shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, such Shares
will be credited to the appropriate account maintained by the tendering
stockholder at the Book-Entry Transfer Facility, in each case without expense to
such stockholder.
DIVIDEND REINVESTMENT PLAN. The Company does not have a Dividend
Reinvestment Plan.
COMPANY STOCK OPTION PLANS. The Company is not offering, as part of the
Offer, to purchase any of the Options ("Options") outstanding under the
Company's Incentive Stock Plan and tenders of such Options will not be accepted.
Holders of Options who wish to participate in the Offer may either (i) comply
with the procedures for guaranteed delivery set forth under "Guaranteed
Delivery" above without having to exercise their Options (pursuant to their
terms) until after the results of the Offer are known (provided, however, that
an Option holder will not be required to make the requisite tender through an
Eligible Institution and may personally execute and deliver the Notice of
Guaranteed Delivery) or (ii) exercise their Options (pursuant to
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their terms) and purchase Shares of the Company's common stock and then tender
such Shares pursuant to the Offer, provided that, in the case of either (i) or
(ii), any such exercise of an Option and tender of Shares is in accordance with
the terms of the Incentive Stock Plan and the Options. In no event are any
Options to be delivered to the Depositary in connection with a tender of Shares
hereunder. An exercise of an Option cannot be revoked even if Shares received
upon the exercise thereof and tendered in the Offer are not purchased in the
Offer for any reason.
COMPANY 401K PLAN. Participants in the Company's Savings Investment Plan
cannot tender shares owned under the Savings Investment Plan. Presently, the
Savings Investment Plan prohibits participants from tendering shares owned under
the Savings Investment Plan in the case of a tender offer by the Company.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Company, in its sole discretion, and
its determination shall be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders of any Shares that it
determines are not in proper form or the acceptance for payment of or payment
for which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in any tender with respect to any particular Shares
or any particular stockholder and the Company's interpretation of the terms of
the Offer will be final and binding on all parties. No tender of Shares will be
deemed to have been properly made until all defects or irregularities have been
cured by the tendering stockholder to the satisfaction of the Company or waived
by the Company. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person shall be obligated to give notice of any
defects or irregularities in tenders, nor shall any of them incur any liability
for failure to give any such notice.
TENDERING STOCKHOLDER'S REPRESENTATION AND WARRANTY; COMPANY'S ACCEPTANCE
CONSTITUTES AN AGREEMENT. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering stockholder's acceptance of the
terms and conditions of the Offer, as well as the tendering stockholder's
representation and warranty to the Company that (a) such stockholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of such
Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person,
directly or indirectly, to tender Shares for such person's own account unless,
at the time of tender and at the end of the proration period or period during
which Shares are accepted by lot (including any extensions thereof), the person
so tendering (i) has a net long position equal to or greater than the amount of
(x) Shares tendered or (y) other securities convertible into or exchangeable or
exercisable for the Shares tendered and will acquire such Shares for tender by
conversion, exchange or exercise and (ii) will deliver or cause to be delivered
such Shares in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and the Company upon the terms and conditions of the Offer.
LOST OR DESTROYED CERTIFICATES. Stockholders whose certificates for their
shares have been lost, stolen, misplaced or destroyed must contact the
Depositary at (800) 446-2617 for instructions as to documents which will be
required to be submitted together with the Letter of Transmittal in order to
replace certificate(s) representing the shares. SUCH STOCKHOLDERS ARE ADVISED TO
CONTACT THE DEPOSITARY IMMEDIATELY TO PERMIT TIMELY PROCESSING OF SUCH
DOCUMENTATION.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Company pursuant to the Offer, may also be withdrawn
at any time after 12:00 Midnight, New York City time, on Monday, December 14,
1998.
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For a withdrawal to be effective, a notice of withdrawal must be in
written, telegraphic or facsimile transmission form and must be received in a
timely manner by the Depositary at its address set forth on the back cover of
this Offer to Purchase. Any such notice of withdrawal must specify the name of
the tendering stockholder, the name of the registered holder, if different from
that of the person who tendered such Shares, the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates for Shares to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry tender set forth in Section 3, the notice of withdrawal also must
specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility. None of the Company, the Dealer Manager, the
Depositary, the Information Agent or any other person shall be obligated to give
notice of any defects or irregularities in any notice of withdrawal nor shall
any of them incur liability for failure to give any such notice. All questions
as to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Company, in its sole discretion, which determination
shall be final and binding.
Withdrawals may not be rescinded and any Shares withdrawn will thereafter
be deemed not properly tendered for purposes of the Offer unless such withdrawn
Shares are properly retendered prior to the Expiration Date by again following
one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain tendered Shares on behalf of the Company, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, as promptly as
practicable following the Expiration Date, the Company (i) will determine the
Purchase Price it will pay for the Shares properly tendered and not withdrawn
prior to the Expiration Date, taking into account the number of Shares so
tendered and the prices specified by tendering stockholders, and (ii) will
accept for payment and pay for (and thereby purchase) Shares properly tendered
at prices at or below the Purchase Price and not withdrawn prior to the
Expiration Date. For purposes of the Offer, the Company will be deemed to have
accepted for payment (and therefore purchased) Shares that are properly tendered
at or below the Purchase Price and not withdrawn (subject to the proration
provisions of the Offer) only when, as and if it gives oral or written notice to
the Depositary of its acceptance of such Shares for payment pursuant to the
Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 5,000,000 Shares (subject to increase or
decrease as provided in Section 14) or such lesser number of Shares as are
properly tendered at prices not in excess of $16.00 nor less than $14.00 per
Share and not withdrawn as permitted in Section 4.
The Company will pay for Shares purchased pursuant to the Offer by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering stockholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any proration and commence payment for Shares
purchased until approximately five NYSE trading days after the Expiration Date.
Certificates for all Shares tendered and not purchased, including all Shares
tendered at prices in excess of the Purchase Price and Shares not purchased due
to proration, will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to the account maintained with the
applicable Book-Entry Transfer Facility by the
14
<PAGE> 15
participant therein who so delivered such Shares) to the tendering stockholder
at the Company's expense as promptly as practicable after the Expiration Date
without expense to the tendering stockholders. Under no circumstances will
interest on the Purchase Price be paid by the Company by reason of any delay in
making payment. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of the stock transfer taxes, or exemption therefrom, is
submitted. See Instruction 7 of the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES FOR NON-UNITED STATES HOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
under the Exchange Act, if at any time on or after October 16, 1998 and prior to
the time of payment for Shares tendered any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) that,
in the Company's sole judgment in any such case and regardless of the
circumstances giving rise thereto (including any action or omission to act by
the Company), makes it inadvisable to proceed with the Offer or with such
acceptance for payment:
(a) there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or any other person, domestic or foreign, before
any court, authority, agency or tribunal that directly or indirectly (i)
challenges the making of the Offer, the acquisition of some or all of the Shares
pursuant to the Offer or otherwise relates in any manner to the Offer, or (ii)
in the Company's sole judgment, could materially and adversely affect the
business, condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially impair
in any way the contemplated future conduct of the business of the Company or any
of its subsidiaries or materially impair the contemplated benefits of the Offer
to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or the Company or any of its
subsidiaries, by any court or any authority, agency or tribunal that, in the
Company's sole judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all of the Shares illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or restrict
the ability of the Company, or render the Company unable, to accept for payment
or pay for some or all of the Shares, (iii) materially impair the contemplated
benefits of the Offer to the Company or (iv) materially and adversely affect the
business, condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise materially impair
in any way the contemplated future conduct of the business of the Company or any
of its subsidiaries;
15
<PAGE> 16
(c) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (iv) any limitation
(whether or not mandatory) by any governmental, regulatory or administrative
agency or authority on, or any event that, in the Company's reasonable judgment,
might affect, the extension of credit by banks or other lending institutions in
the United States, (v) any significant decrease in the market price of the
Shares, (vi) any change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the sole judgment of
the Company, have a material adverse effect on the Company's business,
operations or prospects or the trading in the Shares, (vii) in the case of any
of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof, (viii) any decline in either the Dow
Jones Industrial Average (8299 at the close of business on October 15, 1998) or
the Standard and Poor's Index of 500 Industrial Companies (1047.5 at the close
of business on October 15, 1998) by an amount in excess of 10% measured from the
close of business on October 15, 1998; or (ix) any default under the Company's
credit facility that would prevent the Company from borrowing the funds
necessary for the Offer;
(d) a tender or exchange offer for any or all of the Shares (other than the
Offer), or any merger, business combination or other similar transaction with or
involving the Company or any subsidiary, shall have been proposed, announced or
made by any person;
(e) (i) any entity, "group" (as that term is used in Section 13(d)(3) of
the Exchange Act) or person shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares (other than any
such person, entity or group who has filed a Schedule 13D or Schedule 13G with
the Commission on or before October 15, 1998), (ii) any such entity, group or
person who has filed a Schedule 13D or Schedule 13G with the Commission on or
before October 15, 1998 shall have acquired or proposed to acquire beneficial
ownership of an additional 2% or more of the outstanding Shares or (iii) any
person, entity or group shall have filed a Notification and Report Form under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a public
announcement reflecting an intent to acquire the Company or any of its
subsidiaries or any of their respective assets or securities other than in
connection with a transaction authorized by the Board of Directors of the
Company;
(f) any change or changes shall have occurred or are threatened in the
business, financial condition, assets, income, operations, prospects or stock
ownership of the Company or its subsidiaries that, in the Company's sole
judgment, is or may be material to the Company or its subsidiaries; or
(g) the Offer would, if consummated, result in the delisting of the Shares
from the NYSE.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and may be waived by
the Company, in whole or in part, at any time and from time to time in its sole
discretion. The Company's failure 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 the Company concerning the events described above
will be final and binding.
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed and traded on the NYSE. The Company has not paid
dividends on the Shares. The following table sets forth, for the fiscal quarters
indicated, the high and low closing per Share sales prices on
16
<PAGE> 17
the NYSE Composite Tape as compiled from published financial sources per Share
in each such fiscal quarters:
<TABLE>
<CAPTION>
PERIODS HIGH LOW
------- ---- ---
<S> <C> <C> <C>
Fiscal 1996-97 Second Quarter (February 1 - March 31, 1997)*.... 12 3/8 10 1/4
14 3/4 9 3/4
Third Quarter (April 1 - June 30, 1997)..........
20 5/8 15
Fourth Quarter (July 1 - September 30, 1997).....
Fiscal 1997-98 First Quarter (October 1 - December 31, 1997).... 19 11/16 15 13/16
20 15/16 15 15/16
Second Quarter (January 1 - March 31, 1998)......
21 11/16 18 7/8
Third Quarter (April 1 - June 30, 1998)..........
21 1/4 14
Fourth Quarter (July 1 - September 30, 1998).....
</TABLE>
- -------------------------
* Prior to February 1, 1997, the Shares were not publicly traded.
On October 15, 1998, the last full trading day on the NYSE prior to the
announcement and commencement of the Offer, the closing price per Share sales
price on the NYSE Composite Tape was $13.9375. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
8. SOURCE AND AMOUNT OF FUNDS.
Assuming the Company purchases 5,000,000 Shares pursuant to the Offer at a
purchase price of $16.00 per Share, the Company expects the maximum aggregate
cost, including all fees and expenses applicable to the Offer, to be
approximately $81.5 million. It is anticipated that the Company will fund the
purchase of Shares pursuant to the Offer and the payment of related fees and
expenses from borrowings by the Company under its revolving credit facility and
cash from operations.
On January 31, 1997 the Company entered into a three year, $50 million
revolving credit facility (the "Credit Agreement"), among the Company, the
lenders named therein (the "Banks") and The First National Bank of Chicago, as
agent (the "Agent"). The Credit Agreement was amended on October 16, 1998 to
increase the amount capable of being borrowed to $100 million. Borrowings under
the Credit Agreement by the Company bear interest at a rate per annum equal to,
at the Company's option, either a (i) variable interest rate charged at LIBOR
plus the applicable margin rate of 0.60% plus 0.10% if the facility is 50% or
more utilized or (ii) the maximum of the federal funds rate plus the applicable
margin rate of 0.50% or the prime rate plus 0.10% if the facility is 50% or more
utilized. In respect of borrowings, an unused commitment fee of 0.175% is
payable to the Banks quarterly in arrears. Borrowings under the Credit Agreement
are unsecured and mature on January 31, 2000. The Credit Agreement also contains
certain representations and warranties, covenants and conditions customary to
credit facilities of this nature. As of the date hereof, there are no unpaid
borrowings under the Credit Agreement.
The Company currently anticipates that any borrowings under the Credit
Agreement will be repaid out of operating cash flows or a refinancing of the
Company's borrowings under the Credit Agreement.
The preceding description of the Credit Agreement is qualified in its
entirety by reference to the text of the Credit Agreement and Amendment thereto,
which are incorporated by reference as exhibits to the Issuer Tender Offer
Statement on Schedule 13E-4 (the "Schedule 13E-4") of which this Offer to
Purchase forms a part. A copy of the Schedule 13E-4 may be obtained from the
Commission in the manner provided in Section 9 under the heading "Certain
Information Concerning the Company -- General."
