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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange
Act of 1934
and
SCHEDULE 13D*
under the Securities Exchange Act of 1934
WAVERLY, INC.
(Name of Subject Company)
MP ACQUISITION CORP.
WOLTERS KLUWER U.S. CORPORATION
WOLTERS KLUWER NV
(Bidders)
COMMON STOCK, $2.00 PAR VALUE PER SHARE
(Title of Class of Securities)
943614107 (COMMON STOCK)
(CUSIP Number of Class of Securities)
MR. PETER W. VAN WEL
c/o Wolters Kluwer United States Inc.
161 North Clark Street
48th Floor
Chicago, Illinois 60601
(312) 425-7010
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Bidders)
COPY TO:
Arnold J. Schaab, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Telephone (212) 326-0168
CALCULATION OF FILING FEE
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TRANSACTION VALUATION** AMOUNT OF FILING FEE***
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$390,519,714 $78,103.94
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* This Statement also constitutes the Statement on Schedule 13D of MP
Acquisition Corp., Wolters Kluwer U.S. Corporation and Wolters Kluwer nv
filed with respect to the shares of Common Stock, par value $2.00 per share,
of Waverly, Inc. beneficially owned by MP Acquisition Corp., Wolters Kluwer
U.S. Corporation and Wolters Kluwer nv.
** For purposes of calculating the filing fee only. This calculation assumes
the purchase of 10,013,326 shares of common stock, $2.00 par value, of
Waverly, Inc., at $39.00 net per share in cash.
*** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the aggregate value of cash offered by MP Acquisition Corp. for
such number of Shares.
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CUSIP NO. 943614107 PAGE 2 OF PAGES
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MP Acquisition Corp.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
5,338,680 shares of
Common Stock pursuant to
the Stock Option and Tender Agreement
dated as of February 10, 1998(1)
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
53.3%
10. TYPE OF REPORTING PERSON
CO
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(1) The Offeror disclaims beneficial ownership of such shares and this statement
shall not be construed as an admission that Wolters Kluwer is the beneficial
owner of any securities covered by this statement.
2
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CUSIP NOS. 124883 10 9 AND 124883 20 8 PAGE 3 OF PAGES
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wolters Kluwer U.S. Corporation
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS
BK
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
5,338,680 shares of Common Stock pursuant to
the Stock Option and Tender Agreement dated as of
February 10, 1998(1)
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
53.3%
10. TYPE OF REPORTING PERSON
CO
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(1) The Parent disclaims beneficial ownership of such shares and this statement
shall not be construed as an admission that Wolters Kluwer is the beneficial
owner of any securities covered by this statement.
3
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CUSIP NO. 943614107 PAGE 4 OF PAGES
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wolters Kluwer nv
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
5,338,680 shares of
Common Stock pursuant to
the Stock Option and Tender Agreement
dated as of February 10, 1998(1)
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
53.3%
10. TYPE OF REPORTING PERSON
CO
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(1) Wolters Kluwer disclaims beneficial ownership of such shares and this
statement shall not be construed as an admission that Wolters Kluwer is the
beneficial owner of any securities covered by this statement.
4
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ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Waverly, Inc., a Maryland corporation
(the "Company"), which has its principal executive offices at 351 West Camden
Street, Baltimore, Maryland, 21201.
(b) The class of equity securities to which this statement relates is common
stock, par value $2.00 per share. The information set forth in the Introduction
of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by MP Acquisition Corp., a Maryland
corporation (the "Offeror"), Wolters Kluwer U.S. Corporation, a Delaware
corporation (the "Parent") and Wolters Kluwer nv, a corporation organized under
the laws of The Netherlands ("Wolters Kluwer"). The information set forth in the
Introduction, Section 9 ("Certain Information Concerning Wolters Kluwer, Wolters
Kluwer International, the Parent, WK America, Lippincott-Raven and the Offeror")
and Schedule I ("Directors and Executive Officers of Wolters Kluwer, Wolters
Kluwer International, the Parent, WK America, Lippincott-Raven and the Offeror")
of the Offer to Purchase is incorporated herein by reference.
(e) and (f) During the last five years, none of Wolters Kluwer, Parent or
the Offeror and, to the best knowledge of the Parent and the Offeror, none of
the persons listed in Schedule I of the Offer to Purchase has been (i) convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) The information set forth in Section 9 ("Certain Information Concerning
Wolters Kluwer, Wolters Kluwer International, the Parent, WK America,
Lippincott-Raven and the Offeror") and Section 11 ("Background of the Offer:
Past Contacts, Transactions or Negotiations with the Company") of the Offer to
Purchase is incorporated herein by reference.
(b) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Company"), Section 9 ("Certain Information Concerning
Wolters Kluwer, Wolters Kluwer International, the Parent, WK America,
Lippincott-Raven and the Offeror"), Section 11 ("Background of the Offer; Past
Contacts, Transactions or Negotiations with the Company") and Section 12
("Purpose of the Offer and the Merger; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company") and Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Certain Effects of the
Transaction") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction, Section 9
("Certain Information Concerning Wolters Kluwer, Wolters Kluwer International,
the Parent, WK America, Lippincott-Raven and the Offeror"), Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company") and Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference. As a
result of the Parent's conditional option to purchase the Shares beneficially
owned by the stockholders who are party to the Stock Option and Tender
Agreement, dated as of February 10, 1998 with the Parent and the Offeror, the
Parent and the Offeror may be deemed to beneficially own an aggregate of
5,338,680 Shares (representing approximately 53.3% of the Shares outstanding on
February 10, 1998, on a fully diluted basis.) However, each of Wolters Kluwer,
the Parent and the Offeror have disclaimed beneficial ownership to such shares
and this statement shall not be construed as an admission that any of Wolters
Kluwer, the Parent or the Offerer are the beneficial owners of any securities
covered by this statement.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Wolters Kluwer, Wolters Kluwer International, the Parent,
WK America, Lippincott-Raven and the Offeror"), Section 11 ("Background of the
Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 12 ("Purpose of the Offer; and the Merger Plans for the Company") of the
Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 9 ("Certain Information Concerning
Wolters Kluwer, Wolters Kluwer International, the Parent, WK America,
Lippincott-Raven and the Offeror") of the Offer to Purchase is incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Wolters Kluwer, Wolters Kluwer International, the Parent,
WK America, Lippincott-Raven and the Offeror") Section 11 ("Background of the
Offer, Past Contacts, Transactions and Negotiations with the Company") and
Section 12 ("Purpose of the Offer and the Merger; Plans for the Company") of the
Offer to Purchase is incorporated herein by reference.
6
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ITEM 10. ADDITIONAL INFORMATION. (CONTINUED)
(b) and (c) The information set forth in the Introduction and Section 16
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 7 ("Certain Effects of the
Transaction") of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Form of Offer to Purchase dated February 18, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Credit Suisse First Boston Corporation to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement to be published in The Wall Street Journal on February 18,
1998.
(a)(8) Press Release issued by the Parent on February 11, 1998
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of February 10, 1998, among the Parent, the
Offeror and the Company.
(c)(2) Stock Option and Tender Agreement, dated as of February 10, 1998, among the
Parent, the Offeror and the Stockholders set forth therein.
(c)(3) Guarantee, dated February 11, 1998, between Wolters Kluwer and the Company.
(d) Not applicable.
(e) Not applicable.
(f) None.
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7
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SIGNATURE
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.
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Dated: February 18, 1998 MP Acquisition Corp.
By: /s/ BRUCE C. LENZ
------------------------------------------
Name: Bruce C. Lenz
Title: Vice President, Treasurer and
Secretary
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SIGNATURE
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.
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Dated: February 18, 1998 Wolters Kluwer U.S. Corporation
By: /s/ BRUCE C. LENZ
------------------------------------------
Name: Bruce C. Lenz
Title:Executive Vice President
and Chief Financial Officer
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SIGNATURE
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.
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Dated: February 18, 1998 Wolters Kluwer nv
By: /s/ PETER W. VAN WEL
------------------------------------------
Name: Peter W. van Wel
Title: Member of the Executive Board
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EXHIBIT INDEX
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EXHIBIT
NO. DESCRIPTION
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(a)(1) Form of Offer to Purchase dated February 18, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Credit Suisse First Boston Corporation to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement to be published in The Wall Street Journal on February 18, 1998.
(a)(8) Press Release issued by the Parent on February 11, 1998.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of February 10, 1998, among the Parent, the Offeror and the
Company.
(c)(2) Stock Option and Tender Agreement, dated as of February 10, 1998, among the Parent, the Offeror and the
Stockholders set forth therein.
(c)(3) Guarantee, dated as of February 11, 1998, between Wolters Kluwer and the Company.
(d) Not applicable.
(e) Not applicable.
(f) None.
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Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Waverly, Inc.
at
$39.00 Net Per Share
by
MP Acquisition Corp.
an indirect wholly owned subsidiary of
Wolters Kluwer U.S. Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY
TIME, ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF
COMMON STOCK, PAR VALUE $2.00 PER SHARE ("SHARES"), OF WAVERLY, INC. (THE
"COMPANY"), WHICH TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY THE
PARENT OR THE OFFEROR, REPRESENT AT LEAST TWO-THIRDS OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS, (ii) RECEIPT
BY THE OFFEROR (AS DEFINED HEREIN) OF CERTAIN
GOVERNMENTAL APPROVALS AND (iii) SATISFACTION OF
CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION
15-- "CERTAIN CONDITIONS TO THE OFFEROR'S
OBLIGATIONS", WHICH SETS FORTH IN
FULL THE CONDITIONS OF THE
OFFER.
THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER,
DATED AS OF FEBRUARY 10, 1998, BY AND AMONG WOLTERS KLUWER U.S. CORPORATION,
MP ACQUISITION CORP. AND THE COMPANY. THE BOARD OF DIRECTORS OF THE
COMPANY HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND THE
MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF EACH OF THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT
HOLDERS OF THE SHARES ACCEPT THE OFFER AND TENDER
THEIR SHARES IN THE
OFFER.
IMPORTANT
Any stockholder desiring to tender Shares should either (i) complete and
sign the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and deliver the Letter of Transmittal
with the Shares and all other required documents to the Depositary, or follow
the procedure for book-entry transfer set forth in Section 3-- "Procedure for
Tendering Shares" or (ii) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for the
stockholder. Stockholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such person
if they desire to tender their Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares pursuant to the guaranteed delivery procedure set forth in Section
3--"Procedure for Tendering Shares".
Questions and requests for assistance or additional copies of this Offer to
Purchase, Letter of Transmittal or any other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase.
The Dealer Manager for the Offer is:
[LOGO]
February 18, 1998
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TABLE OF CONTENTS
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PAGE
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INTRODUCTION............................................................................................... 1
1. Terms of the Offer................................................................................... 2
2. Acceptance for Payment and Payment for Shares........................................................ 4
3. Procedure for Tendering Shares....................................................................... 5
4. Withdrawal Rights.................................................................................... 8
5. Certain United States Federal Income Tax Considerations.............................................. 9
6. Price Range of Shares; Dividends..................................................................... 10
7. Certain Effects of the Transaction................................................................... 10
8. Certain Information Concerning the Company........................................................... 11
9. Certain Information Concerning Wolters Kluwer, Wolters Kluwer International, the Parent, WK America,
Lippincott-Raven and the Offeror..................................................................... 13
10. Source and Amount of Funds........................................................................... 15
11. Background of the Offer; Past Contacts, Transactions or Negotiations with the Company................ 15
12. Purpose of the Offer and the Merger; Plans for the Company........................................... 16
13. The Merger Agreement, the Option Agreement and the Guarantee......................................... 17
14. Dividends and Distributions.......................................................................... 26
15. Certain Conditions to the Offeror's Obligations...................................................... 27
16. Certain Legal Matters................................................................................ 28
17. Fees and Expenses.................................................................................... 31
18. Miscellaneous........................................................................................ 31
Schedule I -- Directors and Executive Officers of Wolters Kluwer, Wolters Kluwer International, the
Parent, WK America, Lippincott-Raven and the Offeror................................................. 32
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To the Holders of Common Stock,
par value $2.00 per share, of Waverly, Inc.:
INTRODUCTION
MP Acquisition Corp., a Maryland corporation (the "Offeror") and an indirect
wholly owned subsidiary of Wolters Kluwer U.S. Corporation, a Delaware
corporation (the "Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $2.00 per share (the "Common Stock" or the "Shares"), of
Waverly, Inc., a Maryland corporation (the "Company"), at a purchase price of
$39.00 per Share net to the seller in cash (such price, or such higher price per
Share as may be paid in the Offer (as defined below), referred to herein as the
"Offer Price"), without interest thereon, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"). Tendering holders of record of Shares who tender
directly will not be obligated to pay brokerage fees or commissions or, except
as set forth in the Letter of Transmittal, transfer taxes on the purchase of
Shares by the Offeror pursuant to the Offer. Stockholders who hold their Shares
through a bank or broker should check with such institution as to whether they
charge any service fees. The Offeror will pay all charges and expenses of Credit
Suisse First Boston Corporation, which is acting as Dealer Manager for the Offer
(in such capacity, the "Dealer Manager"), Morgan Guaranty Trust Company of New
York (the "Depositary") and Georgeson & Company Inc. (the "Information Agent")
in connection with the Offer. See Section 17--"Fees and Expenses".
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER (AS HEREINAFTER DEFINED) AND THE MERGER AGREEMENT (AS HEREINAFTER
DEFINED), HAS UNANIMOUSLY DETERMINED THAT THE MERGER IS ADVISABLE, AND THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, TOGETHER WITH THE SHARES BENEFICIALLY OWNED BY THE PARENT OR THE
OFFEROR REPRESENT AT LEAST TWO-THIRDS OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER IS ALSO CONDITIONED UPON THE
OFFEROR OBTAINING CERTAIN GOVERNMENTAL APPROVALS AND THE SATISFACTION OF OTHER
TERMS AND CONDITIONS. SEE SECTION 15-- "CERTAIN CONDITIONS TO THE OFFEROR'S
OBLIGATIONS".
Morgan Stanley & Co. Incorporated ("Morgan Stanley"), the Company's
financial advisor, has delivered to the Company's Board of Directors its written
opinion that the consideration to be received by the stockholders of the Company
pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view. A copy of such opinion is contained in the Company's
Statement on Schedule 14D-9 which is being distributed to the Company's
stockholders.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of February 10, 1998 (the "Merger Agreement"), by and among the Parent, the
Offeror and the Company. The Merger Agreement provides that, among other things,
as soon as practicable after the purchase of Shares pursuant to the Offer and
the satisfaction of the other conditions set forth in the Merger Agreement and
in accordance with the relevant provisions of the Maryland General Corporation
Law, as amended (the "Maryland GCL"), the Offeror will be merged with and into
the Company (the "Merger"). See Section 12--"Purpose of the Offer and the
Merger; Plans for the Company". Following consummation of the Merger, the
Company will continue as the surviving corporation (the "Surviving Corporation")
and will be an indirect wholly owned subsidiary of the Parent. At the effective
time of the Merger (the "Effective Time"), each share of the Common Stock that
is issued and outstanding (other than stock of the Company owned by the Company,
the Parent, the Offeror, or any other subsidiary of the Parent or stock with
respect
1
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to which appraisal rights are available and properly exercised under Maryland
law, if any), will be converted into the right to receive the Offer Price,
without interest thereon, upon surrender of the certificates formerly
representing such Shares. See Section 5--"Certain United States Federal Income
Tax Considerations" for a description of certain tax consequences of the Offer
and the Merger. The payment obligations of the Parent and the Offeror under the
Merger Agreement have been guaranteed by Wolters Kluwer nv, a corporation
organized under the laws of The Netherlands ("Wolters Kluwer") and the ultimate
parent of the Parent and the Offeror, pursuant to a Letter Agreement, dated
February 11, 1998 between Wolters Kluwer and the Company (the "Guarantee"). See
Section 13--"The Merger Agreement, the Option Agreement and the Guarantee".
The Merger Agreement provides that, promptly after the Offeror acquires
Shares pursuant to the Offer, the Parent will be entitled to designate up to
that number of directors of the Board of Directors of the Company (rounded up to
the next whole number) as will make the percentage of the Company's directors
designated by the Parent equal to the aggregate voting power of the Shares held
by the Parent and any of its subsidiaries (assuming the exercise of all
outstanding options to purchase Common Stock).
The Parent and the Offeror have entered into a Stock Option and Tender
Agreement, dated as of February 10, 1998 (the "Option Agreement"), with the
stockholders identified therein (each a "Stockholder" and collectively, the
"Stockholders") beneficially owning an aggregate of 5,338,680 Shares
(representing approximately 53.3% of the Shares outstanding on February 10, 1998
on a fully diluted basis). Such Shares beneficially owned by the Stockholders
are hereinafter referred to as the "Stockholders' Shares". Pursuant to the
Option Agreement, the Stockholders have, among other things, (i) agreed to
tender into the Offer and not withdraw all of the Stockholders' Shares, unless
the Offer is terminated by Parent or the Offeror without any Shares being
purchased thereunder and (ii) granted to Parent or the Offeror, as the Parent
shall designate ("the Optionee"), a conditional option to purchase the
Stockholders' Shares. In addition, certain Stockholders have agreed to appoint
Parent under certain circumstances as such Stockholders' proxy to vote such
Stockholders' Shares on all matters in connection with the consummation of the
transactions contemplated by the Merger Agreement and the Option Agreement.
The Company has advised the Offeror that as of February 10, 1998, there were
(i) 9,039,576 Shares issued and outstanding, (ii) outstanding stock options
under the Waverly Press, Inc. 1984 Stock Option Plan, the Company 1996 Employee
Stock Option Plan and the Director Stock Plan (collectively, the "Company Stock
Option Plans") for not in excess of 973,750 Shares and (iii) 500,000 shares of
preferred stock, none of which are issued and outstanding. As of the date
hereof, neither the Offeror nor the Parent beneficially owns any Shares. If the
Offeror acquires at least 6,675,551 Shares in the Offer, the Minimum Condition
will be satisfied. Accordingly, the Offeror would have sufficient voting power
to approve the Merger without the affirmative vote of any other stockholder. In
the event that the Offeror acquires 90% or more of the Shares, the Parent would
be able to effectuate the Merger by appropriate resolutions of the Boards of
Directors of the Offeror and the Company without any meeting or action by the
stockholders of the Company.
The Offeror has been advised by the Company that, to the best of the
Company's knowledge, all of the Company's directors and executive officers
currently intend to tender all Shares owned by them pursuant to the Offer.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
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accordance with Section 4--"Withdrawal Rights". The term "Expiration Date" means
12:00 Midnight, New York City time, on Tuesday, March 17, 1998, unless the
Offeror shall have extended the period of time for which the Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Offeror, shall expire.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time that
notice of such increase is first published, sent or given to holders of Shares
in the manner specified below, 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 is first so published, sent or given,
then the Offer will be extended until the expiration of such period of ten
business days. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday, and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION AND THE
OFFEROR OBTAINING CERTAIN GOVERNMENTAL APPROVALS. THE MERGER AGREEMENT AND THE
OFFER MAY BE TERMINATED BY THE OFFEROR AND THE PARENT IF CERTAIN EVENTS OCCUR.
THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION
15--"CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS". The Offeror reserves the
right (but shall not be obligated), in accordance with applicable rules and
regulations of the United States Securities and Exchange Commission (the
"Commission"), and subject to the limitations set forth in the Merger Agreement
and described below, to waive any condition (other than the Minimum Condition)
to the Offer prior to the Expiration Date. If the Minimum Condition or any of
the other conditions set forth in Section 15--"Certain Conditions to the
Offeror's Obligations" have not been satisfied, by 12:00 Midnight, New York City
time, then on Tuesday, March 17, 1998 (or any other time then set as the
Expiration Date), the Offeror may, subject to the terms of the Merger Agreement
as described below, elect to (i) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the Offer,
as extended, (ii) subject to complying with applicable rules and regulations of
the Commission, accept for payment all Shares so tendered and not extend the
Offer, or (iii) subject to the Merger Agreement terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
stockholders. Notwithstanding the foregoing, prior to invoking the condition set
forth in paragraph (a) of Section 15--"Certain Conditions to the Offeror's
Obligations" with regard to actions taken or statutes, rules, regulations,
judgments, orders or injunctions promulgated, entered or enforced by any
governmental entity of competent jurisdiction in the United States or other
country in which the Company or the Parent directly or indirectly has material
assets or operations with respect to the Parent's ownership of the Shares,
operation of the Company's business or prohibiting the Offer or the Merger, the
Parent shall have used its reasonable efforts to cause any such judgment, order
or injunction to be vacated or lifted.
Under the terms of the Merger Agreement, the Offeror may not, without the
consent of the Company, amend or waive the Minimum Condition, reduce the number
of Shares subject to the Offer, reduce the price per Share to be paid pursuant
to the Offer, impose any other conditions to the Offer other than the conditions
set forth in Section 15--"Certain Conditions to the Offeror's Obligations" or
modify such conditions (other than to waive any such conditions to the extent
permitted by the Merger Agreement), change the form of consideration payable in
the Offer, or amend, waive or add any other term of the Offer in any manner
adverse to the Company or the holders of Shares, or extend the expiration date
of the Offer. Notwithstanding the foregoing, the Offeror shall extend the Offer
for a period of ten business days following the initial expiration date of the
Offer, if any of the conditions shall not have been satisfied or waived at such
date. In addition, the Merger Agreement provides that the Offeror shall extend
the Offer at any time up to six (6) months for one or more period(s) of not more
than 10 business days beyond the latest expiration date if all conditions to the
Offer have not been waived or satisfied. In addition, the Offer Price may be
increased and the Offer may be extended to the extent required by law in
connection with such increase without the consent of the Company.
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Subject to the applicable rules and regulations of the Commission and
subject to the limitations set forth in the Merger Agreement, the Offeror also
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to extend the period of time during which the Offer is open and
thereby delay payment for any Shares regardless of whether such Shares were
theretofore accepted for payment, or to terminate the Offer and not to accept
for payment or pay for any Shares not theretofore accepted for payment or paid
for, upon the occurrence of any of the conditions set forth in Section
15--"Certain Conditions to the Offeror's Obligations", by giving written notice
of such delay or termination to the Depositary, and (ii) at any time or from
time to time, to amend the Offer in any respect. The Offeror's right to delay
payment for any Shares or not to pay for any Shares theretofore accepted for
payment is subject to the applicable rules and regulations of the Commission,
including Rule l4e-l(c) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), relating to the Offeror's obligation to pay for or return
tendered Shares promptly after the termination or withdrawal of the Offer. Under
no circumstances will interest be paid on the purchase price for tendered
Shares, whether or not the Offeror exercises its right to extend the Offer.
There can be no assurance that the Offeror will exercise its rights to extend
the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or termination or amendment of the Offer will be
followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c) and 14e-l(d) under the Exchange Act. Without limiting the obligation of
the Offeror under such rule or the manner in which the Offeror may choose to
make any public announcement, the Offeror currently intends to make
announcements by issuing a press release to the Dow Jones News Service and
making any appropriate filing with the Commission.
If, subject to the terms of the Merger Agreement, the Offeror makes a
material change in the terms of the Offer or the information concerning the
Offer, or if it waives a material condition of the Offer, the Offeror will
disseminate additional tender offer materials and extend the Offer if and to the
extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act or
otherwise. The minimum period during which a tender offer must remain open
following material changes in the terms of the offer or the information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changes. With respect to a
change in price or a change in percentage of securities sought, a minimum ten
business day period is generally required to allow for adequate dissemination to
stockholders and investor response.
The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees
appear on the 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. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4--"Withdrawal Rights" promptly after the later to occur
of (a) the Expiration Date and (b) subject to compliance with Rule 14e-l(c)
under the Exchange Act, the satisfaction or waiver of the conditions set forth
in Section 15--"Certain Conditions to the Offeror's Obligations". The payment
obligations of the Parent and the Offeror under the Merger Agreement have been
guaranteed by
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Wolters Kluwer pursuant to the Guarantee. See Section 13--"The Merger Agreement,
the Option Agreement and the Guarantee". Subject to compliance with Rule
14e-l(c) under the Exchange Act, the Offeror expressly reserves the right to
delay payment for Shares in order to comply in whole or in part with any
applicable law. See Section 1--"Terms of the Offer" and Section 16--"Certain
Legal Matters". 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 (i) certificates for such Shares or timely confirmation (a "Book-
Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in Section 3--"Procedures for
Tendering Shares", (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with all required signature
guarantees or in the case of a book-entry transfer, an Agent's Message (as
defined below) and (iii) any other documents required by the Letter of
Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Offeror gives written notice to the Depositary of the Offeror's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Offeror and transmitting such payment to
tendering stockholders. If, for any reason whatsoever, acceptance for payment of
any Shares tendered pursuant to the Offer is delayed, or the Offeror is unable
to accept for payment Shares tendered pursuant to the Offer, then, without
prejudice to the Offeror's rights under Section 1--"Terms of the Offer", the
Depositary may, nevertheless, on behalf of the Offeror, retain tendered Shares,
and such Shares may not be withdrawn, except to the extent that the tendering
stockholders are entitled to withdrawal rights as described in Section
4--"Withdrawal Rights" below and as otherwise required by Rule 14e-l(c) under
the Exchange Act. Under no circumstances will interest be paid by the Offeror
because of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to the Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within the
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
3. PROCEDURE FOR TENDERING SHARES.
VALID TENDERS. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents, must
be received by the Depositary at the address set forth on the back cover of this
Offer to Purchase prior to the Expiration Date, or the tendering stockholder
must comply with the guaranteed
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delivery procedure set forth below. In addition, either (i) certificates
representing such Shares must be received by the Depositary along with the
Letter of Transmittal or such Shares must be tendered pursuant to the procedure
for book-entry transfer set forth below, and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the guaranteed delivery procedures set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted. Delivery of
documents to the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures does not constitute delivery to the Depositary.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility procedures for transfer. Although delivery of Shares may be
effected through book-entry at the Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at the address set forth on the back cover of this Offer to
Purchase or (ii) the guaranteed delivery procedures described below must be
complied with.
SIGNATURE GUARANTEE. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule l7Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Offeror, is
received by the Depositary, as provided below, prior to the Expiration Date;
and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), and any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message, and any other documents required by the
Letter of Transmittal are
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received by the Depositary within three trading days after the date of such
Notice of Guaranteed Delivery. The term "trading day" is any day on which
the NASDAQ National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee by
an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or the Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent Message, and
(iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT "BACKUP" WITHHOLDING WITH
RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE
OFFER OR PURSUANT TO THE MERGER, EACH STOCKHOLDER MUST EITHER PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER
("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL
INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE
LETTER OF TRANSMITTAL OR ESTABLISH SOME OTHER EXEMPTION TO BACKUP WITHHOLDING.
FOREIGN HOLDERS MUST SUBMIT A COMPLETED FORM W-8 TO AVOID BACKUP WITHHOLDING.
THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY. SEE INSTRUCTIONS 8 AND 9 SET
FORTH IN THE LETTER OF TRANSMITTAL AND SECTION 5--"CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS".
EXAMINATION OF VALIDITY. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Offeror, in its sole discretion,
and its determination will be final and binding on all parties. The Offeror
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of the Offeror, be unlawful. The Offeror also reserves
the absolute right to waive any of the conditions of the Offer, subject to the
limitations set forth in the Merger Agreement, or any defect or irregularity in
the tender of any Shares. The Offeror's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
Instructions to the Letter of Transmittal) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of the Offeror, the
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
stockholder irrevocably appoints designees of the Offeror as such stockholder's
attorneys-in-fact and proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's right with respect to the Shares tendered by such stockholder and
accepted for payment by the Offeror (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after February 10,
1998). All such powers of attorney and proxies shall be considered coupled with
an interest in the tendered Shares. This appointment is effective when, and only
to the extent that, the Offeror accepts for payment the Shares deposited with
the Depositary. Upon acceptance for payment, all prior powers of attorney and
proxies given by the stockholder with respect to such Shares or other securities
or rights will, without further action, be revoked and no subsequent proxies may
be given or written consent executed (and, if given or
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executed, will not be deemed effective). The designees of the Offeror will, with
respect to the Shares and other securities or rights, be empowered to exercise
all voting and other rights of such stockholder as they in their sole judgment
deem proper in respect of any annual or special meeting of the Company's
stockholders, or any adjournment or postponement thereof. The Offeror reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Offeror's payment for such Shares, the Offeror must be able
to exercise full voting and other rights with respect to such Shares and the
other securities or rights issued or issuable in respect of such Shares,
including voting at any meeting of stockholders (whether annual or special or
whether or not adjourned) in respect of such Shares.
A tender of Shares pursuant to any one 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 that (i) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after February 10, 1998), and (ii) when the same are accepted for payment by the
Offeror, the Offeror will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claims. The Offeror's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and the Offeror upon the terms and subject to the conditions of the
Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4--"Withdrawal Rights", tenders
of Shares made 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 pursuant to the Offer, may also be
withdrawn at any time after Saturday, April 18, 1998. If purchase of or payment
for Shares is delayed for any reason or if the Offeror is unable to purchase or
pay for Shares for any reason, then, without prejudice to the Offeror's rights
under the Offer, tendered Shares may be retained by the Depositary on behalf of
the Offeror and may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section
4--"Withdrawal Rights", subject to Rule 14e-1(c) under the Exchange Act, which
provides that no person who makes a tender offer shall fail to pay the
consideration offered or return the securities deposited by or on behalf of
security holders promptly after the termination or withdrawal of the Offer.
For a withdrawal of Shares tendered pursuant to the Offer to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the Depositary at the address set forth on the back cover
of this Offer to Purchase and must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holders, if different from the name of the person who tendered
the Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3--"Procedure for Tendering
Shares", any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares and must otherwise comply with such Book-Entry Transfer Facility's
procedures. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Offeror, in its sole
discretion, and its determination will be final and binding on all parties. None
of the Offeror, the Parent, the Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification.
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Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section
3--"Procedure for Tendering Shares".
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.
The following is a summary of certain United States federal income tax
considerations of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted to cash in the Merger
(including pursuant to the exercise of appraisal rights). The discussion is for
general information only and does not purport to consider all aspects of United
States federal income taxation that may be relevant to holders of Shares. The
discussion is based on current provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), existing, proposed and temporary regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all of which are subject to change. The discussion applies only to holders of
Shares in whose hands Shares are capital assets within the meaning of Section
1221 of the Code, and may not apply to Shares received pursuant to the exercise
of employee stock options or otherwise as compensation, or to certain types of
holders of Shares (such as insurance companies, tax-exempt organizations and
broker-dealers) who may be subject to special rules under the United States
federal income tax laws. This discussion does not discuss the United States
federal income tax consequences to a holder of Shares who, for United States
federal income tax purposes, is a non-resident alien individual, a foreign
corporation, a foreign partnership or a foreign estate or trust, nor does it
consider the effect of any foreign, state or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD
CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE
RULES DISCUSSED BELOW TO SUCH HOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
HOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF
STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for United States federal income tax purposes. In general,
for United States federal income tax purposes, a holder of Shares will recognize
gain or loss equal to the difference between (i) the holder's adjusted tax basis
in the Shares sold pursuant to the Offer or converted to cash in the Merger and
(ii) the amount of cash received therefor. Gain or loss must be determined
separately for each block of Shares (i.e., Shares acquired at the same cost in a
single transaction) sold pursuant to the Offer or converted to cash in the
Merger. Assuming that Shares are held as a capital asset, such gain or loss will
be a capital gain or loss. Any such capital gain will be a long-term capital
gain taxable to a non-corporate holder at a maximum rate of 20% if the holder's
Shares have been held for more than 18 months on the date of sale (in the case
of the Offer) or the Effective Time of the Merger (in the case of the Merger); a
long-term capital gain taxable to a non-corporate holder at a maximum rate of
28% if the Shares have been held for more than one year but not more than 18
months on the date of the sale (or the Effective Time of the Merger) and a
short-term capital gain taxable to a non-corporate holder at a maximum rate of
up to 39.6% if the Shares have been held for one year or less on the date of
sale (or the Effective Time of the Merger).
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%, unless a holder of Shares (i) is a
corporation or comes within certain exempt categories and, when required,
demonstrates this fact or (ii) provides a correct TIN to the payor, certifies as
to no loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. A holder who does not
provide a correct TIN may be subject to penalties imposed by the Internal
Revenue Service. Any amount paid as backup withholding does not constitute an
additional tax and will be creditable against the holder's United States federal
income tax liability. Each holder of Shares should consult with his or her own
tax advisor as to his or her qualification for exemption from backup withholding
and the procedure for obtaining such exemption. Holders tendering their Shares
in the Offer may prevent backup withholding by completing the Substitute Form
W-9 included in the Letter of Transmittal. See Section 3--"Procedure for
Tendering Shares." Similarly, holders who convert their Shares
9
<PAGE>
into cash in the Merger may prevent backup withholding by completing a
Substitute Form W-9 and submitting it to the paying agent for the Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are traded in the over-the-counter market, with daily quotations
reported on the NASDAQ quotation system. The following table sets forth for the
periods indicated the high and low sales prices and dividends per Share as
reported by published financial sources:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
--------- --------- -----------
<S> <C> <C> <C>
Year Ended December 31, 1996:
First Quarter.................................................................... $ 24.500 $ 20.000 $ .060
Second Quarter................................................................... 24.500 19.750 .065
Third Quarter.................................................................... 26.250 20.000 .065
Fourth Quarter................................................................... 29.500 22.750 .065
Year Ended December 31, 1997:
First Quarter.................................................................... $ 25.250 $ 17.750 $ .065
Second Quarter................................................................... 22.500 19.625 .070
Third Quarter.................................................................... 25.625 21.250 .070
Fourth Quarter................................................................... 47.250 24.000 .070
</TABLE>
On November 4, 1997, the last full trading day prior to the public
announcement of the Company's initiation of the process to sell the Company, the
closing price per Share as reported on NASDAQ was $27.375. On February 17, 1998,
the last full trading day prior to the commencement of the Offer, the closing
price per Share as reported on NASDAQ was $38.6875.
