<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
SCOTSMAN INDUSTRIES, INC.
(Name of Subject Company)
------------------------------
BERISFORD ACQUISITION CORPORATION
WELBILT CORPORATION
BERISFORD PLC
(Bidders)
------------------------------
COMMON STOCK, $0.10 PAR VALUE PER SHARE
(Title of Class of Securities)
809340102
(CUSIP Number of Class of Securities)
------------------------------
WELBILT CORPORATION
225 HIGH RIDGE ROAD
STAMFORD, CT 06905
TELEPHONE: (203) 325-8300
FACSIMILE: (203) 325-3422
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
------------------------------
COPY TO:
DENNIS J. BLOCK, ESQ.
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NEW YORK 10038
TELEPHONE: (212) 504-6000
FACSIMILE: (212) 504-6666
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE*
<S> <C>
$379,974,705 $75,995
</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only. The
filing fee calculation assumes the purchase of all outstanding shares of
common stock, $0.10 par value per share (the "Shares"), of Scotsman
Industries, Inc. at a price of $33.00 per Share in cash, without interest.
The filing fee calculation is based on 10,627,875 Shares outstanding as of
July 1, 1999 and assumes the issuance prior to the consummation of the Offer
(as defined herein) of 886,510 Shares upon the exercise of outstanding
options. The amount of the filing fee calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended,
equals 1/50th of one percent of the value of the transaction.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount previously paid: Not applicable Filing party: Not applicable
Form or registration no.: Not applicable Date filed: Not applicable
</TABLE>
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(CONTINUED ON FOLLOWING PAGE(S))
(Page 1 of 7 Pages)
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Berisford Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Welbilt Corporation, a Delaware
corporation ("Parent") and an indirect wholly owned subsidiary of Berisford plc,
a public limited company organized under the laws of England and Wales
("Berisford"), to purchase all of the outstanding shares of common stock, par
value $0.10 per share (the "Shares"), of Scotsman Industries, Inc., a Delaware
corporation (the "Company"), at $33.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated July 1, 1999 (the "Offer to Purchase"), a copy of which
is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal,
a copy of which is attached hereto as Exhibit (a)(2) (which, as amended or
supplemented from time to time, together constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Scotsman Industries, Inc. and the
address of its principal executive offices is 820 Forest Edge Drive, Vernon
Hills, Illinois 60061. The telephone number of the Company at such location is
(847) 215-4500.
(b) The information set forth in the "INTRODUCTION" of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in "Price Range of the Shares; Dividends" of
the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Purchaser, Parent and
Berisford. The information set forth in the "INTRODUCTION" and "Certain
Information Concerning Purchaser, Parent and Berisford" of the Offer to Purchase
is incorporated herein by reference. The name, business address, present
principal occupation or employment, the material occupations, positions, and
offices or employments for the past five years of each director and executive
officer of Purchaser, Parent and Berisford and the name, principal business and
address of any corporation or other organization in which such occupations,
positions, offices and employments are or were carried on are set forth in
Schedule I to the Offer to Purchase and incorporated herein by reference.
(e)-(f) During the last five years none of Purchaser, Parent or Berisford
and, to the best knowledge of Purchaser, Parent and Berisford, none of the
persons listed in Schedule I to the Offer to Purchase (i) has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which any such person was or is subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in "Certain Information Concerning Purchaser,
Parent and Berisford" and "Background of the Offer; Purpose of the Offer and the
Merger; Merger Agreement" of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in the "INTRODUCTION," "Certain Information
Concerning Purchaser, Parent and Berisford," "Background of the Offer; Purpose
of the Offer and the Merger; Merger Agreement" and "Plans for the Company; Other
Matters" 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 the "INTRODUCTION" and "Sources and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
<PAGE>
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the "INTRODUCTION," "Background of the
Offer; Purpose of the Offer and the Merger; Merger Agreement" and "Plans for the
Company; Other Matters" of the Offer to Purchase is incorporated herein by
reference.
(f)-(g) The information set forth in the "INTRODUCTION" and "Effect of the
Offer on the Market for the Shares; Stock Listing; Exchange Act Registration;
Margin Regulations" of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the "INTRODUCTION," "Certain
Information Concerning Purchaser, Parent and Berisford" and "Background of the
Offer; Purpose of the Offer and the Merger; Merger Agreement" of the Offer to
Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT
COMPANY'S SECURITIES.
The information set forth in the "INTRODUCTION," "Sources and Amount of
Funds," "Background of the Offer; Purpose of the Offer and the Merger; Merger
Agreement," "Plans for the Company; Other Matters" and "Fees and Expenses" of
the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Fees and Expenses" of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser, Parent or Berisford, or to the best knowledge of Purchaser,
Parent and Berisford, any of the persons listed in Schedule I of the Offer to
Purchase, and the Company, or any of its executive officers, directors,
controlling persons or subsidiaries.
(b)-(c) The information set forth in the "INTRODUCTION," "Conditions to the
Offer" and "Certain Legal Matters" of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in "Effect of the Offer on the Market for the
Shares; Stock Listing; Exchange Act Registration; Margin Regulations" and
"Certain Legal Matters" of the Offer to Purchase is incorporated herein by
reference.
(e) None.
(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, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated July 9, 1999.
2
<PAGE>
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Joint Press Release of Berisford and the Company dated July 2, 1999.
(a)(8) Press Release of Parent dated July 9, 1999.
(a)(9) Summary Advertisement.
(b)(1) Bank Commitment Letter, dated as of July 1, 1999, by and between
Parent, Purchaser and Barclays Bank PLC and National Westminster Bank Plc.
(c)(1) Agreement and Plan of Merger, dated as of July 1, 1999, by and among
Parent, Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated as of April 29, 1999, by and between
Berisford and the Company.
(d) None.
(e) Not applicable.
(f) None.
3
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: July 9, 1999
BERISFORD ACQUISITION CORPORATION
By: __________________________________
Name:
Title:
WELBILT CORPORATION
By: __________________________________
Name:
Title:
BERISFORD PLC
By: __________________________________
Name:
Title:
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE NO.
- --------- ------------
<S> <C> <C>
(a)(1) Offer to Purchase, dated July 9, 1999........................................................
(a)(2) Letter of Transmittal........................................................................
(a)(3) Notice of Guaranteed Delivery................................................................
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.............
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.....................................................................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9........