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company, a Missouri corporation organized on October 23, 1996, whose
principal executive office is located at 800 Market Street, St. Louis, MO 63101,
is primarily engaged, directly and through its subsidiaries, in the
manufacturing, distribution and marketing of store brand ready-to-eat and hot
cereal products, store
17
<PAGE> 18
brand crackers and cookies and store brand and branded snack nuts. The Company's
products are primarily sold in the United States and Canada. On September 10,
1998, the Company completed the sale of its Beech-Nut Baby Food business for $68
million in cash. Most of the proceeds were used to repay borrowings incurred
when the Company acquired Sugar Kake Cookie Inc. on August 25, 1998 (a store
brand cookie company with sales of approximately $28 million) and Nutcracker
Brands, Inc. on September 8, 1998 (a store brand and branded snack nut company
with sales of approximately $42 million). Previously, on April 23, 1998, the
Company acquired Flavor House Products, Inc. a store brand and branded snack nut
company with sales of approximately $62 million.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's stockholders and filed with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 2120, Washington D.C. 20549; at its
regional offices located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and 7 World Trade Center, New York, New York 10048. Copies
of such material may also be obtained by mail, upon payment of the Commission's
customary charges, from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549. The Commission
also maintains a Web site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy statements and other information concerning the Company also can
be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005, on which the Shares are listed. In addition, the Company will furnish
without charge to each person to whom this Offer is delivered a copy of the
Company's Form 10-K as of September 30, 1997 upon request to Ralcorp Holdings,
Inc., 800 Market Street, Suite 2900, St. Louis, Missouri 63101.
18
<PAGE> 19
CERTAIN FINANCIAL INFORMATION
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated financial
information of the Company and its subsidiaries. The historical financial
information (other than the ratios of earnings to fixed charges) was derived
from the audited consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1997 (the "Company's
1997 Annual Report"), and from the unaudited summary consolidated financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
quarters ended June 30, 1998 and 1997 (the "Company's Quarterly Reports"), and
other information and data contained in the Company's 1997 Annual Report and the
Company's Quarterly Reports. More comprehensive financial information is
included in such reports and the financial information which follows is
qualified in its entirety by reference to such reports and all of the financial
statements and related notes contained therein, copies of which may be obtained
as set forth above in Section 9 under the heading "Certain Information
Concerning the Company -- General."
<TABLE>
<CAPTION>
UNAUDITED
------------------
NINE MONTHS ENDED YEAR ENDED
JUNE 30, SEPTEMBER 30,
------------------ --------------------
1998 1997 1997 1996
------- ---- ---- ----
(IN MILLIONS, EXCEPT PER SHARE
AMOUNTS AND RATIOS)
<S> <C> <C> <C> <C>
STATEMENT OF EARNINGS:
Net sales............................................. $427.6 $595.0 $739.7 $1,027.4
Gross profit.......................................... 149.7 266.6 314.5 490.6
Net earnings (loss)................................... 28.5 526.6(a) 531.5(b) (46.8)(c)
Net earnings (loss) per share:
Basic.............................................. .87 15.98 16.11 (1.42)
Diluted............................................ .86 15.86(a) 16.01(b) (1.40)(c)
Ratio of earnings to fixed charges(d)................. 54.3 58.7 59.4 --
Deficiency of earnings available to cover fixed
charges............................................ $ 16.8
BALANCE SHEET (at period date):
Working capital....................................... $ 70.6 $ 67.4 $ 64.9 $ 90.6
Total assets.......................................... 411.7 412.5 400.3 627.1
Total assets less goodwill related to acquisitions.... 372.9 388.5 377.6 598.0
Total indebtedness.................................... 10.7 14.4 -- 378.4
Shareholders' equity.................................. 307.0 281.4 286.7 107.4
Book Value per Share(e)............................... 9.45 8.53 8.69 3.26
WEIGHTED AVERAGE SHARES OUTSTANDING (DURING PERIOD):
Basic................................................. 32.8 33.0 33.0 33.0
Diluted............................................... 33.2 33.2 33.2 33.4
ACTUAL SHARES OUTSTANDING (AT PERIOD DATE).............. 32.5 33.0 33.0 32.9
</TABLE>
19
<PAGE> 20
Notes to Summary Historical Consolidated Financial Information
(a) Included in Net earnings (loss) for the nine months ended June 30, 1997 are
two separate restructuring charges totaling $14.5 million, after tax, or
$.44 per diluted share. In addition, the nine month period ended June 30,
1997 includes a one-time tax-free gain on the sale of the Company's branded
cereal and snack mix businesses of $516.5 million or $15.56 per diluted
share. Therefore, excluding these nonrecurring items, net earnings and net
earnings per diluted share for the nine months ended June 30, 1997 would
have been $24.6 million and $.74, respectively.
(b) Included in Net earnings (loss) for the year ended September 30, 1997 are
restructuring charges totaling $12.4 million, after tax, or $.37 per diluted
share and a one-time tax-free gain on the sale of the Company's branded
cereal and snack mix businesses of $515.4 million or $15.52 per diluted
share. Therefore, excluding these nonrecurring items, net earnings and net
earnings per diluted share for the year ended September 30, 1997 would have
been $28.5 million and $.86, respectively.
(c) Included in Net earnings (loss) for the year ended September 30, 1996 is an
asset impairment charge related to the Company's private label cereal
business of $68.8 million, after tax, or $2.06 per diluted share. In
addition, the year ended September 30, 1996 includes a restructuring charge
of $10.4 million, after tax, or $.31 per diluted share. Therefore, excluding
these charges, net earnings and net earnings per diluted share for the year
ended September 30, 1996 would have been $32.4 million and $.97,
respectively.
(d) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consists of earnings before equity earnings related to the
Company's interest in Vail Resorts, Inc., taxes on earnings, capitalized
interest and "fixed charges". "Fixed charges" consists of interest expense
and estimated interest components of rental expense.
(e) Book value per share outstanding is calculated as total shareholders' equity
divided by the number of actual shares outstanding at the end of the
appropriate period.
20
<PAGE> 21
SUMMARY UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION
The following summary unaudited pro forma combined financial information of the
Company gives effect to (i) the sale of the Company's Branded Business to
General Mills, Inc. effective January 31, 1997, the sale of the Company's Resort
Operations to Vail Resorts, Inc. effective January 3, 1997 and the sale of the
Company's Branded Baby Food Business to The Milnot Company effective September
10, 1998 (collectively the "Sold Businesses") and (ii) as further adjusted to
give effect to the assumed purchase pursuant to the Offer of 5,000,000 Shares at
a $14.00 price per share and a $16.00 price per share, as if the applicable
transactions had occurred on October 1, 1997 and 1996, with respect to statement
of earnings data and on June 30, 1998 and September 30, 1997 with respect to
balance sheet data. The pro forma adjustments relating to the Sold Businesses,
are further described in the "Unaudited Pro Forma Combined Financial
Information" section of the Company's quarterly report filed on Form 10-Q for
the quarter ended June 30, 1998. As described in the Form 10-Q, pro forma
adjustments related to the Sold Businesses have been made to adjust the
Company's Consolidated Statements of Earnings for the nine months ended June 30,
1998 and year ended September 30, 1997 and the Consolidated Balance Sheet at
June 30, 1998, as applicable. Those pro forma adjustments related to the Offer
are further described in the accompanying Notes to Summary Unaudited Pro Forma
Combined Financial Information. The Summary Unaudited Pro Forma Combined
Financial Information should be read in conjunction with the Summary Historical
Consolidated Financial Information and does not purport to be indicative of the
results that would actually have been obtained had the purchase of the Shares
pursuant to the Offer been completed at the dates indicated or that may be
obtained in the future.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
JUNE 30, 1998 SEPTEMBER 30, 1997
--------------------------------------------- ---------------------------------------------
PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR
SOLD SOLD SOLD SOLD
PRO FORMA FOR BUSINESSES BUSINESSES PRO FORMA FOR BUSINESSES BUSINESSES
SOLD AND OFFER AND OFFER SOLD AND OFFER AND OFFER
BUSINESSES AT $14.00 AT $16.00 BUSINESSES AT $14.00 AT $16.00
------------- ------------- ------------- ------------- ------------- -------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS:
Net sales.............. $330.7 $330.7 $330.7 $383.1 $383.1 $383.1
Gross profit........... 102.6 102.6 102.6 106.8 106.8 106.8
Net earnings........... 29.4 27.2 26.8 8.1 5.3 4.9
Net earnings per share:
Basic................ .90 .98 .96 .25 .19 .18
Diluted.............. .89 .96 .95 .24 .19 .17
Ratio of earnings to
fixed charges........ 67.8 8.5 7.5 7.9 1.3 1.1
WEIGHTED AVERAGE SHARES
OUTSTANDING (DURING
PERIOD):
Basic.................. 32.8 27.8 27.8 33.0 28.0 28.0
Diluted................ 33.2 28.2 28.2 33.2 28.2 28.2
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1998
---------------------------------------------
PRO FORMA FOR PRO FORMA FOR SEPTEMBER 30, 1997
SOLD SOLD ---------------------------------------------
PRO FORMA FOR BUSINESSES BUSINESSES PRO FORMA FOR PRO FORMA FOR
SOLD AND OFFER AND OFFER HISTORICAL OFFER OFFER
BUSINESSES AT $14.00 AT $16.00 (AUDITED) AT $14.00 AT $16.00
------------- ------------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET:
Working capital........ $ 95.1 $ 95.1 $ 95.1 $ 64.9 $ 64.9 $ 64.9
Total assets........... 417.2 417.2 417.2 400.3 400.3 400.3
Total assets less
goodwill related to
acquisitions......... 378.4 378.4 378.4 377.6 377.6 377.6
Total indebtedness..... 10.7 82.2 92.2 -- 71.5 81.5
Shareholders' equity... 317.3 245.8 235.8 286.7 215.2 205.2
Book Value per Share... 9.76 8.94 8.57 8.69 7.69 7.33
ACTUAL SHARES OUTSTANDING
(AT PERIOD DATE)....... 32.5 27.5 27.5 33.0 28.0 28.0
</TABLE>
21
<PAGE> 22
Notes to Summary Unaudited Pro Forma Combined Financial Information
The pro forma adjustment assumptions made to adjust historical financial
information for the effects of the Sold Businesses transactions are discussed in
detail in the "Unaudited Pro Forma Combined Financial Information" section of
the Company's quarterly report filed on Form 10-Q for the quarter ended June 30,
1998. The following notes describe the pro forma adjustments relating to the
Offer.
(1) Assumes that the Company acquires 5,000,000 Shares pursuant to the Offer at
per share prices of $14.00 and $16.00. Based on these per share prices, the
total costs to the Company would be $71.5 million and $81.5 million,
respectively, including an estimated $1.5 million of transaction costs
required to effect the Offer. Assumed costs have been included in the
appropriate unaudited pro forma summary balance sheet information column as
additional indebtedness with a corresponding adjustment to Shareholders'
equity.
(2) Net earnings data has been adjusted to reflect the net interest expense
related to the additional indebtedness referred to in Note (1).
(3) The initial column of the balance sheet data as of September 30, 1997,
representing a summary of the Company's historical consolidated financial
position at that date, has been adjusted to reflect increases in
indebtedness and declines in shareholders' equity as a result of the Offer.
(4) Pro forma weighted average shares outstanding are adjusted to reflect the
acquisition of shares by the Company pursuant to the Offer.
(5) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consists of earnings before equity earnings related to the
Company's interest in Vail Resorts, Inc., taxes on earnings, capitalized
interest and "fixed charges". "Fixed charges" consists of interest expense
and estimated interest components of rental expense.
(6) Book value per share outstanding is calculated as total shareholders' equity
divided by the number of actual shares outstanding at the end of the
appropriate period.
10. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING
SHARES.
As of October 15, 1998, the Company had issued and outstanding 31,711,317
Shares and had reserved 2,891,924 Shares for the granting of stock based awards,
including the issuance of Shares upon exercise of outstanding Options. The
5,000,000 Shares that the Company is offering to purchase represent
approximately 15.8% of the Shares then outstanding (approximately 15.8% assuming
exercise of outstanding exercisable Options). As of October 15, 1998, the
Company's directors and executive officers as a group (11 persons) beneficially
owned an aggregate of 1,394,387 Shares representing approximately 4.4% of the
outstanding Shares, assuming the exercise by such persons of their currently
exercisable Options, including Shares allocated to the accounts of such persons
under the Company's Savings Investment Plan. Each of the Company's executive
officers and directors has advised the Company that he or she does not intend to
tender any Shares pursuant to the Offer although certain executive officers and
directors have an interest in Shares held by the trustee of the Savings
Investment Plan and the trustee will be making an independent decision whether
or not to tender any such Shares. If the Company purchases 5,000,000 Shares
pursuant to the Offer, and neither executive officers or directors nor the
trustee of the Savings Investment Plan tender Shares pursuant to the Offer, then
after the purchase of Shares pursuant to the Offer, the Company's executive
officers and directors as a group would own beneficially approximately 5.2% of
the outstanding Shares immediately after the Offer, assuming the exercise by
such persons of their currently exercisable Options, and including all Shares
allocated to the accounts of such persons under the Company's Savings Investment
Plan.