7. CERTAIN EFFECTS OF THE TRANSACTION.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will adversely affect the liquidity and
market value of the remaining Shares held by stockholders other than the
Offeror. The Company has advised the Offeror that, as of February 10, 1998,
there were approximately 380 stockholders of record and approximately 1,400
beneficial owners of the Shares.
MARKET FOR SHARES. Depending upon the aggregate market value and per Share
price of any Shares not purchased pursuant to the Offer, the Shares may no
longer meet the standards of the National Association of Securities Dealers,
Inc. (the "NASD") for continued inclusion in the NASDAQ over-the-counter market
which require that an issuer have at least 750,000 publicly held shares with a
market value of five million dollars held by at least 400 stockholders holding
round lots and have net tangible assets of at least four million dollars. If
these standards are not met, the Shares might nevertheless continue to be
included in the NASD's NASDAQ Stock Market with quotations published in the
NASDAQ "additional list" or in one of the "local lists." However, if the number
of holders of shares of common stock falls below 400, or if the number of
publicly held shares of common stock falls below 750,000, or if there are not at
least two market makers for such shares, NASD rules provide that the common
stock would no longer be "qualified" for NASDAQ Stock Market reporting, and the
NASDAQ Stock Market would cease to provide any quotations. Shares held directly
or indirectly by an officer or director of the Company, or by any beneficial
owner of more than 10% of the Shares, ordinarily will not be considered as being
publicly held for this purpose. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, the Common Stock no longer meets the NASD
requirements for continued inclusion in any other tier of the NASDAQ Stock
Market, and the Common Stock is no longer included in any tier of the NASDAQ
over-the-counter market, the market for such Shares could be adversely affected.
In the event the Common Stock no longer meets the requirements of the NASD
for inclusion in any tier of the NASDAQ National Market, quotations might still
be available from other sources. The extent of
10
<PAGE>
the public market for such Shares and availability of such quotations would,
however, depend upon the number of holders of such Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration under the Exchange
Act, as described below, and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if there are fewer than 300 record holders of Shares.
It is the intention of the Offeror to seek to cause an application for such
termination to be made as soon after consummation of the Offer as the
requirements for termination of registration of the Shares are met. If such
registration were terminated, the Company would no longer legally be required to
disclose publicly in proxy materials distributed to stockholders the information
which it now must provide under the Exchange Act or to make public disclosure of
financial and other information in annual, quarterly and other reports required
to be filed with the Commission under the Exchange Act, and the officers,
directors and 10% stockholders of the Company would no longer be subject to the
"short-swing" insider trading reporting and profit recovery provisions of the
Exchange Act. Furthermore, if such registration were terminated, persons holding
"restricted securities" of the Company may be deprived of their ability to
dispose of such securities under Rule 144 promulgated under the Securities Act
of 1933, as amended (the "Securities Act").
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers. If registration of Shares under the Exchange Act were terminated,
the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase, including financial information, has been
furnished by the Company or has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources.
Although neither the Offeror nor the Parent has any knowledge that would
indicate that statements contained herein based upon such information or
documents are untrue, neither the Offeror, the Parent nor the Dealer Manager
assumes any responsibility for the accuracy or completeness of the information
concerning the Company, furnished by the Company, or contained in such documents
and records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to the Offeror or the Parent.
The Company is a Maryland corporation with its principal executive offices
located at 351 West Camden Street, Baltimore, Maryland 21201. The Company is a
worldwide publisher of books, periodicals and electronic media in the fields of
medicine, allied health and related disciplines. Products are distributed to
students, practitioners, institutions and companies engaged in the healthcare
industry. The Company has operating offices in the United States, Europe, the
Far East and South America.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted from the Company's press release dated February 10,
1998 announcing its year-end results for the fiscal year ended December 31,
1997. More comprehensive financial information is included in the reports and
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference to the reports and other
documents and all the financial information (including any related notes)
contained in the Company's annual reports on Form 10-K and quarterly reports on
Form 10-Q. Such reports and other documents should be available for inspection
and copies thereof should be obtainable in the manner set forth below.
11
<PAGE>
WAVERLY, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31,
---------------------- DECEMBER 31,
1997 1996 ----------------------
---------- ---------- 1996
----------
1997 UNAUDITED
----------
UNAUDITED
<S> <C> <C> <C> <C>
Net Revenues.................................................. $ 172,386 $ 170,961 $ 48,261 $ 50,106
Costs and expenses:
Cost of sales............................................... 102,909 102,027 28,616 28,967
Selling and distribution.................................... 40,700 40,540 10,615 11,178
General and administrative.................................. 10,355 12,899 2,294 3,516
Depreciation and amortization............................... 6,880 6,053 1,727 1,741
---------- ---------- ---------- ----------
Total operating expenses...................................... 160,844 161,519 43,252 45,402
INCOME FROM OPERATIONS........................................ 11,542 9,442 5,009 4,704
Other income (expense)........................................ 92 234 (83) (121)
Interest expense.............................................. (766) (1,065) (260) (321)
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EARNINGS OF
AFFILIATED ENTITIES......................................... 10,868 8,611 4,666 4,262
Income tax expense............................................ (3,955) (3,170) (1,630) (1,583)
Equity in the earnings (losses) of affiliated entities........ 183 906 232 93
---------- ---------- ---------- ----------
NET INCOME.................................................... $ 7,096 $ 6,347 $ 3,268 $ 2,772
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per common share and common share equivalents:
BASIC......................................................... $ 0.79 $ 0.71 $ 0.36 $ 0.31
DILUTED....................................................... $ 0.75 $ 0.68 $ 0.34 $ 0.30
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cash dividends declared per share............................. $ 0.275 $ 0.255 $ 0.070 $ 0.065
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average number of common shares outstanding................... 8,943,118 8,902,020 8,975,659 8,920,808
Dilutive potential common shares.............................. 505,963 452,961 663,913 505,574
---------- ---------- ---------- ----------
Adjusted weighted-average shares.............................. 9,449,081 9,354,981 9,639,572 9,426,382
</TABLE>
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. The Company is required to disclose in such proxy statements
certain information, as of particular dates, concerning the Company's directors
and officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interests of such persons
in transactions with the Company. Such reports, proxy statements and other
information may be inspected at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street (Suite 400), Chicago, Illinois 60661. Copies of such material may also be
obtained by mail, at prescribed rates, from the Commission's principal office at
450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a
World Wide Web site on the internet at http://www.sec.gov
12
<PAGE>
that contains reports and other information regarding registrants that file
electronically with the Commission. Such material should also be available for
inspection at the offices of NASDAQ, 1735 K Street, N.W., Washington D.C. 20006.
9. CERTAIN INFORMATION CONCERNING WOLTERS KLUWER, WOLTERS KLUWER INTERNATIONAL,
THE PARENT, WK AMERICA, LIPPINCOTT-RAVEN AND THE OFFEROR.
The Offeror is a Maryland corporation which was formed as an acquisition
vehicle in connection with the Offer, the Merger and the other transactions
contemplated by the Merger Agreement and will be merged with and into the
Company pursuant to the Merger. The Offeror is a wholly owned subsidiary of
Lippincott-Raven Publishers, Inc., a Delaware corporation ("Lippincott-Raven"),
which is a wholly owned subsidiary of WK America, Inc., a Delaware corporation
("WK America"), which is a wholly owned subsidiary of the Parent. Wolters Kluwer
International Holding B.V., a corporation organized under the laws of The
Netherlands and a wholly owned subsidiary of Wolters Kluwer ("Wolters Kluwer
International"), owns 100% of the outstanding shares of capital stock of the
Parent. Wolters Kluwer International, the Parent and WK America are holding
companies formed by Wolters Kluwer solely for the purpose of holding shares of
capital stock of indirect subsidiaries of Wolters Kluwer.
The payment obligations of the Parent and the Offeror under the Merger
Agreement have been guaranteed by Wolters Kluwer pursuant to the Guarantee.
Wolters Kluwer is a multidomestic publishing company active in 25 countries.
Core activities are legal and tax publishing, business publishing,
medical/scientific publishing, educational publishing/professional training and
trade publishing for selected markets. Wolters Kluwer has sales of approximately
$2.5 billion. In addition to Lippincott-Raven, Wolters Kluwer's U.S. holdings
include Aspen Publishers, CCH Incorporated, Facts and Comparisons and Legal
Information Services. The principal executive offices of Wolters Kluwer are
located at Stadhouderskade 1, 1000 AV, Amsterdam, The Netherlands. The principal
executive office of the Parent and the Offeror is c/o Wolters Kluwer United
States Inc., 161 North Clark Street, 48th Floor, Chicago, Illinois 60601.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Wolters Kluwer, Wolters Kluwer International, Parent, WK
America, Lippincott-Raven and the Offeror are set forth in Schedule I hereto.
Set forth below is certain consolidated financial information regarding
Wolters Kluwer and its subsidiaries. The financial information set forth below
was prepared in accordance with generally accepted accounting principles used in
the Netherlands ("Dutch GAAP"), which differ in certain respects from United
States generally accepted accounting principles ("US GAAP"). The principal
differences include:
- Acquired publishing rights are capitalized. In general, publishing rights
are considered to have an indefinite economic life, and therefore no
systematic amortization is applied. Write-offs are taken in the case of
permanent impairment. Under US GAAP, acquired publishing rights are
amortized over their estimated life, not to exceed 40 years.
- Pension costs are based on actuarially computed contributions to
foundations. Under US GAAP, pension costs are actuarially computed in
accordance with the provisions of Financial Accounting Standard No. 87,
Employers Accounting for Pensions, and include current service costs,
interest costs and amortization of prior service costs.
- Post-retirement and post-employment benefits are recorded when
contributions are made to the plan or at the time of retirement or
termination for unfunded plans. US GAAP generally requires accrual of such
costs over the period that the employee provides services to the company.
The consolidated financial statements of Wolters Kluwer are published in
Dutch guilders ("guilders" or "Dfl"). The dollar amounts in the table below have
been translated from guilders at the noon buying
13
<PAGE>
rate in New York City for cable transfers in foreign currencies as certified for
customs purposes by the Federal Reserve Bank in New York City (the "Noon Buying
Rate") on June 30, 1997, which was Dfl1.962 per $1.00. Such rate may differ from
the actual rates used in the preparation of the consolidated financial
statements of Wolters Kluwer as of and for each of the years in the three-year
period ended December 31, 1996 and the interim consolidated financial statements
of Wolters Kluwer as of and for the six-month period ended June 30, 1997, which
are expressed in guilders. The dollar amounts appearing herein may differ from
the actual dollar amounts that were translated into guilders in the preparation
of such financial statements. The following table sets forth, for the periods
and dates indicated, the average, high, low and period-end Noon Buying Rates for
guilders expressed in guilders per $1.00.
YEARLY EXCHANGE RATES
(AMOUNTS IN DFL)
<TABLE>
<CAPTION>
YEAR AVERAGE(1) HIGH LOW PERIOD-END
- ---------------------------------------------------------------------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C>
1994.................................................................. 1.8055 1.9774 1.6677 1.7342
1995.................................................................. 1.5964 1.6825 1.5097 1.6076
1996.................................................................. 1.6886 1.7650 1.6032 1.7298
1997.................................................................. 1.9573 2.1271 1.7254 2.0271
1998 (through February 10, 1998)...................................... -- 2.0765 1.9410 2.0372
</TABLE>
- ------------------------
(1) The average of the Noon Buying Rates on the last business day of each month
during the relevant period.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 1997(1) 1996(1) 1995 1994
-------------------- -------------------- --------- ---------
(CURRENCY IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
AMOUNTS IN ACCORDANCE WITH
DUTCH GAAP
INCOME STATEMENT DATA:
Revenues...................................... US$ 1,234 Dfl2,421 US$ 2,199 Dfl4,315 Dfl2,944 Dfl2,736
Operating income.............................. 265 520 472 927 609 544
Net income.................................... 124 244 244 479 452 382
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................... US$ (423) Dfl (829) US$ (247) Dfl (484) Dfl (21) Dfl (151)
Total assets.................................. 4,013 7,874 3,438 6,746 2,074 1,853
Liabilities................................... 3,194 6,267 2,830 5,553 1,341 1,247
Stockholder's equity.......................... 819 1,607 608 1,193 733 606
FULLY DILUTED PER SHARE DATA
Net income.................................... US$ 1.82 Dfl 3.57 US$ 3.58 Dfl 7.03 Dfl 6.70 Dfl 5.75
</TABLE>
- ------------------------
(1) Exchange rate based on the Noon Buying Rate on June 30, 1997: Dfl1.962=US$1.
Operating income for the year ended December 31, 1996, and the six months
ended June 30, 1997, reflects operating income before the amortization of
goodwill.
Except as provided in the Merger Agreement and the Option Agreement and as
otherwise described in this Offer to Purchase, none of Wolters Kluwer, the
Parent or the Offeror, or, to the best knowledge of the Parent and the Offeror,
any of the persons listed on Schedule I hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, none of
Wolters Kluwer, the Parent or the Offeror, or to the best
14
<PAGE>
knowledge of the Parent and the Offerer, any of the persons listed on Schedule I
hereto, has had, since January 1, 1995, any business relationships or
transactions with the Company or any of its executive officers, directors or
affiliates that would require reporting under the rules of the Commission
applicable to this Offer to Purchase. Except as set forth in this Offer to
Purchase, since January 1, 1995, there have been no contacts, negotiations or
transactions between Wolters Kluwer, the Parent or the Offeror or any of their
respective subsidiaries, or to the best knowledge of the Parent and the Offeror,
any of the persons listed on Schedule I hereto, and the Company or its
affiliates, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets. Except as set forth in this Offer to
Purchase, neither the Parent nor the Offeror, nor, to the best knowledge of the
Parent and the Offeror, any of the persons listed on Schedule I hereto,
beneficially owns any Shares or has effected any transactions in the Shares
during the past 60 days.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Offeror and the Parent to
consummate the Offer and the Merger and to pay related fees and expenses is
estimated to be approximately $385 million. The Offeror intends to obtain the
required funds from capital contributions and/or loans from Wolters Kluwer.
It is presently anticipated that funds borrowed will be repaid from
internally generated funds of the Parent or the Company. The Parent may,
however, employ alternative methods for refinancing such borrowings, including,
without limitation, debt financing, depending on prevailing interest rates and
financial and other economic conditions.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
On November 5, 1997, the Company announced that its Board of Directors had
initiated a process to explore the sale of the Company and that it had retained
Morgan Stanley & Co. Incorporated to assist it in seeking prospective buyers
through an auction process. The press release noted that the Company would seek
a buyer who would demonstrate commitment to the Company's employees and maintain
a substantial operating presence in Baltimore.
On December 17, 1997, the Parent sent a preliminary letter of interest to
the Company indicating its initial interest in purchasing the Company. Such
interest was contingent upon, among other things, the completion of satisfactory
financial and legal due diligence.
On January 15, 1998, the Chief Executive Officer of the Parent, other
members of the Parent and Lippincott-Raven senior management teams and
representatives of the Parent's legal and financial advisors attended a
presentation hosted by members of the Company's senior management team and its
financial advisor to discuss the Company's business activities and its financial
performance.
On January 19, 1998, Morgan Stanley sent to the Parent, as one of four
parties selected to continue in the auction process, a letter (the "Bid
Procedures Letter") governing further procedures for the auction process and a
form of Agreement and Plan of Merger. The parties were invited to submit a firm
written offer to acquire the Company (a "Proposal") and were instructed to
submit Proposals by February 4, 1998. The Bid Procedures Letter identified which
factors the Company would use in evaluating Proposals and instructed the parties
to include in the Proposal the specific amount of consideration offered per
share. Each party was asked to mark changes in the form of the Agreement and
Plan of Merger provided, which had been prepared by the Company, and to include
in the Proposal a statement that such party would be prepared to execute the
Agreement and Plan of Merger (with any proposed modifications) in the form
submitted. Pursuant to the Bid Procedures Letter, submission of a Proposal
constituted an agreement to be bound by the terms set forth therein.
On January 27, 1998, the Supervisory Board of Wolters Kluwer met, reviewed
the possible acquisition of the Company with the Executive Board of Wolters
Kluwer and authorized management of the Parent to make an offer to acquire the
Company.
15
<PAGE>
The Parent submitted an offer proposal to the Company in the afternoon on
February 4, 1998. The offer proposal was conditioned upon, among other things,
the Company's agreement to negotiate with the Parent on an exclusive basis and
the binding agreement of the Passano family, among other things, to tender their
Shares in the Offer. SEE Section 13--"The Merger Agreement, the Option Agreement
and the Guarantee".
On the afternoon of February 5, 1998, the Parent's financial advisor
discussed the Parent's offer proposal with the Company's financial advisor. On
the morning of February 6, 1998, the Chief Executive Officer of Parent and the
Chief Executive Officer of Lippincott-Raven spoke with the Chairman of the
Company regarding certain matters related to the transaction.
From February 6 until February 10, 1998, the legal and financial advisors to
the Company met with those of the Parent to negotiate the Merger Agreement and
the Option Agreement. The Board of Directors met with the Company's legal and
financial advisors during the day on February 10, 1998. In the evening of
February 10, 1998, the Merger Agreement and the Option Agreement were finalized
and executed. On the morning of February 11, 1998, public announcements in the
United States and The Netherlands were made prior to the opening of NASDAQ and
Wolters Kluwer executed the Guarantee.
On February 18, 1998, the Parent and the Offeror commenced the Offer.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger, the Merger Agreement and the Option
Agreement is to enable the Parent to acquire control of, and the entire equity
interest in, the Company. The Offer, the Merger Agreement and the Option
Agreement are intended to increase the likelihood that the Merger will be
effected as promptly as practicable.
Under the Maryland GCL and the Articles of Incorporation of the Company, any
merger (other than a merger effectuated pursuant to the short-form merger
provisions of the Maryland GCL) must be approved by the Board of Directors of
the Company and the affirmative vote of the holders of two-thirds of the
outstanding voting power. The Board of Directors of the Company has unanimously
approved the Offer, the Merger and the Merger Agreement and the transactions
contemplated thereby. The Company has agreed (if required by applicable law to
consummate the Merger) to take all action necessary to convene a meeting of its
stockholders as promptly as practicable after the consummation of the Offer for
the purpose of obtaining stockholder approval of the Merger. The Parent has
agreed that, subject to applicable law, all Shares owned by the Offeror or any
other subsidiary of the Parent will be voted in favor of the Merger. The
stockholders meeting shall be held as soon as practicable following the purchase
of Shares pursuant to the Offer. If the Offeror owns two-thirds of the Shares,
approval of the Merger can be obtained without the affirmative vote of any other
stockholder of the Company. In the event that the Offeror acquires 90% or more
of the Shares, the Parent would be able to effectuate the Merger by appropriate
resolutions of the Boards of Directors of the Offeror and of the Company without
any meeting or action by the stockholders of the Company.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. Appraisal rights with respect to the Shares will not be available in
connection with the Merger if, among other things, the Shares are listed on a
national securities exchange or are designated as national market system
securities on an interdealer quotation system by the National Association of
Securities Dealers, Inc. on the record date for determining stockholders
entitled to vote on the Merger. See Section 7--"Certain Effects of the
Transaction". If such appraisal rights become available, a holder of Shares will
have such rights with respect to the Merger if such holder properly exercises
his appraisal rights under the Maryland GCL and the Merger is consummated (the
"Merger Dissenter"). If the right to receive fair value is applicable and the
statutory procedures for exercising or perfecting dissenters' appraisal rights
are complied with in accordance with the Maryland GCL, then generally a judicial
determination will be made of the fair value required to be paid in cash to the
Merger Dissenters for their Shares. Any such judicial determination of the fair
value of
16
<PAGE>
Shares may not include any appreciation or depreciation which directly or
indirectly results from the Merger and could be based upon considerations other
than or in addition to the price paid pursuant to the Offer or the market value
of the Shares. Fair value may be more or less than the price paid pursuant to
the Offer.
In the event that appraisal rights were available, an objecting stockholder
shall cease to have any rights as a stockholder with respect to the Shares
except the right to receive payment of the fair value thereof. The stockholder's
rights may be restored only upon the withdrawal, with the consent of the
Company, of the demand for payment, no filing of a petition for appraisal within
the time required, a determination of the court that the stockholder is not
entitled to an appraisal, or the abandonment or rescission of the transaction to
which the stockholder objected.
The foregoing summary of the rights of objecting stockholders does not
purport to be a complete statement of the procedures to be followed by
stockholders desiring to exercise their dissenters' appraisal rights. The
preservation and exercise of dissenters' rights are conditioned on strict
adherence to the applicable provisions of the Maryland GCL.
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or otherwise
in which the Offeror seeks to acquire the remaining Shares not held by it. The
Offeror believes, however, that Rule 13e-3 will not be applicable to the Merger
if the Merger is consummated within one year after the termination of the Offer
at the same per Share price as paid in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the Commission and disclosed to stockholders prior to
consummation of the transaction.
PLANS FOR THE COMPANY. Wolters Kluwer believes that, in today's highly
competitive global medical publishing markets, marked by a gradual ongoing shift
to electronic publishing, both the quality and the quantity of content ownership
are increasingly important. A strategic alliance between Wolters Kluwer and
Waverly is a natural step towards securing long-term success in the medical
publishing marketplace. As such, the Parent will continue to evaluate the
business and operations of the Company during the pendency of the Offer and
after the consummation of the Offer and the Merger. The Parent plans to
integrate the operations of the Company with those of Lippincott-Raven
Publishers, Inc., Wolters Kluwer's medical publishing operation headquartered in
Philadelphia, Pennsylvania. It is anticipated that certain operations of the
combined company, such as medical society journals and others, will be based in
Baltimore, Maryland. Other operations will be centered in Philadelphia,
Pennsylvania.
13. THE MERGER AGREEMENT, THE OPTION AGREEMENT AND THE GUARANTEE.
The following is a summary of certain material provisions of the Merger
Agreement, the Option Agreement and the Guarantee, copies of which are filed as
exhibits to the Schedule 14D-1 and Schedule 13D. These summaries do not purport
to be complete and are qualified in their entirety by reference to the
respective texts of the Merger Agreement, the Option Agreement and the
Guarantee. Capitalized terms not otherwise defined below shall have the meanings
set forth in the Merger Agreement.
THE MERGER AGREEMENT
THE OFFER. The Merger Agreement provides for the commencement of the Offer
not later than the fifth business day from the public announcement of the
execution of the Merger Agreement. The Merger Agreement also provides that the
Offeror cannot amend or waive the Minimum Condition or decrease the Offer Price
or the number of Shares sought, change the form of consideration to be paid
pursuant to the Offer, amend any other term or condition of the Offer in any
manner adverse to the holders of Shares or
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extend the expiration date of the Offer without the prior written consent of the
Company. Notwithstanding the foregoing provisions, the Parent has agreed to
cause the Offeror to extend the Offer at any time up to six (6) months from the
date of the Merger Agreement in periods of ten business days for each such
extension, if, and to the extent that, at the initial expiration date of the
Offer, or any extension thereof, all conditions to the Offer have not been
satisfied or waived.
COMPANY ACTIONS. Pursuant to the Merger Agreement, the Company has agreed
that, as promptly as practicable following the commencement of the Offer, it
will file with the Commission and mail to its stockholders, a Solicitation/
Recommendation Statement on Schedule 14D-9 containing the recommendation of the
Board of Directors that the Company's stockholders accept the Offer and approve
the Merger, subject to the fiduciary duties of the Company's directors under
applicable law and to the provisions of the Merger Agreement.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the Maryland
GCL, the Offeror shall be merged with and into the Company at the Effective
Time. Following the Merger, the separate corporate existence of the Offeror
shall cease and the Company shall continue as the Surviving Corporation and
shall succeed to and assume all the rights and obligations of the Offeror in
accordance with the Maryland GCL. At the Effective Time, the Articles of
Incorporation of the Company shall be the Articles of Incorporation of the
Surviving Corporation and the By-Laws of Offeror shall be the By-Laws of the
Surviving Corporation. The directors and officers of the Offeror shall become
the directors and officers of the Surviving Corporation.
CONVERSION OF SECURITIES. As of the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any Shares, each holder of a
Share that is issued and outstanding (other than Shares owned by the Company,
the Parent, the Offeror, or any other subsidiary of the Parent or stock with
respect to which appraisal rights are available and properly exercised under
Maryland law, if any) shall acquire the right to receive the Offer Price from
the Surviving Corporation as consideration for the conversion of each Share,
without any further action by such holder. Each share of stock of the Offeror
issued and outstanding immediately prior to the Effective Time shall, at the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any shares of stock of the Offeror, be converted into and become
one fully paid and nonassessable share of Common Stock, par value $2.00 per
share, of the Surviving Corporation.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to the Parent and the Offeror,
including, but not limited to, representations and warranties as to organization
and qualification, subsidiaries, capital structure, authority to enter into the
Merger Agreement and to consummate the transactions contemplated thereby,
required consents and approvals, filings made by the Company with the Commission
under the Securities Act or the Exchange Act (including financial statements
included in the documents filed by the Company under those acts), absence of
material adverse change, employee benefit plans, environmental laws and
regulations, intangible property and copyrights, compliance with applicable
laws, licenses and permits, tax matters, liability insurance and the
inapplicability of certain state takeover statutes.
The Offeror and the Parent have also made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties as to organization, authority to enter into the Merger Agreement and
to consummate the transactions contemplated thereby, required consents and
approvals, investigation by the Parent and financing.
COVENANTS RELATING TO THE CONDUCT OF BUSINESS. During the period from the
date of the Merger Agreement until such time as the Parent's designees shall
constitute a majority of the Board of Directors of the Company, the Company has
agreed that it will, in all material respects, carry on its business in the
ordinary course as currently conducted and, to the extent consistent therewith,
seek to preserve intact its current business organization, keep available the
services of its current officers and key employees and
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preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing business shall not be
materially impaired. The Company has agreed that, except as otherwise expressly
contemplated by the Merger Agreement, during such period, the Company will not,
without the prior written consent of the Parent:
(a) issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (i) any additional shares of capital stock of any class
(including the Shares), or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares or
capital stock, or any rights, warrants, options, calls, commitments or any
other agreements of any character to purchase or acquire any shares of
capital stock or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for any shares of capital stock or
(ii) any other securities in respect of, in lieu of, or in substitution for
Shares outstanding on the date of the Merger Agreement;
(b) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding Shares;
(c) split, combine, subdivide or reclassify any Shares or declare, set
aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution in respect of any Shares or otherwise
make any payments to stockholders in their capacity as such, other than the
declaration and payment of regular quarterly cash dividends in accordance
with past dividend policy and except for dividends by a direct or indirect
wholly owned subsidiary of the Company;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its direct or indirect subsidiaries
(other than the Merger);
(e) adopt any amendments to its Articles of Incorporation or By-Laws or
alter through merger, liquidation, reorganization, restructuring or in any
other fashion the corporate structure or ownership of any direct or indirect
subsidiary of the Company;
(f) make any material acquisition, by means of merger, consolidation or
otherwise, or material disposition, of assets or securities (other than the
Merger);
(g) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue any debt securities or make any loans, advances or
capital contributions to, or investments in, any other person other than the
Company or any direct or indirect wholly owned subsidiary of the Company;
(h) grant any material increases in the compensation of any of its
directors, officers or key employees, except in the ordinary course of
business and in accordance with past practice, PROVIDED, HOWEVER, that the
Company shall be entitled to pay, prior to the Effective Time, bonuses with
respect to 1997 pursuant to the Company's Incentive Plan, and shall further
be entitled to disregard for purposes of the calculation of the amount of
such bonuses any effect that results from, or action that is taken in
contemplation of, the Merger Agreement or the transaction contemplated
thereby;
(i) enter into any new or amend any existing employment or severance or
termination agreement with any director or officer of the Company;
(j) except as may be required to comply with applicable law, become
obligated under any new pension plan, welfare plan, multiemployer plan,
employee benefit plan, severance plan, benefit arrangement, or similar plan
or arrangement, which was not in existence on the date of the Merger
Agreement, or amend, other than in the ordinary course of business
consistent with past practice, any such plan or arrangement in existence on
the date of the Merger Agreement if such amendment would have the effect of
materially enhancing any benefits thereunder;
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(k) (i) take, or agree or commit to take, any action that would make any
representation or warranty of the Company under the Merger Agreement
inaccurate at the Effective Time (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), (ii) omit, or agree or commit to omit, to take any action necessary
to prevent any such representation or warranty from being inaccurate in any
material respect at the Effective Time (except for representations and
warranties which speak as of a particular date, which need be accurate only
as of such date), provided however that the Company shall be permitted to
take or omit to take such action which can be cured, and in fact is cured,
at or prior to the Effective Time or (iii) take, or agree or commit to take,
any action that would result in, or is reasonably likely to result in, any
of the conditions of the Merger set forth in Article VI of the Merger
Agreement ("Conditions to Consummation of the Merger") not being satisfied;
or
(l) authorize, recommend propose or announce an intention to do any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
NO SOLICITATION. The Company has agreed in the Merger Agreement that, from
and after the date of the Merger Agreement, neither the Company nor its
officers, directors, employees, representatives and agents will (i) directly or
indirectly, solicit, initiate or encourage any proposal or offer for a merger,
asset acquisition or other business combination involving the Company or any
proposal or offer to acquire a significant equity interest in, or a significant
portion of the assets of, the Company other than the transactions contemplated
by the Merger Agreement (an "Alternative Proposal"), or engage in negotiations
or enter into any agreement or provide any confidential information or data to
any person in connection with or relating to any Alternative Proposal, (ii)
immediately cease any existing discussions or negotiations, if any, with any
parties with respect to any Alternative Proposal, and (iii) will notify the
Parent as soon as practicable if it receives any inquiries or proposals or any
negotiations or discussions are sought to be initiated with the Company.
Notwithstanding the foregoing, the Board of Directors of the Company will not be
prohibited from acting in any manner which, in the opinion of the Board after
consultation with its counsel, could reasonably be deemed inconsistent with its
fiduciary duties to the Company's stockholders under applicable law.
OPTIONS. Prior to the Effective Time, the Company and the Parent have
agreed to take all actions necessary to provide that the Company shall pay to
the holder of each outstanding stock option granted under the Company Stock
Option Plans, whether or not then exercisable or vested, an amount equal to the
product of (i) the number of Shares subject or related to such option and (ii)
the excess of the Offer Price over the exercise or purchase price per Share
subject or related to such option (such payment to be net of applicable
withholding taxes). Each such option shall thereafter be cancelled.
INDEMNIFICATION. From and after the consummation of the Offer, the Parent
shall (and shall cause the Surviving Corporation to) exculpate, indemnify and
hold harmless all past and present officers and directors of the Company and its
subsidiaries to the full extent permitted by applicable law or the Company's
Articles of Incorporation and By-Laws or indemnification agreements in effect on
the date of the Merger Agreement for acts or omissions occurring at or prior to
the Effective Time. The Parent will cause the Surviving Corporation to provide,
for an aggregate period of not less than six years from the Effective Time, the
Company's current directors and officers liability insurance and indemnification
policy that provides coverage for events occurring at or prior to the Effective
Time that is no less favorable than the Company's existing policy.
EMPLOYEES AND EMPLOYEE BENEFITS. The Merger Agreement provides that:
(a) individuals who are employed by the Company and its subsidiaries
immediately prior to the Effective Time shall be employees of the Company
and its subsidiaries as of the Effective Time (each such employee an
"Affected Employee" and, together with all former employees of the Company
and its subsidiaries, "Company Employees").
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(b) The Parent will, or will cause the Surviving Corporation to, give
Affected Employees full credit for purposes of eligibility and vesting and
determination of the level of benefits under any employee benefit plans or
arrangement maintained by the Parent, the Surviving Corporation or any
subsidiary of the Parent for such Affected Employees' service with the Company
or any subsidiary of the Company to the same extent recognized by the Company
immediately prior to the Effective Time.
(c) The Parent will, or will cause the Surviving Corporation to, (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
with respect to participation and coverage requirements applicable to the
Company Employees under any welfare benefit plans that such employees may be
eligible to participate in after the Effective Time, other than limitations or
waiting periods that are already in effect with respect to such employees and
that have not been satisfied as of the Effective Time under any welfare plan
maintained for the Company Employees immediately prior to the Effective Time,
and (ii) provide each Company Employee with credit for any co-payments and
deductibles paid prior to the Effective Time in satisfying any applicable
deductible or out-of-pocket requirements under any welfare plans that such
employees are eligible to participate in after the Effective Time.
(d) Until December 31, 2000, the coverage and benefits provided to Affected
Employees pursuant to employee benefit plans or arrangements maintained by
Parent, the Surviving Corporation, or any subsidiaries of the Parent shall be,
in the aggregate, not less favorable than those provided to such employees
immediately prior to the Effective Time, and after December 31, 2000, the Parent
will provide or cause the Surviving Corporation to provide coverage and benefits
which are, in the aggregate, at least as favorable to the Affected Employees as
the coverage and benefits provided to the Parent's employees. Without limiting
the generality of the foregoing, the Parent will honor, or cause the Surviving
Corporation to honor, until December 31, 2000, the severance policy of the
Company as in effect as of the Effective Time.