(a)(7) Joint Press Release of Berisford and the Company dated July 2, 1999..........................
(a)(8) Press Release of Parent dated July 9, 1999...................................................
(a)(9) Summary Advertisement........................................................................
(b)(1) Bank Commitment Letter, dated as of July 1, 1999, by and between Parent, Purchaser and
Barclays Bank PLC and National Westminster Plc...............................................
(c)(1) Agreement and Plan of Merger, dated as of July 1, 1999, by and among Parent, Purchaser and
the Company..................................................................................
(c)(2) Confidentiality Agreement, dated as of April 29, 1999, by and between Berisford and the
Company......................................................................................
(d) None.........................................................................................
(e) Not Applicable...............................................................................
(f) None.........................................................................................
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
AT
$33.00 NET PER SHARE
BY
BERISFORD ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
WELBILT CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BERISFORD PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 1, 1999, by and among Welbilt Corporation, Berisford Acquisition
Corporation and Scotsman Industries, Inc. (the "Company"). The Board of
Directors of the Company has, at a meeting duly called and held, by a vote of
all those present, (i) approved the Merger Agreement and the transactions
contemplated thereby, including the Offer (as defined below) and the Merger
referred to herein, (ii) determined that the Offer and the Merger are fair to,
and in the best interests of, the Company's stockholders and (iii) resolved to
recommend that the stockholders accept the Offer and tender their Shares (as
defined herein) pursuant to the Offer.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined herein) that
number of Shares which, when added to the Shares, if any, beneficially owned by
Parent or Purchaser, represents at least a majority of the Shares outstanding on
a fully diluted basis on the date Shares are accepted for payment. The Offer is
also subject to the other conditions set forth in this Offer to Purchase. See
Section 14.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the enclosed Letter of Transmittal
(or a facsimile thereof) in accordance with the Instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed (if required
by Instruction 1 to the Letter of Transmittal), mail or deliver the Letter of
Transmittal (or a facsimile thereof) and any other required documents to the
Depositary (as defined herein) and either deliver the certificates for such
Shares to the Depositary or tender such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 of this Offer to Purchase or (ii)
request such stockholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such stockholder. Any stockholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee to tender such Shares.
If a stockholder desires to tender Shares and such stockholder's
certificates evidencing such Shares are not immediately available, or 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 prior to the
expiration of the Offer, such stockholder's tender may be executed by following
the procedures for guaranteed delivery set forth in Section 3 of this Offer to
Purchase.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER
TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND
OTHER RELATED MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT OR TO THE
DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS SET FORTH ON
THE BACK COVER OF THIS OFFER TO PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO
PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY AND THE
OTHER TENDER OFFER MATERIALS MAY ALSO BE OBTAINED FROM BROKERS, DEALERS,
COMMERCIAL BANKS OR TRUST COMPANIES.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
[LOGO]
July 9, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
INTRODUCTION
1. Terms of the Offer.............................................................. 4
2. Acceptance for Payment and Payment.............................................. 5
3. Procedures for Tendering Shares................................................. 7
4. Withdrawal Rights............................................................... 10
5. Certain U.S. Federal Income Tax Consequences.................................... 10
6. Price Range of the Shares; Dividends............................................ 11
7. Effect of the Offer on the Market for the Shares; Stock Listing; Exchange Act
Registration; Margin Regulations.............................................. 12
8. Certain Information Concerning the Company...................................... 13
9. Certain Information Concerning Purchaser, Parent and Berisford.................. 17
10. Sources and Amount of Funds..................................................... 20
11. Background of the Offer; Purpose of the Offer and the Merger; Merger
Agreement..................................................................... 21
12. Plans for the Company; Other Matters............................................ 32
13. Dividends and Distributions..................................................... 34
14. Conditions to the Offer......................................................... 35
15. Certain Legal Matters........................................................... 36
16. Fees and Expenses............................................................... 40
17. Miscellaneous................................................................... 41
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER, PARENT AND
BERISFORD.................................................................................. I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
Scotsman Industries, Inc:
INTRODUCTION
Berisford Acquisition Corporation, a Delaware corporation ("Purchaser") and
a wholly owned subsidiary of Welbilt Corporation, a Delaware corporation
("Parent"), which is an indirect wholly owned subsidiary of Berisford plc, a
public limited company organized under the laws of England and Wales
("Berisford"), hereby offers to purchase all outstanding shares of common stock,
par value $0.10 per share (the "Shares"), of Scotsman Industries, Inc., a
Delaware corporation (the "Company"), at a price of $33.00 per Share, net to the
seller in cash, without interest (the "Offer Price"), upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, as amended or supplemented from time to time,
collectively constitute the "Offer").
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by Purchaser 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. Purchaser will pay all fees and expenses of Schroder &
Co. Inc. ("Schroders"), which is acting as the Dealer Manager (in such capacity,
the "Dealer Manager"), Harris Trust Company of New York, which is acting as the
Depositary (in such capacity, the "Depositary"), and D.F. King & Co., Inc.,
which is acting as Information Agent (in such capacity, the "Information
Agent"), incurred in connection with the Offer and in accordance with the terms
of the agreements entered into between Purchaser and/or Parent and/or Berisford
and each such person. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS, AT A
MEETING DULY CALLED AND HELD, BY A VOTE OF ALL THOSE PRESENT, (I) APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, (II) DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND
IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND (III) RESOLVED TO
RECOMMEND THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER. THE FACTORS CONSIDERED BY THE COMPANY BOARD IN ARRIVING
AT ITS DECISION TO APPROVE THE OFFER AND THE MERGER AND TO RECOMMEND THAT
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES ARE
DESCRIBED IN THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE
14D-9 (THE "SCHEDULE 14D-9"), WHICH HAS BEEN FILED BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") IN CONNECTION WITH THE
OFFER AND IS BEING MAILED TO THE STOCKHOLDERS OF THE COMPANY HEREWITH.
Morgan Stanley & Co. Incorporated ("Morgan Stanley"), financial advisor to
the Company, has delivered to the Company Board its opinion, dated as of July 1,
1999 (the "Financial Advisor Opinion"), to the effect that, as of such date and
based upon and subject to certain assumptions and matters stated therein, the
consideration to be received by the holders of Shares in the Offer and the
Merger is fair, from a financial point of view, to such holders. A copy of the
Financial Advisor Opinion is attached as an exhibit to the Schedule 14D-9.