Except as set forth in Schedule A, based on the Company's records and on
information provided to the Company by its directors, executive officers and
subsidiaries, neither the Company nor any subsidiary of the Company nor, to the
best of the Company's knowledge, any of the directors or executive officers of
the
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<PAGE> 23
Company or any of its subsidiaries, nor any associates or subsidiaries of any of
the foregoing, has effected any transactions involving the Shares during the 40
business days prior to the date hereof.
Except as otherwise described herein, neither the Company nor, to the best
of the Company's knowledge, any of its affiliates, directors or executive
officers, is a party to any contract, arrangement, understanding or relationship
with any other person relating, directly or indirectly, to the Offer 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 such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies, consents or authorizations.
On December 18, 1996, the Board of Directors of the Company declared a
dividend distribution of one Common Stock Purchase Right (the "Rights") for each
outstanding share of Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company (other than shares held in the Company's treasury). The
dividend distribution was paid on January 31, 1997 to the stockholders of record
at the close of business on January 31, 1997. Except as set forth below, each
Right entitles the registered holder to purchase from the Company one share of
Common Stock at a price of $30 per share, subject to adjustment (the "Rights
Purchase Price"). The description and terms of the Rights are set forth in a
Shareholder Protection Rights Agreement (the "Rights Agreement") between the
Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent").
Until the earlier of (i) the close of business on the tenth business day
following the public announcement or the date that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) (an "Acquiring Person") has
acquired, or obtained the right to acquire, 20% or more of the outstanding
shares of Common Stock of the Company without the prior express written consent
of the Company executed on behalf of the Company by a duly authorized officer of
the Company following express approval by action of at least a majority of the
members of the Board of Directors then in office (the "Stock Acquisition Date"),
or (ii) the close of business on the tenth business day (or such later date as
determined by the Board of Directors but not later than the Stock Acquisition
Date) following the commencement of a tender offer or exchange offer, without
the prior written consent of the Company, by a person (other than the Company,
any subsidiary of the Company or any employee benefit plan of the Company)
which, upon consummation, would result in such party's control of 20% or more of
the Company's voting stock (the earlier of the dates in clause (i) or (ii) above
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Company's Common Stock certificates outstanding as of
January 31, 1997 (other than shares held in the Company's treasury), by such
Common Stock certificates. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), new Common Stock certificates issued
after January 31, 1997, upon transfer, new issuance or issuance from the
Company's treasury of the Company's Common Stock, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates outstanding as of
January 31, 1997 will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will then evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on January 31, 2007, unless earlier redeemed or exchanged by the Company,
as described below.
The Rights Purchase Price payable, and the number of shares of Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Common Stock, (ii) upon the issuance of Common Stock or rights to subscribe for
shares of Common Stock or securities convertible into Common Stock at less than
the then current market price of the Common Stock, or (iii) upon
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<PAGE> 24
the distribution to holders of Common Stock of securities (other than those
described in (ii) above), evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings).
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires 20% or more of the
Company's outstanding voting stock without the prior written consent of the
Board of Directors, each Right, except those held by such persons, would entitle
each holder of a Right to acquire such number of shares of the Company's Common
Stock as shall equal the result obtained by multiplying the then current Rights
Purchase Price by the number of shares of Common Stock for which a Right is then
exercisable and dividing that product by 50% of the then current per-share
market price of Company Common Stock.
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires more than 20% but
less than 50% of the outstanding Company Common Stock without prior written
consent of the Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one share of Company
Common Stock.
If the Company were acquired in a merger or other business combination
transaction where the Company is not the surviving corporation or where Company
Common Stock is exchanged or changed or 50% or more of the Company's assets or
earnings power is sold in one or several transactions without the prior written
consent of the Board of Directors, each Right would entitle the holders thereof
(except for the Acquiring Person) to receive such number of shares of the
acquiring company's common stock as shall be equal to the result obtained by
multiplying the then current Rights Purchase Price by the number of shares of
Company Common Stock for which a Right is then exercisable and dividing that
product by 50% of the then current market price per share of the common stock of
the acquiring company on the date of such merger or other business combination
transaction.
With certain exceptions, no adjustment in the Rights Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Rights Purchase Price. No fractional shares will be issued. In lieu of
fractional shares, an adjustment in cash will be made based on the market price
of the Common Stock on the last trading date prior to the date of exercise.
The Rights can be redeemed by the Board of Directors for $.01 per Right at
any time prior to the tenth business day following the Stock Acquisition Date
(as defined above). Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make announcement
thereof, and the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the redemption price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including, but not
limited to, an amendment to lower certain thresholds described above to not less
than the greater of: (i) any percentage greater than the largest percentage of
the Voting Power (as defined in the Rights Agreement) of the Company then known
by the Company to be beneficially owned by any person or group of affiliated or
associated persons (other than an excepted person); and (ii) 10%, except that
from and after such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 10 dated
December 27, 1996. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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<PAGE> 25
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise be traded publicly and may reduce the
number of stockholders, thereby concentrating the voting power of the
non-tendering stockholders. Nonetheless, the Company anticipates that there will
be a sufficient number of Shares outstanding and publicly traded following
consummation of the Offer to ensure a continued trading market for the Shares.
Based upon published guidelines of the NYSE, the Company does not believe that
its purchase of Shares pursuant to the Offer will cause the Company's remaining
Shares to be delisted from the NYSE.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using such Shares as collateral. The Company
believes that, following the purchase of Shares pursuant to the Offer, the
Shares will continue to be "margin securities" for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit that appears
to be material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or of any approval or
other action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
acquisition or ownership of Shares by the Company as contemplated herein. Should
any such approval or other action be required, the Company presently
contemplates that such approval or other action will be sought. The Company is
unable to predict whether it may determine that it is required to delay the
acceptance for payment of or payment for Shares tendered pursuant to the
Offering pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 6.
13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences of an exchange of Shares for cash pursuant to the Offer by
United States Holders (as defined below). This summary is based upon the
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
existing and proposed United States Treasury Regulations promulgated thereunder,
rulings, administrative pronouncements and judicial decisions, changes to which
could affect the tax consequences described herein and could be made on a
retroactive basis.
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular stockholders in light of their
personal circumstances, or to certain types of stockholders (such as certain
financial institutions, dealers or traders in securities or commodities,
insurance companies, tax-exempt organizations or persons who hold Shares as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
for United States federal income tax purposes or that have a functional currency
other than the United States dollar). For purposes of this summary, a "United
States Holder" is a holder of Shares that for United States federal income tax
purposes is (i) a citizen or resident of the United States, (ii) a corporation
or partnership created or organized in or under the laws of the United States or
any State or division thereof (including the District of Columbia), (iii) an
estate the income of which is subject to United States federal income taxation
regardless of its source or (iv) a trust (a) the administration over which a
United States court can exercise
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<PAGE> 26
primary supervision and (b) all of the substantial decisions of which one or
more United States persons have the authority to control. Notwithstanding the
preceding sentence, to the extent provided in United States Treasury
Regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be United States Holders. A "Non-United
States Holder" is a holder of Shares other than a United States Holder.
Non-United States Holders who are not subject to United States federal income
tax on a net basis should see Section 3 for a discussion of the applicable
United States withholding rules and the potential for obtaining a refund of all
or a portion of the tax withheld. This summary may not be applicable with
respect to Shares acquired as compensation (including Shares acquired upon the
exercise of stock options or which were or are subject to forfeiture
restrictions). This summary also does not address the state, local or foreign
tax consequences of participating in the Offer.
EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S TAX ADVISOR AS TO THE
PARTICULAR CONSEQUENCES TO SUCH HOLDER OF PARTICIPATION IN THE OFFER.
CONSEQUENCES TO TENDERING STOCKHOLDERS OF THE EXCHANGE OF SHARES FOR CASH
PURSUANT TO THE OFFER.
An exchange of Shares for cash in the Offer by a United States Holder will
be a taxable transaction for United States federal income tax purposes. As a
consequence of the exchange, the United States Holder will, depending on such
holder's particular circumstances, be treated either as having sold such
holder's Shares or as having received a dividend distribution from the Company
with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such holder's
Shares, and thus will recognize gain or loss if the exchange (i) results in a
"complete termination" of all of such holder's equity interest in the Company,
(ii) is a "substantially disproportionate" redemption with respect to such
holder or (iii) is "not essentially equivalent to a dividend" with respect to
the holder, each as discussed below. In applying each of the Section 302 tests,
a United States Holder will be treated as owning Shares actually or
constructively owned by certain related individuals and entities.
A United States Holder that exchanges all Shares actually and
constructively owned by such holder for cash pursuant to the Offer will be
treated as having completely terminated such holder's equity interest in the
Company. An exchange of Shares for cash will be "substantially disproportionate"
with respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange. A United
States Holder will satisfy the "not essentially equivalent to a dividend" test
if the reduction in such holder's proportionate interest in the Company
constitutes a "meaningful reduction" given such holder's particular facts and
circumstances. The IRS has indicated in published rulings that any reduction in
the percentage interest of a stockholder whose relative stock interest in a
publicly held corporation is minimal (an interest of less than 1% should satisfy
this requirement) and who exercises no control over corporate affairs should
constitute such a "meaningful reduction." If a United States Holder sells Shares
to persons other than the Company at or about the time such holder also sells
Shares to the Company pursuant to the Offer, and the various sales effected by
the holder are part of an overall plan to reduce or terminate such holder's
proportionate interest in the Company, then the sales to persons other than the
Company may, for United States federal income tax purposes, be integrated with
the holder's exchange of Shares pursuant to the Offer and, if integrated, may be
taken into account in determining whether the holder satisfies any of the three
tests described above.
If a United States Holder is treated as having sold such holder's Shares
under the tests described above, such holder will recognize gain or loss equal
to the difference between the amount of cash received and such holder's adjusted
tax basis in the Shares exchanged therefor. Any such gain or loss will be
capital gain or loss. In the case of a noncorporate United States Holder, the
maximum marginal United States federal income tax rate applicable to such gain
will be lower than the maximum marginal United States federal income tax rate
applicable to ordinary income if such United States Holder's holding period for
such Shares exceeds one year.
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If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares for cash, cash
received by such holder will be treated as a dividend to the extent of such
holder's rateable share of the Company's current and accumulated earnings and
profits. Such a dividend will be includible in the United States Holder's gross
income as ordinary income without reduction for the adjusted tax basis of the
Shares exchanged, and no loss will be recognized. In such event the United
States Holder's adjusted tax basis in its Shares exchanged generally will be
added to such holder's adjusted tax basis in the remaining Shares. To the extent
that cash received in exchange for Shares is treated as a dividend to a
corporate United States Holder, such holder will be (i) eligible for a
dividends-received deduction (subject to applicable limitations) and (ii)
subject to the "extraordinary dividend" provisions of the Code. To the extent,
if any, that the cash received by a United States Holder exceeds the Company's
current and accumulated earnings and profits, it will be treated first as a
tax-free return of such United States Holder's tax basis in the Shares and
thereafter as capital gain.
The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Company to accept fewer shares than are tendered.
Therefore, a United States Holder can be given no assurance that a sufficient
number of such holder's Shares will be exchanged pursuant to the Offer to ensure
that such exchange will be treated as a sale, rather than as a dividend, for
United States federal income tax purposes pursuant to the rules discussed above.
CONSEQUENCES TO STOCKHOLDERS WHO DO NOT TENDER OR WHOSE TENDER IS NOT ACCEPTED
PURSUANT TO THE OFFER.
Stockholders, none of whose Shares will be exchanged pursuant to the Offer,
will not incur any United States federal income tax liability as a result of the
consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to Non-United States Holders and backup
withholding tax requirements.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH STOCKHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OFFER, INCLUDING
THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to holders of Shares or by decreasing or increasing the
number of Shares being sought in the Offer). Amendments to the Offer may be made
at any time and from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the last previously scheduled
or announced Expiration Date. Any public announcement made pursuant to the Offer
will be
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disseminated promptly to stockholders in a manner reasonably calculated to
inform stockholders of such change. Without limiting the manner in which the
Company may choose to make a public announcement, except as required by
applicable law, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4 (d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material changes
in the terms of the Offer or information concerning the Offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid for
Shares, the number of Shares being sought in the Offer or the Dealer Manager's
soliciting fees and, in the event of an increase in the number of Shares being
sought, such increase exceeds 2% of the outstanding Shares, and (ii) the Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that such notice
of an increase or decrease is first published, sent or given in the manner
specified in this Section 14, the Offer will be extended until the expiration of
such period of ten business days. For the 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.
15. FEES AND EXPENSES.
The Company has retained Wasserstein Perella to act as its financial
advisor, as well as the Dealer Manager, in connection with the Offer.