(e) Through December 31, 2000, the Parent will provide, or cause the
Surviving Corporation to provide, to each currently retired Company Employee and
to each Company Employee who retires prior to December 31, 2000 (the "Retired
Employees") the benefits (other than stock options) disclosed to the Parent and
the Offeror on the disclosure schedules prepared by the Company and annexed to
the Merger Agreement. From December 31, 2000 until December 31, 2002, the Parent
will continue to provide or cause the Surviving Corporation to provide the
Retired Employees with the post-retirement medical insurance premium percentage
subsidy which each such Retired Employee is receiving as of December 31, 2000
and that in all other respects, the post-retirement medical benefits available
to Retired Employees will be no less favorable than those available to the
Parent's employees who are eligible for post-retirement medical benefits under
its retiree medical benefit plan. From and after December 31, 2002, the Parent
will provide the Retired Employees the post-retirement medical coverage provided
to employees or former employees of the Parent who are eligible for
post-retirement medical benefits, treating for all purposes of such coverage the
Retired Employee's service with the Company as service with the Parent.
(f) The Parent and the Surviving Corporation will honor without modification
and assume the employment agreements, executive termination agreements and
individual benefit arrangements as in effect at the Effective Time.
(g) The Parent shall advise the employees of the Company, in a written
communication issued to the Company Employees as soon as practicable following
the date of the Merger Agreement, of Parent's undertakings with respect to
employee benefits set forth in the Merger Agreement.
(h) Until December 31, 2000, the Parent shall not terminate or merge or
consolidate the Waverly, Inc. Pension Plan (the "Pension Plan") and the Pension
Plan shall not be amended except as required by applicable law.
CORPORATE PRESENCE. The Merger Agreement provides that the Surviving
Corporation shall maintain a substantial operating presence in the City of
Baltimore, Maryland, including maintaining a substantial work force and
operations in Baltimore, for a period of five (5) years following the Effective
Time.
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BOARD REPRESENTATION. The Merger Agreement provides that promptly after
such time as the Offeror acquires Shares pursuant to the Offer, the Offeror
shall be entitled to designate at its option up to that number of directors,
rounded to the nearest whole number, of the Company's Board of Directors,
subject to compliance with Section 14(f) of the Exchange Act, as will make the
percentage of the Company's directors designated by the Parent equal to the
aggregate voting power of the Shares (assuming the exercise of all options to
purchase Common Stock); PROVIDED, HOWEVER, until the Effective Time, such Board
of Directors shall have at least two directors who are directors on the date of
the Merger Agreement, PROVIDED, that subsequent to the purchase of and payment
for Shares pursuant to the Offer, the Parent shall always have its designees
represent at least a majority of the entire Board of Directors. From and after
the time that the Parent's designees constitute a majority of the Company's
Board of Directors, any actions relating to the amendment or termination of the
Merger Agreement by the Company or any extension of time requiring the approval
of the Company or waiver of any condition or rights of the Company thereunder
must be approved by a majority of the Board of Directors who were directors of
the Company on the date of the Merger Agreement; PROVIDED that if there are no
such directors, then such action may be taken only by unanimous vote of the
entire Board of Directors. Subject to applicable law, the Company has agreed to
take all action requested by the Parent which is reasonably necessary to effect
any such election, including mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder.
CONDITIONS PRECEDENT. The respective obligations of each party to effect
the Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following conditions: (i) if required by applicable law, the stockholders
of the Company shall have approved the Merger; PROVIDED, HOWEVER, that the
Parent and the Offeror shall vote all of their shares of capital stock of the
Company entitled to vote thereon in favor of the Merger, (ii) no statute, rule,
regulation, executive order, decree, ruling or injunction or other order issued
by any court of competent jurisdiction or other governmental or regulatory
entity preventing the consummation of the Merger shall be in effect; PROVIDED,
HOWEVER, that each of the parties shall have used its reasonable efforts to have
any such decree, ruling, injunction or order vacated, and (iii) all governmental
consents, orders and approvals legally required for the consummation of the
Merger shall have been obtained and any waiting period (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and under antitrust laws of applicable jurisdictions
outside the United States applicable to the Merger shall have expired or been
terminated.
TERMINATION. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time:
(a) by the mutual consent of the Parent, the Offeror and the Company;
(b) by either the Company or Parent (i) if the Shares shall not have
been purchased pursuant to the Offer on or prior to six (6) months from the
execution of the Merger Agreement; PROVIDED, HOWEVER, that a party may not
terminate the Merger Agreement pursuant to this clause if such party's
failure to fulfill any obligation under the Merger Agreement was the cause
of, or resulted in, the failure of the Parent or the Offeror to purchase the
Shares on or prior to such date or (ii) if any governmental entity of
competent jurisdiction in the United States or other country in which the
Company or the Parent directly or indirectly has material assets or
operations shall have issued an order, decree or ruling or taken any other
action (which order, decree, ruling or other action the parties hereto shall
use their respective reasonable best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by the Merger Agreement and such order, decree, ruling or other
action shall have become final and non-appealable;
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(c) by the Board of Directors of the Company (i) if prior to the
purchase of Shares pursuant to the Offer, (A) the Board of Directors of the
Company shall have entered into or shall have publicly announced its
intention to enter into an agreement or an agreement in principle with
respect to any Alternative Proposal that the Board of Directors of the
Company determines, in good faith after consultation with its financial
advisors, is a bona fide proposal to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, all of the shares then
outstanding or all or substantially all of the assets of the Company, and
otherwise on terms which the Board of Directors of the Company determines in
good faith to be more favorable to the Company and its shareholders than the
Offer and the Merger (a "Superior Proposal"); (B) the Board of Directors of
the Company shall have withdrawn, or modified or changed in a manner adverse
to the Parent or the Offeror its approval or recommendation of the Offer,
the Merger Agreement or the Merger or shall have recommended a Superior
Proposal or shall have executed, or shall have announced its intention to
enter into, an agreement in principle or definitive agreement relating to a
Superior Proposal with a person or entity other than the Parent, the Offeror
or their affiliates (or the Board of Directors of the Company resolves to do
any of the foregoing); (C) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than the Parent, the Offeror or any
affiliate thereof) shall have become the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of a majority of the
outstanding Shares, or (D) any representation or warranty made by the Parent
or the Offeror in the Merger Agreement shall not have been true and correct
in all material respects when made, or the Parent or the Offeror shall have
failed to observe or perform in any material respect any of its material
obligations under the Merger Agreement; provided that prior to exercising
such right of termination, the Company shall give prompt written notice to
the Parent of such misrepresentation or breach of warranty or failure to
observe or perform; provided, further, that the Company shall not have such
right of termination if the condition resulting in such misrepresentation or
breach of warranty or failure to observe or perform is cured; (ii) if the
Parent or the Offeror shall have terminated the Offer, or the Offer shall
have expired, without the Parent or the Offeror, as the case may be,
purchasing any Shares pursuant thereto; provided that the Company may not
terminate the Merger Agreement pursuant to such provision if the Company is
in material breach of the Merger Agreement; or (iii) if the Parent, the
Offeror or any of their affiliates shall have failed to commence the Offer
on or prior to five business days following the date of the initial public
announcement of the Offer; provided, that the Company may not terminate the
Merger Agreement pursuant to such provision if the Company is in material
breach of the Merger Agreement; or
(d) by the Parent or the Offeror (i) if, due to an occurrence that if
occurring after the commencement of the Offer would result in a failure to
satisfy any of the conditions to the Offer, see Section 15--"Certain
Conditions to Offeror's Obligations", the Parent, the Offeror, or any of
their affiliates shall have failed to commence the Offer on or prior to five
business days following the date of the initial public announcement of the
Offer; provided that the Parent may not terminate the Merger Agreement
pursuant to such provision if the Parent or the Offeror is in material
breach of the Merger Agreement; or (ii) prior to the purchase of Shares
pursuant to the Offer, if (A) the Company shall have received any
Alternative Proposal which the Board of Directors of the Company has
determined is a Superior Proposal; (B) the Board of Directors of the Company
shall have withdrawn, or modified or changed in a manner adverse to the
Parent or the Offeror its approval or recommendation of the Offer, the
Merger Agreement or the Merger or shall have recommended an Alternative
Proposal or shall have executed, or shall have announced its intention to
enter into, an agreement in principle or definitive agreement relating to an
Alternative Proposal with a person or entity other than the Parent, the
Offeror or their affiliates (or the Board of Directors of the Company
resolves to do any of the foregoing); (C) any person or group (as defined in
Section 13(d)(3) of the Exchange Act) (other than the Parent, the Offeror or
any affiliate thereof) shall have become the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of more than one-third of the
outstanding Shares, or (D) any representation or warranty made by the
Company in the Merger Agreement
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shall not have been true and correct in all material respects when made, or
the Company shall have failed to observe or perform in any material respect
any of its material obligations under the Merger Agreement; provided that
prior to exercising such right of termination, the Parent and the Offeror
shall give prompt written notice to the Company of such misrepresentation or
breach of warranty or failure to observe or perform; provided, further, that
the Parent and the Offeror shall not have such right of termination if the
condition resulting in such misrepresentation or breach of warranty or
failure to observe or perform is cured.
EFFECT OF TERMINATION; TERMINATION FEE. The Merger Agreement provides that
if the Parent or the Offeror terminates the Merger Agreement pursuant to the
provisions described in clauses (d)(ii) (A), (B) and (C) under "Termination"
above, then immediately following such termination, the Company shall pay to the
Parent $10,000,000 in full satisfaction of the obligations of the Company under
the Merger Agreement. Nothing contained in such provision will relieve any party
from liability for fraud or for willful breach of the Merger Agreement.
Except as set forth above, whether or not the Merger is consummated, all
costs and expenses incurred in connection with the Merger Agreement and the
transactions contemplated thereby shall be paid by the party incurring such
expenses.
OPTION AGREEMENT
GENERAL. As a condition of the willingness of the Parent and the Offeror to
enter into the Merger Agreement, the Parent and the Offeror required that each
of the Stockholders enter into the Option Agreement. The Stockholders, include,
among others, individual members of the Passano family and trusts for the
benefit of certain members of the Passano family.
AGREEMENT TO TENDER. Pursuant to the Option Agreement, the Stockholders
severally (and not jointly) have agreed to tender and sell pursuant to the
Offer, a total of 5,338,680 shares owned by the Stockholders, representing
approximately 53.3% of the outstanding shares on a fully diluted basis. Each
Stockholder severally has agreed to deliver to the Depositary, immediately
following the date of this Offer to Purchase, the Letter of Transmittal together
with the certificates for the Stockholder's Shares, if available, or a "Notice
of Guaranteed Delivery," if the Stockholder's Shares are not available. Each of
the Stockholders has also severally agreed not to withdraw any Shares tendered
into the Offer unless the Offer is terminated by the Parent or the Offeror
without any Shares being purchased thereunder.
OPTION TO PURCHASE. Each Stockholder has also severally granted to the
Optionee a conditional irrevocable option (the "Stock Option") to purchase all
of such Stockholder's Shares legally and/or beneficially owned by such
Stockholder at a purchase price equal to $39.00 per Share. The Stock Option may
be exercised by Optionee, in whole and for all of such Stockholder's Shares but
not in part or for less than all of such Stockholder's Shares (i) if the Offer
was terminated by the Parent or the Offeror for the reasons set forth in (f) or
(g) of the Conditions to the Offer (as set forth in Annex A to the Merger
Agreement) or (ii) in the case of the expiration of the Offer, if the Offer
expires without the purchase of Shares thereunder either without satisfaction of
the Minimum Condition or after the occurrence of circumstances giving rise to a
right of termination by the Parent or the Offeror for the reasons set forth in
(f) or (g) of said Conditions of the Offer, in each case without any violation
of the Offer or the Merger Agreement by the Parent or the Offeror. Notice of
exercise may be given at any time during the period (the "Exercise Period")
commencing on the date on which the Offer is terminated or expires (under the
circumstances provided in this Section) and ending on the date six months and
one day after such commencement date. In addition, the Optionee may also
exercise the Stock Option if the Company terminates the Merger Agreement
pursuant to those provisions of Section 7 relating to Alternative Proposals and
the withdrawal of Company approval of this Offer, whereupon the Exercise Period
shall commence on the date such termination rights are exercised and end on the
date six months and one day thereafter.
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CONDITIONS TO DELIVERY OF THE SHARES. The Option Agreement provides that
the obligation of each Stockholder to deliver such Stockholder's Shares upon
exercise of the Stock Option is subject to (i) all waiting periods under the HSR
Act applicable to the exercise of the Stock Option having expired or been
terminated, (ii) there being no permanent injunction or other order by any court
of competent jurisdiction restricting, preventing or prohibiting the exercise of
the Stock Option or the delivery of the Stockholder's Shares in respect of such
exercise.
REPRESENTATION AND WARRANTIES. The Option Agreement contains customary
representations and warranties by each Stockholder, including those relating to
(i) authority to enter into the Option Agreement and sell Shares owned by such
Stockholder, (ii) no options, warrants or other purchase rights existing as to
such Stockholder's Shares, (iii) good and marketable title to such Stockholder's
Shares, free and clear of all liens, claims, encumbrances and security
interests, (iv) legality, validity and binding effect of the Option Agreement,
and (v) no violation of agreements, judgments, laws, rules and regulations. The
Option Agreement also contains customary representations and warranties by the
Parent and the Offeror, including those relating to authority to enter into the
Option Agreement, the sufficiency of funds of the Parent, legality, validity and
binding effect of the Option Agreement and no violation of agreements,
judgments, laws, rules and regulations.
NO DISPOSITION OF STOCKHOLDERS' SHARES AND NO ACQUISITION OF SHARES. Each
Stockholder severally agreed that, except as contemplated by the Option
Agreement, such Stockholder will not offer or agree to, sell, transfer or
otherwise dispose of, or create any security interest, pledge, option, right of
first refusal, limitation on such Stockholder's voting rights or other
encumbrance with respect to, such Stockholder's Shares. Each such Stockholder
has also agreed that it will not, and will not offer or agree to, acquire any
additional Shares or options, warrants or other rights to acquire Shares,
without the prior written consent of the Parent or the Offeror. Each Stockholder
agrees that such Stockholder shall not grant any proxy or power of attorney with
respect to the voting of Shares (each a "Voting Proxy") to any person except to
vote in favor of any of the transactions contemplated by the Option Agreement or
the Merger Agreement. Each Stockholder represents and warrants that such
Stockholder has not granted any Voting Proxy which is currently (or which will
hereafter become) effective with respect to Shares owned by such Stockholder
except Voting Proxies, if any, granted to another Stockholder, and if such
Stockholder has granted a Voting Proxy to any person other than a Stockholder,
such Voting Proxy is revoked; PROVIDED, HOWEVER, that nothing contained in the
foregoing sentence may be deemed to revoke, limit or otherwise affect the terms
of the Passano Voting Trust, the Urban Voting Trust or the Spahr Voting Trusts
(as described in the Company's Proxy Statement, dated March 25, 1997) as such
terms pertain to the voting of Shares subject to such voting trusts. No Voting
Proxy shall be given or written consent executed by such Stockholder after the
date of the Option Agreement with respect to such Stockholder's Shares (and if
given or executed, will not be effective) so long as the Option Agreement
remains in effect; PROVIDED, HOWEVER, that such Stockholder may hereafter grant
Voting Proxies in furtherance of such Stockholder's obligations under the Voting
Agreement section of the Option Agreement.
COVENANTS OF THE PARENT AND THE OFFEROR. Each of the Parent and the Offeror
has agreed that it will not sell, offer to sell or otherwise dispose of the
Shares in violation of the Securities Act. Each of the Parent and the Offeror
has also agreed that it will perform in all material respects all of its
respective obligations under the Merger Agreement.
NO SOLICITATION. Each Stockholder has agreed that it will immediately cease
any existing discussion or negotiations, if any, with any parties with respect
to any acquisition or exchange of all or any material portion of the assets of,
or any equity interest in, the Company or any of its subsidiaries or any
business combination with the Company or any of its subsidiaries. Each
Stockholder has also agreed that from and after the date of the Option
Agreement, no Stockholder will directly or indirectly solicit or initiate any
takeover proposal from any person, or engage in discussion or negotiations
relating thereto except to the
25
<PAGE>
extent permitted in the Merger Agreement. Each Stockholder will promptly notify
the Parent of its receipt of any Alternative Proposal.
VOTING AGREEMENT. During the time the Option Agreement is in effect, each
Stockholder has agreed to vote all such Stockholder's Shares (i) in favor of the
Merger, the Merger Agreement and the transactions contemplated by the Merger
Agreement, (ii) against any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement, and (iii) against any
action or agreement that would materially impede, interfere with or attempt to
discourage the Offer or the Merger. Each Stockholder also has agreed that, if
the Merger Agreement terminates solely by reason of the Company's exercise of
its termination rights relating to Alternative Proposals or the withdrawal of
its recommendation regarding this Offer and for so long as the Exercise Period
has not ended, such Stockholder will (i) attend or otherwise participate in all
stockholder meetings, or actions by written consent, (ii) vote such
Stockholder's Shares to enlarge the Board of Directors of the Company to provide
the Offeror with a majority of the members of the Board of Directors, (iii)
shall not, without the prior written consent of the Parent or the Offeror, vote
any of such Shares in favor of any actions requiring stockholder approval which
are described in the covenant section of the Merger Agreement, and (iv) vote
such Stockholder's Shares and use its reasonable efforts as a stockholder so as
to prevent the Company from taking certain actions provided for in the Merger
Agreement.
Certain Stockholders listed on Schedule II of the Option Agreement have
agreed that if during the Exercise Period such Stockholder breaches the voting
agreements described above, such Stockholder shall be deemed to have granted
Parent proxies to vote his or her Shares except that Parent shall not have the
right to vote to reduce the Offer Price or the Merger Consideration or to amend
or modify the Merger Agreement or reduce the rights or benefits of the Company
or any stockholders of the Company under the Offer or the Merger Agreement or
reduce the obligation of Parent or Offeror thereunder. The Option Agreement
provides that such proxies terminate if (i) the Offer expires or terminates
without any Shares being purchased thereunder in violation of the Offer or the
Merger Agreement or (ii) the Parent or the Offeror is in violation of the Option
Agreement.
TERMINATION. The Option Agreement will terminate, without any action by any
of the parties, on the date on which the Merger Agreement terminates in
accordance with its terms, except with respect to the exercise of the Stock
Option. The Stock Option may be exercised after termination of the Merger
Agreement on the terms described above under "Option to Purchase."
THE GUARANTEE.
GENERAL. Wolters Kluwer and the Company executed a Guarantee on February
11, 1998 whereby Wolters Kluwer unconditionally guaranteed all of the payment
obligations of the Parent and the Offeror under the Merger Agreement.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, from the date of the Merger Agreement
until the time as the Parent's designees shall constitute a majority of the
Board of Directors of the Company (i) issue, sell, grant, dispose of, pledge or
otherwise encumber, or authorize or propose the issuance, sale, disposition or
pledge or other encumbrance of (a) any additional shares of capital stock of any
class (including the Shares), or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of capital
stock, or any rights, warrants, options, calls, commitments or other agreements
of any character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of capital stock or (b) any other securities in
respect of, in lieu of, or in substitution for, Shares outstanding on the date
hereof; (ii) redeem, purchase or
26
<PAGE>
otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of
its outstanding Shares; or (iii) split, combine, subdivide or reclassify any
Shares or declare, set aside for payment or pay any dividend, or make any other
actual, constructive or deemed distribution in respect of any Shares or
otherwise make any payments to stockholders in their capacity as such, other
than the declaration and payment of regular quarterly cash dividends in
accordance with past dividend policy and except for dividends by a direct or
indirect wholly owned subsidiary of the Company.
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other term of the Offer, the Offeror shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) under the Exchange Act
(relating to the Offeror's obligation to pay for or return tendered Shares after
the termination or withdrawal of the Offer), to pay for any Shares tendered
pursuant to the Offer unless (i) there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares, which
together with the Shares beneficially owned by the Parent or the Offeror
constitute at least two-thirds of the Shares outstanding on a fully diluted
basis, and (ii) any applicable waiting period under the HSR Act or the antitrust
laws of applicable jurisdictions outside the United States applicable to the
purchase of Shares pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer, the Offeror shall not
be required to accept for payment or, subject to the aforementioned
requirements, pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer if, at any time on or after the date of the
Merger Agreement and before the acceptance of such Shares for payment or the
payment therefor, any of the following conditions exists (other than as a result
of any action or inaction of the Parent or the Offeror that constitutes a breach
of the Merger Agreement):
(a) there shall be any statute, rule, regulation, judgment, order or
injunction promulgated, entered, enforced, enacted, issued or applicable to the
Offer or the Merger by any governmental entity of competent jurisdiction in the
United States or other country in which the Company or Parent directly or
indirectly has material assets or operations which (i) seeks to prohibit the
consummation of the Offer or the Merger, (ii) as a result of the Offer or the
Merger, seeks to restrain or prohibit, or impose any material limitations on,
the Parent's or the Offeror's ownership or operation of all or a material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or of the Parent and its subsidiaries, taken as a whole, or compel the
Parent or any of its subsidiaries or affiliates to dispose of or hold separate
all or any material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of the Parent and its subsidiaries, taken as
a whole or requires the Company, the Parent or the Offeror to pay damages that
are material in relation to the Company and its Subsidiaries, taken as a whole,
(iii) seeks to challenge, prohibit, or make illegal the acceptance for payment,
payment for or purchase of Shares pursuant to, or consummation of, the Offer or
the Merger, (iv) seeks to impose material limitations on the ability of the
Offeror or the Parent effectively to exercise full rights of ownership of the
Shares accepted for payment pursuant to the Offer, including without limitation
the right to vote the Shares purchased by it on all matters properly presented
to the Company's stockholders, or (v) seeks to require divestiture by the Parent
or any of its subsidiaries or affiliates of any Shares, provided that the Parent
shall have used all reasonable efforts to cause any such judgment, order or
injunction to be vacated or lifted;
(b) there shall be threatened, instituted or pending any action, suit, or
proceeding by any governmental entity of competent jurisdiction in the United
States, or any other country in which the Company or the Parent directly or
indirectly has material assets or operations, that is reasonably likely,
directly or indirectly, to result in any of the consequences referred to in
clauses (i) through (v) of paragraph (a) above;
(c) there has been since the date hereof any event, occurrence or
development or state of circumstances or facts which has resulted in any adverse
change in the assets, liabilities, financial condition, or results of operations
of the Company or any of its subsidiaries which is material to the Company and
its
27
<PAGE>
subsidiaries, taken as a whole, other than any change or effect arising out of
general economic conditions (a "Company Material Adverse Effect");
(d) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and accurate as of the date of consummation
of the Offer as though made on or as of such date or the Company shall have
breached or failed in any material respect to perform or comply with any
material obligation, agreement or covenant required by the Merger Agreement to
be performed or complied with by it except, (i) those representations and
warranties that address matters only as of a particular date or only with
respect to a specified period of time which need only be true and accurate as of
such date or with respect to such period or (ii) where the failure of such
representations and warranties to be true and accurate, or the breach,
non-performance or non-compliance with such obligations, agreements or
covenants, do not, individually or in the aggregate, result in a Company
Material Adverse Effect;
(e) the Merger Agreement shall have been terminated in accordance with its
terms;
(f) the Company shall have entered into a definitive agreement or agreement
in principle with any person with respect to an Alternative Proposal;
(g) the Company's Board of Directors shall have withdrawn, or modified or
changed in a manner adverse to the Parent or the Offeror (including by amendment
of the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement, or
the Merger, or recommended an Alternative Proposal, or shall have resolved to do
any of the foregoing;
which in the sole judgment of the Parent or the Offeror, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions are for the sole benefit of the Offeror and the
Parent and may be waived by the Parent or the Offeror, in whole or in part at
any time and from time to time in the sole discretion of the Parent or the
Offeror.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
Except as set forth in this Section, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to the Offeror's right to decline to purchase Shares if any of
the conditions specified in Section 15--"Certain Conditions to the Offeror's
Obligations" shall have occurred. 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 adverse consequences might not result to
the Company's business or that certain parts of the Company's business might not
have to be disposed of if any such approvals were not obtained or other action
taken.
U.S. ANTITRUST. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may be consummated following
the expiration of a 15-day waiting period following the filing by the Parent of
a Premerger Notification and Report Form with respect to the Offer, unless the
Parent receives a request for additional information or documentary material
from the Department of Justice, Antitrust Division (the "Antitrust Division") or
the Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. The Parent made such a filing on February 17, 1998 and,
accordingly, the initial waiting period will expire on March 4, 1998. If, within
the initial 15-day waiting
28
<PAGE>
period, either the Antitrust Division or the FTC requests additional information
or documentary material concerning the Offer, the waiting period will be
extended through the tenth day after the date of substantial compliance by all
parties receiving such requests. Complying with a request for additional
information or documentary material can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition of
the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger, or seeking the divestiture of Shares
acquired by the Offeror or the divestiture of substantial assets of the Company
or its subsidiaries or the Parent or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer or to the consummation of the
Merger on antitrust grounds will not be made, or, if such a challenge is made,
of the result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, the Offeror will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15--"Certain Conditions to the Offeror's
Obligations".
GERMAN ANTITRUST. The merger is subject to German antitrust law, which
requires the pre-closing approval of any merger or acquisition, where (i) one
party has consolidated worldwide net sales in its most recent financial year of
DM 2 billion or more or each of at least two parties to such a transaction has
consolidated worldwide net sales of DM 1 billion or more, and (ii) such
transaction has effects in Germany. Accordingly, a pre-closing notification must
be filed with the German Federal Cartel Office in connection with the Merger.
The German Federal Cartel Office has an initial one-month review period in which
it may either (i) approve the Merger, or (ii) initiate an investigation to
examine the consequences of the Merger, which investigation cannot last more
than a total of four months from the date of the original notification unless
the parties to the transaction have agreed to an extension of that period. The
German Federal Cartel Office can prohibit the Merger after the expiration of the
four-month investigation period if the transaction has been completed before
either (i) the expiration of the initial one-month review period without an
earlier clearance notice from the Federal Cartel Office or (ii) the expiration
of the four-month investigation period, without an earlier clearance notice from
the Federal Cartel Office, if an investigation of the Merger has been initiated.
The Merger will not be effective under German law if a notice of prohibition is
issued by the German Federal Cartel Office within the requisite waiting period
or until (i) the one-month waiting period has expired and no additional
investigation has been initiated, (ii) the four-month investigation period has
expired or (iii) clearance notice from the German Federal Cartel Office is
received. Breach of the relevant legislation or closing the transaction without
clearance or before the expiration of the relevant waiting periods may
constitute an administrative offense and subject the Offeror and the Company to
fines. The Parent will file a notification with the German Federal Cartel Office
in connection with the Merger.
MARYLAND STATE TAKEOVER LAWS. Subtitle 6 of Title 3 of the Maryland GCL
(the " Maryland Business Combination Law") prohibits certain "business
combinations" (including certain mergers, consolidations, share exchanges, sales
or dispositions of assets, issuances of stock, liquidations, reclassifications
and benefits from the corporation, including loans or guarantees) between a
Maryland corporation and any interested shareholder (defined generally as any
person who, directly or indirectly, beneficially owns 10 percent or more of the
outstanding voting power of the stock of the corporation or an affiliate of the
corporation that, at any time within the two-year period prior to the date in
question, was the beneficial owner of ten percent or more of the voting power of
the corporation's outstanding voting stock) for five years after the most recent
date on which the interested shareholder became an interested shareholder. After
such five-year period, any such business combination must be approved by two
supermajority
29
<PAGE>
shareholder votes, unless, among other conditions, the corporation's common
stockholders receive a minimum price (as calculated in the Maryland GCL) for
their shares in cash or in the same form as previously paid by the interested
shareholder for its shares. These provisions of the Maryland GCL do not apply to
a business combination with an interested shareholder that is approved or
exempted from the Maryland Business Combination Law by the board of directors of
the corporation prior to the date on which the interested shareholder became
such. The Company's Board of Directors has approved the Offer, the Merger and
the Option Agreement and has exempted any resultant business combination from
the Maryland Business Combination Law.
Subtitle 7 of Title 3 of the Maryland GCL (the "Maryland Control Share Act")
generally prohibits an acquiring person from voting control shares (as described
below) of a Maryland corporation acquired pursuant to a control share
acquisition (as described below), unless voting rights for such shares shall
have been approved by the shareholders of the corporation by the affirmative
vote of two-thirds of all votes entitled to be cast (other than interested
shares, as described below) or unless the shares are acquired pursuant to a
merger agreement with the corporation or unless the corporation's articles of
incorporation or by-laws contain a provision, adopted prior to the acquisition,
permitting the acquisition of such shares. "Control shares" generally means
shares of a corporation acquired by a person within any of the following ranges
of voting power: (i) one-fifth or more, but less than one-third of all voting
power; (ii) one-third or more, but less than a majority of all voting power; or
(iii) a majority or more of all voting power, "Control share acquisition"
generally means the acquisition of, ownership of, or the power to direct the
exercise of voting power with respect to, control shares, but does not include
the acquisition of shares in a merger, consolidation or share exchange to which
the corporation is a party. "Interested shares" generally mean shares of a
corporation in respect of which an acquiring person, an officer of the
corporation or an employee of the corporation who is also a director of the
corporation is entitled to exercise voting power in the election of directors.
The Company's By-laws exempt any acquisition of shares of stock of the Company
from the Maryland Control Share Act.
OTHER STATE TAKEOVER LAWS. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects in such states. In EDGAR V. MITE CORP., in
l982, the Supreme Court of the United States (the "U.S. Supreme Court")
invalidated on constitutional grounds the Illinois Business Takeover statute,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987, in CTS CORP. V.
DYNAMICS CORP. OF AMERICA, the U.S. Supreme Court held that the State of Indiana
may, as a matter of corporate law and, in particular, with respect to those
aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the U.S. Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Offeror does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws. Should
any person seek to apply any state takeover law, the Offeror will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Offeror might be required
to file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Offeror might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer and the Merger. In such case, the Offeror may not be
obligated to accept for payment any Shares tendered. See Section 15--"Certain
Conditions to the Offeror's Obligations."
30
<PAGE>
17. FEES AND EXPENSES.
Neither the Offeror nor the Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or the Parent, will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer Manager
and the Information Agent) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies and other nominees
will, upon request, be reimbursed by the Offeror for customary mailing and
handling expenses incurred by them in forwarding materials to their customers.
Credit Suisse First Boston Corporation ("Credit Suisse First Boston" or
"CSFB") is acting as the Dealer Manager in connection with the Offer and as
financial advisor to Wolters Kluwer in connection with the Parent's proposed
acquisition of the Company, for which services CSFB will receive customary
compensation. Wolters Kluwer also has agreed to reimburse CSFB for its
out-of-pocket expenses, including the fees and expenses of legal counsel and
other advisors, incurred in connection with its engagement, and to indemnify
CSFB and certain related persons against certain liabilities and expenses in
connection with its engagement, including certain liabilities under the federal
securities laws. In the ordinary course of business, CSFB and its affiliates may
actively trade the debt and equity securities of Wolters Kluwer and the equity
securities of the Company for their own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
The Offeror has retained Georgeson & Company Inc., as Information Agent, and
Morgan Guaranty Trust Company of New York, as Depositary, in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Information Agent and the Depositary will
also be indemnified by the Offeror against certain liabilities in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telex, telegraph and personal interviews and may request brokers, dealers and
other nominee stockholders to forward materials relating to the Offer to
beneficial owners of Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Offeror by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE OFFEROR OTHER THAN AS CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF ANY SUCH INFORMATION OR
REPRESENTATION IS GIVEN OR MADE, IT SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Offeror and the Parent have filed with the Commission (i) a Schedule
14D-l, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3
promulgated thereunder, furnishing certain information with respect to the Offer
and (ii) a Schedule 13D, pursuant to Section 13(d)(1) of the Exchange Act. Such
Schedule 14D-l and Schedule 13D, and any amendments thereto, including exhibits,
may be examined and copies may be obtained at the same places and in the same
manner as set forth with respect to the Company in Section 8--"Certain
Information Concerning the Company" (except that they will not be available at
the regional offices of the Commission).
MP ACQUISITION CORP.
February 18, 1998
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
WOLTERS KLUWER, WOLTERS KLUWER INTERNATIONAL, THE PARENT,
WK AMERICA, LIPPINCOTT-RAVEN PUBLISHERS AND THE OFFEROR
1. MEMBERS OF THE SUPERVISORY BOARD AND EXECUTIVE BOARD AND EXECUTIVE
OFFICERS OF WOLTERS KLUWER. The following table sets forth the name, business
address and present principal occupation or employment and material occupations,
positions, offices or employments for the past five years of each member of the
Supervisory Board and Executive Board and each Executive Officer of Wolters
Kluwer. Each such person is a citizen of The Netherlands.