Holders of Shares are urged to, and should, read the Financial Advisor Opinion
carefully.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF SHARES
WHICH, WHEN ADDED TO THE SHARES, IF ANY, BENEFICIALLY OWNED BY PARENT OR
PURCHASER, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS ON THE DATE SHARES ARE
1
<PAGE>
ACCEPTED FOR PAYMENT (THE "MINIMUM CONDITION"), AND (B) THE APPROVAL OF THE
TERMS AND CONDITIONS OF THE OFFER AND THE MERGER BY THE SHAREHOLDERS OF
BERISFORD (THE "BERISFORD SHAREHOLDER CONDITION"). THE OFFER IS ALSO SUBJECT TO
THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTION 14. As
used in this Offer to Purchase, "fully diluted basis" takes into account the
exercise of all outstanding options and other rights and securities exercisable
or convertible into Shares other than options that are not exercisable during
the term of the Offer. The Company has represented and warranted to Parent and
Purchaser that, as of July 1, 1999, there were 10,627,875 Shares issued and
outstanding and 886,510 Shares reserved for issuance pursuant to the exercise of
outstanding options to purchase Shares (the "Options"). The Merger Agreement
provides, among other things, that the Company will not, without the prior
written consent of Parent, issue any additional Shares (except upon the exercise
of outstanding Options). See Section 11. Based on the foregoing, Purchaser
believes that the Minimum Condition will be satisfied if 5,757,193 Shares are
validly tendered prior to the Expiration Date and not withdrawn.
As described above, it is a condition of the consummation of the Offer that
the Berisford Shareholder Condition is satisfied. Such condition will be
satisfied if a majority of Berisford's shareholders attending and voting, vote
to approve the Offer and the Merger Agreement at the extraordinary general
meeting of Berisford's shareholders which has been called for the purpose of
obtaining such approval on July 22, 1999.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 1, 1999 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company. Pursuant to the Merger Agreement and the Delaware General
Corporation Law, as amended (the "DGCL"), no later than the second business day
after the consummation of the Offer and the satisfaction or waiver of certain
conditions, Purchaser shall be merged with and into the Company (the "Merger"),
and the Company will be the surviving corporation in the Merger (the "Surviving
Corporation"). At the effective time of the Merger (the "Effective Time"), each
Share then outstanding, other than Shares held by (i) the Company or any of its
subsidiaries, (ii) Parent or any of its subsidiaries including Purchaser and
(iii) stockholders who properly perfect their dissenters' rights under the DGCL,
will be converted into the right to receive $33.00 in cash or any higher price
per Share paid in the Offer (the "Merger Consideration"), without interest.
The Merger Agreement provides that, upon the purchase by Purchaser of at
least a majority of the Shares pursuant to the Offer and from time to time
thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board so that the percentage
of Parent's nominees on the Company Board equals the percentage of outstanding
Shares beneficially owned by Purchaser. The Company shall, at such time, upon
the request of Purchaser promptly use its best efforts either to increase the
size of the Company Board or secure resignations of incumbent directors or both
and the Company shall take all reasonable action available to the Company to
cause such persons designated by Parent to be elected to the Company Board.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement and the Merger, if required by applicable law and the
Company's Certificate of Incorporation (the "Certificate of Incorporation"). See
Section 11. Under the DGCL and pursuant to the Certificate of Incorporation, the
affirmative vote of the holders of a majority of the outstanding Shares is the
only vote of any class or series of the Company's capital stock that would be
necessary to approve the Merger Agreement and the Merger at a meeting of the
Company's stockholders. If the Minimum Condition is satisfied and Purchaser
purchases at least a majority of the outstanding Shares in the Offer, Purchaser
will be able to effect the Merger without the affirmative vote of any other
stockholder. Pursuant to the Merger Agreement, Parent and Purchaser have agreed
to vote the Shares acquired by them pursuant to the Offer in favor of the
Merger. See Section 12. The Merger Agreement is more fully described in Section
11.
2
<PAGE>
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of a subsidiary corporation, the corporation
holding such stock may merge such subsidiary into itself, or itself into such
subsidiary, without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the event
that Purchaser acquires in the aggregate at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, then, at the election of Parent, a
short-form merger could be effected without any further approval of the Company
Board or the stockholders of the Company. In the Merger Agreement, Parent,
Purchaser and the Company have agreed that, notwithstanding that all conditions
to the Offer are satisfied or waived as of the scheduled Expiration Date,
Purchaser may extend the Offer for a period not to exceed 5 business days, if
the Shares tendered pursuant to the Offer are more than 75% but less than 90% of
the outstanding Shares. Even if Purchaser does not own 90% of the outstanding
Shares following consummation of the Offer, Parent or Purchaser could seek to
purchase additional shares in the open market or otherwise in order to reach the
90% threshold and employ a short-form merger. The per share consideration paid
for any Shares so acquired in open market purchases may be greater or less than
the Offer Price. Parent presently intends to effect a short-form merger, if
permitted to do so under the DGCL, pursuant to which Purchaser will be merged
with and into the Company. See Section 12.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
3
<PAGE>
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 such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not withdrawn in accordance with
Section 4. The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Friday, August 13, 1999, unless and until Purchaser, in accordance with
the terms of the Merger Agreement, shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by Purchaser, shall
expire. In the Merger Agreement, the Company, Parent and Purchaser have agreed
that if all conditions to Purchaser's obligation to accept for payment and pay
for Shares pursuant to the Offer have not been satisfied or waived on the
scheduled Expiration Date, Purchaser will, from time to time until such time as
all such conditions are satisfied or waived, extend the Expiration Date, but in
no event shall Purchaser be required to extend the Expiration Date beyond the
Outside Date (as defined below in Section 11).
The Offer is conditioned upon the satisfaction of the Minimum Condition and
the Berisford Shareholder Condition, the expiration or termination of all
waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and other conditions set forth in Section 14.