Wasserstein Perella will receive a fee for its services of $250,000. The Company
also has agreed to reimburse Wasserstein Perella for certain reasonable
out-of-pocket expenses incurred in connection with the Offer, including
reasonable fees and expenses of counsel, and to indemnify Wasserstein Perella
against certain liabilities in connection with the Offer, including liabilities
under the federal securities laws. Wasserstein Perella has rendered various
investment banking and other advisory services to the Company in the past, for
which it has received customary compensation, and may render similar services to
the Company in the future.
The Company has retained Georgeson & Company Inc. to act as Information
Agent and First Chicago Trust Company of New York to act as Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telegraph and personal interviews and may request brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners. The Information Agent and the Depositary will each
receive reasonable and customary compensation for their respective services,
will be reimbursed by the Company for certain reasonable out-of-pocket expenses
and will be indemnified against certain liabilities in connection with the
Offer, including certain liabilities under the federal securities laws.
No fees or commissions will be payable by the Company to brokers, dealers
or other persons (other than fees to the Dealer Manager, the Information Agent
and the Depositary as described above) for soliciting tenders of Shares pursuant
to the Offer. Stockholders holding Shares through brokers or banks are urged to
consult such brokers or banks to determine whether transaction costs are
applicable if stockholders tender Shares through such brokers or banks and not
directly to the Depositary. The Company, however, upon request, will reimburse
brokers, dealers and commercial banks for customary mailing and handling
expenses incurred by such persons in forwarding the Offer and related materials
to the beneficial owners of Shares held by any such person as a nominee or in a
fiduciary capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Company, the Dealer Manager, the
Information Agent or the Depositary for purposes of the Offer. The Company will
pay or cause to be paid all stock transfer taxes, if any, on its purchase of
Shares except as otherwise provided in Instruction 7 in the Letter of
Transmittal.
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16. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer is being made on the Company's behalf by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. Such Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 9 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE DEALER
MANAGER.
RALCORP HOLDINGS, INC.
October 16, 1998
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SCHEDULE A
CERTAIN TRANSACTIONS INVOLVING SHARES
Except as set forth below, based on the Company's records and on
information provided to the Company by its directors, executive officers and
subsidiaries, neither the Company, nor any subsidiary or associate of the
Company nor, to the best of the Company's knowledge, any of the directors or
executive officers of the Company or any of its subsidiaries, nor any associates
or subsidiaries of any of the foregoing, has effected any transactions involving
the Shares during the 40 business days preceding the date hereof:
Ralcorp Holdings, Inc. repurchased 39,000 Shares in the open market at a price
of $20.1083 per share on August 21, 1998.
James A. Nichols, Corporate Vice President and President, Ralston Foods, sold
3,400 Shares in the open market at a price of $21.00 per share on August 24,
1998.
Ralcorp Holdings, Inc. repurchased 44,800 Shares in the open market at a price
of $21.0419 per share on August 25, 1998.
Ralcorp Holdings, Inc. repurchased 50,000 Shares in the open market at a price
of $20.9883 per share on August 26, 1998.
Ralcorp Holdings, Inc. repurchased 20,000 Shares in the open market at a price
of $19.9581 per share on August 27, 1998.
Ralcorp Holdings, Inc. repurchased 50,000 Shares in the open market at a price
of $19.7873 per share on August 31, 1998.
Ralcorp Holdings, Inc. repurchased 40,000 Shares in the open market at a price
of $18.4297 per share on September 1, 1998.
Ralcorp Holdings, Inc. repurchased 100,000 Shares in the open market at a price
of $18.00 per share on September 16, 1998.
Ralcorp Holdings, Inc. repurchased 7,300 Shares in the open market at a price of
$17.1678 per share on September 17, 1998.
Ralcorp Holdings, Inc. repurchased 50,000 Shares in the open market at a price
of $17.375 per share on September 21, 1998.
Ralcorp Holdings, Inc. repurchased 18,300 Shares in the open market at a price
of $16.375 per share on September 22, 1998.
Ralcorp Holdings, Inc. repurchased 300,000 Shares in the open market at a price
of $15.4498 per share on September 23, 1998.
Kevin J. Hunt, Corporate Vice President and President, Bremner, Inc., purchased
62 Shares through the Company's Savings Investment Plan at a price of $19.875
per share on August 28, 1998 and 88 Shares at a price of $14.00 on September 30,
1998.
James A. Nichols, Corporate Vice President and President, Ralston Foods,
purchased 23 Shares through the Company's Savings Investment Plan at a price of
$19.875 per share on August 28, 1998.
Ronald D. Wilkinson, Corporate Vice President and Director of Product Supply,
purchased 21 Shares through the Company's Savings Investment Plan at a price of
$19.875 per share on August 28, 1998 and 145 Shares at a price of $14.00 on
September 30, 1998.
A-1
<PAGE> 31
The Letter of Transmittal and certificates for Shares and any other
required documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or nominee to the
Depositary at one of its addresses set forth below. Facsimile copies of the
Notice of Guaranteed Delivery but not the Letter of Transmittal will be accepted
from Eligible Institutions.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Federal Express or other
By Mail: Overnight Courier: By Hand:
-------- --------------------------- --------
<S> <C> <C>
First Chicago Trust First Chicago Trust First Chicago Trust
Company of New York Company of New York Company of New York
Tenders & Exchanges Tenders & Exchanges c/o Securities Transfer and
Suite 4660 Suite 4680 Reporting Services Inc.
P.O. Box 2569 14 Wall Street, 8th Floor Attn: Tenders & Exchanges
Jersey City, NJ 07303 New York, NY 10005 One Exchange Plaza, 3rd Floor
New York, NY 10006
</TABLE>
By Facsimile Transmission:
(For transmission of Notice of Guaranteed Delivery by Eligible Institutions
Only)
(201) 222-4720
or
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at the telephone
numbers and locations listed below. Stockholders may also contact their local
broker, dealer, commercial bank, trust company or nominee for assistance
concerning the Offer. To confirm delivery of Shares, stockholders are directed
to contact the Depositary.
The Information Agent for the Offer is:
GEORGENSON & COMPANY INC. LOGO
Wall Street Plaza
New York, NY 10005
(212) 440-9800 (Call Collect)
or
Call Toll-Free (800) 223-2064
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
(212) 969-2700
October 16, 1998
A-2
<PAGE> 1
LETTER OF TRANSMITTAL
to Tender Shares of Common Stock
RALCORP HOLDINGS, INC.
Pursuant to the Offer to Purchase
dated October 16, 1998
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, NOVEMBER 13, 1998, UNLESS THE OFFER IS EXTENDED.
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
-------- --------------------- --------
<S> <C> <C>
First Chicago Trust First Chicago Trust First Chicago Trust
Company of New York Company of New York Company of New York
Tenders & Exchanges Tenders & Exchanges c/o Securities Transfer and
Suite 4660 Suite 4680 Reporting Services Inc.
P.O. Box 2569 14 Wall Street, 8th Floor Attn: Tenders & Exchanges
Jersey City, NJ 07303 New York, NY 10005 One Exchange Plaza, 3rd Floor
New York, NY 10006
</TABLE>
------------------------
DELIVERY OF THIS INSTRUMENT AND ALL OTHER DOCUMENTS TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING
INSTRUCTIONS, CAREFULLY BEFORE CHECKING ANY BOX BELOW.
This Letter of Transmittal is to be used only if (a) certificates for
Shares (as defined below) are to be forwarded herewith or (b) a tender of Shares
is being made concurrently by book-entry transfer to the account maintained by
the Depositary at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to Section 3 of the Offer to Purchase. See Instruction 2.
YOUR ATTENTION IS INVITED IN PARTICULAR TO THE FOLLOWING:
1. If you want to retain your Shares, you do not need to take any action.
2. If you want to participate in the Offer and wish to maximize the chance of
having the Company accept for exchange all the Shares you are tendering
hereby, you should check the box marked "SHARES TENDERED AT PRICE DETERMINED
PURSUANT TO THE OFFER" below and complete the other portions of this Letter
of Transmittal as appropriate.
3. If you wish to select a specific Price at which you will be tendering your
Shares, you should select one of the boxes in the section captioned "PRICE
(IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED" below and complete
the other portions of this Letter of Transmittal as appropriate.
<PAGE> 2
IN ANY EVENT, YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER OF
THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE INFORMATION AGENT AT THE
ADDRESS OR TOLL-FREE NUMBER INDICATED ON THE BACK COVER.
<TABLE>
<S><C>
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- ---------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE USE PRE-ADDRESSED LABEL OR FILL IN
TENDERED CERTIFICATES EXACTLY AS NAME(S) APPEAR(S) ON TENDERED CERTIFICATES
CERTIFICATE(S)) (ATTACH SIGNED ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF
CERTIFICATE NUMBER SHARES
NUMBER(S)* OF SHARES TENDERED**
---------------- --------------- ---------------
---------------- --------------- ---------------
---------------- --------------- ---------------
---------------- --------------- ---------------
---------------- --------------- ---------------
---------------- --------------- ---------------
TOTAL SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------
* DOES NOT need to be completed if Shares are tendered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates listed above, please indicate
in this column the number of Shares you wish to tender. Otherwise, all Shares evidenced by such
certificates will be deemed to have been tendered. See Instruction 4.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURE MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Stockholders who desire to tender Shares pursuant to the Offer (as defined
below) and who cannot deliver their certificates for their Shares (or who are
unable to comply with the procedures for book-entry transfer on a timely basis)
and all other documents required by this Letter of Transmittal to the Depositary
at or before the Expiration Date (as defined in the Offer to Purchase) may
tender their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to
the Book-Entry Transfer Facility does not constitute delivery to the Depositary.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-------------------------------------------------
Account Number
---------------------------------------------------------------
Transaction Code Number
-------------------------------------------------------
[ ]CHECK HERE IF CERTIFICATES FOR 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 that Guaranteed Delivery
----------------------------------
<PAGE> 4
- --------------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 8)
To be completed ONLY if the Shares are being tendered by or on behalf
of a person owning beneficially or of record, as of the close of business
on October 15, 1998 and who continues to own beneficially or of record as
of the Expiration Date, an aggregate of fewer than 100 Shares. The
undersigned either (check one box):
[ ] was the beneficial or record owner of, as of the close of business on
October 15, 1998, and continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares, all of
which are being tendered; or
[ ] is a broker dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of
business on October 15, 1998, and continues to own beneficially or of
record as of the Expiration Date, an aggregate of fewer than 100
Shares and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one
box):
[ ] at the Purchase Price (defined below), as the same shall be determined
by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered" in this Letter of
Transmittal.
- --------------------------------------------------------------------------------
<PAGE> 5
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
TO FIRST CHICAGO TRUST COMPANY OF NEW YORK:
The undersigned hereby tenders to Ralcorp Holdings, Inc., a Missouri
corporation (the "Company"), the above described shares of the Company's $.01
par value Common Stock (the "Shares") (including the associated Stock Purchase
Rights (the "Rights") issued pursuant to the Shareholder Protection Rights
Agreement, dated as of December 27, 1996, between the Company and the Rights
Agent named therein, as amended), at the price per Share indicated in this
Letter of Transmittal, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Company's Offer to Purchase, dated October 16,
1998 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together constitute the "Offer"). Unless the
context otherwise requires, all references to the Shares shall include the
associated Rights.
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with 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), the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to all the Shares that are being tendered hereby and orders the registration
of all such Shares if tendered by book-entry transfer and hereby irrevocably
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that said Depositary
also acts as the agent of the Company) with respect to such Shares with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificate(s) for such Shares or transfer ownership of such
Shares on the account books maintained by any of the Book-Entry Transfer
Facilities, together in either such case with all accompanying evidences of
transfer and authenticity, to, or upon the order of, the Company upon receipt by
the Depositary, as the undersigned's agent, of the aggregate Purchase Price (as
defined below) with respect to such Shares;
(b) present certificates for such Shares for cancellation and transfer on
the Company's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, subject to the next paragraph, all in accordance with
the terms of the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) the undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer, including the undersigned's representation and
warranty that:
(i) the undersigned has a net long position in Shares or equivalent
securities at least equal to the Shares tendered within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, and
(ii) such tender of Shares complies with Rule 14e-4;
(b) when and to the extent the Company accepts such Shares for purchase,
the Company will acquire good, marketable and unencumbered title to them, free
and clear of all security interests, liens, charges, encumbrances, conditional
sales agreements or other obligations relating to their sale or transfer, and
not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any additional
documents the Depositary or the Company deems necessary or desirable to complete
the assignment, transfer and purchase of the Shares tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the Offer.
All authorities conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the
<PAGE> 6
heirs, personal representatives, executors, administrators, successors, assigns,
trustees in bankruptcy, and legal representatives of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
The name(s) and address(es) of the registered holder(s) should be printed
above, if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The certificate numbers, the
number of Shares represented by such certificates and the number of Shares that
the undersigned wishes to tender, should be set forth in the appropriate boxes
above. The price at which such Shares are being tendered should be indicated in
the box below.