SUPERVISORY BOARD
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
O. Hattink....................... Chairman, Member since 1981 Chairman of Supervisory Board of Aon
Landgoed Backershagen 33 Holdings BV and RBC Finance BV
2243 AX WASSENAAR Vice-chairman of Supervisory Board of IHC
Caland NV and Member of Supervisory Board
of Coca Cola Beverages Nederland BV
Director British Gas
International Holdings BV
Advisory Director Invesco
Europe Limited
Chairman, Committee of Shareholders
Koninklijke Ten Cate NV
B.H. ter Kuile................... Member since 1986 Emeritus Prof. European Law, Erasmus
Neuhuyskade 4 University of Rotterdam
2596 XL DEN HAAG Member and secretary of Supervisory Board
of NV Verenigd Streekvervoer Nederland
Deputy-Justice Court of Justice of The
Hague
J.M.M. Maeijer................... Member since 1982 Emeritus Prof. Commercial Law University
Pauluslaan 17 of Nijmegen
6564 AP HEILIG Member of Supervisory Board of Vendex
LANDSTICHTING International NV
Deputy-Justice Court of Justice of Den
Bosch
J.V.H. Pennings.................. Member since 1995 Chairman of the Executive Board of Oce NV
Casinoweg 170 Chairman of Supervisory Board of
5915 ER VENLO Koninklijke Grolsch NV and Koninklijke IBC
Member of Supervisory Board of De
Nederlandsche Bank NV and Tulip
Computers
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
H. de Ruiter..................... Member since 1994 Chairman of Supervisory Board of
Prins Frederiklaan 16 Koninklijke Ahold NV, Beers NV,
2243 HW WASSENAAR Koninklijke Hoogovens NV and Koninklijke
Pakhoed NV
Vice-chairman of Supervisory Board of
AEGON NV and Member of Supervisory Board
of Heineken NV and NV Koninklijke
Nederlandse Petroleum Maatschappij
A.H.C.M. Walravens............... Member since 1978 Professor and consultant
Oude Delft 130 Chairman of Supervisory Board of
2611 CG DELFT Tauw Beheer and NV Verenigd Streekvervoer
Nederland
Member of Supervisory Board of Achmea
Holding, Bull Benelux and CSM
Member Monitoring Committee Deloitte &
Touche
N.J. Westdijk.................... Member since 1993 Chairman Executive Board of Royal Pakhoed
Nieuwe Gracht 161 NV
3512 LL UTRECHT Member of Supervisory Board of De
Nationale Investeringsbank NV and Fortis
AMEV NV
</TABLE>
EXECUTIVE BOARD
The names of the members of the Executive Board of Wolters Kluwer, whose
present principal occupations are serving as such members and whose present
business address is, unless otherwise indicated, c/o Wolters Kluwer,
Stadhouderskade 1, 1000 AV Amsterdam, The Netherlands.
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS OFFICE
- ------------------------------ ---------------------------------------------------------------------------------
<S> <C>
C.J. Brakel................... Chairman since 1995; Member since 1981.
C.H. van Kempen............... Member since 1993; Chief Executive Officer of Wolters Kluwer Italy, an indirect
wholly owned subsidiary of Wolters Kluwer, from 1990 through 1993.
Robert Pieterse............... Member since 1987.
Peter W. van Wel.............. Member since 1993; President and Chief Executive Officer of the Parent, from 1990
through 1993, and from 1996 to the present.
</TABLE>
33
<PAGE>
EXECUTIVE OFFICERS
The names of the Executive Officers of Wolters Kluwer, whose present
principal occupations are serving as such officers, are:
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS OFFICE
- ------------------------------ ---------------------------------------------------------------------------------
<S> <C>
Hans E.M. van Dinter.......... Chief Financial Officer for more than the past five years.
A.S.F. Kuipers................ Director of Business Development since January 1995; prior to 1995,
Managing Director of BBI Publishers.
Marcel L. Mock................ Head of the Legal Department and Secretary to the Executive Board since June 1997
and November 1997, respectively. Prior to 1997, European Legal Officer and
Statutory Director of Hunter Douglas Europe B.V.
M.H. Sanders.................. Director of Personnel & Organization for more than five years.
</TABLE>
2. MEMBERS OF THE EXECUTIVE BOARD OF WOLTERS KLUWER INTERNATIONAL. The
following table sets forth the name, business address and present principal
occupation or employment and material occupations, positions, offices or
employments for the past five years of each member of the Executive Board of
Wolters Kluwer International. Each such person is a citizen of The Netherlands,
and the business address of each such person is c/o Wolters Kluwer,
Stadhouderskade 1, 1000 AV Amsterdam, The Netherlands.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Hans E.M. van Dinter............. Member Chief Financial Officer of Wolters Kluwer
for more than the past five years.
Marcel L. Mock................... Member Head of the Legal Department and Secretary
to the Executive Board of Wolters Kluwer
since June 1997 and November 1997,
respectively. Prior to 1997, European
Legal Officer and Statutory Director of
Hunter Douglas Europe B.V.
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. The following table sets
forth the name, business address and present principal occupation or employment
and material occupations, positions, offices or employments for the past five
years of each Director and Executive Officer of the Parent. Unless otherwise
indicated, each such person is a citizen of The Netherlands, each occupation set
forth opposite an individual's name refers to employment with Wolters Kluwer and
the business address of each such person is c/o Wolters Kluwer, Stadhouderskade
1, 1000 AV Amsterdam, the Netherlands.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Peter W. van Wel................. Chairman of the Board from 1994 Member of the Executive Board of Wolters
c/o Wolters Kluwer to the present, President and Kluwer since 1993; President and Chief
United States Inc. Chief Executive Officer from 1990 Executive Officer of the Parent from 1990
161 North Clark Street to 1993 and from 1996 to the to 1993 and 1996 to the present.
48th Floor present
Chicago, IL 60601
C.J. Brakel...................... Director Chairman of the Executive Board of Wolters
Kluwer since 1995; member since 1981.
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
C.H. van Kempen.................. Director Member of the Executive Board of Wolters
Kluwer since 1993. Chief Executive Officer
of Wolters Kluwer Italy, an indirect
wholly owned subsidiary of Wolters Kluwer,
from 1990 through 1993.
R. Pieterse...................... Director Member of the Executive Board since 1987.
Mary Martin Rogers............... Director Chief Executive Officer of Lippincott-
c/o Lippincott-Raven Raven Publishers, Inc. since 1995. Prior
Publishers, Inc. to 1995, Chief Executive Officer of Raven
227 East Washington Square Press, Ltd. for more than five years.
Philadelphia, PA 19106
(U.S. Citizen)
Hugh J. Yarrington............... Director Chief Executive Officer of CCH
c/o CCH Incorporation Incorporated since 1996. Head of the
2700 Lake Cook Road Knowledge Organization of CCH Incorporated
Riverwoods, IL 60015 since 1993.
(U.S. Citizen)
John Marozsan.................... Director Chief Operating Officer of CCH
c/o CCH Incorporation Incorporated since 1996. Prior to 1996,
2700 Lake Cook Road President of Aspen Publishers, Inc. for
Riverwoods, IL 60015 more than five years.
(U.S. Citizen)
Bruce C. Lenz.................... Executive Vice President and Executive Vice President and Chief
c/o Wolters Kluwer Chief Financial Officer Financial Officer of the Parent for more
United States Inc. than five years.
161 N. Clark Street
48th Floor
Chicago, IL 60601-3221
(U.S. Citizen)
</TABLE>
4. DIRECTORS AND EXECUTIVE OFFICERS OF WK AMERICA. The following table sets
forth the name, business address and present principal occupation or employment
and material occupations, positions, offices or employments for the past five
years of each Director and Executive Officer of WK America. Unless otherwise
indicated, each such person is a citizen of The Netherlands. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with WK America.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Peter W. van Wel................. Chairman of the Board and Member of the Executive Board
c/o Wolters Kluwer President of Wolters Kluwer since 1993; President
United States Inc. and Chief Executive Officer of the Parent
161 North Clark Street from 1990 to 1993 and 1996 to the present.
48th Floor
Chicago, Il. 60601
C.J. Brakel Director Chairman of the Executive Board of Wolters
Kluwer since 1995; member since 1981.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Bruce C. Lenz.................... Secretary and Treasurer Executive Vice President and Chief
c/o Wolters Kluwer Financial Officer of the Parent for more
United States Inc. than five years.
161 North Clark Street
48th Floor
Chicago, IL 60601
(U.S. Citizen)
</TABLE>
5. DIRECTORS AND EXECUTIVE OFFICERS OF LIPPINCOTT-RAVEN PUBLISHERS. The
following table sets forth the name, business address and present principal
occupation or employment and material occupations, positions, offices or
employments for the past five years of each Director and Executive Officer of
Lippincott-Raven Publishers, Inc. Unless otherwise indicated, each such person
is a citizen of the United States, and each occupation set forth opposite an
individual's name refers to employment with Lippincott-Raven Publishers.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Peter W. van Wel................. Chairman of the Board Member of the Executive Board of Wolters
c/o Wolters Kluwer Kluwer since 1993; President and Chief
United States Inc. Executive Officer of the Parent from 1990
161 North Clark Street to 1993 and from 1996 to the present.
48th Floor
Chicago, IL 60601-3221
(Citizen of The Netherlands)
C. J. Brakel..................... Director Chairman of the Executive Board of Wolters
c/o Wolters Kluwer nv Kluwer since 1995, member since 1981.
Stadhouderstade
1000 AV Amesterdam
The Netherlands
(Citizen of The Netherlands)
Mary M. Rogers................... Director and Chief Executive Chief Executive Officer since 1995. Prior
c/o Lippincott-Raven Officer, Co-President to 1995, Chief Executive Officer of Raven
Publishers, Inc. Press, Ltd. for more than five years.
Philadelphia, PA
Joseph W. Lippincott III......... Director and Co-President Co-President since 1995. Prior to 1995,
c/o Lippincott-Raven Vice President of J.B. Lippincott Company
Publishers, Inc. for more than five years.
Philadelphia, PA
Vincent J. Parker................ Executive Vice President Executive Vice President for more than
c/o Lippincott-Raven five years.
Publishers, Inc.
Philadelphia, PA
Bruce C. Lenz.................... Secretary and Treasurer Executive Vice President and Chief
c/o Wolters Kluwer Financial Officer of Parent for more than
United States Inc. five years.
161 North Clark Street
48th Floor
Chicago, IL 60601
</TABLE>
36
<PAGE>
6. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. The following table sets
forth the name, business address and present principal occupation or employment
and material occupations, positions, offices or employments for the past five
years of each Director and Executive Officer of the Offeror. Unless otherwise
indicated, each such person is a citizen of the United States, and each
occupation set forth opposite an individual's name refers to employment with the
Parent.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS OFFICE EMPLOYMENT (PRESENT/PAST)
- --------------------------------- --------------------------------- ------------------------------------------
<S> <C> <C>
Peter W. van Wel................. Director Member of the Executive Board of Wolters
c/o Wolters Kluwer Kluwer since 1993; President and Chief
United States Inc. Executive Officer of the Parent from 1990
161 N. Clark Street to 1993 and from 1996 to the present.
48th Floor
Chicago, Il. 60601-3221
(Citizen of The Netherlands)
Mary Martin Rogers............... Director and President Chief Executive Officer of Lippincott-
c/o Lippincott-Raven Raven Publishers, Inc. since 1995. Prior
Publishers, Inc. to 1995, Chief Executive Officer of Raven
227 East Washington Square Press, Ltd. for more than five years.
Philadelphia, PA. 19106
Bruce C. Lenz.................... Director, Vice President and Executive Vice President and Chief
c/o Wolters Kluwer Secretary and Treasurer Financial Officer of the Parent for more
United States Inc. than five years.
161 N. Clark Street
48th Floor
Chicago, IL 60601-3221
</TABLE>
37
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates evidencing
Shares and any other required documents should be sent or delivered by each
stockholder or its broker, dealer, commercial bank or other nominee to the
Depositary as follows:
THE DEPOSITARY FOR THE OFFER IS:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
BY MAIL: BY HAND:
Morgan Guaranty Trust Company Securities Transfer & Reporting Services
Corporate Reorganization (STARS)
P.O. Box 8216 55 Broadway
Boston, MA 02266-8216 3rd Floor
New York, NY 10006
</TABLE>
<TABLE>
<S> <C>
BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION:
Morgan Guaranty Trust Company (781) 794-6333
c/o State Street Corporate Reorganization
70 Campanelli Drive CONFIRM BY TELEPHONE:
Braintree, MA 02184 (781) 794-6388
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent or the Dealer Manager and will be furnished promptly at the
Offeror's expense. A stockholder may also contact its broker, dealer, commecial
bank or trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT (212) 440-9800
ALL OTHERS CALL TOLL FREE (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
CREDIT SUISSE FIRST BOSTON CORPORATION
ELEVEN MADISON AVENUE
NEW YORK, NY 10010-3629
CALL TOLL FREE (800) 881-8320
<PAGE>
LETTER OF TRANSMITTAL
To Tender
Shares of Common Stock
of
Waverly, Inc.
Pursuant to the Offer to Purchase
Dated February 18, 1998
by
MP Acquisition Corp.
an indirect wholly owned subsidiary of
Wolters Kluwer U.S. Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS EXTENDED
THE DEPOSITARY FOR THE OFFER IS:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
BY MAIL: BY HAND:
<S> <C>
Morgan Guaranty Trust Company Securities Transfer &
Corporate Reorganization Reporting Services (STARS)
PO Box 8216 55 Broadway 3rd Floor
Boston, MA 02266-8216 New York, NY 10006
</TABLE>
<TABLE>
<S> <C>
BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION:
Morgan Guaranty Trust Company (781) 794-6333
c/o State Street Corporate Reorganization
70 Campanelli Drive CONFIRM BY TELEPHONE:
Braintree, MA 02184 (781) 794-6388
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be completed by stockholders of Waverly,
Inc. either if certificates evidencing shares of Common Stock (as defined below)
are to be forwarded herewith or if a tender of such shares is to be made by
book-entry transfer to the account of Morgan Guaranty Trust Company of New York,
as Depositary (the "Depositary"), at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3-- "Procedures for Tendering Shares" of the Offer to Purchase (as defined
below). Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
Holders of shares of Common Stock whose certificates are not immediately
available, or who are unable to deliver their certificates and all other
documents required by this Letter of Transmittal to the Depositary on or prior
to the Expiration Date (as defined in Section 1--"Terms of the Offer" of the
Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis and who wish to tender their shares must
tender their shares pursuant to the guaranteed delivery procedure set forth in
Section 3--"Procedures for Tendering Shares" of the Offer to Purchase. See
Instruction 2 of this Letter of Transmittal.
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Institution____________________________________________
Account Number_______________________________________________________________
Transaction Code Number______________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)______________________________________________
Window Ticket Number (if any)________________________________________________
Date of Execution of Notice of Guaranteed Delivery___________________________
Name of Institution Which Guaranteed Delivery________________________________
If Delivery by Book-Entry Transfer:
Account Number______________________________________________________________
Transaction Code Number_____________________________________________________
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES OF COMMON STOCK TENDERED
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s) Certificate(s) Tendered
appear(s) on certificate(s)) (Attach Additional Signed List if Necessary)
<S> <C> <C> <C>
Total Number
Certificate of Shares Number
Number(s)* Evidenced by of Shares
Certificate(s)* Tendered**
Total shares of Common Stock
</TABLE>
* Need not be completed by stockholders delivering shares of Common Stock by
book-entry transfer.
** Unless otherwise indicated, it will be assumed that all shares of Common
Stock evidenced by each certificate delivered to the Depositary are being
tendered. See Instruction 4 of this Letter of Transmittal.
The names and addresses of the registered holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing shares of Common Stock tendered hereby. The certificates and the
number of shares of Common Stock that the undersigned wishes to tender should
be indicated in the appropriate boxes.
/ / CHECK HERE IF TENDER IS BEING MADE PURSUANT TO LOST OR MUTILATED
SECURITIES. SEE INSTRUCTION 10.
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to MP Acquisition Corp., a Maryland
corporation (the "Offeror") and an indirect wholly owned subsidiary of Wolters
Kluwer U.S. Corporation, a Delaware corporation (the "Parent"), the above
described shares of Common Stock, par value $2.00 per share (the "Common
Stock"), of Waverly, Inc., a Maryland corporation (the "Company"), pursuant to
the Offeror's offer to purchase all outstanding shares of Common Stock (the
"Shares"), at a purchase price of $39.00 per Share net to the seller in cash,
without interest thereon (such price or such higher price per share as may be
paid in the Offer (as defined below), referred to herein as the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated February 18, 1998 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer").
Subject to, and effective upon, the acceptance for payment of the Shares
tendered herewith, 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 Offeror, all right, title
and interest in and to all of the Shares tendered hereby and all dividends
(other than quarterly cash dividends having a record date prior to the Offeror
purchasing and becoming a record holder of such Shares), distributions
(including, without limitation, distributions of additional Shares) and rights
declared, issued, paid or distributed in respect of such Shares on or after
February 10, 1998 and payable or distributable to the undersigned on a date
prior to the transfer to the name of the Offeror (or nominee or transferee of
the Offeror) on the Company's stock transfer records of the Shares tendered
herewith (collectively, "Distributions") and irrevocably constitutes and
appoints Peter W. van Wel and Bruce C. Lenz, and each of them, as the true and
lawful agent and attorney-in-fact of the undersigned with respect to such
Shares and all Distributions with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(i) deliver certificates for such Shares and all Distributions or transfer
ownership of such Shares and all Distributions on the account books maintained
by the Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
the Offeror, upon receipt by the Depositary, as the undersigned's agent, of
the Offer Price, (ii) present such Shares and all Distributions for transfer
on the books of the Company and (iii) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms and subject to the conditions
of the Offer.
The undersigned hereby irrevocably appoints Peter W. van Wel and Bruce C.
Lenz, and each of them, as the attorney-in-fact and proxy of the undersigned,
each with full power of substitution, to vote in such manner as each such
attorney and proxy or the substitute for any such attorney and proxy shall, in
the sole discretion of each such attorney and proxy, deem proper, and
otherwise act (by written consent or otherwise) with respect to all of the
Shares tendered hereby (and any Distributions) which the undersigned is
entitled to vote at any meeting of stockholders of the Company (whether annual
or special and whether or not adjourned or postponed), or consent in lieu of
any such meeting or otherwise. This power of attorney and proxy is irrevocable
and is granted in consideration of, and is effective upon, the Offeror's oral
or written notice to the Depositary of its acceptance for payment of such
shares in accordance with the terms of the Offer. Such acceptance for payment
shall revoke all other powers of attorney and proxies given by the undersigned
at any time with respect to such shares (and any Distributions), and no
subsequent powers of attorney or proxies may be given (and if given or
executed shall not be effective) by the undersigned with respect thereto. The
undersigned acknowledges and understands that in order for shares to be deemed
validly tendered, immediately upon the Offeror's acceptance for payment of
such shares, the Offeror must be able to exercise full voting power and other
rights of a record and beneficial holder, including, without limitation,
voting at any meeting of the Company's stockholders or acting by written
consent, with respect to such shares (and any Distributions).
3
<PAGE>
The undersigned hereby represents and warrants that: (i) the undersigned
has full power and authority to tender, sell, assign and transfer the shares
tendered hereby (and any Distributions) and (ii) when the same are accepted
for payment by the Offeror, the Offeror will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, claims and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions.
In addition, the undersigned shall remit and transfer promptly to the
Depositary for the account of the Offeror all Distributions in respect of the
shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
the Offeror shall be entitled, subject to applicable law, to all rights and
privileges as owner of each such Distribution and may withhold the entire
Offer Price or deduct from the Offer Price the amount or value of such
Distribution as determined by the Offeror in its sole discretion.
No authority conferred herein or agreed to be conferred herein shall be
affected by, and all such authority shall survive, the death or incapacity of
the undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, executors, administrators, trustees in bankruptcy, personal
and legal representatives, successors and assigns of the undersigned. Except
as described in Section 4--"Withdrawal Rights" of the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the acceptance for payment of tendered
Shares by the Offeror pursuant to any of the procedures described in Section
2--"Acceptance for Payment and Payment for Shares" of the Offer to Purchase
and in the instructions hereto will constitute the undersigned's acceptance of
the terms and conditions of the Offer. The undersigned recognizes that under
certain circumstances set forth in the Offer to Purchase, the Offeror may not
be required to accept for payment any of the Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the Offer Price for all shares
purchased and return any certificates for Shares not tendered or not
purchased, in the name(s) of the registered holder(s) appearing above under
"Description of Shares of Common Stock Tendered." Similarly, unless otherwise
indicated in the box entitled "Special Delivery Instructions," please mail the
check for the Offer Price for all Shares purchased and return any certificates
for any Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares of Common Stock Tendered." If the boxes entitled
"Special Delivery Instructions" and "Special Payment Instructions" are both
completed, please issue the check for the Offer Price for all Shares purchased
and return any certificates for Shares not tendered or not purchased in the
name(s) of, and deliver said check and/or certificate(s) to, the person(s) so
indicated. Unless otherwise indicated in the box entitled "Special Payment
Instructions," in the case of a book-entry delivery of Shares, please credit
the account maintained at the Book-Entry Transfer Facility with any Shares not
purchased. The undersigned recognizes that the Offeror has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name(s) of the registered holder(s) thereof if the Offeror does not accept for
payment any of the Shares tendered hereby.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1,5,6 and 7)
To be completed ONLY if the check for the Offer Price of Shares purchased or
certificates for Shares not tendered or not purchased are to be issued in the
name of someone other than the undersigned.
Issue / / Check / / Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
(INCLUDE ZIP CODE)
_____________________________________________________________________________
(Recipient's Tax Identification or Social Security No.)
(See Substitute W-9 on reverse side)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1,5,6 and 7)
To be completed ONLY if the check for the Offer Price of Shares purchased or
certificates for Shares not tendered or not purchased are to be sent to
someone other than the undersigned, or to the undersigned at an address other
than that shown under "Description of Shares of Common Stock Tendered."
Issue / / Check / / Certificate(s) to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
_____________________________________________________________________________
(INCLUDE ZIP CODE)
5
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
______________________________________________________________________________
______________________________________________________________________________
(SIGNATURES OF STOCKHOLDER(S))
Dated: ________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificates or on a security position listing or by person(s) authorized to
become registered holder(s) by certificate(s) and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s) ______________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) ________________________________________________________
Address
______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _______________________________________________
Tax Identification or Social Security Number _________________________________
(See Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE OVER THE BELOW INFORMATION.
Authorized Signature(s) ______________________________________________________
Name _________________________________________________________________________
(PLEASE PRINT)
Name of Firm _________________________________________________________________
Address ______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _______________________________________________
Dated: _______________________________________________________________________
6
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. SIGNATURE GUARANTEE. No signature guarantee on this Letter of Transmittal
is required if (i) this Letter of Transmittal is signed by the registered
holder(s) (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 Shares of Shares tendered herewith, unless such
holder(s) have completed either the box entitled "Special Delivery Instructions"
or "Special Payment Instructions" on this Letter of Transmittal or (ii) such
Shares are tendered for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (each, an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates are to be
forwarded herewith or unless an Agent's Message (as defined in Section
2--'Acceptance for Payment and Payment for Shares" of the Offer to Purchase) is
utilized, if tenders are to be made pursuant to the procedures for delivery by
book-entry transfer set forth in Section 3--'Procedures for Tendering shares" of
the Offer to Purchase. Certificates for all physically tendered Shares, or
timely confirmation of a book-entry transfer (a "Book Entry Confirmation") into
the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, this Letter of Transmittal (or manually signed
facsimile hereof) properly completed and duly executed with all required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary at the address set forth herein
on or prior to the Expiration Date (as defined in Section 1--"Terms of the
Offer" of the Offer to Purchase), or the tendering stockholder must comply with
the guaranteed delivery procedures set forth below. If certificates are
forwarded to the Depositary in multiple deliveries, this Letter of Transmittal
(or manually signed facsimile hereof) properly completed and duly executed with
all required signature guarantees must accompany each such delivery.
Stockholders whose certificates for Shares are not immediately available,
who cannot deliver their certificates and all other required documents to the
Depositary on or prior to the Expiration Date, or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis, may tender
their Shares pursuant to the guaranteed delivery procedures set forth in Section
3--"Procedures for Tendering Shares" of the Offer to Purchase. Pursuant to such
procedures, (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Offeror, must be received by the
Depositary, either by hand delivery, mail or facsimile transmission, on or prior
to the Expiration Date and (iii) the certificates for all physically tendered
shares, in proper form for transfer (or Book-Entry Confirmation) together with
this Letter of Transmittal (or manually signed facsimile thereof) properly
completed and duly executed with all required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three trading days after the date of the execution and delivery to the
Depositary of the Notice of Guaranteed Delivery. A trading day is any day on
which the NASDAQ National Market is open for business.
The method of delivery of this Letter of Transmittal, the certificates for
Shares and all other required documents, including delivery through the
Book-Entry Transfer Facility, 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 for such documents to reach the Depositary. Except as
otherwise provided in this Instruction 2, delivery will be deemed made only when
actually received by the Depositary.
No alternative, conditional or contingent tenders will be accepted and no
fractional shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares of Common Stock Tendered" is inadequate, the certificate numbers, the
number of Shares evidenced by such certificates and the number of Shares
tendered should be listed on a separate signed schedule and attached hereto.
7
<PAGE>
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any certificate delivered
to the Depositary herewith are to be tendered, fill in the number of Shares that
are to be tendered in the box entitled "Number of Shares Tendered." In such
case, as soon as practicable after the Expiration Date, new certificate(s)
evidencing the remainder of the Shares that were evidenced by the certificates
delivered to the Depositary herewith will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the box entitled "Special
Delivery Instructions." All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the certificates without alteration, enlargement or any other change whatsoever.
Do not sign the back of the certificates.
If any Share tendered hereby is held of record by two or more holders, all
such holders must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in names of different
holders, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment is to be made, or certificates for Shares not
tendered or not purchased are to be issued in the name of, a person other than
the registered holder(s), in which case the certificate(s) tendered hereby must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificate(s), and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares tendered hereby, the certificates tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed as the name(s) of the registered holder(s) appear(s) on such
certificates. Signatures on such certificates and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer
of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Offeror of such person's authority to so act must be
submitted.
6. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Offer Price
of any shares tendered hereby is to be issued or certificate(s) not tendered or
not purchased are to be issued in the name of a person other than the person
signing this Letter of Transmittal, or to the person(s) signing this Letter of
Transmittal but at an address other than that shown above, the appropriate boxes
on this Letter of Transmittal must be completed.
7. STOCK TRANSFER TAXES. Except as set forth in this Instruction 7, the
Offeror will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of the purchased Shares to it, or to its order, pursuant
to the Offer. If, however, payment of the Offer Price of any Shares purchased is
to be made to, or certificate(s) for Shares not tendered or not purchased are to
be issued in the name of, a person other than the registered owner(s), or if
tendered certificates are registered in the name of any persons other than the
persons signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such other person will be
deducted from the Offer Price of such shares purchased, unless evidence
satisfactory to the Offeror of the payment of such taxes or exemption therefrom
is submitted.
8. WAIVER OF CONDITIONS. Subject to the terms of the Merger Agreement (as
defined in the Offer to Purchase), the conditions of the Offer may be waived by
the Offeror, in whole or in part, at any time and from time to time in Offeror's
sole discretion, in the case of any Shares tendered.
8
<PAGE>
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct taxpayer identification number ("TIN"), generally
the stockholder's social security or federal employer identification number, and
with certain other information, on the Substitute Form W-9, which is provided
under "Important Tax Information" below, and to certify, under penalties of
perjury, that such number is correct and that the stockholder is not subject to
backup withholding of federal income tax. If a tendering stockholder has been
notified by the Internal Revenue Service that such stockholder is subject to
backup withholding, such stockholder must cross out item (2) of the
Certification box (Part 2) of the Substitute Form W-9, unless such stockholder
has since been notified by the Internal Revenue Service that such stockholder is
no longer subject to backup withholding. Failure to provide the information on
the Substitute Form W-9 may subject the tendering stockholder to 31% federal
income tax withholding on the payment of the Offer Price of all Shares purchased
from such stockholder. The box in Part 3 of the Substitute Form W-9 may 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 the TIN within 60 days, the
Depositary will withhold 31% on all payments of the Purchase Price to such
stockholder until a TIN is provided to the Depositary.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing shares has been lost, destroyed or stolen, the stockholder should
promptly notify The Bank of New York. The stockholder will then be instructed as
to the steps that must be taken in order to replace the certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed certificates have been followed.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent or the Dealer Manager at the addresses set forth below or from
brokers, dealers, commercial banks or trust companies and such materials will be
furnished at the Offeror's expense.
IMPORTANT: This Letter of Transmittal (or manually signed facsimile hereof)
properly completed and duly executed (with all required guarantees and
certificates or confirmation of book-entry transfer and all other required
documents) or the Notice of Guaranteed Delivery properly completed and duly
executed must be received by the Depositary on or prior to the Expiration Date.
9
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's current TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder or other payee
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such stockholder or other payee with respect
to shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain stockholders (including, among others, all corporation, and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual or a foreign entity to qualify
as an exempt recipient, that stockholder must submit to the Depositary a
properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed
under penalties of perjury, attesting to that individual's exempt status. A Form
W-8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payment made to the stockholder or other payee. Backup withholding is not an
additional tax. Rather, the federal income tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments made to a stockholder or other
payee with respect to shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of the stockholder's current TIN (or the TIN
of any other payee) by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such stockholder is awaiting
a TIN), and that (1) the stockholder has not been notified by the Internal
Revenue Service that the stockholder is subject to backup withholding as a
result of failure to report all interest or dividends or (2) the Internal
Revenue Service has notified the stockholder that the stockholder is no longer
subject to backup withholding.
What Number to Give the Depositary
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
shares tendered hereby. If the shares are registered in more than one name or
are not registered in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
10
<PAGE>
PAYER'S NAME: MORGAN GUARANTY TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Form W-9 Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security number or
Department of the Treasury RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Employer identification number
Internal Revenue Service
---------------------------------------------------------------------------------
Payer's Request for Taxpayer Part 2--Certification--Under penalties of perjury, I certify that:
Identification Number ("TIN")
---------------------------------------------------------------------------------
(1) The number shown on this form is my correct Taxpayer Identification Number (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 Internal Revenue Service (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. However, if
after being notified by the IRS that you were subject to backup withholding you received another notification from the
IRS that you are no longer subject to backup, do not cross out item (2).
---------------------------------------------------------------------------------
Part 3--
Awaiting TIN / /
SIGNATURE DATE
---------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM 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.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number, 31% of all reportable payments made to me will be
withheld, but that such amounts will be refunded to me if I then provide a
taxpayer identification number within 60 days.
Signature ____________________________ Date ___________________
11
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free (800) 881-8320
12
<PAGE>
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
Waverly, Inc.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS EXTENDED.
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Common Stock (the
"Shares"), par value $2.00 per share, of Waverly, Inc., a Maryland corporation
(the "Company"), are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date (as defined in the Offer to Purchase). This form may be
delivered by hand, facsimile transmission, or mail to the Depositary. See
Section 3--"Procedure for Tendering Shares" of the Offer to Purchase, dated
February 18, 1998 (the "Offer to Purchase").
The Depositary for the Offer is:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
<TABLE>
<CAPTION>
BY MAIL: BY HAND:
<S> <C>
Morgan Guaranty Trust Company Securities Transfer &
Corporate Reorganization Reporting Services (STARS)
PO Box 8216 55 Broadway
Boston, MA 02266-8216 3rd Floor
New York, NY 10006
</TABLE>
<TABLE>
<CAPTION>
BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION:
<S> <C>
Morgan Guaranty Trust Company (781) 794-6333
c/o State Street Corporate Reorganization
70 Campanelli Drive CONFIRM BY TELEPHONE:
Braintree, MA 02184 (781) 794-6388
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to MP Acquisition Corp., a Maryland
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase and in the related Letter of Transmittal (which, together with all
amendments or supplements thereto, constitute the "Offer"), receipt of which is
hereby acknowledged, the number of Shares of the Company indicated below,
pursuant to the guaranteed delivery procedure set forth in Section
3--"Procedures for Tendering Shares" of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: Sign Here
Certificate No(s). (if available): Name(s):
If Securities will be tendered by book-entry transfer:
Name of Tendering Institution: Address:
Account No.: at (Zip Code)
(Please Print) Area Code and Telephone No:
Signature(s):
</TABLE>
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule l7Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three NASDAQ trading days of
the date hereof.
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
(Zip Code)
AUTHORIZED SIGNATURE: __________________________________________________________
Title: _________________________________________________________________________
Name: __________________________________________________________________________
(Please Print or Type)
Area Code & Telephone No.: _____________________________________________________
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Date: ____________________________, 1998
<PAGE>
CREDIT SUISSE FIRST
BOSTON CORPORATION
[LOGO]
Eleven Madison
Avenue Telephone 212 325 2000
New York, NY 10010-3629
Offer to Purchase for Cash
All Outstanding Shares of
Common Stock
of
Waverly, Inc.
at
$39.00 Net Per Share
by
MP Acquisition Corp.
an indirect wholly owned subsidiary of
Wolters Kluwer U.S. Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MARCH 17, 1998 UNLESS THE OFFER IS EXTENDED.
February 18, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by MP Acquisition Corp., a Maryland corporation (the
"Offeror") and an indirect wholly owned subsidiary of Wolters Kluwer U.S.
Corporation, a Delaware corporation (the "Parent"), to act as Dealer Manager in
connection with the Offeror's offer to purchase all outstanding shares of Common
Stock, par value $2.00 per share (the "Shares"), of Waverly, Inc., a Maryland
corporation (the "Company"), at a purchase price of $39.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 18, 1998 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer") enclosed
herewith. The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of February 10, 1998, by and among the Parent, the Offeror and the
Company (the "Merger Agreement").