If such conditions are not satisfied prior to the Expiration Date, Purchaser
reserves the right, subject to the terms of the Merger Agreement and subject to
complying with applicable rules and regulations of the Commission, to (i)
decline to purchase any Shares tendered in the Offer and return all tendered
Shares to the tendering stockholders, (ii) waive any or all conditions to the
Offer and, to the extent permitted by applicable law, purchase all Shares
validly tendered, (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares until the Expiration Date, retain all Shares
which have been tendered during the period or periods for which the Offer is
extended or (iv) subject to the next sentence, amend the Offer. The Merger
Agreement provides that Purchaser will not decrease the Offer Price, change the
initial scheduled expiration of the Offer to a date earlier than the date 25
business days after the date the Offer is commenced, change the form of
consideration to be paid in the Offer, decrease the number of Shares sought in
the Offer, amend any other condition to the Offer in any manner adverse to the
holders of the Shares or impose additional conditions to the Offer without the
prior written consent of the Company.
The Merger Agreement requires Purchaser to accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer if all
conditions to the Offer are satisfied on the Expiration Date. However, if,
immediately prior to the scheduled Expiration Date, all conditions to the Offer
are satisfied but the number of Shares tendered and not withdrawn pursuant to
the Offer constitutes more than 75% but less than 90% of the Shares outstanding,
Purchaser may, in its sole judgment, extend the Offer for a period not to exceed
5 business days. As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with Rules 14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act.
Without limiting the obligation of Purchaser under such Rules or the manner in
which Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Jones News
Service.
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<PAGE>
If Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its purchase of, or payment for,
Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to, and duly
exercise, withdrawal rights as described in Section 4. However, the ability of
Purchaser to delay the payment for Shares which Purchaser has accepted for
payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that
a bidder pay the consideration offered or return the securities tendered by, or
on behalf of, holders of securities promptly after the termination or withdrawal
of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. With respect to a
change in price or a change in the percentage of securities sought, a minimum
period of 10 business days is generally required to allow for adequate
dissemination to stockholders. The requirement to extend the Offer will not
apply to the extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date equals or
exceeds the minimum extension period that would be required because of such
amendment. If, prior to the Expiration Date, Purchaser increases the
consideration offered to holders of Shares pursuant to the Offer, such increased
consideration will be paid to all holders whose Shares are purchased in the
Offer whether or not such Shares were tendered prior to such increase.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, dealers,
banks and similar persons whose names, or the names of whose nominees, appear on
the stockholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and will pay for, as soon as
practicable after the Expiration Date, all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 4.
Purchaser expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for Shares in order to comply in whole or
in part with any applicable law, including, without limitation, the HSR Act and
the Exon-Florio Act. Any such delays will be effected in compliance with Rule
14e-1(c) under the Exchange Act, which requires that a tender offeror pay the
consideration offered or return the tendered securities promptly after
termination or withdrawal of a tender offer.
Berisford will file a Notification and Report Form with respect to the Offer
under the HSR Act. The waiting period under the HSR Act with respect to the
Offer will expire at 11:59 p.m., New York City time, on the 15(th) day after day
such form is filed, unless early termination of the waiting period is granted.
However, the Antitrust Division of the Department of Justice (the "Antitrust
Division") or the Federal Trade Commission (the "FTC") may extend the waiting
period by requesting additional information or documentary material from
Berisford. If such a request is made, such waiting period will expire at
5
<PAGE>
11:59 p.m., New York City time, on the 10(th) day after substantial compliance
by Berisford with such request. See Section 15.
The Purchaser and the Company will make a filing under the Exon-Florio Act
with the Treasury Department of the United States as chairman of the Committee
of Foreign Investment in the United States ("CFIUS"). The time period for CFIUS
to determine whether to undertake an investigation will expire on the 30(th) day
following the acceptance of such filing by CFIUS. In the event that CFIUS
determines to undertake an investigation, such investigation must be completed
within forty-five days after such determination. The President has fifteen days
following the presentation by CFIUS of its recommendation to the President in
which to suspend or prohibit the proposed acquisition or seek other appropriate
relief. See Section 15.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares. 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 Purchaser and
transmitting payment to tendering stockholders. In all cases, payment for Shares
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates for such Shares (or a timely Book
Entry Confirmation (as defined below) with respect thereto), (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message (as defined below) and (iii) any other documents required by the
Letter of Transmittal. Accordingly, payment may be made to tendering
stockholders at different times if delivery of the Shares and other required
documents occur at different times. The per share consideration paid to any
holder of Shares pursuant to the Offer will be the highest per share
consideration paid to any other holder of Shares pursuant to the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE
PAID BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
If Purchaser extends the Offer or is delayed in its acceptance for payment
of, or payment for, Shares (whether before or after its acceptance for payment
of Shares) or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 and 14) (but subject
to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled to
exercise, and duly exercise, withdrawal rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates evidencing Shares not tendered or not accepted for
purchase will be returned to the tendering stockholder, or such other person as
the tendering stockholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration or termination of the Offer. In
the case of Shares delivered by book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to such account maintained at the
Book-Entry Transfer Facility as the tendering stockholder shall specify in the
Letter of Transmittal, as promptly as practicable following the expiration or
termination of the Offer. If no such instructions are given with respect to
Shares delivered by book- entry transfer, any such Shares not tendered or not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated in the Letter of Transmittal as the account from which such
Shares were delivered.
6
<PAGE>
Purchaser reserves the right to transfer or assign, in whole or, from time
to time, in part, to one or more of its affiliates, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES.
VALID TENDER. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together 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 one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date and
either certificates evidencing tendered Shares must be received by the
Depositary at one of such addresses or such Shares must be delivered to the
Depositary pursuant to the procedures 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 tendering stockholder must comply with
the guaranteed delivery procedures described below.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (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 in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation."