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single per Share price (not
in excess of $16.00 nor less than $14.00 per Share) net to the seller in cash
(the "Purchase Price") that it will pay for Shares properly tendered and not
withdrawn prior to the Expiration Date pursuant to the Offer, taking into
account the number of Shares so tendered and the prices (in multiples of $.125)
specified by tendering stockholders. The undersigned understands that the
Company will select the lowest Purchase Price that will allow it to buy
5,000,000 Shares (or such lesser number of Shares as are properly tendered at
prices not in excess of $16.00 nor less than $14.00 per share and not withdrawn)
pursuant to the Offer. The undersigned understands that all Shares properly
tendered prior to the Expiration Date at prices at or below the Purchase Price
and not withdrawn will be purchased at the Purchase Price, upon the terms and
subject to the conditions of the Offer, including its proration provisions, and
that the Company will return all other Shares not purchased pursuant to the
Offer, including Shares tendered at prices greater than the Purchase Price and
not withdrawn prior to the Expiration Date and Shares not purchased because of
proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any such
event, the undersigned understands that certificate(s) for any Shares delivered
herewith but not tendered or not purchased will be returned to the undersigned
at the address indicated above, unless otherwise indicated under the "Special
Payment Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the Special Payment
Instructions, to transfer any certificate for Shares from the name of its
registered holder, or to order the registration or transfer of Shares tendered
by book-entry transfer, if the Company purchases none of the Shares represented
by, such certificate or tendered by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the aggregate net Purchase Price for such of the Shares
tendered hereby as are purchased will be issued to the order of the undersigned
and mailed to the address indicated above, unless otherwise indicated under the
Special Payment Instructions or the Special Delivery Instructions below.
<PAGE> 7
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. THE FOLLOWING MUST BE
COMPLETED BY ALL TENDERING STOCKHOLDERS.
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES OF LIMITED COMMON STOCK.
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
[ ] I want to maximize the chance of having the Company accept for all the
Shares I am tendering (subject to the possibility of proration).
Accordingly, by checking this one box INSTEAD OF ONE OF THE PRICE
BOXES BELOW, I hereby tender Shares at, and am willing to accept, the
Purchase Price resulting from the Offer Process. This action could
result in receiving a price as low as $14.00 per share.
- ------------------------------------- OR ---------------------------------------
PRICE (IN DOLLARS) PER SHARE WHICH SHARES ARE BEING
TENDERED BY STOCKHOLDER
<TABLE>
<S> <C> <C> <C>
[ ] $14.000 [ ] $14.500 [ ] $15.000 [ ] $15.500
[ ] $14.125 [ ] $14.625 [ ] $15.125 [ ] $15.625
[ ] $14.250 [ ] $14.750 [ ] $15.250 [ ] $15.750
[ ] $14.375 [ ] $14.875 [ ] $15.375 [ ] $15.875
[ ] $16.000
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 8
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 9)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or any check for the aggregate Purchase Price of Shares purchased are to be
issued in the name of someone other than the undersigned.
Issue: [ ] Check to: [ ] Certificates to:
Name:
-----------------------------------------------
(Please Print)
Address:
---------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Zip Code)
- -------------------------------------------------------
(Taxpayer Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 9)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or any check for the Purchase Price of Shares purchased, issued in the name
of the undersigned, are to be mailed to someone other than the undersigned at an
address other than that shown on page 1 above.
Mail: [ ] Check to: [ ] Certificates to:
Name:
-----------------------------------------------
(Please Print)
Address:
---------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Zip Code)
<PAGE> 9
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL STOCKHOLDERS)
(PLEASE COMPLETE AND RETURN THE ENCLOSED SUBSTITUTE FORM W-9)
(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificate(s) and
documents transmitted with this Letter of Transmittal. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or another person acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 6.)
SIGNATURE(S) OF OWNER(S)
Dated:
---------------------------------------------------------------------
Name(s):
-------------------------------------------------------------------
(Please Print)
Capacity (full title):
-----------------------------------------------------
Address:
-------------------------------------------------------------------
(Include zip code)
Address:
-------------------------------------------------------------------
(Include zip code)
Area Code(s) and Telephone Number(s):
-------------------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm:
--------------------------------------------------------------
Authorized Signature:
------------------------------------------------------
Name:
----------------------------------------------------------------------
(Please Print)
Title:
---------------------------------------------------------------------
Address:
-------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
--------------------------------------------
Dated:
---------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the
Shares (which term, for purposes of this document, shall include any participant
in the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of such Shares) exactly as the name of the registered
holder appears on the certificate tendered with this Letter of Transmittal and
payment and delivery are to be made directly to such owner unless such owner has
completed either the box entitled "Special Payment Instructions" or "Special
Delivery Instructions" above; or
(b) such Shares are tendered for the account of a member in good standing
of the Security Transfers Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each such entity, an "Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures
on this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if certificates for
Shares are delivered with it to the Depositary (or such certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Shares or confirmation of
a book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal or duly executed and
manually signed facsimile of it, and any other documents required by this Letter
of Transmittal, should be mailed or delivered to the Depositary at the
appropriate address set forth herein and must be delivered to the Depositary on
or before the Expiration Date (as defined in the Offer to Purchase). DELIVERY OF
DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Stockholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
such case, tender their Shares by or through any Eligible Institution by
properly completing and duly executing and delivering a Notice of Guaranteed
Delivery (or facsimile of it) and by otherwise complying with the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure, certificates for all physically tendered Shares or book-entry
confirmations, as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile of it) and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three (3) New York Stock Exchange trading days after receipt by the
Depositary of such Notice of Guaranteed Delivery, all as provided in Section 3
of the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice. For Shares to be tendered validly pursuant to the guaranteed delivery
procedure, the Depositary must receive the Notice of Guaranteed Delivery on or
before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering stockholders, by
<PAGE> 11
execution of this Letter of Transmittal (or a facsimile of it), waive any right
to receive any notice of the acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to stockholders
who tender by book-entry transfer.) If fewer than all of the Shares evidenced by
any certificate are to be tendered, fill in the number of Shares that are to be
tendered in the column entitled "Number of Shares Tendered," in the box
captioned "Description of Shares Tendered." In such case, if any tendered Shares
are purchased, a new certificate for the remainder of the Shares (including any
Shares not purchased) evidenced by the old certificate(s) will be issued and
sent to the registered holder(s), unless otherwise specified in either the
"Special Payment Instructions" or "Special Delivery Instructions" box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. Unless
otherwise indicated, all Shares represented by the certificate(s) listed and
delivered to the Depositary will be deemed to have been tendered.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
properly tendered, the stockholder MUST check the box indicating the price per
Share at which such holder is tendering Shares under "Price (In Dollars) Per
Share at Which Shares Are Being Tendered" on this Letter of Transmittal. ONLY
ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES. A stockholder wishing to tender portions of
such holder's Share holdings at different prices must complete a separate Letter
of Transmittal for each price at which such holder wishes to tender each such
portion of such holder's Shares. The same Shares cannot be tendered (unless
previously properly withdrawn as provided in Section 4 of the Offer to Purchase)
at more than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without any change
whatsoever.
(b) If the Shares are registered in the names of two or more joint holders,
each such holder must sign this Letter of Transmittal.
(c) If any 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 of it) as there are different
registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered holder(s)
of the Shares listed and transmitted hereby, no endorsement(s) of certificate(s)
representing such Shares or separate stock power(s) are required unless payment
is to be made or the certificate(s) for Shares not tendered or not purchased are
to be issued to a person other than the registered holder(s). SIGNATURE(S) ON
SUCH CERTIFICATE(S) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. If this
Letter of Transmittal is signed by a person other than the registered holder(s)
of the certificate(s) listed, or if payment is to be made or their
certificate(s) for Shares not tendered or not purchased are to be issued to a
person other than the registered holder(s), the certificate(s) must be endorsed
or accompanied by appropriate stock power(s), in either case signed exactly as
the name(s) of the registered holder(s) appears on the certificate(s), and the
signature(s) on such certificate(s) or stock power(s) must be guaranteed by an
Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificate(s) or stock power(s)
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 must submit proper
evidence satisfactory to the Company of their authority so to act.
<PAGE> 12
7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no stock
transfer tax stamps or funds to cover such stamps need accompany this Letter of
Transmittal. The Company will pay any stock transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however:
(a) payment of the Purchase Price for Shares tendered hereby and accepted
for purchase is to be made to any person other than the registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be registered
in the name(s) of any person(s) other than the registered holder(s); or
(c) tendered certificates are registered in the name(s) of any person(s)
other than the person(s) signing this Letter of Transmittal; then the Depositary
will deduct from such Purchase Price the amount of any stock transfer taxes
(whether imposed on the registered holder, such other person or otherwise)
payable on account of the transfer to such person, unless satisfactory evidence
of the payment of such taxes or any exemption therefrom is submitted.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered before the Expiration Date
and not withdrawn, the Shares purchased first will consist of all Shares
properly tendered by any stockholder who owned beneficially or of record, as of
the close of business on October 15, 1998 and as of the Expiration Date, an
aggregate of fewer than 100 Shares, and who tenders all of such holder's Shares
at or below the Purchase Price (an "Odd Lot Holder"). This preference will not
be available unless the box captioned "Odd Lots" is completed.
9. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or if such
certificates and/or checks are to be sent to someone other than the person
signing the Letter of Transmittal or to the signer at a different address, the
boxes captioned "Special Payment Instructions" and/or "Special Delivery
Instructions" on this Letter of Transmittal should be completed as applicable
and signatures must be guaranteed as described in Instruction 1.
10. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company in its sole discretion, which determinations
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders of Shares it determines not to be in proper
form or the acceptance of which or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer or any defect or irregularity in any
tender with respect to any particular Shares or any particular stockholder, and
the Company's interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender of Shares will
be deemed to be properly made until all defects and irregularities have been
cured by the tendering stockholder or waived by the Company. Unless waived, any
defects or irregularities in connection with tenders must be cured within such
time as the Company shall determine. None of the Company, the Dealer Manager (as
defined in the Offer to Purchase), the Depositary, the Information Agent (as
defined in the Offer to Purchase) or any other person is or will be obligated to
give notice of any defects or irregularities in tenders and none of them will
incur any liability for failure to give any such notice.
11. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Information Agent or the Dealer Manager at
their addresses and telephone numbers set forth at the end of this Letter of
Transmittal or from your broker, dealer, commercial bank or trust company.
12. FORM W-9 AND FORM W-8. Under the United States federal income tax
backup withholding rules, unless an exemption applies under the applicable law
and regulations, 31% of the gross proceeds payable to a stockholder or other
payee pursuant to the Offer must be withheld and remitted to the United States
Internal Revenue Service ("IRS"), unless the stockholder or other payee provides
its taxpayer identification number (employer identification number or social
security number) to the Depositary (as payor) and certifies
<PAGE> 13
under penalty of perjury that such number is correct. Therefore, each tendering
stockholder should complete and sign the Substitute Form W-9 included as part of
the Letter of Transmittal so as to provide the information and certification
necessary to avoid backup withholding, unless such stockholder otherwise
establishes to the satisfaction of the Depositary that it is not subject to
backup withholding. If the Depositary is not provided with the correct taxpayer
identification number, the tendering stockholder also may be subject to a
penalty imposed by the IRS. The box in part 3 of the form should be checked if
the tendering stockholder 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 box in Part 3 is checked
and the Depositary is not provided with a TIN prior to the payment of the
Purchase Price, the Depositary will withhold 31% on all such payments of the
Purchase Price. If the tendering stockholder provides the Depositary with a
certified TIN within 60 days, the amount withheld shall be refunded by the
Depositary. If withholding results in an overpayment of taxes, a refund may be
obtained. Certain "exempt recipients" (including, among others, all corporations
and certain Non-United States Holders (as defined herein)) are not subject to
these backup withholding and information reporting requirements. In order for a
Non-United States Holder to qualify as an exempt recipient, that stockholder
must submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of
perjury, attesting to that stockholder's exempt status. Such statements can be
obtained from the Depositary.
13. WITHHOLDING ON NON-UNITED STATES HOLDER. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a Non-United States Holder or his agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. For this purpose, a Non-United States Holder is any
stockholder that for United States federal income tax purposes is not (i) a
citizen or resident of the United States, (ii) a corporation or partnership
created or organized in or under the laws of the United States or any State or
division thereof (including the District of Columbia), (iii) an estate the
income of which is subject to United States federal income taxation regardless
of the source of such income or (iv) a trust (a) the administration over which a
United States court can exercise primary supervision and (b) all of the
substantial decisions of which one or more United States persons have the
authority to control. Notwithstanding the preceding sentence, to the extent
provided in United States Treasury Regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also not be
Non-United States Holders. In order to obtain a reduced rate of withholding
pursuant to a tax treaty, a Non-United States Holder must deliver to the
Depositary before the payment a properly completed and executed IRS Form 1001.
In order to obtain an exemption from withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a Non-United States Holder must
deliver to the Depositary a properly completed and executed IRS Form 4224. The
Depositary will determine a stockholder's status as a Non-United States Holder
and eligibility for a reduced rate of, or an exemption from, withholding by
reference to outstanding certificates or statements concerning eligibility for a
reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form
4224) unless facts and circumstances indicate that such reliance is not
warranted. A Non-United States Holder may be eligible to obtain a refund of all
or a portion of any tax withheld if such Non-United States Holder meets the
"complete termination," "substantially disproportionate" or "not essentially
equivalent to a dividend" test described in Section 13 of the Offer to Purchase
or is otherwise able to establish that no tax or a reduced amount of tax is due.