The Offer is conditioned upon, among other things, there being validly
tendered by the Expiration Date (as defined in the Offer to Purchase) and not
withdrawn that number of Shares which, together with the Shares beneficially
owned by the Parent or the Offeror, represent at least two-thirds of the
outstanding Shares on a fully diluted basis (the "Minimum Condition"), the
Offeror obtaining certain governmental approvals and the satisfaction of certain
other terms and conditions. In connection with entering into the Merger
Agreement, the Parent and the Offeror have entered into the Stock Option and
Tender Agreement, dated as of February 10, 1998 (the "Option Agreement") with
the stockholders identified therein (each a "Stockholder" and collectively the
"Stockholders") beneficially owning an aggregate of 5,338,680 Shares
representing approximately 53.3% of the Shares outstanding on a fully diluted
basis (the "Stockholders' Shares"). Pursuant to the Option Agreement, the
Stockholders have, among other things, (i) agreed to tender the Stockholders'
Shares in the Offer unless the Offer is terminated by the Parent or the Offeror
without any Shares being purchased thereunder and (ii) granted to the Parent or
the Offeror, as the Parent shall designate, a conditional option to purchase the
Stockholders' Shares. In addition, certain Stockholders have agreed to appoint
the Parent under certain circumstances as such Stockholders' proxy to vote such
Stockholders' Shares on all matters in
<PAGE>
connection with the consummation of the Merger Agreement and the Option
Agreement. The tender by the Stockholders of the Stockholders' Shares alone will
not cause the Minimum Condition to be satisfied.
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, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase dated February 18, 1998;
2. The Letter of Transmittal to tender the Shares for your use and for the
information of your clients (manually signed facsimile copies of the Letter of
Transmittal may be used to tender such Shares);
3. A Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not permit
certificates for Shares and all other required documents to reach Morgan
Guaranty Trust Company of New York (the "Depositary") by the Expiration Date or
if the procedures for book-entry transfer cannot be completed on a timely basis;
4. A letter from the President and Chief Executive Officer and Chairman of
the Board of the Company and the Company's Solicitation/Recommendation Statement
on Schedule 14D-9 filed with the Securities and Exchange Commission;
5. A form of letter which may be sent to your clients for whose accounts you
hold Shares in your name or in the name of a nominee, with space provided for
obtaining such clients' instructions with regard to the Offer;
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9; and
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS
EXTENDED.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extensions or
amendments), the Offeror will be deemed to have accepted for payment (and
thereby purchased) all Shares validly tendered on or prior to the Expiration
Date and not properly withdrawn if, as and when the Offeror gives oral or
written notice to the Depositary of the Offeror's acceptance of such Shares for
payment pursuant to the Offer. Payment for Shares purchased pursuant to the
Offer will in all cases be made only after timely receipt by the Depositary of
(i) certificates for such Shares, or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, pursuant to the procedures described in Section 3- "Procedures for
Tendering Shares" of the Offer to Purchase and (ii) the Letter of Transmittal
(or manually signed facsimile thereof), properly completed and duly executed
with all required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer of Shares, together
with any other documents required by the Letter of Transmittal.
In order to take advantage of the Offer, the Letter of Transmittal (or
manually signed facsimile thereof) duly executed and properly completed with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of Shares, and any other required documents, should be sent
to the Depositary, and certificates representing the tendered Shares should be
delivered, all in accordance with the instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
2
<PAGE>
If holders of Shares wish to tender their Shares, but it is impracticable
for them to tender their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures specified in Section
3- "Procedures for Tendering Shares" of the Offer to Purchase.
Neither the Parent nor the Offeror nor any officer, director, stockholder,
agent or other representative of the Parent or the Offeror will pay any fees or
commissions to any broker, dealer, or other person (other than the Dealer
Manager, the Information Agent and the Depositary as described in the Offer to
Purchase) in connection with the solicitation of tenders of Shares pursuant to
the Offer. The Offeror will, however, upon request, reimburse brokers, dealers,
commercial banks and trust companies and other nominees for reasonable and
necessary costs and expenses incurred by them in forwarding the Offer to
Purchase and the related documents to the beneficial owners of Shares held by
them as nominee or in a fiduciary capacity.
The Offeror will pay or cause to be paid all stock transfer taxes applicable
to the purchase of Shares pursuant to the Offer, except as set forth in
Instruction 7 of the Letter of Transmittal.
Any inquiries you have with respect to the Offer should be addressed to
Credit Suisse First Boston Corporation, the Dealer Manager, or Georgeson &
Company Inc., the Information Agent, at their respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase. Additional copies
of the enclosed material may be obtained from the Information Agent or the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS THE AGENT OF THE OFFEROR, THE PARENT, THE COMPANY, THE DEALER
MANAGER, THE DEPOSITARY, THE INFORMATION AGENT OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
3
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of
Common Stock
of
Waverly, Inc.
at
$39.00 Net Per Share
by
MP Acquisition Corp.
an indirect wholly owned subsidiary
of
Wolters Kluwer U.S. Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS EXTENDED.
February 18, 1998
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated February 18,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer"), in
connection with the offer by MP Acquisition Corp., a Maryland corporation (the
"Offeror") and an indirect wholly owned subsidiary of Wolters Kluwer U.S.
Corporation, a Delaware corporation (the "Parent"), to purchase all of the
outstanding shares of Common Stock par value $2.00 per share (the "Shares"), of
Waverly, Inc., a Maryland corporation (the "Company"), at a purchase price of
$39.00 per Share net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your
account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $39.00 per Share net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer.
2. The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of February 10, 1998, by and among the Parent, the Offeror and the
Company (the "Merger Agreement").
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on March 17, 1998, unless the Offer is extended.
4. The Board of Directors of the Company has unanimously approved the Merger
Agreement, the Offer and the Merger (as defined in the Offer to Purchase), has
unanimously determined that the Merger is advisable and that the terms of the
Offer and the Merger are fair to, and in the best interests of the Company's
stockholders and recommends that stockholders accept the Offer and tender their
Shares.
<PAGE>
5. The Offer is being made for all Shares outstanding. The Offer is
conditioned upon, among other things, there being validly tendered by the
Expiration Date (as defined in the Offer to Purchase) and not withdrawn that
number of Shares which would, together with the Shares beneficially owned by the
Parent or the Offeror constitute at least two-thirds of the outstanding Shares
on a fully diluted basis (the "Minimum Condition"). In connection with entering
into the Merger Agreement, the Parent and the Offeror have entered into the
Stock Option and Tender Agreement, dated as of February 10, 1998 (the "Option
Agreement") with the stockholders identified therein (each a "Stockholder" and
collectively, the "Stockholders") beneficially owning an aggregate of 5,338,680
Shares representing approximately 53.3% of the Shares outstanding, on a fully
diluted basis (the "Stockholders' Shares"). Pursuant to the Option Agreement,
the Stockholders have, among other things, (i) agreed to tender in the Offer all
of the Stockholders' Shares unless the Offer is terminated by the Parent or the
Offeror without any Shares being purchased thereunder and (ii) granted to the
Parent or the Offeror, as the Parent shall designate, a conditional option to
purchase the Stockholders' Shares. In addition, certain Stockholders have agreed
to appoint Parent under certain circumstances as such Stockholders' proxy to
vote such Stockholders' Shares on all matters in connection with the
consummation of the transactions contemplated by the Merger Agreement and the
Option Agreement. The tender by the Stockholders of the Stockholders' Shares
alone will not cause the Minimum Condition to be satisfied.
6. Except as set forth in Instruction 7 of the Letter of Transmittal,
tendering stockholders will not be obligated to pay stock transfer taxes on the
purchase of Shares by the Offeror pursuant to the Offer. However, federal income
tax backup withholding at a rate of 31 % may be required, unless an exemption is
provided or unless the required taxpayer identification information is provided
(see Instruction 9 to the Letter of Transmittal).
7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for Shares or timely
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to
such Shares pursuant to the procedures described in Section 3-"Procedures for
Tendering Shares" of the Offer to Purchase and (ii) the appropriate Letter of
Transmittal (or manually signed facsimile thereof) properly completed and duly
executed with all required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer of
Shares, together with any other documents required by the appropriate Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates representing Shares or
confirmations for book-entry transfer of such Shares into the Depositary's
account are actually received by the Depositary.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the Expiration Date.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. The Offeror is not aware
of any jurisdiction in which the making of the Offer or the tender of Shares in
connection therewith would not be in compliance with applicable law. If the
Parent or the Offeror becomes aware of any jurisdiction in which the making of
the Offer or the tender of Shares in connection therewith would not be in
compliance with applicable law, the Parent or the Offeror will make a good faith
effort to comply with any such law. If, after such good faith effort, the Parent
or the Offeror cannot comply with any 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 any such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by licensed brokers or
dealers, the Offer shall be deemed to be made on behalf of the Parent or the
Offeror by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF WAVERLY, INC.
The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase, dated February 18, 1998 and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, constitute the
"Offer") in connection with the offer by MP Acquisition Corp., a Maryland
corporation and an indirect wholly owned subsidiary of Wolters Kluwer U.S.
Corporation, a Delaware corporation, to purchase all outstanding shares of
Common Stock, par value $2.00 per share ("Shares"), of Waverly, Inc., a Maryland
corporation, at a purchase price of $39.00 per Share net to the seller in cash
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares) that
are held for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
SIGN HERE
Number of Shares to be Tendered*
- ----------------------------------------
____________ shares of Common Stock
- ----------------------------------------
Signature(s)
-----------------
Dated: February 18, 1998
- ---------------------------------------------------
Please Type or
Print Name(s)
-----------------
- ---------------------------------------------------
Please Type or
Print Address(es)
-----------------
Area Code and
Telephone Number
-----------------
Taxpayer
Identification or
Social Security
Number
- ------------------------------
* Unless otherwise indicated, it will be assumed that all your Shares held by
us for your account are to be tendered.
3
<PAGE>
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>
- -----------------------------------------------------
Give the TAXPAYER
For this type of account: IDENTIFICATION
NUMBER of--
- -----------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, the
first individual on
the account(1)
3. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
4. a. The usual The
revocable savings grantor-trustee(1)
trust (grantor is
also trustee)
b. So-called trust
account that is The actual owner(1)
not a legal or
valid trust under
state law.
5. Sole proprietorship The owner(3)
6. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(4)
- -----------------------------------------------------
<CAPTION>
Give the TAXPAYER
For this type of account: IDENTIFICATION
NUMBER of--
<S> <C> <C>
- -----------------------------------------------------
7. Corporate account The corporation
8. Religious, The organization
charitable, or
educational
organization account
9. Partnership account The partnership
10. Association, club, The organization
or other tax-exempt
organization
11. A broker or The broker or
registered nominee nominee
12. 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. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show your individual name. You may also enter your business or "doing
business as" name. You may use either your social security number or your
employer identification number.
(4) 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 listed, the number
will be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Note: Section references are to the Internal Revenue Code unless otherwise
noted.
Obtaining a Number
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
Payees and Payments Exempt from Backup Withholding
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation
(other than certain hospitals described in Regulations section 1.6041-3(c)) that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (1) through (5) are exempt from backup
withholding for barter exchange transactions and patronage dividends.
(1) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries, Inc.,
Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends that generally are exempt from
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 alien partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Section 404(k) payments made by an ESOP.
Payments of interest that generally are exempt from 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 payor.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Payments of mortgage interest to you.
Exempt payees described above should file substitute 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, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A and 6050N and the regulations promulgated thereunder.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payors
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. 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 correct taxpayer identification number to a requester, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99(a)(7)
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 dated February
18, 1998 and the related Letter of Transmittal and any amendments or supplements
thereto, and is being made to all holders of Shares. The Offer is not being made
to, nor will tenders be accepted from or on behalf of, holders of Shares in any
jurisdiction where the making of the Offer or acceptance thereof is not in
compliance with the laws of such jurisdiction. In those jurisdictions where
securities, blue sky or other 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 Offeror
by Credit Suisse First Boston Corporation ("Credit Suisse First Boston") or one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WAVERLY, INC.
AT
$39.00 NET PER SHARE
by
MP Acquisition Corp.
an indirect wholly owned subsidiary of
Wolters Kluwer U.S. Corporation
MP Acquisition Corp. a Maryland corporation (the "Offeror") and an
indirect wholly owned subsidiary of Wolters Kluwer U.S. Corporation, a Delaware
corporation ("Parent"), is offering to purchase all outstanding shares of Common
Stock, par value $2.00 per share (the "Shares"), of Waverly, Inc., a Maryland
corporation (the "Company"), at a purchase price of $39.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated February 18, 1998 (the
"Offer to Purchase") and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer"). Tendering
stockholders who have shares registered in their name and who tender directly
will not be charged brokerage fees or commissions or, subject to Instruction 7
of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant
to the Offer. Following the Offer, the Offeror intends to effect the Merger
described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MARCH 17, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered by the Expiration Date (as defined below) and not withdrawn that number
of Shares which, together with the Shares beneficially owned by Parent or the
Offeror, represent at least two-thirds of the Shares outstanding on a fully
diluted basis (the "Minimum Condition"), the Offeror obtaining certain
governmental approvals and the satisfaction of certain other terms and
conditions. See the Introduction, Section 1-"Terms of the Offer" and Section
15-"Certain Conditions to the Offeror's Obligations" of the Offer to Purchase.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of February 10, 1998 (the "Merger Agreement"), by and among Parent, the
Offeror and the Company. Pursuant to the Merger Agreement, and on the terms and
subject to the conditions set forth therein, the Offeror will be merged with and
into the Company (the "Merger"), with the Company to be the surviving
corporation in the Merger, and each outstanding Share (other than Shares held by
the Company, Parent, the Offeror or any other subsidiary of Parent, which shall
be cancelled), will be converted into the right to receive $39.00 in cash,
without interest thereon, and the Company will become an indirect wholly owned
subsidiary of Parent.
The Board of Directors of the Company has unanimously approved the Merger
Agreement, the Offer and the Merger, has unanimously determined that the Merger
is advisable and that the terms of the Offer and the Merger are fair to, and in
the best interests of, the Company's stockholders and recommends that
stockholders accept the Offer and tender their Shares.
Parent, the Offeror and certain stockholders of the Company (collectively,
the "Stockholders") beneficially owning an aggregate of 5,338,680 Shares,
representing approximately 53.3% of the outstanding Shares on a fully diluted
basis (the "Stockholders' Shares"), have entered into the Stock Option and
Tender Agreement dated as of February 10, 1998 (the "Option Agreement"),
pursuant to which the Stockholders have, among other things, (i) agreed to
tender in the Offer all of the Stockholders' Shares unless the Offer is
terminated by the Parent or the Offeror without any Shares being purchased
thereunder and (ii) granted to the Parentor the Offeror, as the Parent shall
designate, a conditional option to purchase the Stockholders' Shares. In
addition, certain Stockholders have agreed to appoint Parentunder certain
circumstances as such Stockholders' proxy to vote such Stockholders' Shares on
all matters in connection with the consummation of the transactions contemplated
by the Merger Agreement and the Option Agreement. The tender by the Stockholders
of the Stockholders' Shares alone will not cause the Minimum Condition to be
satisfied.
For purposes of the Offer, the Offeror shall be deemed to have accepted
for payment (and thereby purchased) validly tendered Shares, if, as and when the
Offeror gives oral or written notice to Morgan Guaranty Trust Company of New
York (the "Depositary") of the Offeror's acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Offeror and transmitting payment to
tendering stockholders. Under no circumstances will interest on the purchase
price of the Shares be paid by the Offeror by reason of any delay in making
payment. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (i) certificates for such
Shares (or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase) and (ii) the Letter of Transmittal (or manually signed
facsimile thereof) properly completed and duly executed with all required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer of Shares, together with any other
documents required by the Letter of Transmittal.
The Offeror expressly reserves the right at any time or from time to time,
subject to the terms of the Merger Agreement and regardless of whether any of
the events set forth in Section 15-"Certain Conditions to the Offeror's
Obligations" of the Offer to Purchase shall have occurred or shall have been
determined by the Offeror to have occurred, to extend the period of time during
which the Offer is open and thereby delay acceptance for payment of, and the
payment for, any Shares by giving oral or written notice of such extension to
the Depositary. Any such extension will be followed as promptly as practicable
by public announcement thereof no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
March 17, 1998 unless and until the Offeror shall have extended the period of
time for which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Offeror, shall expire.
Tenders of Shares made pursuant to the Offer are irrevocable, provided
that Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by the Offeror
pursuant to the Offer, may also be withdrawn at any time after April 18, 1998.
To be effective, a written or facsimile transmission notice of withdrawal must
be timely received by the Depositary at the address set forth on the back cover
page of the Offer to Purchase and must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holders, if different from the name of the person who
tendered such Shares. If certificates for Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the release
of such certificates, the serial numbers of the particular certificates
evidencing such Shares and a signed notice of withdrawal with signatures
guaranteed by an Eligible Institution (as defined in the Offer to Purchase) must
be submitted prior to the release of such Shares (except that such signature
guarantee requirement is not applicable in the case of Shares tendered by an
Eligible Institution). In the case of Shares tendered by book-entry transfer,
the notice of withdrawal must also specify the name and number of the account at
the Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with such Book-Entry Transfer Facility's procedures. Any Shares
properly withdrawn will be deemed not to be validly tendered for purposes of the
Offer. Withdrawn Shares may, however, be retendered by repeating one of the
procedures in Section 3-"Procedure for Tendering Shares" of the Offer to
Purchase at any time before the Expiration Date. All questions as to the form
and the validity (including time of receipt) of notices of withdrawal will be
determined by the Offeror, in its sole discretion, whose determination will be
final and binding. None of the Offeror, Parent, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided to the Offeror its list of stockholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal and other
related materials will be mailed to record holders of Shares whose names appear
on the Company's stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the 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.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is made
with respect to the Offer.
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers as set forth below. Additional copies of the Offer to Purchase, the
Letter of Transmittal and other tender offer materials may be obtained from the
Information Agent or the Dealer Manager, and copies will be furnished promptly
at the Offeror's expense. No fees or commissions will be paid to brokers,
dealers or other persons (other than the Information Agent and the Dealer
Manager) for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Bankers and Brokers Call Collect:
(212) 440-9800
All Others Call Toll Free:
(800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
CREDIT FIRST
SUISSE BOSTON
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free (800) 881-8320
February 18, 1998
<PAGE>
February 11, 1998 PRESS RELEASE
For Immediate Release:
For more information, contact:
WAVERLY, INC. WOLTERS KLUWER U.S.
Edward B. Hutton, Jr. Mary Dale Walters
President and CEO Director, Public Relations
Phone: (410) 528-4241 Phone: 312-425-7014
Fax: (410) 528-4414 Fax: 312-425-0232
WAVERLY AGREES TO BE ACQUIRED BY WOLTERS KLUWER
TENDER OFFER AT $39 TO COMMENCE
Baltimore, MD...Waverly, Inc. (NASDAQ: WAVR) and Wolters Kluwer N.V.,
Amsterdam, announced today that they have reached a definitive merger
agreement through which Waverly would be acquired by Wolters Kluwer in a
transaction valued at approximately $375 million. As previously announced,
Waverly has been exploring the possible sale of the Company.
Under the agreement, Wolters Kluwer will promptly commence a tender
offer for all of the outstanding shares of Waverly common stock at US$39 per
share, net to the seller in cash. The tender offer is conditional on Wolters
Kluwer receiving tenders of at least 66 2/3% of Waverly's outstanding common
stock and the expiration of any waiting periods under applicable law.
Shareholders representing a majority of the outstanding shares of Waverly,
including members of the founding Passano family, have entered into a
definitive agreement to tender their shares into the tender offer and vote
for the merger. These shareholders have also granted Wolters Kluwer an option
to purchase shares.
William M. Passano, Jr., Chairman of Waverly, stated, "Waverly is very
pleased to have been able to achieve this level of value for our
shareholders. The $39 price represents a premium of over 42% to the trading
price of Waverly common stock prior to the announcement of the commencement
of the sale process. We are also impressed with Wolters Kluwer's
capabilities and commitment to the medical publishing business and their
employees."
Mr. Passano noted there will be integration between Waverly's business and
Lippincott-Raven Publishers, Inc., Wolters Kluwer's medical publishing
operations headquartered in Philadelphia. It is anticipated that certain
operations, such as medical society journals and others, will be based in
Baltimore. Other operations will be centered in Philadelphia. Mr. Passano
said that Wolters Kluwer has agreed to maintain a substantial operating
presence and a substantial work force in Baltimore, which is an important
consideration for the Passano family. He said he also believes "the combined
companies should have greatly enhanced strength and opportunities which
should, in the long run, increase job opportunities in Baltimore. I am
confident that Waverly's important presence in the Baltimore community will
continue for years to come."
"This acquisition is an excellent fit with Wolters Kluwer's operating
approach," said Peter W. van Wel, a member of the Executive Board of Wolters
Kluwer N.V. with responsibility for its activities in the United States. "In
today's highly competitive medical publishing markets, marked by a gradual
ongoing shift to electronic publishing, both the quality and quantity of
content ownership are becoming increasingly important. A strategic alliance
between Wolters Kluwer and
<PAGE>
PAGE 2
PRESS RELEASE
FEBRUARY 11, 1998
Waverly is a natural step towards securing long-term success in the medical
publishing marketplace. These are all things Wolters Kluwer values for
long-term growth."
Edward B. Hutton, Jr., President and Chief Executive Officer of Waverly,
stated, "We believe Wolters Kluwer is very well positioned to broaden the
company's products and market development capabilities. I am looking forward
to working with Wolters Kluwer's management, whom I know very well, to
continue to build a premier medical publishing company with worldwide
presence."
Morgan Stanley & Co. Incorporated is acting as financial advisor to Waverly
and rendered a fairness opinion to the Waverly Board of Directors. Credit
Suisse First Boston is acting as financial advisor to Wolters Kluwer in the
transaction and will serve as Dealer Manager in the tender offer.
Waverly, Inc., based in Baltimore, Maryland, for over one hundred years, is a
leading international publisher of medical and scientific books, periodicals,
and electronic media. Waverly's sales in 1997 were approximately $172
million. The company has over 600 employees.
Wolters Kluwer is a multidomestic publishing company active in 25 countries.
Core activities are legal and tax publishing, business publishing,
medical/scientific publishing, educational publishing/professional training
and trade publishing for select markets. Wolters Kluwer has sales of
approximately $2.5 billion. The company's U.S. holdings include Aspen
Publishers, CCH Incorporated, Facts and Comparisons, Legal Information
Services, and Lippincott-Raven Publishers.
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WOLTERS KLUWER U.S. CORPORATION,
MP ACQUISITION CORP.,
and
WAVERLY, INC.
February 10, 1998
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
THE OFFER AND MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Company Actions . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.5 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . 8
1.6 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.7 Articles of Incorporation of
the Surviving Corporation . . . . . . . . . . . . . . . . . . 8
1.8 By-Laws of the Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.9 Directors and Officers of the
Surviving Corporation . . . . . . . . . . . . . . . . . . . . 9
1.10 Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . 9
1.11 Merger Without Meeting of
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 Conversion of Capital Stock . . . . . . . . . . . . . . . . 11
2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . 14
3.1 Corporate Organization and
Qualification . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 Authority Relative to This
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .15
3.4 Consents and Approvals; No
Violation . . . . . . . . . . . . . . . . . . . . . . . . . .16
3.5 SEC Reports; Financial
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Statements. . . . . . . . . . . . . . . . . . . . . . . . . . .17
3.6 Absence of Certain Changes
Or Events . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.9 Employee Benefit Plans; Labor
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
3.10 Environmental Laws and
Regulations . . . . . . . . . . . . . . . . . . . . . . . . . .21
3.11 Intangible Property; Copyrights . . . . . . . . . . . . . . . .22
3.12 Compliance with Applicable Laws . . . . . . . . . . . . . . . .22
3.13 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . ..23
3.14 Approvals; Antitakeover
Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.15 Voting Requirements . . . . . . . . . . . . . . . . . . . . . .24
3.16 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . .24
3.17 Opinion of Financial Advisors . . . . . . . . . . . . . . . . .24
3.18 Information Supplied. . . . . . . . . . . . . . . . . . . . . .24
3.19 Confidentiality Agreements. . . . . . . . . . . . . . . . . . .25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
4.1 Corporate Organization and
Qualification . . . . . . . . . . . . . . . . . . . . . . . . .25
4.2 Authority Relative to This
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .26
4.3 Consents and Approvals; No
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . .26
4.4 Interim Operations of Newco . . . . . . . . . . . . . . . . . .27
4.5 Sufficient Funds. . . . . . . . . . . . . . . . . . . . . . . .27
4.6 Share Ownership . . . . . . . . . . . . . . . . . . . . . . . .27
4.7 Information in Proxy Statement
and Schedule 14D-9. . . . . . . . . . . . . . . . . . . . . . .27
4.8 Investigation by Parent . . . . . . . . . . . . . . . . . . . .28
4.9 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . .29
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS. . . . . . . . . . . . . . . . . . . . . .29
5.1 Interim Operations of the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.2 Alternative Proposals . . . . . . . . . . . . . . . . . . . . .32
5.3 Certain Filings . . . . . . . . . . . . . . . . . . . . . . . .33
5.4 Satisfaction of Conditions;
Receipt of Necessary Approvals. . . . . . . . . . . . . . . . .33
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5.5 Access to Information . . . . . . . . . . . . . . . . . . . . .34
5.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5.7 Directors' and Officers' Insurance
and Indemnification . . . . . . . . . . . . . . . . . . . . . .35
5.8 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . .37
5.9 Corporate Presence. . . . . . . . . . . . . . . . . . . . . . .39
5.10 Conduct of Business of Newco. . . . . . . . . . . . . . . . . .39
5.11 Certain Filings . . . . . . . . . . . . . . . . . . . . . . . .39
5.12 Further Assurances. . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . .40
6.1 Conditions to Each Party's
Obligations to Effect the Merger. . . . . . . . . . . . . . . .40
6.2 Additional Conditions to the
Obligations of Parent and Newco . . . . . . . . . . . . . . . .41
6.3 Additional Conditions to the
Obligations of the Company. . . . . . . . . . . . . . . . . . .41
ARTICLE VII
TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . .42
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . .46
ARTICLE VIII
MISCELLANEOUS AND GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . .46
8.1 Payment of Expenses and Other
Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
8.2 Survival of Representations and Warranties; Survival of
Confidentiality Agreement . . . . . . . . . . . . . . . . . . .47
8.3 Modification or Amendment . . . . . . . . . . . . . . . . . . .47
8.4 Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . .47
8.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .47
8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .47
8.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.8 Entire Agreement; Assignment. . . . . . . . . . . . . . . . . .49
8.9 Parties in Interest . . . . . . . . . . . . . . . . . . . . . .49
8.10 Certain Definitions . . . . . . . . . . . . . . . . . . . . . .49
8.11 Obligation of Parent. . . . . . . . . . . . . . . . . . . . . .50
8.12 Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
8.13 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . .51
8.14 Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
8.15 Specific Performance. . . . . . . . . . . . . . . . . . . . . .51
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8.16 Joint and Several Liability . . . . . . . . . . . . . . . . . .52
8.17 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . .52
ANNEX A; CONDITIONS TO THE OFFER . . . . . . . . . . . . . . . . . . . . . . A-1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 10, 1998, by and among Wolters Kluwer U.S. Corporation, a Delaware
corporation ("Parent"), MP Acquisition Corp., a Maryland corporation and a
wholly owned subsidiary of Parent ("Newco"), and Waverly, Inc., a Maryland
corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Newco and
the Company have, subject to the conditions of this Agreement, determined
that the Merger (as defined below) is in the best interests of their
respective stockholders and approved this Agreement and the transactions
contemplated hereby; and
WHEREAS, Parent, Newco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, and
in consideration of the execution and delivery by Parent, Newco and the
Stockholders named therein of a stock option and tender agreement (the "Stock
Option and Tender Agreement") Parent, Newco and the Company hereby agree as
follows:
ARTICLE I
THE OFFER AND MERGER
1.1 The Offer. (a) As promptly as practicable (but in no event
later than five business days after the public announcement of the execution
hereof), Newco shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) an offer
(the "Offer") to purchase for cash all shares of the issued and outstanding
Common Stock, par value $2.00 per share (referred to herein as either the
"Shares" or "Company Common Stock"), of the Company at a price of $ 39.00 per
Share, net to the
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seller in cash (such price, or such higher price per Share as may be paid in
the Offer, being referred to herein as the "Offer Price"), subject to there
being validly tendered and not withdrawn prior to the expiration of the
Offer, that number of Shares which, together with the Shares beneficially
owned by Parent or Newco, represent at least two-thirds of the Shares
outstanding on a fully diluted basis (the "Minimum Condition") and to the
other conditions set forth in Annex A hereto. Newco shall, on the terms and
subject to the prior satisfaction or waiver (except that the Minimum
Condition may not be waived) of the conditions of the Offer, accept for
payment and pay for Shares tendered as soon as it is legally permitted to do
so under applicable law. The obligations of Newco to commence the Offer and
to accept for payment and to pay for any Shares validly tendered on or prior
to the expiration of the Offer and not withdrawn shall be subject only to the
Minimum Condition and the other conditions set forth in Annex A hereto. The
Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") containing the terms set forth in this Agreement, the Minimum
Condition and the other conditions set forth in Annex A hereto. Newco
expressly reserves the right to amend any of the terms and conditions of the
Offer; provided that Newco shall not amend or waive the Minimum Condition,
decrease the Offer Price or decrease the number of Shares sought, change the
form of consideration to be paid pursuant to the Offer, impose conditions to
the Offer in addition to those set forth in Annex A hereto, or amend any
other term or condition of the Offer in any manner adverse to the holders of
the Shares or extend the expiration date of the Offer without the prior
written consent of the Company (such consent to be authorized by the Board of
Directors of the Company or a duly authorized committee thereof).
Notwithstanding the foregoing, Newco shall, and Parent agrees to cause Newco
to, extend the Offer for a period of ten business days following the initial
expiration date of the Offer, if any conditions to the Offer have not been
satisfied or waived at such date. In addition, following such first
extension of the Offer as provided in the preceding sentence, Newco shall,
and Parent agrees to cause Newco to, extend the Offer at any time up to six
(6) months from the execution of this Agreement, for one or more periods of
not more than ten business days, if at the expiration date of the Offer, as
extended, all conditions to the Offer have not been satisfied or waived. In
addition,
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the Offer Price may be increased and the Offer may be extended to the extent
required by law in connection with such increase in each case without the
consent of the Company.
(b) As soon as practicable on the date the Offer is
commenced, Parent and Newco shall file with the United States Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
with respect to the Offer (together with all amendments and supplements
thereto and including the exhibits thereto, the "Schedule 14D-1"). The
Schedule 14D-1 will include, as exhibits, the Offer to Purchase and a form of
letter of transmittal and summary advertisement (collectively, together with
any amendments and supplements thereto, the "Offer Documents"). Parent and
Newco represent that the Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Newco with respect to information
supplied by the Company in writing for inclusion in the Offer Documents.
Each of Parent and Newco further agrees to take all steps necessary to cause
the Offer Documents to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and Newco, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that it
shall have become false and misleading in any material respect and each of
Parent and Newco further agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review the Schedule 14D-1 and the Offer
Documents before they are filed with the SEC. In addition, Parent and Newco
agree to provide the Company and its counsel in writing with any comments or
other communications that Parent, Newco or their counsel
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may receive from time to time from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments or other
communications.
1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer
and represents that the Board of Directors, at a meeting duly called and
held, has (i) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (collectively, the
"Transactions"), (ii) adopted a resolution by the unanimous vote of the Board
of Directors approving the acquisition of Shares by Parent and Newco pursuant
to the Offer, which resolution constitutes approval of the acquisition of
Shares pursuant to the Offer under Section 3-603 of the Maryland General
Corporation Law (the "MGCL"); (iii) adopted a resolution by the unanimous
vote of the Board of Directors which declares that the Transactions are
advisable on substantially the terms and conditions set forth or referred to
in the resolution in accordance with Section 3-105 of the MGCL; (iv)
unanimously determined that as of the date hereof the Transactions are fair
to and in the best interest of the Company's shareholders and (v) unanimously
resolved to recommend that the shareholders of the Company accept the Offer,
tender their Shares thereunder to Newco and approve and adopt this Agreement
and the Merger; provided, that such recommendation may be withdrawn, modified
or amended if, in the opinion of the Board of Directors, after consultation
with its legal counsel, such recommendation would be inconsistent with its
fiduciary duties to the Company's shareholders under applicable law. The
Company represents that it has previously approved an amendment to the
Company's By-laws that exempts the acquisition of Shares pursuant to the
Transactions from the provisions of Section 3-702 of the MGCL. The Company
has been advised that all of its directors and executive officers intend
either to tender their Shares pursuant to the Offer or to vote their Shares
in favor of the Merger.
(b) As promptly as practicable following the commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on
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Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the fiduciary duties of the Company's directors under applicable law and to
the provisions of this Agreement, contain the recommendation referred to in
clause (v) of Section 1.2(a) hereof. The Company represents that the
Schedule 14D-9 will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Company's shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Newco for inclusion in the
Schedule 14D-9. The information supplied by Parent or Newco for inclusion in
the Schedule 14D-9 shall not, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company further agrees to take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. Each of the Company, on the one hand, and Parent and Newco,
on the other hand, agrees promptly to correct any information provided by it
for use in the Schedule 14D-9 if and to the extent that it shall have become
false and misleading in any material respect and the Company further agrees
to take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of the Shares, in each
case as and to the extent required by applicable federal securities laws.
Parent and its counsel shall be given a reasonable opportunity to review the
initial Schedule 14D-9 before it is filed with the SEC. In addition, the
Company agrees to provide Parent, Newco and their counsel in writing with any
comments or other communications that the Company or its counsel may receive
from time to time from the SEC or its staff with
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respect to the Schedule 14D-9 promptly after the receipt of such comments or
other communications.