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
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 such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such 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 Purchaser
may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH
7
<PAGE>
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if 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 Guarantee
Program, the Stock Exchange Medallion Program or by any other "eligible
guarantor institution", as such term is defined in Rule 17Ad-15 under the
Exchange Act (each, an "Eligible Institution" and, collectively, "Eligible
Institutions"). In all other cases, all signatures on Letters of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made, or certificates for Shares not tendered or not accepted for payment
are to be returned, to a person other than the registered holder of the
certificates surrendered, then the tendered certificates for such Shares must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
as aforesaid. See Instruction 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 the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect to)
such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents, are received by the
Depositary within three trading days after the date of execution of
such Notice of Guaranteed Delivery. A "trading day" is any day on which
the New York Stock Exchange (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mailed to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering stockholder will
irrevocably appoint designees of Parent as such
8
<PAGE>
stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by Purchaser and with respect to any and
all non-cash dividends, distributions, rights, other Shares or other securities
issued or issuable in respect of such Shares on or after July 1, 1999
(collectively, "Distributions"). All such proxies will be considered coupled
with an interest in the tendered Shares. Such appointment will be effective if,
as and when, and only to the extent that, Purchaser accepts for payment Shares
tendered by such stockholder as provided herein. All such powers of attorney and
proxies will be irrevocable and will be deemed granted in consideration of the
acceptance for payment by Purchaser of Shares tendered in accordance with the
terms of the Offer. Upon such appointment, all prior powers of attorney, proxies
and consents given by such stockholder with respect to such Shares (and any and
all Distributions) will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given by such
stockholder (and, if given, will not be deemed effective). The designees of
Parent will thereby be empowered to exercise all voting and other rights with
respect to such Shares (and any and all Distributions), including, without
limitation, in respect of any annual or special meeting of the Company's
stockholders (and any adjournment or postponement thereof), actions by written
consent in lieu of any such meeting or otherwise, as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper. Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's acceptance for payment of such Shares,
Purchaser must be able to exercise full voting, consent and other rights with
respect to such Shares (and any and all Distributions), including voting at any
meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser, in its sole discretion, which
determination will be final and binding. Purchaser reserves the absolute right
to reject any or all tenders of any Shares determined by it not to be in proper
form or the acceptance for payment of which, or payment for which, may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its sole discretion, subject to the provisions of the Merger
Agreement, to waive any defect or irregularity in any tender of Shares of any
particular stockholder, whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares will be deemed to
have been validly made until all defects or irregularities relating thereto have
been cured or waived. None of Purchaser, Parent, Berisford, 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. Subject to the terms of the
Merger Agreement, Purchaser's interpretation of the terms and conditions of the
Offer in this regard (including the Letter of Transmittal and the instructions
thereto) will be final and binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a $50 penalty on such stockholder and the Depositary may be required to
withhold 31% of any payment of cash to such stockholder pursuant to the Offer.
All stockholders surrendering Shares pursuant to the Offer should complete and
sign the Substitute Form W-9 included as part of the Letter of Transmittal to
provide the information and certification necessary to avoid backup withholding
(unless an applicable exemption exists and is proved in a manner satisfactory to
the Purchaser and the Depositary). Certain stockholders (including, among
others, all corporations and certain foreign individuals and entities) are not
subject to backup withholding. Noncorporate foreign stockholders should complete
and sign a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
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4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4 or as provided by applicable
law, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior to
the Expiration Date and, unless theretofore accepted for payment and paid for by
Purchaser pursuant to the Offer, may also be withdrawn at any time after
September 6, 1999.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal 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 holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical 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
delivered pursuant to the procedures for book-entry transfer as set forth in
Section 3, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility and otherwise comply with the
Book-Entry Transfer Facility's procedures.
Withdrawals of tendered Shares may not be rescinded, and any Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent,
Berisford, the Depositary, the Dealer Manager, 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.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES.
The following is a general discussion of certain United States Federal
income tax consequences of the receipt of cash by a holder of Shares pursuant to
the Offer or the Merger. Except as specifically noted, this discussion applies
only to U.S. holders.
A "U.S. Holder" means a holder of Shares that is (i) a citizen or resident
of the United States, (ii) a corporation or other entity taxable as a
corporation created or organized in or under the laws of the United States or
any political subdivision thereof or therein, (iii) an estate the income of
which is subject to United States Federal income taxation regardless of its
source, or (iv) a trust if (x) a court within the United States is able to
exercise primary supervision over the administration of the trust and (y) one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust. A "Non-U.S. Holder" is a holder of Shares that is not a
U.S. Holder.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for Federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for Federal income tax purposes, a U.S. Holder will recognize gain or loss equal
to the difference between the amount of cash received by the U.S. Holder
pursuant to the Offer or the Merger and the aggregate tax basis in the Shares
purchased pursuant to the Offer (or canceled pursuant to the Merger). Gain or
loss will be calculated separately for each block of Shares separately purchased
pursuant to the Offer (or canceled pursuant to the Merger).
Gain (or loss) will be capital gain (or loss), assuming that such Shares are
held as a capital asset. Capital gains of individuals, estates and trusts
generally are subject to a maximum Federal income tax rate
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of (i) 39.6% if, at the time Purchaser accepts the Shares for payment (or the
Shares are canceled pursuant to the Merger) the stockholder held the Shares for
not more than one year and (ii) 20% if the stockholder held such Shares for more
than one year at such time. Capital gains of corporations generally are taxed at
the Federal income tax rates applicable to corporate ordinary income. In
addition, under present law the ability to use capital losses to offset ordinary
income is limited.
A stockholder that tenders Shares pursuant to the Offer or surrenders Shares
pursuant to the Merger may be subject to backup withholding at 31% unless the
stockholder provides its TIN and certifies that such number is correct or
properly certifies that it is awaiting a TIN, or unless an exemption applies. A
stockholder that does not furnish its TIN may be subject to a $50 penalty
imposed by the IRS. See "--Backup Withholding" under Section 3.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon the filing of a Federal income tax return.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or with respect to holders of Shares who are subject to special tax
treatment under the Code, such as Non-U.S. Holders, life insurance companies,
tax-exempt organizations, financial institutions, dealers in securities or
currencies, persons who hold Shares as a position in a "straddle" or as part of
a "hedging" or "conversion" transaction and persons that have a functional
currency other than the U.S. dollar, and may not apply to a holder of Shares in
light of individual circumstances. Stockholders are urged to consult their own
tax advisors to determine the particular tax consequences to them (including the
application and effect of any state, local or foreign income and other tax laws)
of the Offer and the Merger.