Backup withholding generally will not apply to amounts subject to the 30% or
treaty-reduced rate of withholding. Non-United States Holders are urged to
consult their own tax advisors regarding the application of United States
federal income tax withholding, including eligibility for a withholding tax
reduction or exemption, and the refund procedure.
14. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares so lost, destroyed or stolen, or contact the Depositary by telephone at
(800) 446-2617. The stockholder will then be instructed by the Depositary as to
the steps that must be taken in order to replace the certificate. This
<PAGE> 14
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost, destroyed or stolen certificates have been
followed.
IMPORTANT: This Letter of Transmittal (together with certificates for the
Shares being tendered and all other required documents), or a Notice of
Guaranteed Delivery must be received prior to 12:00 Midnight, New York City
time, on the Expiration Date.
<PAGE> 15
THE FOLLOWING BOX MUST BE COMPLETED BY ALL TENDERING STOCKHOLDERS.
(SEE INSTRUCTION 12)
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ------------------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW.
FORM W-9 For individuals, this is your social security (SSN). ----------------------------
Aliens that do not have or are not eligible to receive a Social Security Number
SSN may use your individual TIN. For other entities, Resident
Department of the this is your employer identification number (EIN). For
Treasury, Internal sole proprietorships, either your SSN or EIN may be OR
Revenue Service used. Refer to the chart on page 1 of the Guidelines for -------------------------
Certification of Taxpayer Identification Number on Employer
Substitute Form W-9 (the "Guidelines") for further Identification Number
clarification. If you do not have a TIN, see
instructions on how to obtain a TIN on page 2 of the
Guidelines, check the appropriate box in Part 3 below
indicating that you are awaiting a TIN and certify by
signing and dating below.
-----------------------------------------------------------------------------------------
PART 2--For Payees exempt from backup withholding, see the enclosed Guidelines and
PAYOR'S REQUEST FOR complete as instructed therein.
TAXPAYER IDENTIFICATION -----------------------------------------------------------------------------------------
NUMBER ("TIN") AND PART 3: Awaiting TIN [ ]
CERTIFICATION -----------------------------------------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify that (1) the number
shown on this form is my correct TIN (or 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 interest 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 currently subject to backup withholding because of underreporting
interest or dividends on your tax return (see page 2 of the Guidelines for further
clarification).
-----------------------------------------------------------------------------------------
The Internal Revenue Service does not require your consent to any provision of this
document other than certifications to avoid backup withholding.
SIGNATURE
-------------------------------------------------------------------------------
DATE:
-----------------------------------------------------------------------------------
NAME:
----------------------------------------------------------------------------------
(Please Print)
ADDRESS:
--------------------------------------------------------------------------------
(Include Zip Code)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
SIGN HERE
----------------------------------------------------------------------
<PAGE> 16
THE INFORMATION AGENT FOR THE OFFER IS:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, NY 10005
(212) 440-9800 (Call Collect)
or
Call Toll-Free (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019-6163
(212) 969-2700
<PAGE> 17
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER 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 number to
give the payer.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
<S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint
funds, either person(1)
4. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent person(3)
committee for a
designated ward,
minor, or incompetent
person
7. a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
State law
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF--
<S> <C>
8. Sole proprietorship The owner(4)
account
9. A valid trust, Legal entity (Do not
estate, or pension furnish the identifying
trust number of the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or The broker or nominee
registered nominee
15. Account with the The public entity
Department of
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) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 18
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, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a), or an individual
retirement plan or a custodial account under Section 403(b)(7).
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include
the following:
- - Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
Exempt payees described above should file a Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. 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% 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) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your 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) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) 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.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--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> 1
NOTICE OF GUARANTEED DELIVERY OF SHARES OF COMMON STOCK
[RALCORP LOGO RALCORP HOLDINGS, INC.]
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, NOVEMBER 13, 1998, UNLESS THE OFFER IS EXTENDED.
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or a facsimile hereof must be used to accept the Offer (as defined below)
if:
(a) certificates for shares of $.01 par value Common Stock (the "Shares")
(including the associated Stock Purchase Rights issued pursuant to the
Shareholder Protection Rights Agreement, dated as of December 27, 1996, between
Ralcorp Holdings, Inc. and the Rights Agent named therein, as amended), of
Ralcorp Holdings, Inc., a Missouri corporation (the "Company"), cannot be
delivered to the Depositary prior to the Expiration Date (as defined in Section
1 of the Company's Offer to Purchase dated October 16, 1998 (the "Offer to
Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of the
Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the Expiration
Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
-------- --------------------- --------
<S> <C> <C>
First Chicago Trust First Chicago Trust First Chicago Trust
Company of New York Company of New York Company of New York
Tenders & Exchanges Tenders & Exchanges c/o Securities Transfer and
Suite 4660 Suite 4680 Reporting Services Inc.
P.O. Box 2569 14 Wall Street, 8th Floor Attn: Tenders & Exchanges
Jersey City, NJ 07303 New York, NY 10005 One Exchange Plaza, 3rd Floor
New York, NY 10006
</TABLE>
Facsimile Transmission:
(For transmission of Notice of Guaranteed Delivery by Eligible Institutions
Only)
(201) 222-4720
or
(201) 222-4721
Confirm by Telephone:
(201) 222-4707
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form 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> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company at the price per Share
indicated in this Notice of Guaranteed Delivery, 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"), receipt of both of which is
hereby acknowledged, Shares pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if the Shares are being tendered by or on behalf of a
person owning beneficially or of record, as of the close of business on October
15, 1998 and who continues to own beneficially or of record as of the Expiration
Date, an aggregate of fewer than 100 Shares. The undersigned either (check one
box):
[ ] was the beneficial or record owner of, as of the close of business on
October 15, 1998, and continues to own beneficially or of record as of
the Expiration Date, an aggregate of fewer than 100 Shares, all of
which are being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person was the beneficial or record owner of, as of the close of
business on October 15, 1998, and continues to own beneficially or of
record as of the Expiration Date, an aggregate of fewer than 100 Shares
and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company
in accordance with the terms of the Offer (persons checking this box
need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered."
2
<PAGE> 3
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES OF LIMITED COMMON STOCK.
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
[ ] I want to maximize the chance of having the Company accept for all the
Shares I am tendering (subject to the possibility of proration).
Accordingly, by checking this one box INSTEAD OF ONE OF THE PRICE
BOXES BELOW, I hereby tender Shares at, and am willing to accept, the
Price resulting from the Offer Process. This action could result in
receiving a Price as low as $14.00 per share.
- ------------------------------------- OR ---------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C> <C>
[ ] $14.000 [ ] $14.500 [ ] $15.000 [ ] $15.500
[ ] $14.125 [ ] $14.625 [ ] $15.125 [ ] $15.625
[ ] $14.250 [ ] $14.750 [ ] $15.250 [ ] $15.750
[ ] $14.375 [ ] $14.875 [ ] $15.375 [ ] $15.875
[ ] $16.000
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(Please type or print) SIGN HERE
Certificate Nos. (if available):
--------------------------------------------------
- ------------------------------------ Signature(s)
- ------------------------------------ Dated:
--------------------------------------------
Name(s)
If Shares will be tendered by book-entry transfer,
- ------------------------------------ check one box:
Address(es)
[ ] The Depository Trust Company
- ------------------------------------ Account Number:
------------------------------------
Area Code(s) and Telephone Number(s)
- ------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a member in good standing of the Security Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program (each such entity, an
"Eligible Institution") and represents that: (a) the above-named person(s)
"own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 promulgated
under the Securities Exchange Act of 1934, as amended, and (b) such tender of
Shares complies with such Rule 14e-4, and guarantees that the Depositary will
receive (i) certificates of the Shares tendered hereby in proper form for
transfer, or (ii) confirmation that the Shares tendered hereby have been
delivered pursuant to the procedure for book-entry transfer (set forth in
Section 3 of the Offer to Purchase) into the Depositary's account at The
Depository Trust Company together with a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) and any other
documents required by the Letter of Transmittal, all within three New York Stock
Exchange trading days after the date the Depositary receives this Notice of
Guaranteed Delivery.
<TABLE>
<S> <C>
Authorized Signature: Address:
------------------------------ ------------------------------------------------
Name:
---------------------------------------------- ------------------------------------------------
(Please Print) (Including Zip Code)
Title: Area Code and Telephone Number:
---------------------------------------------- -------------------------
Name of Firm: Date:
-------------------------------------- ---------------------------------------------------
</TABLE>
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT
WITH THE LETTER OF TRANSMITTAL.
4
<PAGE> 5
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 6
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 1
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
RALCORP HOLDINGS, INC.
OFFER TO PURCHASE FOR CASH UP TO
5,000,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $16.00
NOR LESS THAN $14.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 13, 1998,
UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Ralcorp Holdings, Inc., a Missouri corporation (the "Company"), has
appointed us to act as Dealer Manager in connection with its offer to purchase
for cash 5,000,000 shares (or such lesser number of shares as are properly
tendered and not withdrawn) of its $.01 par value Common Stock (the "Shares")
(including the associated Stock Purchase Rights issued pursuant to the
Shareholder Protection Rights Agreement, dated as of December 27, 1996, between
the Company and the Rights Agent named therein, as amended), at prices not in
excess of $16.00 nor less than $14.00 per Share in cash, specified by such
stockholders, upon the terms and subject to the conditions set forth in its
Offer to Purchase, dated October 16, 1998 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute the "Offer"). Unless
the context otherwise requires, all references to the Shares shall include the
associated Rights.
The Company will determine the single per Share price, not in excess of
$16.00 nor less than $14.00 per Share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered and not withdrawn
pursuant to the Offer, taking into account the number of Shares so tendered and
the prices specified by tendering stockholders. The Company will select the
lowest Purchase Price that will allow it to buy 5,000,000 Shares (or such lesser
number of Shares as are properly tendered at prices not in excess of $16.00 nor
less than $14.00 per Share and not withdrawn). All Shares properly tendered
prior to the Expiration Date (as defined in the Offer to Purchase) at prices at
or below the Purchase Price and not withdrawn will be purchased at the Purchase
Price, upon the terms and subject to the conditions of the Offer, including the
proration provisions. All Shares acquired in the Offer will be acquired at the
Purchase Price. Shares tendered at prices in excess of the Purchase Price and
Shares not purchased because of proration will be returned at the Company's
expense to the stockholders who tendered such Shares. The Company reserves the
right, in its sole discretion, to purchase more than 5,000,000 Shares pursuant
to the Offer. See Sections 1 and 14 of the Offer to Purchase.
If the number of Shares validly tendered and not withdrawn on or prior to
the Expiration Date is less than or equal to 5,000,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
<PAGE> 2
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 5,000,000 Shares (or such greater number of Shares as
the Company may elect to purchase) are properly tendered at or below the
Purchase Price and not withdrawn, the Company will buy shares first from all Odd
Lot Holders (as defined in the Offer to Purchase) who properly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other stockholders who properly tender Shares at prices at or below the Purchase
Price (and do not withdraw such Shares prior to the Expiration Date). See
Sections 1 and 3 of the Offer to Purchase.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated October 16, 1998;
2. Letter to Clients which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
3. Letter, dated October 16, 1998, from Joe R. Micheletto, Chief Executive
Officer and President of the Company, to stockholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Substitute Form W-9); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to the
Depositary by the Expiration Date or if the procedure for book-entry transfer
cannot be completed on a timely basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 13, 1998, UNLESS THE OFFER IS EXTENDED.
No fees or commissions will be payable by the Company to brokers, dealers
or other persons for soliciting tenders of Shares pursuant to the Offer other
than fees paid to the Dealer Manager, the Information Agent or the Depositary as
described in the Offer to Purchase. The Company, however, upon request, will
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to the beneficial owners of Shares held
by you as a nominee or in a fiduciary capacity. The Company will pay or cause to
be paid any stock transfer taxes applicable to its purchase of Shares, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
To take advantage of the Offer, a duly executed and properly completed
Letter of Transmittal (or a manually signed facsimile thereof) including any
required signature guarantees and any other required documents should be sent to
the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "The Offer -- Procedure for Tendering Shares,"
of the Offer to Purchase, tenders may be made without the concurrent deposit of
stock certificates or concurrent compliance with the procedure for book-entry
transfer, if such tenders are made by or through a broker or dealer, commercial
bank, trust company, savings bank or savings and loan association having an
office, branch or agency in the United States, which is a member in good
standing of the Security Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program. Certificates for Shares so tendered (or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at the "Book-Entry
Transfer Facility" described in the Offer to Purchase), together with
2
<PAGE> 3
a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) and any other documents required by the Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after timely receipt by the Depositary of a properly
completed and duly executed Notice of Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
Wasserstein Perella & Co., Inc. or to the Information Agent at their respective
addresses and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed material may be obtained from the
undersigned, telephone: (212) 969-2700 or from the Information Agent, Georgeson
& Company Inc., telephone: (800) 223-2064 (toll free).