(c) In connection with the Offer, if requested by Parent, the
Company will promptly furnish or cause to be furnished to Parent mailing
labels, security position listings and any available listing or computer file
containing the names and addresses of the record holders of the Shares as of
a recent date, and shall furnish Parent with such information and assistance
as Parent or its agents may reasonably request in communicating the Offer to
the shareholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and Newco shall hold in confidence
the information contained in any of such labels and lists and the additional
information referred to in the preceding sentence, will use such information
only in connection with the Offer, and, if this Agreement is terminated, will
upon request of the Company deliver or cause to be delivered to the Company
all copies of such information then in its possession or the possession of
its agents or representatives.
1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares by
Parent or any of its Subsidiaries (as defined in Section 8.10) which
represent at least two-thirds of the outstanding shares of Company Common
Stock (on a fully diluted basis), Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as is equal to the product of the total number of
directors on such Board (giving effect to the directors designated by Parent
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Newco, Parent and any of their
affiliates bears to the total number of shares of Company Common Stock then
outstanding. The Company shall take all action necessary to cause Parent's
designees to be elected or appointed to the Company's Board of Directors and
to secure the resignations of such number of its incumbent directors as is
necessary to enable Parent's designees to be so elected to the Company's
Board, and shall cause Parent's designees to be so elected. At such times,
the Company will take all action necessary to cause individuals designated by
Parent to constitute the
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same percentage as such individuals represent on the Company's Board of
Directors of (A) each committee of the Board and (B) each board of directors
(and committee thereof) of each Subsidiary in each case to the extent
permitted by the National Association of Securities Dealers (the "NASD")
Rules. Notwithstanding the foregoing, until the Effective Time (as defined in
Section 1.5 hereof), the Company shall retain as members of its Board of
Directors at least two (2) directors that are directors of the Company on the
date hereof (the "Company Designees"); provided, that subsequent to the
purchase of and payment for Shares pursuant to the Offer, Parent shall always
have its designees represent at least a majority of the entire Board of
Directors. The Company's obligations under this Section 1.3(a) shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly take all actions required pursuant to
such Section 14(f) and Rule 14f-1 in order to fulfill its obligations under
this Section 1.3(a), including mailing to shareholders the information
required by such Section 14(f) and Rule 14f-1 as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors. Parent
or Newco will supply the Company any information with respect to either of
them and their nominees, officers, directors and affiliates required by such
Section 14(f) and Rule 14f-1.
(b) From and after the time, if any, that Parent's
designees constitute a majority of the Company's Board of Directors, any
amendment of this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or Newco hereunder, any waiver of any condition or any of the
Company's rights hereunder or other action by the Company hereunder may be
effected only by the action of a majority of the directors of the Company
then in office who were directors of the Company on the date hereof, which
action shall be deemed to constitute the action of the full Board of
Directors; provided, that if there shall be no such directors, such actions
may be effected by the unanimous vote of the entire Board of Directors of the
Company.
1.4 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.5 hereof), the
Company and Newco
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shall consummate a merger (the "Merger") pursuant to which (a) Newco shall be
merged with and into the Company and the separate corporate existence of
Newco shall thereupon cease, (b) the Company shall be the successor or
surviving corporation in the Merger and shall continue to be governed by the
laws of the State of Maryland and (c) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises
shall continue unaffected by the Merger. The corporation surviving the
Merger is sometimes hereinafter referred to as the "Surviving Corporation."
The Merger shall have the effects set forth in the MGCL.
1.5 Effective Time. Parent, Newco and the Company will cause
appropriate Articles of Merger (the "Articles of Merger") to be executed and
filed on the date of the Closing (as defined in Section 1.6) (or on such
other date as Parent and the Company may agree) with the State Department of
Assessments and Taxation of the State of Maryland as provided in the MGCL.
The Merger shall become effective at the time at which the Articles of Merger
have been duly filed with the State Department of Assessments and Taxation of
the State of Maryland or at such time as is agreed upon by the parties and
specified in the Articles of Merger, and such time is hereinafter referred to
as the "Effective Time."
1.6 Closing. The closing of the Merger (the "Closing") shall take
place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom, 1440 New
York Avenue, Washington, D.C. as soon as practicable following the
satisfaction or waiver of all of the conditions set forth in Article VI
hereof or (b) at such other place, time and date as Parent and the Company
may agree.
1.7 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Articles of
Incorporation.
1.8 By-Laws of the Surviving Corporation. The By-Laws of Newco,
as in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation until thereafter amended as provided by law,
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the Articles of Incorporation of the Surviving Corporation and such By-Laws.
1.9 Directors and Officers of the Surviving Corporation. The
directors and officers of Newco at the Effective Time shall, from and after
the Effective Time, be the initial directors and officers, respectively, of
the Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Articles of Incorporation and
By-Laws.
1.10 Shareholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in
accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its shareholders (the "Special Meeting") as soon as practicable
following the acceptance for payment and purchase of Shares by Newco
pursuant to the Offer for the purpose of considering and taking action upon
this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and shall
(x) obtain and furnish the information required to be included by the SEC
in the Proxy Statement (as hereinafter defined) and, after consultation
with Parent, to respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement (the "Proxy Statement") to be
mailed to its shareholders and (y) obtain the necessary approvals of the
Merger and this Agreement by its shareholders; and
(iii) subject to the fiduciary obligations of the Board
under applicable law as advised by its legal counsel, include in the Proxy
Statement the recommendation of the Board that shareholders of
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the Company vote in favor of the approval of the Merger and the adoption of
this Agreement.
(b) Parent agrees that it will provide the Company with the
information concerning Parent and Newco required to be included in the Proxy
Statement and will vote, or cause to be voted, all of the Shares then owned
by it, Newco or any of its other Subsidiaries and affiliates in favor of the
approval of the Merger and the adoption of this Agreement.
(c) The Company represents that the Proxy Statement (or any
amendment thereof or supplement thereto) at the date mailed to Company
stockholders and at the time of the Special Meeting will not contain any
untrue statement of material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
that no representation is made by the Company with respect to statements made
therein based on information supplied by Parent or Newco in writing for
inclusion in the Proxy Statement. If at any time prior to the Effective Time
any event with respect to the Company or any of its Subsidiaries should occur
which is required to be described in a supplement to the Proxy Statement,
such event shall be so described, and such supplement shall be promptly filed
with the SEC and, as required by law, disseminated to the stockholders of the
Company. With respect to the information relating to the Company, the Proxy
Statement will comply as to form and substance in all material respects with
the requirements of the Exchange Act.
1.11 Merger Without Meeting of Shareholders. Notwithstanding
Section 1.10 hereof, in the event that Parent, Newco or any other Subsidiary
of Parent shall acquire at least 90% of the outstanding shares of each class
of capital stock of the Company, pursuant to the Offer or otherwise, the
parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of shareholders of the Company, in accordance with Section
3-106 of the MGCL.
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ARTICLE II
CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or common stock, par value $ .01 per share, of
Newco ("Newco Common Stock"):
(a) Newco Common Stock. Each issued and outstanding share
of Newco Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
All shares of Company Common Stock that are owned by the Company as treasury
stock and any shares of Company Common Stock owned by Parent, Newco or any
other wholly owned Subsidiary of Parent shall be cancelled and retired and
shall cease to exist and no consideration shall be delivered in exchange
therefor.
(c) Exchange of Shares. Each share of Company Common Stock
issued and outstanding (other than Shares to be cancelled in accordance with
Section 2.1(b) hereof), shall be converted into the right to receive the
Offer Price, payable to the holder thereof, without interest (the "Merger
Consideration"), upon surrender of the certificate formerly representing such
share of Company Common Stock in the manner provided in Section 2.2. All
such shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease
to exist, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to receive
the Merger Consideration therefor upon the surrender of such certificate in
accordance with Section 2.2.
(d) Stock Options. Parent and the Company shall take all
actions necessary to provide that, immediately prior to the Effective Time,
(i) the Company shall pay to the holder of each then outstanding stock option
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to purchase Shares (an "Option") granted under the Company's stock option plans
and agreements (the "Option Plans") with such Options listed on Section 2.1 of
the disclosure schedule delivered to Parent and Newco by the Company
concurrently with the execution hereof (the "Company Disclosure Schedule"),
whether or not then exercisable or vested, an amount in respect thereof equal to
the product of (A) the excess, if any, of the Offer Price over the per share
exercise price of each such Option and (B) the number of Shares subject thereto
(such payment to be net of applicable withholding taxes) and (ii) each such
Option shall be cancelled; provided, however, that the foregoing shall be
subject to the obtaining of any necessary consents of holders of Options, it
being agreed that the Company and Parent will (x) use all reasonable best
efforts to obtain any such consents and (y) make any amendments to the terms of
such stock option or compensation plans or arrangements that are necessary to
give effect to the transactions contemplated by this Section 2.1.
2.2 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust
company reasonably acceptable to the Company to act as agent for the holders
of shares of Company Common Stock in connection with the Merger (the "Paying
Agent") to receive the funds to which holders of shares of Company Common
Stock shall become entitled pursuant to Section 2.1(c) hereof. Parent shall
take all steps necessary to deposit or cause to be deposited with the Paying
Agent such funds as needed for timely payment hereunder. Such funds shall be
invested by the Paying Agent as directed by Parent or the Surviving
Corporation.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time but in no event more than three business days
thereafter, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates"),
whose shares were converted pursuant to Section 2.1 hereof into the right to
receive the Merger Consideration (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
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Paying Agent and shall be in such form and have such other provisions as
Parent and the Company may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender of a Certificate for cancellation to
the Paying Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly
represented by such Certificate and the Certificate so surrendered shall
forthwith be cancelled. If payment of the Merger Consideration is to be made
to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form
for transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in Company
Common Stock. At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Common Stock on the records of the Company.
From and after the Effective Time, the holders of Certificates evidencing
ownership of shares of Company Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such
Shares, except as otherwise provided for herein or by applicable law. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided
in this Article II.
(d) Termination of Fund; No Liability. At any time
following one (1) year after the Effective
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Time, the Surviving Corporation shall be entitled to require the Paying Agent
to deliver to it any funds (including any interest received with respect
thereto) which had been made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or other similar laws) only as general creditors thereof
with respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Parent and Newco that:
3.1 Corporate Organization and Qualification. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation
and is qualified and in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the business
conducted, by it require such qualification, except where the failure to so
qualify or be in good standing would not have a Company Material Adverse
Effect (as defined in Section 8.10). Each of the Company and its
Subsidiaries has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power and authority would
not have a Company Material Adverse Effect. The Company has heretofore made
available to Parent complete and correct copies of its Articles of
Incorporation and By-Laws as in effect as of the date hereof.
3.2 Capitalization. The authorized capital stock of the Company
consists of: (i) 12,000,000 Shares,
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of which, as of the date hereof 9,039,576 Shares were issued and outstanding,
and (ii) 500,000 shares of preferred stock, no par value per share, none of
which, as of the date hereof, were issued and outstanding. All of the
outstanding Shares have been duly authorized and validly issued and are fully
paid and nonassessable. Except as set forth in Section 3.2 of the Company
Disclosure Schedule, as of the date hereof all outstanding shares of capital
stock of the Company's Subsidiaries are owned by the Company or a direct or
indirect wholly owned subsidiary of the Company, free and clear of all liens,
charges, encumbrances, claims and options of any nature. Except as set forth
on Section 3.2 of the Company Disclosure Schedule, there are not as of the
date hereof any outstanding or authorized options, warrants, calls, rights
(including preemptive rights), commitments or any other agreements of any
character which the Company or any of its Subsidiaries is a party to, or may
be bound by, requiring it to issue, transfer, sell, purchase, redeem or
acquire any shares of capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, any shares
of capital stock of the Company or any of its Subsidiaries.
3.3 Authority Relative to This Agreement. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and, subject to approval of this Agreement by the holders of two-thirds of
the outstanding Shares in accordance with the MGCL, to consummate the
transactions contemplated hereby. This Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than,
with respect to the Merger, the approval of this Agreement by the holders of
two-thirds of the outstanding Shares in accordance with the MGCL). This
Agreement has been duly and validly executed and delivered by the Company
and, assuming this Agreement constitutes the valid and binding agreement of
Parent and Newco, constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating
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to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law).
3.4 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the respective Articles of
Incorporation or certificate of incorporation, as the case may be, or
respective By-Laws of the Company or any of its Subsidiaries; (b) except as
set forth on Section 3.4(b) of the Company Disclosure Schedule, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (i) in connection with
the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (ii) pursuant to the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Exchange Act"), (iii) the
filing of the Articles of Merger pursuant to the MGCL and appropriate
documents with the relevant authorities of other states in which the Company
or any of its Subsidiaries is authorized to do business all of which states
are set forth on Section 3.4(b)(iii) of the Company Disclosure Schedule, (iv)
as may be required by any applicable state corporation, securities or "blue
sky" laws or state takeover laws, (v) such filings, consents, approvals,
orders, registrations and declarations of the Company as may be required
under the laws of Germany or any other relevant foreign country or (vi) where
the failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not have a Company Material
Adverse Effect; (c) except as set forth on Section 3.4(c) of the Company
Disclosure Schedule, result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration
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or lien or other charge or encumbrance) under any of the terms, conditions or
provisions of any note, license, agreement or other instrument or obligation
to which the Company or any of its Subsidiaries is a party or by which any of
them or any of their respective assets may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation or
acceleration or liens or other charges or encumbrances) as to which requisite
waivers or consents have been obtained or which would not have a Company
Material Adverse Effect; or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 3.4 are duly and timely obtained or made and the approval of this
Agreement by the Company's stockholders has been obtained, violate any order,
writ, injunction, decree, statute, rule or regulation in effect as of the
date of this Agreement and applicable to the Company or any of its
Subsidiaries or any of their respective assets, except for violations which
would not have a Company Material Adverse Effect.
3.5 SEC Reports; Financial Statements.
(a) The Company has filed all reports required to be filed by
it with the Securities and Exchange Commission (the "SEC") since January 1,
1995 pursuant to the federal securities laws and the SEC rules and
regulations thereunder, all of which as of their respective dates, complied
in all material respects with applicable requirements of the Exchange Act
(collectively, the "Company SEC Reports"). None of the Company SEC Reports,
including, without limitation, any financial statements or schedules included
therein, as of their respective dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated statements of financial position and the
related consolidated statements of operations, stockholders' equity and cash
flows (including the related notes thereto) of the Company included in the
Company SEC Reports complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a basis consistent with
prior periods (except as otherwise noted therein), and present fairly the
financial position of the Company as of their respective dates, and the
consolidated results of its operations and its cash flows for the periods
presented therein (subject, in the case of
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the unaudited interim financial statements, to normal year-end adjustments).
(c) The income statement set forth on Section 3.5(c) of the
Company Disclosure Schedule is an accurate summary of the results of
operations for the period presented therein.
3.6 Absence of Certain Changes or Events. As of the date of this
Agreement, except as set forth on Section 3.6 of the Company Disclosure
Schedule or as a consequence of, or as contemplated by this Agreement, since
December 31, 1996, the business of the Company has been carried on only in
the ordinary and usual course, and other than in the ordinary course of
business, there has not occurred any change (other than a change affecting
the Company's industry generally) which has resulted or is reasonably likely
to result in a Company Material Adverse Effect.
3.7 Litigation. As of the date hereof, except as set forth on
Section 3.7 of the Company Disclosure Schedule there is no action, claim,
suit, proceeding or governmental investigation pending or, to the knowledge
of the Company, threatened against the Company or its Subsidiaries by or
before any court, governmental or regulatory authority or by any third party.
3.8 Taxes.
(a) The Company and its Subsidiaries have filed (or have
obtained extensions to file) all Tax Returns (as defined below) required to
be filed by the Company and its Subsidiaries for taxable periods ending on or
prior to the Closing other than those Tax Returns the failure of which to
file would not have a Company Material Adverse Effect. Such Tax Returns are
true, correct and complete in all material respects.
(b) All Taxes (as defined below) shown on such Tax Returns
have been paid in full or adequate provisions have been made to reflect such
items on the Company's or its Subsidiaries' balance sheet (in accordance with
GAAP).
(c) There are no material liens for Taxes upon the assets of
either the Company or its Subsidiaries
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except for statutory liens for current taxes not yet due.
(d) Neither the Company nor any Subsidiary has waived in
writing any statute of limitation with respect to Taxes of the Company or any
Subsidiary.
(e) For the purpose of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies, penalties or other assessments imposed by any
United States federal, state, local, or foreign taxing authority, including,
but not limited to income, excise, property, sales, transfer, franchise,
payroll, withholding, social security or other taxes, including any interest,
penalties or additions attributable thereto, and "Tax Return" shall mean any
return, report, information return or other document (including any related
or supporting information) with respect to Taxes.
3.9 Employee Benefit Plans; Labor Matters. (a) Section 3.9 of
the Company Disclosure Schedule sets forth a true and complete list of all
collective bargaining agreements, employment, consulting, severance, deferred
compensation and non-competition agreements, executive compensation plans,
stock purchase, stock award and stock option plans and agreements, restricted
stock awards, bonus and incentive plans, directors fee arrangements, both tax
qualified and non-qualified and statutory and non-statutory employee pension
plans, employee profit sharing plans, 401(k) savings plans, multiemployer
plans, employee welfare plans, group life insurance, hospitalization
insurance other similar plans or arrangements (either written or oral but
only to the extent an oral plan provides material benefits) providing for
benefits to any employees, consultants or director of the Company or any
Subsidiaries or affiliates of the Company. With respect to the employee
benefit plans, stock option plans, restricted stock award programs and other
programs and arrangements maintained or contributed to by the Company or any
of its Subsidiaries (the "Company Plans"), except as specifically set forth
on Section 3.9 of the Company Disclosure Schedule: (i) each Company Plan
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service (the "IRS")
that it is so qualified and nothing has occurred since the date of such
letter that could reasonably be expected to affect the
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qualified status of such Company Plan; (ii) each Company Plan has been
operated in all material respects in accordance with its terms and the
requirements of applicable law; (iii) neither the Company nor any of its
Subsidiaries has incurred any direct or indirect liability under, arising out
of or by operation of Title IV of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), in connection with the termination of, or
withdrawal from, any Company Plan or other retirement plan or arrangement,
and no fact or event exists that could reasonably be expected to give rise to
any liability. Except as set forth on Section 3.9 of the Company Disclosure
Schedule, the aggregate accumulated benefit obligations of each Company Plan
subject to Title IV of ERISA (as of the date of the most recent actuarial
valuation prepared for such Company Plan) do not exceed the fair market value
of the assets of such Company Plan (as of the date of such valuation).
(b) The Company is not subject to any collective bargaining
or other labor union contracts applicable to persons employed by the Company
or its Subsidiaries as of the date of this Agreement. As of the date of this
Agreement, there is no pending or threatened in writing labor dispute, strike
or work stoppage against the Company or any of its Subsidiaries which may
interfere with the respective business activities of the Company or its
Subsidiaries.
(c) As of the date of this Agreement, there are no more than
973,750 options issued and outstanding under the Company's stock option
plans. No options have been issued to employees or directors of the Company
or its Subsidiaries since January 1, 1998. There are no restricted stock
awards which have been issued by the Company that are currently outstanding.
(d) The consummation of the transactions contemplated by this
Agreement will not give rise to an obligation on behalf of the Company to
make severance payments to any individuals, except such as may arise from
actions of the Company taken at the direction of Parent following the
Effective Time.
(e) No payments made to any individual by the Company or any
Subsidiary as a result of the consummation of the transactions contemplated
by this Agreement
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would be non-deductible under either Section 162(m) of the Code or Section
280G of the Code.
(f) Neither the Company nor any Subsidiary has taken any
action or failed to take any action which would result in the imposition of a
material excise tax on the Company pursuant to Sections 4975, 4980B and 4999
of the Code.
3.10 Environmental Laws and Regulations. As of the date of this
Agreement, except as set forth on Section 3.10 of the Company Disclosure
Schedule, (i) the Company and each of its Subsidiaries is in compliance with
all applicable federal, state and local laws and regulations relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) (collectively, "Environmental Laws"), except for
non-compliance that would not have a Company Material Adverse Effect; (ii)
neither the Company nor any of its Subsidiaries (a) has received written
notice of any action, cause of action, claim, investigation, demand or notice
by any person or entity alleging liability under or non-compliance with any
Environmental Law (an "Environmental Claim") or (b) to the knowledge of the
Company is subject to any Environmental Claim which is reasonably likely to
have a Company Material Adverse Effect; (iii) there has not been a Release of
Hazardous Materials at any property currently or formerly owned or operated
by the Company, any of its Subsidiaries or predecessor in interest except
where such Release would not have a Company Material Adverse Effect; (iv) to
the knowledge of the Company there has not been a Release of Hazardous
Materials at any disposal or treatment facility that received Hazardous
Materials generated by the Company, its Subsidiaries or a predecessor in
interest. For the purpose of this Section, "Hazardous Materials" means (a)
any element, compound, or chemical that is defined, listed or otherwise
classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous waste,
special waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) polychlorinated byphenyls;
(d) any substance exhibiting a hazardous waste characteristic including but
not limited to corrosivity, ignitability, toxicity or reactivity as well as
any radioactive or
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explosive materials; and (e) any asbestos-containing materials. The term
"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping or disposing
of Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into
the environment.
3.11 Intangible Property; Copyrights. The Company and its
Subsidiaries own or have all rights to use all patents, trademarks, trade
names, service marks, brands, logos, copyrights, licenses, trade secrets,
customer lists and other proprietary intellectual property rights
(collectively "Intellectual Property") required for, used in or incident to
the businesses of the Company and its Subsidiaries as now conducted or
proposed to be conducted. All Intellectual Property owned by the Company is
valid and enforceable except as such invalidity or unenforceability would not
have or would reasonably be expected to have a Company Material Adverse
Effect. The Company has not received notice of any infringement, and has no
reason to know of any claim or threatened infringement of the rights of
others with respect to any Intellectual Property used or owned by the
Company, the loss of which could have a Company Material Adverse Effect.
Except as set forth in Section 3.11 of the Company Disclosure Schedule, the
Company and its Subsidiaries have not been sued within the past two years (or
with respect to a Subsidiary, since such Subsidiary was acquired by the
Company if acquired less than two years prior to the date hereof) for
infringing on the Intellectual Property of another entity or person. To the
knowledge of the Company, the Company is not now using, and has not in the
past used without appropriate authorization, any confidential information or
trade secrets of any third party. The Company has never received any notice
alleging such conduct. The Company has timely and accurately made all
requisite filings and payments with the Register of Copyrights and is
otherwise in compliance with all applicable rules and regulations of the
Copyright Office except where such noncompliance would not have a Company
Material Adverse Effect.
3.12 Compliance with Applicable Laws. Except as set forth in
Section 3.12 of the Company Disclosure Schedule, to the knowledge of the
Company, since January
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1, 1996 neither the Company nor any of its Subsidiaries has violated or
failed to comply with any statute, law, regulation, rule, judgment, decree or
order of any governmental entity applicable to its business or operations,
except for violations and failures to comply that would not, individually or
in the aggregate, reasonably be expected to result in a Company Material
Adverse Effect. The conduct of the business of the Company and its
Subsidiaries is in conformity with all federal, state and local governmental
and regulatory requirements applicable to its business and operations, except
where such nonconformities would not, in the aggregate, reasonably be
expected to result in a Company Material Adverse Effect. The Company and its
Subsidiaries have all permits, licenses and franchises from governmental
agencies required to conduct their businesses as now being conducted, except
for such permits, licenses and franchises the absence of which would not, in
the aggregate, reasonably be expected to result in a Company Material Adverse
Effect.
3.13 Insurance. To the knowledge of the Company, the Company and
its Subsidiaries have obtained and maintained in full force and effect
insurance with responsible and reputable insurance companies or associations
in such amounts, on such terms and covering such risks, including fire and
other risks insured against by extended coverage, as is reasonably prudent,
and each has maintained in full force and effect public liability insurance,
insurance against claims for personal injury or death or property damage
occurring in connection with the activities of the Company or its
Subsidiaries or any properties owned, occupied or controlled by the Company
or its Subsidiaries, in such amount as reasonably deemed necessary by the
Company or its Subsidiaries.
3.14 Approvals; Antitakeover Provisions. The Company has taken
all action necessary to approve the Transactions under the MGCL (except for
shareholder approval and the filing of a certificate or articles of merger),
including, but not limited to, all actions required to render the provisions
of Sections 3-601 through 3-604 of the MGCL restricting business combinations
with "interested shareholders" inapplicable to the Transactions. The Company
has taken all actions required to render the provisions of Section 3-702 of
the MGCL restricting voting rights of "control shares" inapplicable
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to Shares acquired by Parent, Newco or their affiliates pursuant to the Offer
or the Merger.
3.15 Voting Requirements. The affirmative vote of the holders of
two-thirds of the outstanding shares of Company Common Stock is the only vote
of the holders of any class of the Company's capital stock necessary to
approve this Agreement and the transactions contemplated by this Agreement.
3.16 Brokers and Finders. Other than as set forth on Section 3.16
of the Company Disclosure Schedule, the Company has not employed any
investment banker, broker, finder, advisor, consultant or intermediary in
connection with the transactions contemplated by this Agreement which would
be entitled to any investment banking, brokerage, finder's, advisory or
similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
3.17 Opinion of Financial Advisors. The Board of Directors has
received the opinion of Morgan Stanley & Co. Incorporated dated February 10,
1998, to the effect that, as of such date, the applicable Merger
Consideration is fair to the stockholders of the Company from a financial
point of view.
3.18 Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in (i)
the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be
filed by the Company in connection with the Offer pursuant to Rule 14f-1
promulgated under the Exchange Act (the "Information Statement") or (iv) the
proxy statement (together with any amendments or supplements thereto, the
"Proxy Statement") relating to the Special Meeting, if any, will, in the case
of the Offer Documents, the Schedule 14D-9 and the Information Statement, at
the respective times the Offer Documents, the Schedule 14D-9 and the
Information Statement are filed with the SEC or first published, sent or
given to the Company's stockholders, or, in the case of the Proxy Statement,
at the time the Proxy Statement is first mailed to the Company's stockholders
or at the time of the Special Meeting, if any, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
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light of the circumstances under which they are made, not misleading. If at
any time prior to the Effective Time any event with respect to the Company or
its Subsidiaries should occur which is required to be described in a
supplement to (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement, or (iv) the Proxy Statement, such event shall be so
described, and such supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company and to
Parent. The Schedule 14D-9, the Information Statement and the Proxy
Statement will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
3.19 Confidentiality Agreements. Except as set forth in Section
3.19 of the Company Disclosure Schedule, the confidentiality agreements
entered into with any other potential purchasers are in substantially the
same form as the Confidentiality Agreement (as defined in Section 5.5) and
all benefits under such agreements shall inure to the Company as of the
Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
Each of Parent and Newco represents and warrants jointly and severally
to the Company that:
4.1 Corporate Organization and Qualification. Each of Parent,
Newco and each of Parent's Subsidiaries which is both owned directly or
indirectly by Parent and directly or indirectly owns Newco is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation. Each of Parent, Newco and Parent's
Subsidiaries is qualified and in good standing as a foreign corporation in
each jurisdiction where the properties owned, leased or operated, or the
business conducted, by it require such qualification, except where the
failure to so qualify or be in good standing would not have a Parent Material
Adverse Effect (as defined in Section 8.10).
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4.2 Authority Relative to This Agreement. Each of Parent and
Newco has the requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement and the consummation by Parent and Newco of the transactions
contemplated hereby have been duly and validly authorized by the respective
Boards of Directors of Parent and Newco and by Parent as the sole stockholder
of Newco, and no other corporate proceedings on the part of Parent and Newco
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each of Parent and Newco and, assuming this Agreement
constitutes the valid and binding agreement of the Company, constitutes the
valid and binding agreement of each of Parent and Newco, enforceable against
each of them in accordance with its terms, except that the enforcement hereof
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
4.3 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement by Parent or Newco nor the consummation by
Parent and Newco of the transactions contemplated hereby will (a) conflict
with or result in any breach of any provision of the Articles of
Incorporation or the By-Laws, respectively, of Parent or Newco; (b) except as
set forth in Section 4.3 of the Disclosure Schedule delivered to the Company
by Parent concurrently with the execution hereof (the "Parent Disclosure
Schedule"), require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
except (i) in connection with the applicable requirements of the HSR Act,
(ii) pursuant to the applicable requirements of the Exchange Act, (iii) the
filing of the Articles of Merger pursuant to the MGCL and appropriate
documents with the relevant authorities of other states in which Parent or
Newco is authorized to do business or (iv) as may be required by any
applicable state corporation, securities or "blue sky" laws or state takeover
laws, (v) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications would not
have a Parent Material
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Adverse Effect; (c) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or liens or other
charges or encumbrances) under any of the terms, conditions or provisions of
any note, license, agreement or other instrument or obligation to which
Parent or any of its Subsidiaries is a party or by which any of them or any
of their respective assets may be bound, except for such violations, breaches
and defaults (or rights of termination, cancellation or acceleration or lien
or other charge or encumbrance) as to which requisite waivers or consents
have been obtained or which would not have a Parent Material Adverse Effect;
or (d) assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in this Section 4.3 are duly and timely
obtained or made, violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Parent or any of its Subsidiaries or to any of
their respective assets, except for violations which would not have a Parent
Material Adverse Effect.
4.4 Interim Operations of Newco. Newco was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby.
4.5 Sufficient Funds. Either Parent or Newco has sufficient
funds available (through existing credit arrangements or otherwise) to
purchase all of the Shares outstanding on a fully diluted basis and to pay
all fees, expenses and payments related to the Transactions.
4.6 Share Ownership. None of Parent and Newco, or any of their
respective "affiliates" or Associates (as such terms are defined in Rule
12b-2 under the Exchange Act), beneficially own any Shares.
4.7 Information in Proxy Statement and Schedule 14D-9. None of
the information supplied by Parent or Newco for inclusion or incorporation by
reference in the Proxy Statement or the Schedule 14D-9 will, at the date
mailed to stockholders and at the time of the Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated
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therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Parent or any of its
Subsidiaries should occur which is required to be described in a supplement
to the Proxy Statement or the Schedule 14D-9, such event shall be so
described, and such supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company and Parent.
With respect to information relating to Parent or Newco, the Proxy Statement
will comply in all material respects with the provisions of the Exchange Act
and the rules and regulations thereunder.
4.8 Investigation by Parent. Parent and Newco have conducted
their own independent review and analysis of the businesses, assets,
condition, operations and prospects of the Company and its Subsidiaries and
acknowledge that Parent and Newco have been provided access to the
properties, premises and records of the Company and its Subsidiaries for this
purpose. In entering into this Agreement, Parent and Newco:
(a) acknowledge that none of the Company, its Subsidiaries or any
of their respective directors, officers, employees, affiliates, agents or
representatives makes any representation or warranty, either express or
implied, as to the accuracy or completeness of any of the information
provided or made available to Parent and Newco or their agents or
representatives prior to the execution of this Agreement, and
(b) agree, to the fullest extent permitted by law, that none of the
Company, its Subsidiaries or any of their respective directors, officers,
employees, affiliates, agents or representatives shall have any liability or
responsibility whatsoever to Parent and Newco on any basis based upon any
information provided or made available, or statements made, to Parent and
Newco prior to the execution of this Agreement, except that the foregoing
limitations shall not apply with respect to representations or warranties of
the Company in any Company SEC Report or in Article III of this Agreement and
in the Company Disclosure Schedule, but always subject to the limitations and
restrictions contained in such representations and warranties.