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
The Shares are listed on the NYSE under the symbol SCT. The following table
sets forth, for each of the periods indicated, the range of high and low
reported last sales price per Share on the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Calendar Year Ended December 31, 1997
First Quarter......................................................... $ 29.375 $ 23.000
Second Quarter........................................................ 28.250 24.500
Third Quarter......................................................... 28.688 25.250
Fourth Quarter........................................................ 27.563 23.500
Calendar Year Ended December 31, 1998
First Quarter......................................................... $ 30.750 23.250
Second Quarter........................................................ 30.250 25.750
Third Quarter......................................................... 29.063 20.563
Fourth Quarter........................................................ 21.938 14.750
Calendar Year Ending December 31, 1999
First Quarter......................................................... $ 21.250 $ 16.750
Second Quarter........................................................ 22.250 17.125
Third Quarter (through July 8)........................................ 32.750 21.688
</TABLE>
On July 1, 1999, the last full trading day prior to the public announcement
of the execution of the Merger Agreement, the last reported closing sales price
of the Shares on the NYSE was $21.81 per Share. The Offer Price of $33.00
represents a 51.3% premium over this closing sales price. On July 8, 1999, the
last full trading day prior to the commencement of the Offer, the last reported
sales price of the Shares on
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the NYSE was $32.63 per Share. Stockholders are urged to obtain a current market
quotation for the Shares.
During the calendar years of 1997, 1998 and the first quarter of 1999 the
Company paid at the end of each quarter a cash dividend of $0.025. Except for
the payment of $0.025 quarterly dividend to be delivered and paid at customary
times, under the terms of the Merger Agreement, the Company is not permitted to
declare or pay dividends with respect to the Shares without the prior written
consent of Parent; Parent does not intend to consent to any such declaration or
payment.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS.
MARKET FOR THE SHARES. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by stockholders. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether it would cause future market prices to be greater or less
than the Offer Price.
NEW YORK STOCK EXCHANGE QUOTATION. Depending upon the number of Shares
purchased pursuant to the Offer, the Shares may no longer meet the requirements
of the NYSE for continued listing. According to the NYSE's published guidelines,
the NYSE would consider delisting the Shares, if among other things, the total
number of stockholders (including the holders of record and beneficial holders
of stock held in the name of NYSE member organizations) were to fall below 400,
or such number of total stockholders were to fall below 1,200 and the average
monthly trading volume of the Shares were to fall below 100,000, the number of
publicly held Shares (exclusive of management or other concentrated holdings)
were to fall below 600,000 or the aggregate market value of publicly held Shares
were not to exceed $8 million. In the Merger Agreement, the Company represented
that as of July 1, 1999 there were 10,627,875 Shares outstanding. According to
the Company, as of July 7, 1999, there were approximately 3,618 holders of
record of Shares. If, as a result of the purchase of Shares pursuant to the
Offer or otherwise, the Shares no longer meet the requirements of the NYSE for
continued listing and the Shares are no longer listed, the market for Shares
would be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges through the
Nasdaq National Market or other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of holders of Shares remaining at such time, the interests in maintaining
a market in Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act, as described below, and other
factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange, quoted on an automated inter-
dealer quotation system or held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit recovery provisions of
Section 16(b), the requirement of furnishing a proxy statement pursuant to
Section 14(a) in connection with stockholders' meetings and the related
requirement of furnishing an annual report to stockholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the
12
<PAGE>
Company to dispose of such securities pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
may be impaired or eliminated.
MARGIN REGULATIONS. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status 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 stock exchange 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. In addition, if registration of the
Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
Parent currently intends to seek delisting of the Shares from the NYSE and
the termination of the registration of the Shares under the Exchange Act as soon
after the completion of the Offer as the requirements for such delisting and
termination are met. If the NYSE listing and the Exchange Act registration of
the Shares are not terminated prior to the Merger, then the Shares will be
delisted from the NYSE and the registration of the Shares under the Exchange Act
will be terminated following the consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. According to the Company's Annual Report on Form 10-K for the
fiscal year ended January 3, 1999, the Company is a leading international
manufacturer and marketer of a diversified line of commercial refrigeration
products. The Company markets and sells its products to customers in the
foodservice and food retail industries. Customers in the foodservice industry
include restaurants, hotels, motels, soft-drink bottlers and brewers, and
customers in the food retail industry include supermarkets and convenience
stores. The Company was incorporated as a Delaware corporation in 1989 in
connection with Household International, Inc.'s ("Household") spin-off of its
commercial foodservice equipment operations. Effective April 14, 1989, the
Company became publicly traded on the NYSE and its operations ceased to be owned
by Household. The Company's principal executive offices are located at 820
Forest Edge Drive, Vernon Hills, Illinois 60061.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries, excerpted or derived from the
information contained in the Company's Annual Report on Form 10-K for the fiscal
year ended January 3, 1999, and its Quarterly Report on Form 10-Q for the fiscal
quarter ended April 4, 1999, each as filed with the Commission pursuant to the
Exchange Act.
More comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and other documents
and all of the financial information (including any related notes) contained
therein. Such reports, documents and financial information may be inspected and
copies may be obtained from the Commission in the manner set forth below under
"Available Information".