Very truly yours,
Wasserstein Perella & Co., Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE DEALER
MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
RALCORP HOLDINGS, INC.
OFFER TO PURCHASE FOR CASH UP TO
5,000,000 SHARES OF ITS COMMON STOCK
(INCLUDING THE ASSOCIATED STOCK PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF $16.00
NOR LESS THAN $14.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 13, 1998,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October
16, 1998, and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the Offer by Ralcorp Holdings, Inc., a Missouri
corporation (the "Company"), to purchase 5,000,000 shares (or such lesser number
of shares as are properly tendered and not withdrawn) of its $.01 par value
Common Stock (the "Shares") (including the associated Stock Purchase Rights
issued pursuant to the Shareholder Protection Rights Agreement, dated as of
December 27, 1996, between the Company and the Rights Agent named therein, as
amended), at prices not in excess of $16.00 nor less than $14.00 per Share in
cash, specified by such stockholders, upon the terms and subject to the
conditions set forth in the Offer. Unless the context otherwise requires, all
references to the Shares shall include the associated Rights.
The Company will determine the single per Share price, not in excess of
$16.00 nor less than $14.00 per Share, net to the seller in cash (the "Purchase
Price"), that it will pay for Shares properly tendered pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 5,000,000 Shares (or such lesser number of Shares as are
properly tendered at prices not in excess of $16.00 nor less than $14.00 per
Share). All Shares properly tendered prior to the Expiration Date (as defined in
the Offer to Purchase) at prices at or below the Purchase Price and not
withdrawn will be purchased at the Purchase Price, upon the terms and subject to
the conditions of the Offer, including the proration provisions. All Shares
acquired in the Offer will be acquired at the Purchase Price. Shares tendered at
prices in excess of the Purchase Price and Shares not purchased because of
proration will be returned at the Company's expense to the stockholders who
tendered such Shares. The Company reserves the right, in its sole discretion, to
purchase more than 5,000,000 Shares pursuant to the Offer. See Sections 1 and 14
of the Offer to Purchase.
If the number of Shares validly tendered and not withdrawn on or prior to
the Expiration Date is less than or equal to 5,000,000 Shares (or such greater
number of shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
Upon the terms and subject to the conditions of the Offer, if at the
Expiration Date more than 5,000,000 Shares (or such greater number of Shares as
the Company may elect to purchase) are properly tendered at or below the
Purchase Price and not withdrawn, the Company will buy Shares first from Odd Lot
Holders (as defined in the Offer to Purchase) who properly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other stockholders who properly tender Shares at prices at or below the Purchase
Price (and do not withdraw them prior to the Expiration Date). See Sections 1
and 3 of the Offer to Purchase.
We are the owner of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to your
instructions. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION
ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
<PAGE> 2
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares at prices not in excess of $16.00 nor less
than $14.00 per Share as indicated in the attached Instruction Form, net to
you in cash.
2. The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set
forth in the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at
12:00 Midnight, New York City time, on Friday, November 13, 1998, unless
the Company extends the Offer.
4. The Offer is for 5,000,000 Shares, constituting approximately 15.8%
of the Shares outstanding as of October 16, 1998.
5. Tendering stockholders who are registered holders will not be
obligated to pay any brokerage commissions or solicitation fees to the
Dealer Manager, Depositary, Information Agent or the Company or, subject to
Instruction 7 of the Letter of Transmittal, stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer.
6. If you held beneficially or of record, as of the close of business
on October 15, 1998 and continue to hold as of the Expiration Date, an
aggregate of fewer than 100 Shares, and you instruct us to tender on your
behalf all such Shares at or below the Purchase Price before the Expiration
Date and check the box captioned "Odd Lots" in the attached Instruction
Form, the Company, upon the terms and subject to the conditions of the
Offer, will accept all such Shares for purchase before proration, if any,
of the purchase of other Shares properly tendered at or below the Purchase
Price.
7. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each such portion of your Shares. We must submit separate
Letters of Transmittal on your behalf for each such price you will accept
for each such portion tendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all such Shares unless
you specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, NOVEMBER 13, 1998, UNLESS THE COMPANY EXTENDS THE
OFFER.
As described in Section 1 of the Offer to Purchase, if more than 5,000,000
Shares (or such greater number of Shares as the Company may elect to purchase)
have been properly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, the Company will purchase tendered Shares on the
basis set forth below:
(a) first, all Shares tendered and not withdrawn prior to the Expiration
Date by any Odd Lot Holder (as defined in the Offer to Purchase) who:
(1) tenders all Shares owned beneficially or of record by such Odd Lot
Holder at a price at or below the Purchase Price (tenders of less than all
Shares owned by such stockholder will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and if applicable on the Notice of Guaranteed Delivery; and
2
<PAGE> 3
(b) second, after purchase of all of the foregoing Shares, all other Shares
properly tendered at prices at or below the Purchase Price and not withdrawn
prior to the Expiration Date on a pro rata basis (with appropriate adjustments
to avoid purchases of fractional Shares) as described in Section 1 of the Offer
to Purchase.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to, nor will tenders be accepted from or on behalf of, the holders of
Shares residing in such jurisdiction. In any jurisdiction the securities or blue
sky laws of which require the Offer to be made by a licensed broker or dealer,
the Offer is being made on the Company's behalf by the Dealer Manager or one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
3
<PAGE> 4
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF RALCORP HOLDINGS, INC.
Please tender to Ralcorp Holdings, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon terms and subject to the conditions
contained in the Offer to Purchase of the Company dated October 16, 1998, and
the related Letter of Transmittal, the receipt of both of which is acknowledged.
NUMBER OF SHARES TO BE TENDERED: SHARES
- ------------------------------------------------------------------------------
ODD LOTS
[ ] By checking this box the undersigned represents that the undersigned owned
beneficially or of record as of the close of business on October 15, 1998,
and continues to own beneficially or of record as of the Expiration Date, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
In addition, the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company in
accordance with the terms of the Offer (persons checking this box need not
indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (In Dollars) Per Share
At Which Shares Are Being Tendered."
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED,
THERE IS NO PROPER TENDER OF SHARES
(Stockholders who desire to tender Shares at more than one price must
complete a separate Instruction Form for each price at which Shares are
tendered.)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] $14.000 [ ] $14.500 [ ] $15.000 [ ] $15.500
[ ] $14.125 [ ] $14.625 [ ] $15.125 [ ] $15.625
[ ] $14.250 [ ] $14.750 [ ] $15.250 [ ] $15.750
[ ] $14.375 [ ] $14.875 [ ] $15.375 [ ] $15.875
[ ] $16.000
</TABLE>
- --------------------------------------------------------------------------------
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
- --------------------------------------------------------------------------------
4
<PAGE> 5
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED.
<TABLE>
<S> <C>
Signature(s): Address:
-------------------------------------- --------------------------------
- --------------------------------------------------- ----------------------------------------
(Including Zip Code)
Name(s):
------------------------------------------- Area Code/Phone Number:
-----------------
- --------------------------------------------------- ---------------------------------------
(Please Print) Date:
----------------------------------
- ---------------------------------------------------
(Taxpayer Identification or Social Security Number)
</TABLE>
5
<PAGE> 1
[RALCORP LOGO]
October 16, 1998
To Our Stockholders:
Ralcorp Holdings, Inc. is offering to purchase up to 5,000,000 shares of
its common stock (the "Shares") (including the associated Stock Purchase Rights)
from existing stockholders. The price will not be in excess of $16.00 nor less
than $14.00 per Share. Ralcorp Holdings, Inc. is conducting the tender offer
through a procedure commonly referred to as a "Dutch Auction." This allows you
to select the price within the specified price range at which you are willing to
sell your Shares to Ralcorp.
On October 15, 1998, the last trading day prior to the announcement and
commencement of the offer, the closing price per Share for Ralcorp's common
stock on the New York Stock Exchange ("NYSE") was $13.9375. Any stockholder,
tendering shares directly to the Depositary, whose Shares are purchased in the
offer will receive the net purchase price in cash and will not incur the usual
transaction costs associated with open-market sales. Any stockholders owning an
aggregate of less than 100 Shares whose Shares are properly tendered directly to
the Depositary and purchased pursuant to the offer will avoid the applicable odd
lot discounts payable on sales of odd lots on the NYSE.
The offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. I encourage you to read these materials carefully before
making any decision with respect to the offer. The instructions on how to tender
Shares are also explained in detail in the accompanying materials.
Neither Ralcorp Holdings, Inc. nor the Board of Directors makes any
recommendation to stockholders as to whether to tender or refrain from tendering
their Shares. Each stockholder must make the decision whether to tender Shares
and, if so, how many Shares and at what price or prices Shares should be
tendered. The Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the offer.
Sincerely,
J. R. Micheletto
J. R. Micheletto
Chief Executive Officer
and President
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to Purchase and
the related Letter of Transmittal which are being mailed to stockholders of
Project Windmill on or about October 16, 1998. While the Offer is being made to
all stockholders of the Company, tenders will not be accepted from or on behalf
of the stockholders in any jurisdiction in which the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In those jurisdictions
whose laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Company by Wasserstein
Perella & Co., Inc. ("Wasserstein Perella" or the "Dealer Manager"), or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash by RalCorp Holdings, Inc. Up to
5,000,000 Shares of its Common Stock (including the Associated Stock Purchase
Rights) At a Purchase Price not in Excess of $16.00 Nor Less Than $14.00 Per
Share.
RalCorp Holdings, Inc., a Missouri corporation (the "Company"), invites
its stockholders to tender up to 5,000,000 shares of its $.01 par value Common
Stock (the "Shares") (including the associated Stock Purchase Rights issued
pursuant to the Shareholder Protection Rights Agreement, dated as of December
27, 1996, between the Company and the Rights Agent named therein, as amended),
to the Company at prices not in excess of $16.00 nor less than $14.00 per Share
in cash, as specified by stockholders tendering their Shares, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 16,
1998 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.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 13, 1998, UNLESS THE OFFER IS
EXTENDED.
The Offer is not conditioned on any minimum number of shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.
EACH STOCKHOLDER MUST MAKE THE DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES AND AT WHAT PRICE OR PRICES SHARES SHOULD BE TENDERED. THE
COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS
INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company will determine the single per Share price, not in excess of
$16.00 nor less than $14.00 per Share, net to the seller in cash, that it will
pay for Shares properly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering stockholders. The Company will select the lowest purchase price
(the "Purchase Price") that will allow it to buy 5,000,000 Shares (or such
lesser number of Shares as are properly tendered and not withdrawn at prices
not in excess of $16.00 nor less than $14.00 per Share). All Shares properly
tendered prior to the Expiration Date at prices at or below the Purchase Price
and not withdrawn will be purchased at the Purchase Price, upon the terms and
subject to the conditions of the Offer, including the proration provisions. All
Shares acquired in the Offer will be acquired at the Purchase Price. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Friday, November
13, 1998, unless and until the Company, in its sole discretion, shall have
extended the period of time during which the Offer will remain open, in which
event the term "Expiration Date" shall refer to the latest time and date at
which the Offer, as so extended by the Company, shall expire. The Company
reserves the right, in its sole discretion, to purchase more than 5,000,000
Shares pursuant to the Offer. For purposes of the Offer, the Company will be
deemed to have accepted for payment (and therefore purchased) Shares properly
tendered at or below the Purchase Price and not withdrawn (subject to the
proration provisions of the Offer) only when, as and if the Company gives oral
or written notice to the Depositary of its acceptance of such Shares for
payment pursuant to the Offer. 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 timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase)), a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) and any other documents required by the Letter of Transmittal. The
Board of Directors has determined that the Company's financial condition and
outlook and current market conditions, including recent trading prices of the
Shares, makes this an attractive time to repurchase a significant portion of
the outstanding Shares. In the view of the Board of Directors, the Offer
represents an attractive investment that should benefit the Company and its
stockholders over the long term. The Board of Directors believes that the
purchase of Shares at this time is consistent with the Company's long term
corporate goal of seeking to increase stockholder value. Accordingly, the
Company is providing stockholders with the opportunity to determine the price
or prices (not greater than $16.00 nor less than $14.00 per Share) at which
they are willing to sell their Shares, subject to the terms and conditions of
the Offer and without the usual transaction costs associated with market sales.