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4.9 Brokers and Finders. Other than Credit Suisse First Boston
Corporation, which has been retained by Parent's Board of Directors, Parent
and Newco have not employed any investment banker, broker, finder, advisor,
consultant or intermediary in connection with the transactions contemplated
by this Agreement which would be entitled to any investment banking,
brokerage, finder's, advisory or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Interim Operations of the Company. Except as set forth on
Section 5.1 of the Company Disclosure Schedule, during the period from the
date of this Agreement to the time the directors of Newco have been elected
to, and shall constitute a majority of, the Board of Directors of the Company
pursuant to Section 1.3 (unless Parent shall otherwise agree in writing and
except as otherwise contemplated by this Agreement), the Company will conduct
its operations according to its ordinary and usual course of business
consistent with past practice and seek to preserve intact its current
business organizations, keep available the service of its current officers
and employees and preserve its relationships with customers, suppliers and
others having business dealings with it. Without limiting the generality of
the foregoing, and except as otherwise contemplated by this Agreement or as
set forth on Section 5.1 of the Company Disclosure Schedule, the Company will
not, without the prior written consent of Parent:
(i) issue, sell, grant, dispose of, pledge or
otherwise encumber, or authorize or propose the issuance, sale,
disposition or pledge or other encumbrance of (A) any additional
shares of capital stock of any class (including the Shares), or any
securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for any shares of capital stock, or any rights,
warrants, options, calls, commitments or any other agreements of any
character to purchase or acquire any shares of capital stock or any
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securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of capital stock or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof;
(ii) redeem, purchase or otherwise acquire, or propose
to redeem, purchase or otherwise acquire, any of its outstanding
Shares;
(iii) split, combine, subdivide or reclassify any
Shares or declare, set aside for payment or pay any dividend, or make
any other actual, constructive or deemed distribution in respect of
any Shares or otherwise make any payments to stockholders in their
capacity as such, other than the declaration and payment of regular
quarterly cash dividends in accordance with past dividend policy and
except for dividends by a direct or indirect wholly owned Subsidiary
of the Company;
(iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its direct or indirect
Subsidiaries (other than the Merger);
(v) adopt any amendments to its Articles of
Incorporation or By-Laws or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any direct or indirect Subsidiary of the
Company;
(vi) make any material acquisition, by means of
merger, consolidation or otherwise, or material disposition, of assets
or securities (other than the Merger);
(vii) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue any
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debt securities or make any loans, advances or capital contributions to, or
investments in, any other person other than the Company or any direct or
indirect wholly owned Subsidiary of the Company;
(viii) grant any material increases in the
compensation of any of its directors, officers or key employees,
except in the ordinary course of business and in accordance with past
practice, provided, however, that the Company shall be entitled to
pay, prior to the Effective Time, bonuses with respect to 1997
pursuant to the Company's Incentive Plan, and shall further be
entitled to disregard for purposes of the calculation of the amount of
such bonuses any effect that results from, or action that is taken in
contemplation of, this Agreement or the transaction contemplated
hereby;
(ix) enter into any new or amend any existing
employment or severance or termination agreement with any director or
officer of the Company;
(x) except as may be required to comply with
applicable law, become obligated under any new pension plan, welfare
plan, multiemployer plan, employee benefit plan, severance plan,
benefit arrangement, or similar plan or arrangement, which was not in
existence on the date hereof, or amend, other than in the ordinary
course of business consistent with past practice, any such plan or
arrangement in existence on the date hereof if such amendment would
have the effect of materially enhancing any benefits thereunder;
(xi) (A) take, or agree or commit to take, any action
that would make any representation or warranty of the Company
hereunder inaccurate at the Effective Time (except for representations
and warranties which speak as of a particular date, which need be
accurate only as of such date), (B) omit, or agree or commit to omit,
to take any action necessary to
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prevent any such representation or warranty from being inaccurate in any
material respect at the Effective Time (except for representations and
warranties which speak as of a particular date, which need be accurate only
as of such date), provided however that the Company shall be permitted to
take or omit to take such action which can be cured, and in fact is cured,
at or prior to the Effective Time or (C) take, or agree or commit to take,
any action that would result in, or is reasonably likely to result in, any
of the conditions of the Merger set forth in Article VI not being
satisfied; or
(xii) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
5.2 Alternative Proposals. Subject to the last sentence of this
Section 5.2, from and after the date hereof and prior to the Effective Time,
the Company (a) will not, and will cause its officers, directors, employees,
representatives and agents not to, initiate, solicit or encourage, directly
or indirectly, any Alternative Proposal (as defined in Section 8.10) or
engage in any negotiations or enter into any agreement or provide any
confidential information or data to any person in connection with or relating
to any Alternative Proposal; (b) will immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Alternative Proposal; and (c) will notify Parent as soon
as practicable if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations and/or discussions
are sought to be initiated or continued with, the Company. Notwithstanding
the foregoing, nothing in this Section 5.2 shall require the Board of
Directors of the Company on behalf of the Company to act, or refrain from
acting, in any manner which, in the opinion of the Board of Directors of the
Company after consultation with its counsel, could reasonably be deemed
inconsistent with its fiduciary duties to the Company's stockholders under
applicable law.
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5.3 Certain Filings. The Company and Newco shall reasonably
cooperate with one another (a) in connection with the preparation of the
Proxy Statement and the Schedule 14D-9, and (b) in determining whether any
action by or in respect of, or filing with, any governmental body, agency or
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and (c) in seeking any such actions, consents, approvals, or
waivers or making any such filings, furnishing information required in
connection therewith or with the Proxy Statement and the Schedule 14D-9 and
seeking timely to obtain any such actions, consents, approvals or waivers.
5.4 Satisfaction of Conditions; Receipt of Necessary Approvals.
(a) Subject to the terms and conditions herein provided, each
of the parties hereto agrees to (i) promptly effect all necessary
registrations, submissions and filings, including, but not limited to,
filings under the HSR Act, German Law Against Restraints of Competition and
submissions of information requested by governmental authorities, which may
be necessary or required in connection with the consummation of the
transactions contemplated by this Agreement, (ii) use its reasonable best
efforts to secure federal antitrust clearance (including taking steps to
avoid or set aside any preliminary or permanent injunction or other order of
any federal or state court of competent jurisdiction or other governmental
authority), (iii) use its reasonable best efforts to take all other action
and to do all other things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by
this Agreement and (iv) use its reasonable best efforts to obtain all other
necessary or appropriate waivers, consents and approvals (including but not
limited to such filings, consents, approvals, orders, registrations and
declarations as may be required under the laws of any foreign country in
which the Company or any of its Subsidiaries or Parent or any of its
Subsidiaries conducts any business or owns any assets) and to lift any
injunction or other legal bar to the Merger (and, in such case, to proceed
with the Merger as expeditiously as possible), subject, however, to the
requisite
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vote of the stockholders of the Company. Parent represents and warrants to
the Company that Parent's affiliates have full power and authority to effect
the transactions contemplated by this Section 5.4.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to use its reasonable efforts or take any action pursuant to this
Section 5.4 if in the opinion of the Board of Directors after consultation
with its counsel such actions could reasonably be deemed inconsistent with
its fiduciary duties to the Company's stockholders under applicable law.
5.5 Access to Information. To the extent permitted by applicable
law, upon reasonable notice, the Company shall (and shall cause each of its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financing sources and other representatives of Parent, access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such
period, the Company shall (and shall cause each of its Subsidiaries to)
furnish promptly to the Parent (a) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws and (b) all
other information concerning its business, properties and personnel as Parent
may reasonably request. Parent will hold any such information which is
nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreement between the Company and Parent, dated as of
December 5, 1997 (the "Confidentiality Agreement").
5.6 Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to
Parent and the Company. Thereafter, so long as this Agreement is in effect,
neither the Company, Parent nor any of their respective affiliates shall
issue or cause the publication of any press release or other announcement
with respect to the Merger, this Agreement or the other transactions
contemplated hereby without prior consultation with the other party, except
as may be required by law, the rules and regulations of any national
securities exchange or over-the-counter market or by any listing agreement
with a national securities exchange.
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5.7 Directors' and Officers' Insurance and Indemnification.
(a) From and after the consummation of the Offer, Parent
shall, and shall cause the Company (or, if after the Effective Time, the
Surviving Corporation) to, indemnify, defend and hold harmless any person who
is now, or has been at any time prior to the date hereof, or who becomes
prior to the Effective Time, an officer or director (the "Company Indemnified
Party") of the Company and its Subsidiaries against all losses, claims,
damages, liabilities, costs and expenses (including attorney's fees and
expenses), judgments, fines, losses, and amounts paid in settlement in
connection with any actual or threatened action, suit, claim, proceeding or
investigation (each a "Claim") to the extent that any such Claim is based on,
or arises out of, the fact that such person is or was a director or officer
of the Company or any of its Subsidiaries, and to the extent that any such
Claim pertains to any matter or fact arising out of any act or omission prior
to or at the Effective Time, regardless of whether such Claim is asserted or
claimed prior to, at or after the Effective Time, to the full extent
permitted under applicable law or the Company's Articles of Incorporation,
By-laws or indemnification agreements in effect at the date hereof identified
on Section 5.7 of the Company Disclosure Schedule, or otherwise as permitted
by contracts identified on Section 5.7 of the Company Disclosure Schedule,
including provisions relating to advancement of expenses incurred in the
defense of any action or suit. Without limiting the foregoing, in the event
any Company Indemnified Party becomes involved in any capacity in any Claim,
then from and after consummation of the Offer Parent shall, or shall cause
the Company (or the Surviving Corporation if after the Effective Time) to,
periodically advance to such Company Indemnified Party its legal and other
expenses (including the cost of any investigation and preparation incurred in
connection therewith), subject to the provision by such Company Indemnified
Party of an undertaking to reimburse the amounts so advanced in the event of
a final non-appealable determination by a court of competent jurisdiction
that such Company Indemnified Party is not entitled thereto.
(b) Parent and the Company agree that all rights to
indemnification and all limitations on liability existing in favor of a
Company Indemnified Party as provided
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in the Company's Articles of Incorporation and By-laws as in effect as of the
date hereof shall survive the Merger and shall continue in full force and
effect, without any amendment thereto, for a period of six years from the
Effective Time to the extent such rights are consistent with the MGCL;
provided, that in the event any claim or claims are asserted or made within
such six year period, all rights to indemnification in respect of any such
claim or claims shall continue until disposition of any and all such claims;
provided further, that nothing in this Section 5.7 shall impair any rights or
obligations of any present or former directors or officers of the Company
(c) Parent shall cause to be maintained in effect for the
Indemnified Parties (as defined below) for not less than six years after the
Effective Time policies of directors' and officers' liability insurance and
fiduciary liability insurance with respect to matters occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) providing substantially the same coverage
and containing terms and conditions which are no less advantageous, in any
material respect, to those currently maintained by the Company for the
benefit of the Company's present or former directors, officers, employees or
agents covered by such insurance policies prior to the Effective Time (the
"Indemnified Parties").
(d) In the event Parent or Newco or any of their successors
or assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case,
to the extent necessary to effectuate the purposes of this Section 5.7,
proper provision shall be made so that the successors and assigns of Parent
and Newco assume the obligations set forth in this Section 5.7 and none of
the actions described in clauses (i) or (ii) shall be taken until such
provision is made.
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5.8 Employees.
(a) Parent agrees that individuals who are employed by the
Company and its Subsidiaries immediately prior to the Effective Time shall be
employees of the Company and its Subsidiaries as of the Effective Time (each
such employee, an "Affected Employee" and together with all former employees
of the Company and its Subsidiaries "Company Employees").
(b) Parent will, or will cause the Surviving Corporation to,
give Affected Employees full credit for purposes of eligibility and vesting
and determination of the level of benefits under any employee benefit plans
or arrangements maintained by Parent, the Surviving Corporation or any
Subsidiary of Parent for such Affected Employees' service with the Company or
any Subsidiary of the Company to the same extent recognized by the Company
immediately prior to the Effective Time.
(c) Parent will, or will cause the Surviving Corporation to,
(i) waive all limitations as to preexisting conditions exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Company Employees under any welfare benefit plans that such employees may
be eligible to participate in after the Effective Time, other than
limitations or waiting periods that are already in effect with respect to
such employees and that have not been satisfied as of the Effective Time
under any welfare plan maintained for the Company Employees immediately prior
to the Effective Time, and (ii) provide each Company Employee with credit for
any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time.
(d) Parent agrees that until December 31, 2000, the coverage
and benefits provided to Affected Employees pursuant to employee benefit
plans or arrangements maintained by Parent, the Surviving Corporation, or any
Subsidiaries of the Parent shall be, in the aggregate, not less favorable
than those provided to such employees immediately prior to the Effective Time
determined in accordance with the benefits set forth on Section 5.8(d)(i) of
the Company Disclosure Schedule, and after
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December 31, 2000, Parent agrees to provide or cause the Surviving
Corporation to provide coverage and benefits in the aggregate, at least as
favorable to the Affected Employees as the coverage and benefits provided to
Parent's employees. Without limiting the generality of the foregoing, Parent
agrees to honor, or to cause the Surviving Corporation to honor, until
December 31, 2000, the severance policy of the Company as in effect as of the
Effective Time, as set forth on Section 5.8(d)(ii) of the Company Disclosure
Schedule.
(e) Through December 31, 2000, Parent agrees to provide, or
to cause the Surviving Corporation to provide, to each currently retired
Company Employee and to each Company Employee who retires prior to December
31, 2000 (the "Retired Employees"), the benefits (other than stock options)
set forth on Section 5.8(e)(i) of the Company Disclosure Schedule. From
December 31, 2000 until December 31, 2002, Parent agrees to continue to
provide or to cause the Surviving Corporation to provide the Retired
Employees with the post-retirement medical insurance premium percentage
subsidy (as described on Section 5.8(e)(i) of the Company Disclosure
Schedule) which each such Retired Employee is receiving as of December 31,
2000 and that in all other respects, the post-retirement medical benefits
available to Retired Employees will be no less favorable than those available
to Parent's employees who are eligible for post-retirement medical benefits
under its retiree medical benefit plan. From and after December 31, 2002,
Parent will provide the Retired Employees the post-retirement medical
coverage provided to employees or former employees of Parent who are eligible
for post-retirement medical benefits, treating for all purposes of such
coverage the Retired Employee's service with the Company as service with
Parent.
(f) Parent and the Surviving Corporation hereby agree to
honor without modification and assume the employment agreements, executive
termination agreements and individual benefit arrangements set forth on
Section 5.8(f) of the Company Disclosure Schedule, all as in effect at the
Effective Time.
(g) Parent shall advise the employees of the Company, in a
written communication issued to the Company Employees as soon as practicable
following the
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date of this Agreement, of Parent's undertakings set forth in this Section
5.8.
(h) Until December 31, 2000, Parent agrees that there shall
be no termination or merger or consolidation of the Waverly, Inc. Pension
Plan (the "Pension Plan") and the Pension Plan shall not be amended except as
required by applicable law.
5.9 Corporate Presence. Parent and Newco agree that the Surviving
Corporation shall maintain a substantial operating presence in the City of
Baltimore, Maryland, including maintaining a substantial work force and
operations in Baltimore, for a period of five (5) years following the
Effective Time.
5.10 Conduct of Business of Newco. During the period of time from
the date of this Agreement to the Effective Time, Newco shall not engage in
any activities of any nature except as provided in or contemplated by this
Agreement.
5.11 Certain Filings. The Company and Newco shall reasonably
cooperate with one another (a) in connection with the preparation of the
Proxy Statement and the Schedule 14D-9, and (b) in determining whether any
action by or in respect of, or filing with, any governmental body, agency or
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement and (c) in seeking any such actions, consents, approvals, or
waivers or making any such filings, furnishing information required in
connection therewith or with the Proxy Statement and the Schedule 14D-9 and
seeking timely to obtain any such actions, consents, approvals or waivers.
5.12 Further Assurances. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. The provisions of Sections 5.7 are intended to benefit the
Company Indemnified Parties, and with respect to paragraph 5.7(c)
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hereof the Indemnified Parties, as the case may be, and shall be binding on
all successors and assigns of Parent, Newco, the Company and the Surviving
Corporation and shall be enforceable by the Company Indemnified Parties and
the Indemnified Parties, as the case may be, after the Effective Time.
Parent hereby guarantees the performance by the Surviving Corporation of the
obligations pursuant to Sections 5.7, 5.8. and 5.9.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 Conditions to Each Party's Obligations to Effect the Merger.
The respective obligations of each party to effect the Merger are subject to
the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been
duly approved by the stockholders of the Company entitled to vote with
respect thereto in accordance with applicable law and the Articles of
Incorporation and By-Laws of the Company.
(b) Injunction. There shall not be in effect any statute,
rule, regulation, executive order, decree, ruling or injunction or other
order of a court or governmental or regulatory agency of competent
jurisdiction directing that the transactions contemplated herein not be
consummated or otherwise materially limiting or restricting ownership or the
operation of the business of the Surviving Corporation; provided, however,
that, subject to the terms and provisions herein provided (including but not
limited to Section 5.4 of this Agreement), prior to invoking this condition
each party shall use its reasonable efforts to have any such decree, ruling,
injunction or order vacated.
(c) Governmental Filings and Consents. Subject to the terms
and provisions herein provided (including but not limited to Section 5.4
hereof), all governmental consents, orders and approvals legally required for
the consummation of the Merger and the transactions contemplated hereby shall
have been obtained and be in effect at the Effective Time, other than
non-material consents, orders or approvals and the waiting periods
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under the HSR Act and under antitrust laws of applicable jurisdictions
outside the United States shall have expired or been terminated.
6.2 Additional Conditions to the Obligations of Parent and Newco.
The respective obligations of Parent and Newco to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the
following conditions, any or all of which may be waived in whole or in part
by Parent or Newco, as the case may be, to the extent permitted by applicable
law.
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct as of the Effective Time as though made on and as of the Effective
Time (except for changes permitted by this Agreement and that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date), except in any case where
such failures to be true and correct in the aggregate would not have a
Company Material Adverse Effect.
(b) Performance. The Company shall have performed in all
material respects all of its respective covenants and agreements under this
Agreement theretofore to be performed.
(c) Officer's Certificate. Parent shall have received at the
Effective Time a certificate dated the Effective Time and executed by the
President or a Vice President of the Company certifying to the fulfillment of
the conditions specified in Sections 6.2(a) and (b) hereof.
6.3 Additional Conditions to the Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction
at or prior to the Effective Time of the following conditions, any and all of
which may be waived in whole or in part by the Company to the extent
permitted by applicable law:
(a) Representations and Warranties. The representations and
warranties of Parent and Newco set forth in this Agreement shall be true and
correct as of the Effective Time as though made on and as of the Effective
Time (except for changes permitted by this Agreement
41
<PAGE>
and that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date), except
in any case where such failures to be true and correct in the aggregate would
not have a Parent Material Adverse Effect.
(b) Performance. Parent and Newco shall have performed in
all material respects all of their respective covenants and agreements under
this Agreement theretofore to be performed.
(c) Officer's Certificate. The Company shall have received
at the Effective Time a certificate dated the Effective Time and executed by
the President or a Vice President of Parent certifying to the fulfillment of
the conditions specified in Sections 6.3(a) and (b) hereof.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after shareholder approval thereof:
(a) By the mutual consent of Parent, Newco and the Company.
(b) By either the Company or Parent:
(i) if shares of Company Common Stock shall not have
been purchased pursuant to the Offer on or prior to six (6) months
from the execution of this Agreement; provided, however, that the
right to terminate this Agreement under this Section 7.1(b)(i) shall
not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of Parent or Newco, as the case may be, to purchase shares of
Company Common Stock pursuant to the Offer on or prior to such date;
or
(ii) if any governmental entity of competent
jurisdiction in the United States
42
<PAGE>
or other country in which the Company or Parent directly or indirectly
has material assets or operations shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other
action the parties hereto shall use their respective reasonable best
efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final
and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, (a) the Board of Directors of the
Company shall have entered into or shall have publicly announced its
intention to enter into an agreement or an agreement in principle with
respect to any Alternative Proposal that the Board of Directors
determines, in good faith after consultation with its financial
advisors, is a Superior Proposal (as defined in Section 8.10); (b)
the Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Parent or Newco its
approval or recommendation of the Offer, this Agreement or the Merger
or shall have recommended a Superior Proposal or shall have executed,
or shall have announced its intention to enter into, an agreement in
principle or definitive agreement relating to an Superior Proposal
with a person or entity other than Parent, Newco or their affiliates
(or the Board of Directors of the Company resolves to do any of the
foregoing); (c) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent, Newco or any affiliate thereof)
shall have become, after the date of this Agreement, the beneficial
owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of
a majority of the outstanding Shares, or (d) any representation or
warranty made by Parent or Newco in this Agreement shall not have been
true and correct in all material respects when made, or
43
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Parent or Newco shall have failed to observe or perform in any material
respect any of its material obligations under this Agreement; provided
that prior to exercising such right of termination, the Company shall
give prompt written notice to Parent of such misrepresentation or breach
of warranty or failure to observe or perform; provided, further, that
the Company shall not have such right of termination if the condition
resulting in such misrepresentation or breach of warranty or failure to
observe or perform is cured (i) in the event such notice is delivered on
or prior to the fourth business day prior to the then-scheduled
expiration date of the Offer, not later than the earlier of (A) such
expiration date and (B) ten business days following delivery of such
notice and (ii) in the event such notice is delivered on or after the
third business day prior to such expiration date, not later than three
business days following such delivery (it being agreed that in such
event the Offer shall be extended as necessary at least until the end of
such cure period); or
(ii) if Parent or Newco shall have terminated the
Offer, or the Offer shall have expired, without Parent or Newco, as
the case may be, purchasing any shares of Company Common Stock
pursuant thereto; provided that the Company may not terminate this
Agreement pursuant to this Section 7.1(c)(ii) if the Company is in
material breach of this Agreement; or
(iii) if Parent, Newco or any of their affiliates
shall have failed to commence the Offer on or prior to five business
days following the date of the initial public announcement of the
Offer; provided, that the Company may not terminate this Agreement
pursuant to this Section 7.1(c)(iii) if the Company is in material
breach of this Agreement.
(d) By Parent or Newco:
(i) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to satisfy any
44
<PAGE>
of the conditions set forth in Annex A hereto, Parent, Newco, or any of
their affiliates shall have failed to commence the Offer on or prior to
five business days following the date of the initial public announcement
of the Offer; provided that Parent may not terminate this Agreement
pursuant to this Section 7.1(d)(i) if Parent or Newco is in material
breach of this Agreement; or
(ii) prior to the purchase of shares of Company Common
Stock pursuant to the Offer, if (a) the Company shall have received
any Alternative Proposal which the Board of Directors of the Company
has determined is a Superior Proposal; (b) the Board of Directors of
the Company shall have withdrawn, or modified or changed in a manner
adverse to Parent or Newco its approval or recommendation of the
Offer, this Agreement or the Merger or shall have recommended an
Alternative Proposal or shall have executed, or shall have announced
its intention to enter into, an agreement in principle or definitive
agreement relating to an Alternative Proposal with a person or entity
other than Parent, Newco or their affiliates (or the Board of
Directors of the Company resolves to do any of the foregoing); (c) any
person or group (as defined in Section 13(d)(3) of the Exchange Act)
(other than Parent, Newco or any affiliate thereof) shall have become,
after the date of this Agreement, the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of more than one-third
of the outstanding Shares, or (d) any representation or warranty made
by the Company in this Agreement shall not have been true and correct
in all material respects when made, or the Company shall have failed
to observe or perform in any material respect any of its material
obligations under this Agreement; provided that prior to exercising
such right of termination, Parent and Newco shall give prompt written
notice to the Company of such misrepresentation or breach of warranty
or failure to observe or perform; provided, further, that Parent and
Newco shall not have such right of termination if the condition
45
<PAGE>
resulting in such misrepresentation or breach of warranty or failure to
observe or perform is cured (i) in the event such notice is delivered on
or prior to the fourth business day prior to the then-scheduled
expiration date of the Offer, not later than the earlier of (A) such
expiration date and (B) ten business days following delivery of such
notice and (ii) in the event such notice is delivered on or after the
third business day prior to such expiration date, not later than three
business days following such delivery (it being agreed that in such
event the Offer shall be extended as necessary at least until the end of
such cure period).
7.2 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 7.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become null and void, and there shall be no liability on the part
of Parent, Newco or the Company or their respective directors, officers,
employees, representatives, agents, advisors or shareholders other than the
obligations pursuant to this Section 7.2, except that the agreements
contained in Sections 8.1, 8.2, 8.3, 8.4, 8.6, 8.7, 8.8, 8.12, 8.14, 8.15,
8.16 and the last sentence of Section 5.5 shall survive the termination
hereof, provided, however, that if Parent or Newco terminates this Agreement
pursuant to Section 7.1(d)(ii)(a), (b) and (c) hereof, then immediately
following such termination the Company shall pay to Parent $10,000,000 in
full satisfaction of the obligations of the Company under this Agreement.
Nothing contained in this Section 7.2 shall relieve any party from liability
for fraud or for willful breach of this Agreement.
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1 Payment of Expenses and Other Payments. Whether or not the
Merger shall be consummated, each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and
the consummation of the transactions contemplated hereby.
46
<PAGE>
8.2 Survival of Representations and Warranties; Survival of
Confidentiality Agreement. The representations and warranties made herein
shall not survive beyond the earlier of termination of this Agreement or the
Effective Time. This Section 8.2 shall not limit any covenant or agreement
of the parties hereto which by its terms contemplates performance after the
Effective Time. The Confidentiality Agreement shall survive any termination
of this Agreement, and the provisions of such Confidentiality Agreement shall
apply to all information and material delivered by any party hereunder.
8.3 Modification or Amendment. Subject to the applicable
provisions of the MGCL, at any time prior to the Effective Time, the parties
hereto may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective parties; provided,
however, that after approval of this Agreement by the stockholders of the
Company, no amendment shall be made which reduces or changes the
consideration payable in the Merger or adversely affects the rights of the
Company's stockholders hereunder without the approval of such stockholders.
8.4 Waiver of Conditions. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
8.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
8.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of
47
<PAGE>
the State of Maryland without giving effect to the principles of conflicts of
law thereof.
8.7 Notices. Any notice, request, instruction or other document
to be given hereunder by any party to the other parties shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, or by facsimile transmission (with a confirming copy sent by
overnight courier), as follows:
(a) If to the Company, to
Waverly, Inc.
351 West Camden Street
Baltimore, Maryland 21117
(410) 528-4000 (telephone)
(410) 528-4414 (telecopier)
with copies to:
Michael P. Rogan
Skadden, Arps, Slate, Meagher &
Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005-2111
(202) 371-7000 (telephone)
(202) 393-5760 (telecopier)
Ariel Vannier
Venable, Baetjer, Howard & Civiletti,
LLP
1201 New York Avenue, N.W.
Suite 1000
Washington, D.C. 20005
(202) 962-4800 (telephone)
(202) 962 8300 (telecopier)
(b) If to Parent or Newco, to
Bruce C. Lenz, Executive Vice
President
Wolters Kluwer United States Inc.
161 North Clark Street
Chicago, IL 60601
(312) 425-7020 (telephone)
(312) 425-0233 (telecopier)
48
<PAGE>
with a copy to:
Arnold J. Schaab, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, NY 10022
(212) 326-0168 (telephone)
(212) 326-0806 (telecopier)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
8.8 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, among the parties
or any of them with respect to the subject matter hereof and (b) shall not be
assigned by operation of law or otherwise without the prior written consent
of the other parties. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties
and their respective permitted successors and assigns.
8.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, other
than the right to receive the consideration payable in the Merger pursuant to
Article II hereof, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement; provided, however, that the provisions of Sections 5.7 shall
inure to the benefit of the Company Indemnified Parties and the Indemnified
Parties and shall be binding on all successors and assigns of Parent, Newco,
the Company and the Surviving Corporation and shall be enforceable by the
Company Indemnified Parties and the Indemnified Parties, as the case may be,
after the Effective Time.
8.10 Certain Definitions. As used herein:
(a) "Alternative Proposal" shall mean any proposal or offer
for a merger, asset acquisition or other
49
<PAGE>
business combination involving the Company or any proposal or offer to
acquire a significant equity interest in, or a significant portion of the
assets of, the Company other than the transactions contemplated by this
Agreement.
(b) "Company Material Adverse Effect" shall mean any adverse
change in the assets, liabilities, financial condition, or results of
operations of the Company or any of its Subsidiaries which is material to the
Company and its Subsidiaries taken as a whole other than any change or effect
arising out of general economic conditions.
(c) "Parent Material Adverse Effect" shall mean any material
adverse change in the assets, liabilities, financial condition, or results of
operations of Parent or any of its Subsidiaries which is material to Parent
and its Subsidiaries taken as a whole other than any change or effect arising
out of general economic conditions.
(d) "Subsidiary" shall mean, when used with reference to any
entity, any corporation a majority of the outstanding voting securities of
which are owned directly or indirectly by such entity.
(e) "Superior Proposal" means any bona fide proposal to
acquire, directly or indirectly, for consideration consisting of cash and/or
securities, all of the Shares then outstanding or all or substantially all
the assets of the Company, and otherwise on terms which the Board of
Directors of the Company determines in good faith to be more favorable to the
Company and its shareholders than the Offer and the Merger (after
consultation with the Company's financial advisor).
8.11 Obligation of Parent. Whenever this Agreement requires Newco
to take any action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause Newco to take such action and a
guarantee of the performance thereof.
8.12 Validity. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
50
<PAGE>
of this Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party.
8.13 Interpretation. The words "hereof", "herein", and "herewith"
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and article, section, paragraph, exhibit and schedule
references are to the articles, sections, paragraphs, exhibits and schedules
of this Agreement unless otherwise specified. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed to
be followed by the words "without limitation". The words describing the
singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa. The phrase "to the
best knowledge of" or any similar phrase shall mean such facts and other
information which as of the date of this Agreement are actually known (or
after reasonable inquiry would have been known) to (i) in the case of the
Company, any officer of the Company; and (ii) in the case of Parent or Newco,
any of their respective officers. The phrase "made available" in this
Agreement shall mean that the information referred to has been made available
if requested by the party to whom such information is to be made available.
The phrases "the date of this Agreement", "the date hereof", and terms of
similar import, unless the context otherwise requires, shall be deemed to
refer to February 10, 1998. As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule l2b-2 of the Exchange
Act. No presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Agreement.
8.14 Captions. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
8.15 Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any
51
<PAGE>
breach of this Agreement, each non-breaching party would be irreparably and
immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (a) will waive, in any action for
specific performance, the defense of adequacy of a remedy at law and (b)
shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this
Agreement in any action instituted in a court of competent jurisdiction.
8.16 Joint and Several Liability. Parent and Newco hereby agree
that they will be jointly and severally liable for all covenants, agreements,
obligations and representations and warranties made by either of them in this
Agreement.
8.17 Schedules. The Company Disclosure Schedule and the Parent
Disclosure Schedule shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth verbatim
herein. No such disclosure shall be deemed to be an admission or
representation as to the materiality of the item so disclosed.
52
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of the date
first above written.
Attest: WAVERLY, INC.
[seal]
By: /s/ William M. Passano, Jr.
---------------------------------
Name: William M. Passano, Jr.
Title: Chairman
Attest: WOLTERS KLUWER U.S. CORPORATION
[seal]
By: /s/ Peter W. van Wel
---------------------------------
Name: Peter W. van Wel
Title: President
Attest: MP ACQUISITION CORP.
[seal]
By: /s/ Bruce C. Lenz
---------------------------------
Name: Bruce C. Lenz
Title: Vice President
53
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ANNEX A
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex A shall have the meanings
ascribed to them in the Agreement and Plan of Merger to which it is attached,
except that the term "Merger Agreement" shall be deemed to refer to such
Agreement and Plan of Merger.
Notwithstanding any other provisions of the Offer, and in addition
to (and not in limitation of) Newco's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), Newco shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Newco's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay
for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate the Offer if (i) any applicable waiting period under the HSR Act or
the antitrust laws of applicable jurisdictions outside the United States has
not expired or terminated prior to the expiration of the Offer, (ii) the
Minimum Condition has not been satisfied, (iii) at any time on or after the
date hereof, and before the expiration of the Offer any of the following
conditions exist:
(a) there shall be any statute, rule, regulation, judgment,
order or injunction promulgated, entered, enforced, enacted, issued or
applicable to the Offer or the Merger by any governmental entity of competent
jurisdiction in the United States or other country in which the Company or
Parent directly or indirectly has material assets or operations which (l)
seeks to prohibit the consummation of the Offer or the Merger, (2) as a
result of the Offer or the Merger, seeks to restrain or prohibit, or impose
any material limitations on, Parent's or Newco's ownership or operation of
all or a material portion of the businesses or assets of the Company and its
Subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken as a
whole, or compel Parent or any of its subsidiaries or affiliates to dispose
of or hold
A-1
<PAGE>
separate all or any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or of Parent and its subsidiaries,
taken as a whole or requires the Company, Parent or Newco to pay damages that
are material in relation to the Company and its Subsidiaries, taken as a
whole, (3) seeks to challenge, prohibit, or make illegal the acceptance for
payment, payment for or purchase of Shares pursuant to, or consummation of,
the Offer or the Merger, (4) seeks to impose material limitations on the
ability of Newco or Parent effectively to exercise full rights of ownership
of the Shares accepted for payment pursuant to the Offer, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's shareholders (5) seeks to require
divestiture by Parent or any of its Subsidiaries or affiliates of any Shares,
provided that Parent shall have used all reasonable efforts to cause any such
judgment, order or injunction to be vacated or lifted;
(b) there shall be threatened, instituted or pending any
action, suit, or proceeding by any governmental entity of competent
jurisdiction in the United States, or any other country in which the Company
or Parent directly or indirectly has material assets or operations, that is
reasonably likely, directly or indirectly, to result in any of the
consequences referred to in clauses (1) through (5) of paragraph (a) above;
(c) there has been since the date hereof any event,
occurrence or development or state of circumstances or facts which has had or
would reasonably be expected to have a Company Material Adverse Effect (as
defined in Section 8.10);
(d) the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and accurate as of the date
of consummation of the Offer as though made on or as of such date or the
Company shall have breached or failed in any material respect to perform or
comply with any material obligation, agreement or covenant required by the
Merger Agreement to be performed or complied with by it except, (i) those
representations and warranties that address matters only as of a particular
date or only with respect to a specified period of time which need only be
true and accurate as of such date or with respect to such period or (ii)
A-2
<PAGE>
where the failure of such representations and warranties to be true and
accurate, or the breach, non-performance or non-compliance with such
obligations, agreements or covenants, do not have, individually or in the
aggregate, or would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect;
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
(f) the Company shall have entered into a definitive
agreement or agreement in principle with any person with respect to an
Alternative Proposal;
(g) the Company's Board of Directors shall have withdrawn,
or modified or changed in a manner adverse to Parent or Newco (including by
amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement, or the Merger, or recommended an Alternative Proposal, or shall
have resolved to do any of the foregoing;
which in the sole judgment of Parent or Newco, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payments.
The foregoing conditions are for the sole benefit of Newco and
Parent and may be waived by Parent or Newco, in whole or in part at any time
and from time to time in the sole discretion of Parent or Newco.
A-3
<PAGE>
STOCK OPTION AND TENDER AGREEMENT
Stock Option and Tender Agreement (this "Agreement"), dated February 10,
1998, is by and among Wolters Kluwer U.S. Corporation, a Delaware corporation,
("PARENT"), MP Acquisition Corp., a Maryland corporation and a wholly-owned
subsidiary of Parent ("SUB"), and the stockholders set forth in SCHEDULE I
hereto (each, a "STOCKHOLDER" and collectively, the "STOCKHOLDERS").