13
<PAGE>
SCOTSMAN INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA
<TABLE>
<CAPTION>
FOR FISCAL YEARS ENDED
------------------------------------------------
<S> <C> <C> <C>
JAN. 3, 1999 DEC. 28, 1997 DEC. 29, 1996
(I) (I) (I)
-------------- --------------- ---------------
Net sales...................................................... $ 633,044 $ 571,588 $ 356,373
Cost of sales.................................................. 474,679 429,598 257,942
Gross profit................................................... 158,365 141,990 98,431
Selling and administrative expenses............................ 93,945 83,071 58,135
Income from operations......................................... 64,420 58,919 40,296
Interest expense, net.......................................... 26,820 21,358 5,279
Income before income taxes..................................... 37,600 37,561 35,017
Income taxes................................................... 18,672 18,642 16,449
Income before extraordinary loss............................... 18,928 18,919 18,568
Extraordinary loss (net of income taxes of $422)............... -- (633) --
Net income..................................................... $ 18,928 $ 18,286 $ 18,568
Preferred stock dividends...................................... -- -- 813
Net income available to common shareholders.................... $ 18,928 $ 18,286 $ 17,755
Basic earnings per share (ii):
Income before extraordinary loss............................. $ 1.79 $ 1.79 $ 1.89
Extraordinary loss........................................... -- (0.06) --
Earnings per common share.................................... $ 1.79 $ 1.73 $ 1.89
Diluted earnings per share (iii):
Income before extraordinary loss............................. $ 1.76 $ 1.75 $ 1.73
Extraordinary loss........................................... -- (0.06) --
Earnings per common share.................................... $ 1.76 $ 1.69 $ 1.73
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
------------------------------
<S> <C> <C>
APR. 4, 1999 APR. 5, 1998
(I) (I)
-------------- --------------
Net sales......................................................................... $ 159,811 $ 152,215
Cost of sales..................................................................... 121,659 115,094
Gross profit...................................................................... $ 38,152 $ 37,121
Selling and administrative expenses............................................... 24,246 22,392
Amortization expense.............................................................. 2,092 1,841
Income from operations............................................................ $ 11,814 $ 12,888
Interest expense, net............................................................. 6,675 7,206
Income before income taxes........................................................ $ 5,139 $ 5,682
Income taxes...................................................................... 2,806 3,342
Income before minority interest................................................... $ 2,333 $ 2,340
Minority interest................................................................. (23)
Net income........................................................................ $ 2,310 $ 2,340
Basic EPS (ii):
Earnings per common share......................................................... $ 0.22 $ 0.22
Diluted EPS (iii):
Earnings per common share......................................................... $ 0.22 $ 0.22
</TABLE>
14
<PAGE>
BALANCE SHEET DATA
<TABLE>
<CAPTION>
AT JAN. 3, AT DEC. 28, AT APR. 4,
1999 1997 1999
-------------- --------------- --------------
<S> <C> <C> <C>
(I) (I) (I)
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C>
Current Assets:
Cash and temporary cash investments............................ $ 22,429 $ 24,085 $ 19,580
Trade accounts and notes receivable, net of allowances of
$5,214 in 1998 and $5,371 in 1997............................ 119,210 102,880 112,285
Inventories.................................................... 90,908 75,350 90,712
Deferred income taxes.......................................... 14,981 12,515 15,100
Other current assets........................................... 10,799 12,266 4,724
Total current assets......................................... 258,327 227,096 $ 242,401
Properties and equipment, net.................................. 99,463 86,762 98,568
Goodwill, net.................................................. 309,743 281,855 307,013
Deferred Income Taxes.......................................... -- -- 8,024
Other noncurrent assets........................................ 40,117 64,411 31,761
Total Assets................................................. $ 707,650 $ 660,124 $ 687,767
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt and current maturities of capitalized lease
obligations and long-term debt............................... $ 24,801 $ 29,519 $ 24,133
Trade accounts payable......................................... 54,985 44,889 47,915
Accrued income taxes........................................... 17,052 4,002 16,674
Accrued expenses............................................... 68,184 69,537 61,914
Total current liabilities.................................... 165,022 147,947 $ 150,636
Long-term debt and capitalized lease obligations................. 330,531 321,132 328,130
Deferred income taxes.......................................... 2,368 2,305 2,324
Other noncurrent liabilities................................... 41,858 46,086 40,995
Total Liabilities............................................ 539,779 517,470 $ 522,085
Minority Interest................................................ 7,338 -- 6,666
Shareholders' Equity:
Common stock, $.10 par value, authorized 50,000,000 shares;
issued 10,783,090 shares and 10,760,490 shares,
respectively................................................. 1,078 1,076 $ 1,080
Preferred stock, $1.00 par value, authorized 10,000,000 shares;
issued 0 shares.............................................. -- -- --
Additional paid in capital..................................... 74,200 73,639 74,376
Retained earnings.............................................. 97,134 79,266 99,179
Accumulated other comprehensive income......................... (10,167) (9,615) (13,813)
Less: Common stock held in treasury; 186,210 and 191,893
shares, respectively......................................... (1,712) (1,712) (1,806)
Total Shareholders' Equity................................... 160,533 142,654 $ 159,016
Total Liabilities and Shareholders' Equity................... $ 707,650 $ 660,124 $ 687,767
</TABLE>
- ------------------------
(i) The Company reports on a 52-53 week fiscal year ending on the Sunday nearest
to December 31. Fiscal year 1999 will have 52 weeks and the quarter ended
April 4, 1999 is a 13 week period. Fiscal year 1998 had 53 weeks and the
quarter ended April 5, 1998 was a 14 week period.
(ii) 'Basic' earnings per common share are computed by dividing net income
available to common shareholders by the weighted average number of common
shares outstanding: 10,590,081, 10,554,984, 9,398,016 for the fiscal years
ended January 3, 1999, December 28, 1997 and December 29, 1996,
respectively, and 10,601,516 and 10,575,923 for the three months ended April
4, 1999 and April 5, 1998, respectively.
(iii) 'Diluted' net income per share includes options, warrants and convertible
securities in the calculation. The total number of shares used in the
fully-diluted calculation for the fiscal years ended January 3, 1999,
December 28, 1997 and December 29, 1996, and the three months ended April 4,
1999, and April 5, 1998, were 10,763,089, 10,803,261, 10,708,879, 10,722,866
and 10,831,973, respectively.
15
<PAGE>
AVAILABLE INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their renumeration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13(th) Floor, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661.
Copies of such information should be obtainable, by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material should also be
available for inspection at the library of the NYSE, 20 Broad Street, New York,
NY 10005. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy and information
statements and other information may be found on the Commission's web site
address, http://www.sec.gov.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser, Parent and Berisford do not have
any knowledge that any such information is untrue, none of the Purchaser, Parent
or Berisford takes any responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy or any such information.
CERTAIN COMPANY PROJECTIONS. During the course of discussions between
representatives of Berisford and the Company, the Company provided Berisford or
its representatives with certain non-public business and financial information
about the Company including at least two sets of projected financial
information. During the course of the discussions, the Company updated projected
financial information previously provided to representatives of Berisford. The
following is a summary of the updated projected financial information for the
twelve months ending June 30, 2000 provided by the Company.
<TABLE>
<S> <C>
Net sales (in millions)............................................. $ 779.7
Earnings before interest and income taxes (in millions)............. 83.4
Earnings before interest, income taxes, depreciation and
amortization (in millions)........................................ 105.7
</TABLE>
Berisford, Parent and Purchaser did not rely on this information in
determining the Offer Price. The Company has advised the Purchaser, Parent and
Berisford that it does not as a matter of course make public any projections as
to future performance or earnings, and the projections set forth above are
included in this Offer to Purchase only because the information was provided to
Berisford. Such projections are based on the Company continuing to operate as an
independent company.