The Offer also allows stockholders to sell a portion of their Shares while
retaining a continuing equity position in the Company if they so desire. Upon
the terms and subject to the conditions of the Offer, if more than 5,000,000
Shares (or such greater number of Shares as the Company may elect to purchase)
have been properly tendered at prices at or below the Purchase Price and not
withdrawn prior to the Expiration Date, the Company will purchase properly
tendered Shares on the following basis: (a) first, all Shares properly tendered
and not withdrawn prior to the Expiration Date by any Odd Lot Holder (as
defined in the Offer to Purchase) who: (1) tenders all Shares beneficially
owned, by such Odd Lot Holder at a price at or below the Purchase Price
(partial tenders will not qualify for this preference); and (2) completes the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery; and (b) second, after purchase of all of the
foregoing Shares, all other Shares properly tendered at prices at or below the
Purchase Price and not withdrawn prior to the Expiration Date, on a pro rata
basis (with appropriate adjustments to avoid purchases of fractional Shares) as
described below. The Company expressly reserves the right, in its sole
discretion, at any time and from time to time to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
payment for, any Shares by giving oral or written notice of such extension to
First Chicago Trust Company of New York (the "Depositary") and making a public
announcement thereof. Shares tendered pursuant to the Offer may be withdrawn at
any time prior to the Expiration Date and, unless theretofore accepted for
payment by the Company pursuant to the Offer, may also be withdrawn at any time
after 12:00 Midnight, New York City time, on Monday, December 14, 1998. For a
withdrawal to be effective, a notice of withdrawal must be in written,
telegraphic or facsimile transmission form and must be received in a timely
manner by the Depositary at its address set forth on the back cover of the
Offer to Purchase. Any such notice of withdrawal must specify the name of the
tendering stockholder, the name of the registered holder, if different from
that of the person who tendered such Shares, the number of Shares tendered and
the number of Shares to be withdrawn. If the certificates for Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates for Shares to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution (as defined in the Offer to Purchase) (except in the
case of Shares tendered by an Eligible Institution). If Shares have been
tendered pursuant to the procedure for book-entry tender set forth in the Offer
to Purchase, the notice of withdrawal also must specify the name and the number
of the account at the applicable Book-Entry Transfer Facility to be credited
with the withdrawn Shares and otherwise comply with the procedures of such
facility. The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any tenders are made. The
information required to be disclosed by Rule 13e-4(d)(l) under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference. The Offer to Purchase and the related Letter
of Transmittal are being mailed to record holders of Shares and are being
furnished to brokers, banks and similar persons whose names or the names of
whose nominees, appear on the Company's stockholder 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. Additional copies of the
Offer to Purchase and the Letter of Transmittal may be obtained from the
Depositary, the Information Agent or the Dealer Manager and will be furnished
promptly at the Company's expense.
The Information Agent for the Offer is: [Georgeson Logo] Wall Street
Plaza New York, New York 10005
Banks and Brokers call collect (212) 440-9800 Call Toll Free:
(800) 223-2064
The Dealer Manager for the Offer is: Wasserstein Perella & Co., Inc. 31
West 52nd Street
New York, New York 10019 (212) 969-2700 October 16, 1998
<PAGE> 1
[RALCORP LOGO]
For Release: Immediate
Contact: Daniel P. Zoellner
314/877-7052
RALCORP HOLDINGS, INC. ANNOUNCES DUTCH AUCTION SELF-TENDER OFFER
FOR UP TO 5,000,000 SHARES
ST. LOUIS, MO, OCTOBER 16, 1998 . . . Ralcorp Holdings, Inc. today
announced that its Board of Directors has approved a tender offer for up to
5,000,000 shares of the Company's Common Stock at a price of not in excess of
$16.00 or less than $14.00 per share. The exact price will be determined by a
procedure commonly referred to as a "Dutch Auction." (See Editor's Note.)
The Company has approximately 31,711,317 shares of Common Stock currently
outstanding. This offering to repurchase up to 5,000,000 shares of Common Stock
from existing stockholders equates to approximately 15.8 percent of the number
of shares outstanding. The closing price for the Company's Common Stock on the
New York Stock Exchange on October 15, 1998, the last full day of trading prior
to commencement of this tender offer, was $13.9375 per share.
The Company stated that neither the Company nor its Board of Directors
makes any recommendation to stockholders to tender shares of Common Stock. The
Company anticipates that the offer will commence today and documents will begin
being mailed to stockholders today. The tender offer, proration period and
withdrawal rights will expire at midnight (EST) on November 13, 1998 (the 20th
business day after commencement of the offer), unless extended.
Wasserstein Perella & Co., Inc. is acting as Dealer Manager of the offer
and Georgeson & Company Inc. is acting as the Information Agent. Questions and
requests for assistance or for copies of the Offer of Purchase may be directed
to either the Dealer Manager or Information Agent at their respective addresses
and telephone numbers listed below.
Ralcorp Holdings, Inc. is a leading manufacturer of private label
ready-to-eat and hot cereals, crackers and cookies and private label and value
brand snack nuts.
<TABLE>
<S> <C>
DEALER MANAGER: INFORMATION AGENT:
Wasserstein Perella & Co, Inc. Georgeson & Company Inc.
31 West 52nd Street Wall Street Plaza
New York, NY 10019 New York, NY 10005
(212) 969-2700 (800) 223-2064
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EDITOR'S NOTE: Under this tender offer, the price to be paid per share will be
set by "Dutch Auction," meaning the Company will pay only that amount per share
which is necessary, within the stated range, in order to secure the needed
number of shares to complete the offer. Once the price per share is determined,
all shareholders will be paid the same amount for each share of stock sold.
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Ex 99(b)(2)
EXECUTION COPY
AMENDMENT NO. 1 TO CREDIT AGREEMENT
This Amendment (this "Amendment") is entered into as of October 16,
1998 by and among Ralcorp Holdings, Inc., a Missouri corporation (the
"Borrower"), The First National Bank of Chicago, individually and as agent
("Agent"), and the other financial institutions signatory hereto.
RECITALS
A. The Borrower, the Agent and the Lenders are party to that certain
credit agreement dated as of January 31, 1997 (the "Credit Agreement"). Unless
otherwise specified herein, capitalized terms used in this Amendment shall have
the meanings ascribed to them by the Credit Agreement.
B. The Borrower, the Agent and the undersigned Lenders wish to amend
the Credit Agreement on the terms and conditions set forth below.
Now, therefore, in consideration of the mutual execution hereof and
other good and valuable consideration, the parties hereto agree as follows:
1. Amendment to Credit Agreement. Upon the "Effective Date"
(as defined below), the Credit Agreement shall be amended as follows:
(a) Article I is amended by adding and/or amending
the following definitions:
(i) The definition of "Applicable Commitment Fee
Percentage" is amended in its entirety to read as follows:
"Applicable Commitment Fee Percentage" means
.175%.
(ii) The definition of "Applicable Eurodollar
Margin" is amended in its entirety to read as follows:
"Applicable Eurodollar Margin" means .60%.
(iii) The definition of "Commitment" is amended in
its entirety to read as follows:
"Commitment" means, for each Lender, the
obligation of such Lender to make Loans (other than
Swing Line Loans) and participate in Facility
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Letters of Credit not exceeding the amount set forth
opposite such Lender's name in Schedule 1 attached
hereto and as set forth in any Notice of Assignment
relating to any assignment which has become effective
pursuant to Section 12.3.2, as such amount may be
modified from time to time pursuant to the terms
hereof.
(iv) The definition of "Required Lenders" is amended
in its entirety to read as follows:
"Required Lenders" means Lenders in the
aggregate having 100% of the Aggregate Commitment or,
if the Aggregate Commitment has been terminated, 100%
of the sum of (a) the aggregate unpaid principal
amount of the outstanding Loans plus (b) the
aggregate amount of the outstanding Facility Letter
of Credit Obligations.
(v) The definition of "Utilization Margin" is amended
in its entirety to read as follows:
"Utilization Margin" means (a) .10% at all
times when the sum of the aggregate principal amount
of all outstanding Loans and the aggregate amount of
Facility Letter of Credit Obligations equals or
exceeds 50% of the Aggregate Commitment and (b) 0% at
all other times.
(vi) A new definition shall be added to the Credit
Agreement to read as follows:
"Year 2000 Issues" means anticipated costs,
problems and uncertainties associated with the
inability of certain computer applications to
effectively handle data including dates on and after
January 1, 2000, as such inability affects the
business, operations and financial condition of the
Borrower and its Subsidiaries.
(vii) A new definition shall be added to the Credit
Agreement to read as follows:
"Year 2000 Program" is defined in Section
5.25.
(b) Exhibit G to the Credit Agreement is amended and
replaced in the form attached hereto as Exhibit G.
(c) A new Schedule 1 attached hereto shall be added
to the Credit Agreement as Schedule 1 thereto.
(d) A new Section 5.25 is added to the Credit
Agreement to read as
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follows:
5.25. Year 2000. The Borrower has made a full and
complete assessment of the Year 2000 Issues and has a realistic and
achievable program for remediating the Year 2000 Issues on a timely
basis (the "Year 2000 Program"). Based on such assessment and on the
Year 2000 Program the Borrower does not reasonably anticipate that Year
2000 Issues will have a Material Adverse Effect.
(e) Section 6.2 is amended in its entirety to read as
follows:
6.2 Use of Proceeds. The Borrower will, and will
cause each Subsidiary to, use the proceeds of the Advances to meet the
general corporate needs of the Borrower and its Subsidiaries, including
the making of Investments and Purchases and stock repurchases permitted
hereunder. The Borrower will not, nor will it permit any Subsidiary to,
use any of the proceeds of the Advances or any Facility Letter of
Credit to purchase or carry any "margin stock" (as defined in
Regulation U) or to finance the Purchase of any Person which has not
been approved and recommended by the board of directors (or functional
equivalent thereof) of such Person.
(f) Section 6.10 is amended in its entirety to read
as follows:
6.10 Capital Stock and Dividends. The Borrower will
not, nor will it permit any Subsidiary to, (a) issue or have
outstanding any preferred stock, other than preferred stock not having
mandatory redemption, retirement and other repurchase dates commencing
less than 91 days after the Facility Termination Date then in effect or
(b) declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock)
or redeem, repurchase or otherwise acquire or retire any of its capital
stock or any options or other rights in respect thereof at any time
outstanding, except that (i) any Subsidiary may declare and pay
dividends or make distributions to the Borrower or to a Guarantor, (ii)
so long as no Default or Unmatured Default exists before or after
giving effect to the declaration or payment of such dividends, the
Borrower may declare and, within 45 days thereafter, pay dividends on
its capital stock in an amount which, when added to the amount of all
prior dividends does not exceed 10% of Net Worth at such time (before
giving effect to such dividend) and (iii) so long as no Default or
Unmatured Default exists before or after giving effect to the
repurchase of such stock, the Borrower may, after the date hereof,
repurchase its common stock in an aggregate amount not to exceed
$100,000,000.
(g) Section 6.11(d) is amended by deleting the
reference therein to "$50,000,000" and replacing it with
"$100,000,000".
(h) Section 6.24.1 is amended in its entirety to read
as follows:
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6.24.1. Adjusted Net Worth. At all times after the
date hereof, maintain a minimum Adjusted Net Worth at least equal to
the sum of (a) an amount equal to 90% of Adjusted Net Worth as of
September 30, 1998 (but no less than $213,500,000) minus the
aggregate amount of stock repurchases by the Company after the date
hereof not to exceed $100,000,000 plus (b) the sum of all proceeds (net
of related costs, expenses, fees and taxes) received by the Borrower or
any Subsidiary of the Borrower from the issuance of its capital stock,
plus (c) for each Fiscal Quarter ending after the date hereof and prior
to the time of determination, 50% of the Borrower's positive Adjusted
Net Income for such Fiscal Quarter.
2. Representations and Warranties of the Borrower. The
Borrower represents and warrants that:
(a) The execution, delivery and performance by the
Borrower of this Amendment have been duly authorized by all necessary
corporate action and that this Amendment is a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as the enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally;
(b) Each of the representations and warranties
contained in the Credit Agreement is true and correct in all material
respects on and as of the date hereof as if made on the date hereof;
(c) After giving effect to this Amendment, no Default
or Unmatured Default has occurred and is continuing.
3. Effective Date. This Amendment shall become effective upon
(a) the execution and delivery hereof by the Borrower, the Agent and all the
Lenders, (b) the execution and delivery of the Reaffirmation of Guaranty in the
form attached hereto as Exhibit A by Bremner, Inc., Flavor House Products, Inc.,
Nutcracker Brands, Inc., Sugar Kake Cookie, Inc. and Wortz Company and (c) the
execution and delivery by the Borrower of a new Note for each Lender in the
amount of its Commitment specified in Schedule 1 hereto (the "Effective Date").
4. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy
of the Agent or any Lender under the Credit Agreement or any Loan
Document, nor constitute a waiver of any provision of the Credit
Agreement or any Loan Document, except as specifically set forth
herein. Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this
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Agreement", "hereunder", "hereof", "herein" or words of similar import
shall mean and be a reference to the Credit Agreement as amended
hereby.
5. Costs and Expenses.
The Borrower hereby affirms its obligation under
Section 9.7 of the Credit Agreement to reimburse the Agent for all
reasonable costs, internal charges and out-of-pocket expenses paid or
incurred by the Agent in connection with the preparation, negotiation,
execution and delivery of this Amendment, including but not limited to
the attorneys' fees and time charges of attorneys for the Agent with
respect thereto.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
8. Counterparts. This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed an original but
all such counterparts shall constitute one and the same instrument.
(signature page to follow)
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date and year first above written.
RALCORP HOLDINGS, INC.
By:________________________________
Its:_______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By:________________________________
Its:_______________________________
THE TORONTO DOMINION (TEXAS), INC.
By:________________________________
Its:_______________________________
WACHOVIA BANK OF GEORGIA, N.A.
By:________________________________
Its:_______________________________