W I T N E S S E T H:
WHEREAS, Parent, Sub, and Waverly, Inc., a Maryland corporation (the
"Company") are entering into an Agreement and Plan of Merger (the "MERGER
AGREEMENT") pursuant to which Sub has agreed to make a tender offer (the
"Offer") for all outstanding shares of Common Stock, par value $2.00 per share
(the "COMMON STOCK"), of the Company at $39.00 per share (the "OFFER PRICE"),
net to the seller in cash, to be followed by a merger (the "Merger") of Sub with
and into the Company.
WHEREAS, as a condition to the willingness of Parent and Sub to enter into
the Merger Agreement, each of Parent and Sub has required that each Stockholder
agree, and in order to induce Parent and Sub to enter into the Merger Agreement,
each Stockholder has agreed, among other things, (i) to tender in the Offer all
of the shares of Common Stock now owned or which may hereafter be acquired by
such Stockholder (the "Shares"), (ii) to grant to Parent or Sub, as Parent shall
designate (the "Optionee") the option to purchase the Shares in certain
circumstances, (iii) as to certain Stockholders, to appoint Parent as such
Stockholder's proxy under certain circumstances to vote the Shares in connection
with the Merger Agreement, (iv) with respect to certain questions put to
stockholders of the Company for a vote, to vote the Shares, in each case, in
accordance with the terms and conditions of this Agreement, and (v) to restrict
transfers or exercises of Company Options (as defined in Section 8 below), if
any, held by such Stockholder except as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. TENDER OF SHARES. Each Stockholder severally (and not jointly)
agrees to tender and sell to Parent and/or Sub pursuant to the Offer all of the
Shares legally and/or beneficially owned by such Stockholder (as set forth on
SCHEDULE I hereto) and that once tendered, each Stockholder agrees that such
Shares will not be withdrawn from the Offer unless the Offer is terminated by
Parent or Sub without any shares of Common Stock being purchased thereunder.
Each Stockholder severally (and not jointly) agrees that such Stockholder shall
deliver to the depositary for the Offer, immediately following the commencement
of the Offer, either a letter of transmittal together with the certificates for
the Shares, if available, or a "Notice of Guaranteed Delivery", if the Shares
are not available.
<PAGE>
2. STOCK OPTION.
2.1 GRANT OF STOCK OPTION. Each Stockholder hereby grants to
Optionee an irrevocable option (the "STOCK OPTION") on the terms and conditions
set forth in this Section 2, to purchase all of the Shares legally and/or
beneficially owned by such Stockholder (as set forth on SCHEDULE I hereto), at
such time as Optionee may exercise the Stock Option during the Exercise Period
(as defined below), at a purchase price equal to the Offer Price.
2.2 EXERCISE OF STOCK OPTION. (a) The Stock Option may be exercised
by Optionee, in whole and for all of such Stockholder's Shares but not in part
or for less than all of such Stockholder's Shares, (i) if the Offer was
terminated by Parent or Sub for the reasons set forth in (f) or (g) of the
Conditions to the Offer (as set forth in Annex A to the Merger Agreement) or
(ii) in the case of the expiration of the Offer, if the Offer expired without
the purchase of Shares thereunder either without satisfaction of the Minimum
Condition (as defined in the Merger Agreement) or after the occurrence of
circumstances giving rise to a right of termination by Parent or Sub for the
reasons set forth in (f) or (g) of said Conditions of the Offer, in each case
without any violation of the Offer or the Merger Agreement by Parent or Sub.
Notice of exercise may be given at any time during the period (the "EXERCISE
PERIOD") commencing on the date on which the Offer is terminated or expires
(under the circumstances provided in this Section 2.2) and ending on the date
six months and one day after such commencement date. In addition, Optionee may
also exercise the Stock Option if the Merger Agreement shall terminate by reason
of the Company's exercise of its termination rights pursuant to Section
7.1(c)(i)(a) or (b) of the Merger Agreement, whereupon the Exercise Period shall
commence on the date such termination rights are exercised and end on the date
six months and one day thereafter.
(b) In the event Optionee wishes to exercise the Stock Option,
Optionee shall send a written notice (an "EXERCISE NOTICE") during the Exercise
Period to each Stockholder specifying that Optionee shall purchase the total
number of Shares held by such Stockholder and a date, which shall be a business
day, and a place, which shall be in the city of Baltimore, for the closing of
such purchase (the "STOCK OPTION CLOSING").
(c) Upon receipt of the Exercise Notice, each Stockholder shall
be obligated to deliver to Optionee a certificate or certificates representing
the number of Shares held by such Stockholder (or to direct the depositary for
the Offer to so deliver such certificate or certificates), in accordance with
the terms of this Agreement, on the later of the date specified in such Exercise
Notice or the first business day on which the conditions specified in Section
2.3 shall be satisfied. The date specified in such Exercise Notice may be as
early as one business day after the date of such Exercise Notice but shall not
be later than five (5) business days after the later of (i) the date of such
Exercise Notice, or (ii) the date all conditions under Section 2.3 are
satisfied.
2
<PAGE>
2.3 CONDITIONS TO DELIVERY OF THE SHARES. The obligation of the
Stockholders to deliver, and of the Optionee to pay for, the Shares upon
exercise of the Stock Option is subject to the following conditions:
(a) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the exercise of the Stock
Option and the delivery of the Shares shall have expired or been terminated; and
(b) There shall be no permanent injunction or other order by any
court of competent jurisdiction restricting, preventing or prohibiting the
exercise of the Stock Option or the delivery of the Shares in respect of such
exercise.
2.4 STOCK OPTION CLOSING. At the Stock Option Closing, each
Stockholder will deliver to Optionee a certificate or certificates evidencing
the number of Shares owned by such Stockholder, each such certificate being duly
endorsed in blank and accompanied by such stock powers and such other documents
as may be necessary in Optionee's judgment to transfer record ownership of the
Shares into Optionee's name on the stock transfer books of the Company, and
Optionee will purchase the delivered Shares at the Offer Price. All payments
made by Optionee to the Stockholders pursuant to this Section 2.4 shall be made
by wire transfer of immediately available funds or by certified bank check
payable to the Stockholders, in an amount for each Stockholder equal to the
product of (a) the Offer Price and (b) the number of Shares delivered by such
Stockholder in respect of the Stock Option Closing.
2.5 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the number of issued and outstanding shares of Common Stock by reason
of any stock dividend, subdivision, merger, recapitalization, combination,
conversion or exchange of shares, or any other change in the corporate or
capital structure of the Company (including, without limitation, the declaration
or payment of an extraordinary dividend of cash or securities) which would have
the effect of diluting or otherwise adversely affecting Optionee's rights and
privileges under this Agreement, the number and kind of the shares and the
consideration payable in respect of the Shares shall be appropriately and
equitably adjusted to restore to Optionee its rights and privileges under this
Agreement. Without limiting the scope of the foregoing, in any such event, at
the option of Optionee, the Stock Option shall represent the right to purchase,
in addition to the number and kind of Shares which Optionee would be entitled to
purchase pursuant to the immediately preceding sentence, whatever securities,
cash or other property the Shares subject to the Stock Option shall have been
converted into or otherwise exchanged for, together with any securities, cash or
other property which shall have been distributed with respect to such Shares.
3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
Each Stockholder severally (and not jointly), represents and warrants
to Parent and Sub that:
3
<PAGE>
3.1 POWER AND AUTHORITY. Such Stockholder has all necessary power
and authority to enter into this Agreement and to sell, assign, transfer and
deliver to Parent and/or Sub, pursuant to the terms and conditions of this
Agreement and the Merger Agreement, the Shares legally and/or beneficially owned
by such Stockholder (as set forth on SCHEDULE I hereto).
3.2 NO OTHER RIGHTS. Except for this Agreement, there are no
outstanding options, warrants or rights to purchase or acquire such Shares of
such Stockholder.
3.3 ONLY SHARES. Such Shares of such Stockholder subject to this
Agreement are the only shares of Common Stock owned of record, or owned
beneficially with the power to sell, by such Stockholder.
3.4 TITLE. Such Stockholder has, and upon the closing of the Offer,
Sub shall receive good and marketable title to such Shares of such Stockholder,
free and clear of all liens, claims, encumbrances and security interests of any
nature whatsoever.
3.5 VALIDITY. This Agreement is the legal, valid and binding
agreement of such Stockholder enforceable against such Stockholder in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
3.6 NON-CONTRAVENTION. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both) by
Stockholder under, or give rise to a right of termination, cancellation or
acceleration of any obligation under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
such Stockholder under, any provision of (i) the charter or organizational
documents of such Stockholder, if any (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to such Stockholder or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to such Stockholder or any of its properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
liens, security interests, charges or encumbrances that, individually or in the
aggregate, would not materially impair the ability of such Stockholder to
perform its obligations hereunder or prevent, limit or restrict the consummation
of any of the transactions contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent and Sub
hereby represent and warrant to each Stockholder as follows:
4.1 POWER AND AUTHORITY. Each of Parent and Sub has all necessary
power and authority to enter into the Agreement and to purchase the Shares
pursuant to the terms and conditions of this Agreement and the Merger Agreement.
4
<PAGE>
4.2 SUFFICIENT FUNDS. Parent and/or Sub has, or prior to the date of
the Stock Option Closing will have, all of the funds necessary to consummate the
transactions contemplated hereby on a timely basis and to pay any and all of its
related fees and expenses.
4.3 VALIDITY. This Agreement is the legal, valid and binding
agreement of Parent and Sub enforceable against them in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
4.4 NON-CONTRAVENTION. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Parent, Sub or any
of Parent's other subsidiaries which are both owned directly or indirectly by
Parent and which directly or indirectly owns Sub ("Owning Subs") under, any
provision of (i) the Charter or Bylaws of Parent (or any comparable
organizational documents) or any provision of the comparable charter or
organizational documents of Sub or any Owning Sub, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent, Sub
or any Owning Sub or (iii) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent, Sub or any Owning Sub or any of their
respective properties or assets, other than, in the case of clauses (ii) or
(iii), any such conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the aggregate would
not have a Parent Material Adverse Effect (as defined in the Merger Agreement),
materially impair the ability of Parent or Sub to perform its obligations
hereunder or prevent, limit or restrict the consummation of any of the
transactions contemplated hereby.
5. COVENANTS OF STOCKHOLDERS.
5.1 NO DISPOSITION OR ENCUMBRANCE OF SHARES; NO ACQUISITION OF
SHARES. (a) Each Stockholder severally (and not jointly) covenants and agrees
that, except as contemplated by this Agreement, no Stockholder shall, and no
Stockholder shall offer or agree to, sell, transfer, tender, assign, hypothecate
or otherwise dispose of, or create any security interest, lien, claim, pledge,
option, right of first refusal, agreement, limitation on such Stockholder's
voting rights, charge or other encumbrance of any nature whatsoever with respect
to the Shares now legally and/or beneficially owned by, or that may hereafter be
acquired by, such Stockholder. Each Stockholder severally (and not jointly)
agrees that such Stockholder shall not grant any proxy or power of attorney with
respect to the voting of Shares (each a "Voting Proxy") to any person except to
vote in favor of any of the transactions contemplated by this Agreement or the
Merger Agreement. Each Stockholder hereby represents and warrants that such
Stockholder has granted no Voting Proxy which is currently (or which will
hereafter become) effective with respect to
5
<PAGE>
Shares owned by such Stockholder except Voting Proxies, if any, granted to
another Stockholder, and if such Stockholder has granted a Voting Proxy to any
person other than a Stockholder, such Voting Proxy is hereby revoked; PROVIDED,
HOWEVER, that nothing contained in the foregoing sentence shall be deemed to
revoke, limit or otherwise affect the terms of the Passano Voting Trust, the
Urban Voting Trust or the Spahr Voting Trusts (as described in the Company's
Proxy Statement, dated March 25, 1997) as such terms pertain to the voting of
Shares subject to such voting trusts. No Voting Proxy shall be given or written
consent executed by such Stockholder after the date hereof with respect to such
Stockholder's Shares (and if given or executed, shall not be effective) so long
as this Agreement remains in effect; PROVIDED, HOWEVER, that such Stockholder
may hereafter grant Voting Proxies in furtherance of such Stockholder's
obligations under Section 7.1 hereof.
(b) Each Stockholder hereby severally (and not jointly)
covenants and agrees that it shall not, and shall not offer to agree to, acquire
any additional shares of Common Stock, or options, warrants or other rights to
acquire shares of Common Stock, without the prior written consent of Parent or
Sub.
5.2 NO SOLICITATION OF TRANSACTIONS. Each Stockholder shall
immediately cease any existing discussions or negotiations, if any, with any
parties conducted heretofore with respect to any acquisition or exchange of all
or any material portion of the assets of, or any equity interest in, the Company
or any of its subsidiaries or any business combination with the Company or any
of its subsidiaries. From and after the date hereof, no Stockholder shall,
directly or indirectly, solicit or initiate any takeover proposal or offer from
any person, or (except to the extent permitted by the last sentence of Section
5.2 of the Merger Agreement) engage in discussions or negotiations relating
thereto (including by way of furnishing information). Each Stockholder shall
promptly advise Parent of the receipt of any Alternative Proposal (as defined in
the Merger Agreement).
5.3 STOCKHOLDERS' REPRESENTATIVE. Each Stockholder hereby appoints
William M. Passano, Jr. as Stockholders' Representative to act as Stockholders'
Representative for purposes of giving and receiving notices under this
Agreement.
6. COVENANTS OF PARENT AND SUB.
6.1 NO SALE. Neither Parent nor Sub will sell, offer to sell or
otherwise dispose of the Shares in violation of the Securities Act of 1933, as
amended.
6.2 PERFORMANCE. Parent and Sub shall perform in all material
respects all of their respective obligations under the Merger Agreement.
7. VOTING AGREEMENT: PROXY OF STOCKHOLDER.
7.1 VOTING AGREEMENT. (a) Each Stockholder hereby severally (and
not jointly) agrees that, during the time this Agreement is in effect, at any
meeting of the stockholders of the Company, however called, and in any action by
written consent of the
6
<PAGE>
stockholders of the Company, such Stockholder shall (i) vote all of the Shares
legally and/or beneficially owned by such Stockholder in favor of the Merger,
the Merger Agreement (as amended from time to time) and any of the transactions
contemplated by the Merger Agreement; (ii) vote such Shares against any action
or agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement; and (iii) vote the Shares against any action or
agreement that would materially impede, interfere with or attempt to discourage
the Offer or the Merger.
(b) Each Stockholder hereby severally (and not jointly) further
agrees that, if the Merger Agreement shall terminate solely by reason of the
Company's exercise of its termination rights pursuant to Section 7.1(c)(i)(a) or
(b) of the Merger Agreement and for as long as the Exercise Period has not
ended, such Stockholder (i) shall attend or otherwise participate in all duly
called stockholder meetings and in all actions by written consent of
stockholders, (ii) shall vote the Shares legally and/or beneficially owned by
such Stockholder to enlarge the Board of Directors of the Company and to provide
the Optionee with a majority of members of the Board, (iii) shall not, without
the prior written consent of Parent or Sub, vote any of such Shares in favor of
any actions requiring stockholder approval which are described in Section 5 of
the Merger Agreement and (iv) shall otherwise vote such Shares, and use its
reasonable efforts in its capacity as stockholder of the Company, to prevent the
actions prohibited by Section 5 of the Merger Agreement.
7.2 IRREVOCABLE PROXY. With respect to those persons set forth in
Schedule II hereto, in the event that any Stockholder shall breach its covenant
set forth in Section 7.1, such Stockholder (without any further action on such
Stockholder's part) shall be deemed to have hereby irrevocably appointed Parent
as the attorney-in-fact and proxy of such Stockholder pursuant to the provisions
of Section 2-507 of the MGCL, with full power of substitution, to vote, and
otherwise act (by written consent or otherwise) with respect to all shares of
Common Stock (including the Shares) that such Stockholder is entitled to vote at
any meeting of stockholders of the Company (whether annual or special and
whether or not an adjourned or postponed meeting) or consent in lieu of any such
meeting or otherwise to vote such shares as set forth in Section 7.1 above;
PROVIDED that in any such vote or other action pursuant to such proxy, Parent
shall not have the right (and such proxy shall not confer the right) to vote to
reduce the Offer Price or the Merger Consideration (as defined in the Merger
Agreement) or to otherwise modify or amend the Merger Agreement to reduce the
rights or benefits of the Company or any stockholders of the Company (including
the Stockholders) under the Offer or the Merger Agreement or to reduce the
obligations of Parent and/or Sub thereunder; and PROVIDED FURTHER, that this
proxy shall irrevocably cease to be in effect at any time that (x) the Offer
shall have expired or terminated without any share of Common Stock being
purchased thereunder, in violation of the terms of the Offer or the Merger
Agreement or (y) Parent or Sub shall be in violation of the terms of this
Agreement. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST. Each Stockholder shall execute and deliver to Parent any proxy cards
that such Stockholder receives to vote in favor of the consummation of the
Merger. Parent shall deliver to the Secretary of the Company any such proxy
cards received by it at any meeting called to approve the consummation of the
Merger.
7
<PAGE>
8. TRANSFER OF OPTIONS. Each of the Stockholders identified on Schedule
I hereto as holding options to purchase shares of Common Stock of the Company
(each a "Company Option") severally (and not jointly) agrees that so long as
this Agreement shall remain in effect, such Stockholder (for purposes of this
Section 8, an "Optionholder") will not transfer or exercise any Company Options
held by such Optionholder provided, however, that at the Effective Time, (as
defined in the Merger Agreement) each Optionholder agrees to accept an amount in
respect of such Company Options equal to the product of (A) the excess, if any,
of the Offer Price over the per share exercise price of each such Company Option
and (B) the number of Shares subject thereto (such payment to be net of
applicable withholding taxes) and each such Company Option shall thereafter be
canceled.
9. EFFECTIVENESS: TERMINATION: NO SURVIVAL. This Agreement shall become
effective as to each Stockholder upon its execution by such Stockholder, Parent
and Sub hereto and upon the execution of the Merger Agreement. This Agreement
may be terminated as to each Stockholder at any time by mutual written consent
of such Stockholder, Parent and Sub. Other than the Stock Option, which shall
be governed by Section 2.2(a), this Agreement shall terminate, without any
action by the parties hereto, on the date on which the Merger Agreement
terminates in accordance with its terms. No such termination shall relieve any
party from liability for any breach of this Agreement. The representations and
warranties of the parties set forth in Sections 3 and 4 hereof shall not survive
the termination of this Agreement (except that if the Stock Option is duly
exercised, Sections 3.1, 3.2, 3.4 and 3.5 shall survive the exercise of the
Stock Option and the purchase of the Shares pursuant thereto, regardless of any
investigation made by Parent or Sub).
10. MISCELLANEOUS.
10.1 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by registered or certified mail, postage prepaid, with return receipt
requested, as follows:
If to Parent or Sub, to:
Wolters Kluwer United States Inc.
161 North Clark Street
Chicago, Illinois 60601
Attention: Bruce C. Lenz
Executive Vice President
with a copy to:
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Attention: Arnold J. Schaab, Esq.
8
<PAGE>
If to the Stockholders, to the Stockholders'
Representative at:
Waverly, Inc.
351 West Camden Street
Baltimore, Maryland 21117
Attention: William M. Passano, Jr.
with a copy to:
Venable, Baetjer, Howard & Civiletti, LLP
1201 New York, Avenue, N.W.
Suite 1000
Washington, D.C. 20005
Attention: Ariel Vannier, Esq.
and a copy to:
Skadden, Arps, Slate, Meagher & Flom
1440 New York Avenue, N.W.
Washington, D.C. 20005
Attention: Michael P. Rogan, Esq.
10.2 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party which is entitled to the benefits thereof and
this Agreement may be amended or supplemented at any time. No such waiver,
amendment or supplement shall be effective unless in writing and signed by the
party sought to be bound thereby.
10.3 NO PRIOR AGREEMENTS. This Agreement and the Merger Agreement
contain the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof. This Agreement is not intended to confer upon any
other person any rights or remedies hereunder.
10.4 SUCCESSORS AND ASSIGNS. This Agreement shall not be assignable,
except that Parent or Sub may assign its rights under this Agreement to another
direct or indirect wholly-owned subsidiary of Parent, but such assignment shall
not relieve Parent or Sub of their respective obligations hereunder. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
and against the parties hereto and their successors (including heirs,
administrators and executors of individuals) and permitted assigns.
10.5 REMEDIES. Parent and Sub, on the one hand, and the Stockholders,
on the other hand, each acknowledge and agree that the other would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed by the other in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each party shall be
9
<PAGE>
entitled to an injunction or injunctions to redress the breaches of this
Agreement and to specifically enforce the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which such party may be
entitled at law or in equity.
10.6 EXPENSES. Each of the parties shall pay its own expenses in
connection with the negotiation, execution and performance of the Agreement.
10.7 COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two or more counterparts, each of which shall be considered to be an
original, both of which together shall constitute the same instrument.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of Maryland, without regard to the
principles of conflicts of laws.
10.9 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
11. EFFECT OF HEADINGS. The section headings herein are for convenience
only and shall not affect the meaning or interpretation of this Agreement.
10
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement to take effect
as of the date set forth above.
WOLTERS KLUWER U.S. CORPORATION
By: /s/ Peter W. van Wel
--------------------------------
Name: Peter W. van Wel
Title: President
MP ACQUISITION CORP.
By: /s/ Bruce C. Lenz
--------------------------------
Name: Bruce C. Lenz
Title: Vice President
11
<PAGE>
STOCKHOLDERS
/s/ William M. Passano, Jr. /s/ Matthew K. Hill
- --------------------------- -------------------------------
William M. Passano, Jr. Matthew K. Hill
/s/ Helen A. Passano By: /s/ Kemp Passano Hill
- --------------------------- ----------------------------
Helen A. Passano Legal Representative of
Matthew K. Hill
/s/ Thomas J. Hill /s/ Edward Passano Hill
- --------------------------- -------------------------------
Thomas J. Hill Edward Passano Hill
/s/ Kemp Passano Hill By: /s/ Kemp Passano Hill
- --------------------------- ----------------------------
Kemp Passano Hill Legal Representative of
Edward Passano Hill
/s/ William Harrison Hill /s/ Leslie H. Passano
- --------------------------- -------------------------------
William Harrison Hill Leslie H. Passano
By: /s/ Kemp Passano Hill
---------------------------
Legal Representative of
William Harrison Hill
/s/ Virginia J. Hill /s/ Terry D. Passano
- --------------------------- -------------------------------
Virginia J. Hill Terry D. Passano
By: /s/ Kemp Passano Hill
---------------------------- Trust for Ida K. Passano
Legal Representative of
Virginia J. Hill
By: /s/ William M. Passano, Jr.
----------------------------
Name: William M. Passano, Jr.
Title: Trustee
By: /s/ Susan P. Macfarlane
----------------------------
Name: Susan P. Macfarlane
Title: Trustee
12
<PAGE>
Passano Family Life Estate
By: /s/ Edward M. Passano, Sr. /s/ C. Alexandra Passano
------------------------------- ------------------------------
Name: Edward M. Passano, Sr. C. Alexandra Passano
Title: Trustee
By: /s/ William M. Passano, Jr. /s/ William M. Passano, Jr.
------------------------------- ------------------------------
Name: William M. Passano, Jr. Legal Representative of
Title: Trustee C. Alexandra Passano
By: /s/ Susan P. Macfarlane /s/ Nicholas Bartlett
------------------------------- ------------------------------
Name: Susan P. Macfarlane Nicholas Bartlett
Title: Trustee
/s/ Cannon Passano By: /s/ Joanne Bartlett
- ----------------------------------- ---------------------------
Cannon Passano Legal Representative of
Nicholas Bartlett
By: /s/ William M. Passano, Jr. /s/ E. Magruder Passano, Jr.
------------------------------- ---------------------------
Legal Representative of E. Magruder Passano, Jr.
Cannon Passano
/s/ Caroline Passano /s/ Helen M. Passano
- ----------------------------------- ---------------------------
Caroline Passano Helen M. Passano
By: /s/ William M. Passano, Jr. /s/ Joanne B. Bartlett
-------------------------------- ---------------------------
Legal Representative of Joanne B. Bartlett
Caroline Passano
/s/ Tamara A. Passano /s/ Christopher Bartlett
- ---------------------------------- ---------------------------
Tamara A. Passano Christopher Bartlett
By: /s/ Helen M. Passano /s/ Elizabeth Bartlett
------------------------------ ---------------------------
Legal Representative of Elizabeth Bartlett
Tamara A. Passano
13
<PAGE>
/s/ Edward M. Passano, Sr. By:
- ------------------------------- ----------------------------
Edward M. Passano Legal Representative of
Elizabeth Passano
/s/ Mary F. Passano /s/ Catherine M. Passano
- ------------------------------- -------------------------------
Mary F. Passano Catherine M. Passano
/s/ Mary T. Fleming By: /s/ E. Magruder Passano, Jr.
- ------------------------------- ----------------------------
Mary T. Fleming Legal Representative of
Catherine M. Passano
/s/ Samuel G. Macfarlane /s/ Graham Long
- ------------------------------- -------------------------------
Samuel G. Macfarlane Graham Long
/s/ Sarah R. Passano By: /s/ Margaret M. Long
- -------------------------------- ---------------------------
Sarah R. Passano Legal Representative of
Graham Long
By: /s/ Helen M. Passano /s/ Margaret M. Long
----------------------------- -------------------------------
Legal Representative of Margeret P. Long
Sarah R. Passano
/s/ Anne Hutton
-------------------------------
Anne Hutton
/s/ Katherine Long
- -------------------------------
Katherine Long
By: /s/ Margaret M. Long
----------------------------
Legal Representative of
Katherine Long
/s/ Eleanor Macfarlane By: /s/ Edward B. Hutton, Jr.
- -------------------------------- ----------------------------
Eleanor Macfarlane Legal Representative of
Anne Hutton
14
<PAGE>
By: /s/ David Macfarlane /s/ Michael Urban
----------------------------- ------------------------------
Legal Representative of Michael Urban
Eleanor Macfarlane Urban Voting Trust
/s/ James P. Macfarlane By: /s/ William M. Passano, Jr.
- -------------------------------- ---------------------------
James P. Macfarlane Name: William M. Passano, Jr.
Title: Trustee
/s/ Jamie M. Macfarlane By: /s/ Michael Urban
- -------------------------------- ---------------------------
Jamie M. Macfarlane Name: Michael Urban
Title: Trustee
By: /s/ James P Macfarlane /s/ John Spahr, Jr.
----------------------------- ---------------------------
Legal Representative of John Spahr, Jr.
Jamie M. Macfarlane
/s/ Grace S. Macfarlane /s/ Robert Spahr
- -------------------------------- ---------------------------
Grace S. Macfarlane Robert Spahr
By: /s/ David G. Macfarlane /s/ Edward B. Hutton
---------------------------- ---------------------------
Legal Representative of Edward B. Hutton
Grace S. Macfarlane
/s/ David G. Macfarlane
- -------------------------------
David G. Macfarlane
15
<PAGE>
The Company hereby consents to the provisions of Section 7 of this
Agreement as applicable to the Shares held by the Spahr Voting Trusts which are
subject to that certain Escrow Agreement dated January 10, 1991 among the
Company, the Spahrs and First National Bank of Maryland, as Escrow Agent.
WAVERLY, INC.
By: /s/ Edward B. Hutton, Jr.
----------------------------
Edward B. Hutton, Jr.
Chief Executive Officer and President
The subscribers to each of the Passano Voting Trust, the Urban Voting Trust
and the Spahr Voting Trusts hereby consent to any and all actions taken or
contemplated to be taken by the Trustees who are Stockholders pursuant to this
Agreement.
SUBSCRIBERS:
/s/ William M. Passano, Jr.
- ---------------------------------
/s/ Susan P. Macfarlane
- ---------------------------------
/s/ Edward M. Passano, Jr.
- ---------------------------------
/s/ John Spahr, Jr.
- ---------------------------------
/s/ Robert Spahr, Jr.
- ---------------------------------
/s/ Michael Urban
- ---------------------------------
/s/ Catsfield, Inc
- ---------------------------------
By: Michael Urban
----------------------------
Beneficial Owner
16
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
WAVERLY, INC. As of 1/30/98 09-Feb-98
Directors and Officers Stock Ownership
Actual
Holdings @ 401K Total Options GRAND
01/30/98 Holdings Outstanding TOTAL
-------- ---------- ------------ -----------
William M. Passano Jr. O/D
- -----------------------
<S> <C> <C> <C> <C>
133,255 4,689 85,000 222,944
Helen A. (Wife) 45,384 45,384
Kemp H. (Adult) 27,001 27,001
Thomas (Adult) 0 0
Kemp & Thomas (Adult) 400 400
William (Minor) 1,903 1,903
Virginia (Minor) 2,703 2,703
Matthew (Minor) 100 100
Edward(Minor) 600 600
Leslie H. (Adult) 11,644 11,644
Will (Adult) 11,460 11,460
Terry D. (Adult) 1,708 1,708
Caroline (Minor) 1,753 1,753
C. Alexandra (Minor) 1,753 1,753
Cannon (Minor) 1,648 1,648
Joanne B. (Adult) 20,215 20,215
Christopher (Adult) 1,703 1,703
Nicholas (Minor) 1,703 1,703
Elizabeth (Minor) 2,103 2,103
------- ------- -------- ----------
Subtotal 267,036 4,689 85,000 356,725
Trust (Ida K.) 15,662 15,662
------- ------- -------- ----------
GRAND TOTAL 282,698 4,689 85,000 372,387
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
WAVERLY, INC. As of 2/8/98 10-Feb-98
Directors and Officers Stock Ownership
Actual
Holdings @ 401K Total Options GRAND
01/30/98 Holdings Outstanding TOTAL
-------- ---------- ------------ -----------
E. Magruder Passano, Jr. O/D
- -----------------------
<S> <C> <C> <C> <C>
Self 7,616 497 29,000 37,113
Helen M. (Wife) 79,769 79,769
Catherine M. (Minor) 62,435 62,435
Sarah R. (Minor) 30,333 30,333
Tamara A. (Minor) 44,115 44,115
-------- ------- -------- --------
GRAND TOTAL 224,268 497 29,000 253,765
Edward M. Passano
- ----------------- D
Self 2,600 2,600
Mary F. (Wife) 6,130 6,130
Mary T. Fleming 2,610 2,610
-------- ------- -------- --------
GRAND TOTAL 11,340 0 0 11,340
LIFE ESTATE 3,227,822 3,227,822
--------- ---------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
WAVERLY, INC. As of 2/8/98 10-Feb-98
Directors and Officers Stock Ownership
Actual Total
Holdings @ 401K Options GRAND
01/30/98 Holdings Outstanding TOTAL
-------- ---------- ------------ -----------
Samuel G. Macfarlane D
- -----------------------
<S> <C> <C> <C> <C>
Self 1,320 1,320
Susan P. (Wife) 0 0
Margaret P. Long (Adult) 20,664 20,664
Katherine Long (Minor) 900 900
Graham Long (Minor) 900 900
David G. (Adult) 21,552 21,552
Grace S. (Minor) 100 100
Eleanor (Minor) 100 100
James P. (Adult) 29,566 29,566
Jamie M. (Minor) 100 100
--------- -------- ----------- -----------
Subtotal 75,202 0 0 75,202
Trust 7,800 7,800
--------- -------- ----------- -----------
GRAND TOTAL 83,002 0 0 83,002
TOTAL FAMILY 3,829,130 5,186 114,000 3,948,316
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
WAVERLY, INC. As of 2/8/98 10-Feb-98
Directors and Officers Stock Ownership
Actual Total
Holdings @ 401K Options GRAND
1/30/98 Holdings Outstanding TOTAL
-------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Spahr, John Mr. Dir 155,000 0 0 155,000
Hutton, Edward B, Jr. O/D 850 1,817 282,000 284,667
Anne (Minor) 200 0 0 200
Urban, Michael O/D 800,000 0 2,500 802,500
Spahr, Robert O/D 155,000 0 0 155,000
--------- --------- ----------- -----------
Total 1,111,050 1,817 284,500 1,397,367
GRAND TOTAL 4,940,180 7,003 398,500 5,345,683
</TABLE>
20
<PAGE>
SCHEDULE II
Passano Family Life Estate
Robert Spahr
John Spahr, Jr.
Dr. Michael Urban
William M. Passano, Jr.
Helen A. Passano
Helen M. Passano, individually and as
legal guardian of:
- Catherine M. (minor)
- Sarah R. (minor)
- Tamara A. (minor)
Kemp Passano Hill, individually and as
egal guardian of:
- William (minor)
- Virginia (minor)
- Matthew (minor)
- Edward (minor)
James P. MacFarlane, individually and
as legal guardian of:
- Jamie M. (minor)
Edward B. Hutton, Jr., individually and
as legal guardian of:
- Anne (minor)
21
<PAGE>
WOLTERS KLUWER nv
Box 818
1000 AV Amsterdam THE NETHERLANDS
February 11, 1998
Waverly, Inc.
251 West Camden Street
Baltimore, Maryland
In connection with and pursuant to your entering into the Agreement and
Plan of Merger dated as of February 10, 1998 with MP Acquisition Corp. and
Wolters Kluwer U.S. Corporation, we hereby unconditionally guarantee the
payment obligations of MP Acquisition Corp. and Wolters Kluwer U.S. Corporation
under that Agreement.
Sincerely,
WOLTERS KLUWER nv
By: /s/ Peter W. van Wel
--------------------------
Peter W. van Wel
Member, Executive Board
Agreed and Accepted:
WAVERLY, INC.
By: /s/ Edward B. Hutton, Jr.
---------------------------
Name: Edward B. Hutton, Jr.
Its: Chief Executive Officer
and President