The projections were not prepared with a view to public disclosure or
compliance with the published guidelines of the Commission or the guidelines
established by the American Institute of Certified Public Accountants regarding
projections or forecasts. These forward looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from the projections. The Company's internal operating projections
are, in general, prepared solely for internal use and capital budgeting and
other management decisions and are subjective in many respects and thus
susceptible to various interpretations and periodic revision based on actual
experience and business developments. The projections were based on a number of
assumptions that are beyond the control of the Company, the Purchaser, Parent or
Berisford or their respective financial advisors, including economic forecasting
(both general and specific to the Company's business and industries), which is
inherently uncertain and
16
<PAGE>
subjective. Accordingly, there can be no assurance that the assumptions made in
preparing the projections will prove accurate, and actual results may be
materially different than those contained in the projections. None of the
Purchaser, Parent or Berisford or their respective financial advisors assumes
any responsibility for the accuracy of any of the projections. The inclusion of
the foregoing projections should not be regarded as an indication that the
Company, the Purchaser, Parent or Berisford or any other person who received
such information considers it an accurate prediction of future events and the
projections should not be relied upon as such. None of the Company, the
Purchaser, Parent or Berisford intends to update, revise or correct such
projections if they become inaccurate (even in the short term).
9. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT AND BERISFORD.
The Purchaser, a Delaware corporation, was recently incorporated for the
purpose of acquiring the Company and has not conducted any unrelated activities
since its incorporation. The principal executive office of the Purchaser is
located at 225 High Ridge Road, Stamford, CT 06905. All outstanding shares of
common stock of Purchaser are owned by Parent.
The principal executive office of Parent, a Delaware corporation and an
indirect wholly owned subsidiary of Berisford, is located at 225 High Ridge
Road, Stamford, CT 06905. All outstanding shares of common stock of Parent are
indirectly owned by Berisford.
Berisford is a public limited company organized under the laws of England
and Wales with its principal executive office at Washington House, 40-41 Conduit
Street, London, England W1R 9FB. Berisford is a holding company, owning two
principal businesses, Welbilt and Magnet. Magnet is a leading United Kingdom
manufacturer of kitchen furniture, doors, windows and bathroom products. Welbilt
is the leading North American supplier of cooking and warming equipment to the
global foodservice industry. Welbilt focuses on five primary market segments,
quick service and full service restaurant chains, hotels, institutional
customers and independent restaurant operators.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser, Parent and Berisford is set forth in
Schedule I hereto
Except as set forth in this Offer to Purchase, none of Purchaser, Parent or
Berisford or, to the best knowledge of Purchaser, Parent or Berisford, any of
the persons listed on Schedule I, or any associate or majority owned subsidiary
of any of the foregoing, beneficially owns or has a right to acquire any equity
security of the Company, including the Shares, and none of Purchaser, Parent,
Berisford or, to the best of knowledge of Purchaser, Parent or Berisford, any of
the persons or entities referred to above, or any of the respective executive
officers, directors or subsidiaries of any of the foregoing, has effected any
transaction in any equity security of the Company, including the Shares, during
the past sixty (60) days.
Except as set forth in this Offer to Purchase, none of Purchaser, Parent or
Berisford 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 Purchaser, Parent or
Berisford, or any of their respective affiliates, or, to the best knowledge of
Purchaser, Parent or Berisford, any of the persons listed on Schedule I, has
had, since January 1, 1996, any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that would be
required to be reported under the rules of the Commission. Except as set forth
in this Offer to Purchase, since January 1, 1996 there have been no contacts,
negotiations or transactions between Purchaser, Parent, Berisford or any of
their respective affiliates or, to the best knowledge of Purchaser, Parent or
Berisford, any of the persons listed on Schedule I, and the Company or its
affiliates concerning a merger, consolidation or acquisition, tender
17
<PAGE>
offer or other acquisition of securities, election of directors or a sale or
other transfer of a material amount of assets.
BERISFORD PLC
SELECTED CONSOLIDATED FINANCIAL DATA (1)
(IN MILLIONS)
Because the only consideration in the Offer and the Merger is cash and there
is no financing condition, each of Purchaser, Parent and Berisford believes the
financial condition of Berisford and its subsidiaries is not material to a
decision by a holder of Shares whether to sell, tender or hold Shares pursuant
to the Offer. Notwithstanding the foregoing, set forth below is certain summary
selected consolidated financial information with respect to Berisford. Berisford
publishes its financial statements in pounds sterling (L). The selected
consolidated financial data of Berisford and its subsidiaries set forth below
for the three 52 week periods ended September 26, 1998, have been derived from
the audited financial statements of Berisford ("Berisford's Audited
Statements"). The selected unaudited consolidated financial information of
Berisford for each of the twenty-six week periods ended March 27, 1999 and March
26, 1998 have been derived from the unaudited interim financial statements of
Berisford, but, in the opinion of its management, include all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
such information. The following summary is qualified in its entirety by
reference to Berisford's Audited Statements and the unaudited interim financial
statements and the related notes contained therein.
Berisford's Audited Statements have been prepared in accordance with United
Kingdom generally accepted accounting principles ("UK GAAP"), which practices
are described in the notes to such statements. UK GAAP differs in significant
respects from generally accepted accounting principles in the
18
<PAGE>
United States ("US GAAP"). The principal differences relevant to understanding
the Berisford financial statements are set forth below.
<TABLE>
<CAPTION>
FOR FISCAL YEARS ENDED
------------------------------------------------------------
<S> <C> <C> <C> <C>
SEPTEMBER 26, SEPTEMBER 26, SEPTEMBER 27, SEPTEMBER 28,
1998 1998 1997 1996
--------------- ------------- ------------- -------------
<CAPTION>
U.S. DOLLARS(1) POUNDS STERLING
--------------- -------------------------------------------
$M LM
<S> <C> <C> <C> <C>
Consolidated Profit and Loss Account Data:
Turnover(2)......................................... 1006.5 591.2 549.7 511.9
Operating profit (loss)............................. 101.8 59.8 45.1 36.4
Trading profit (loss)............................... 101.8 59.8 45.1 36.4
Profit before taxation:............................. 85.5 50.2 60.4 24.3
Profit for the financial year....................... 79.5 46.7 56.8 19.5
Total gains recognized in the Period................ 74.1 43.5 53.9 19.1
Consolidated Balance Sheet Data (at the end of
Period):
Cash at bank and in hand............................ 66.4 39.0 57.8 120.1
Current assets excluding cash....................... 348.7 204.8 178.5 179.5
Fixed assets........................................ 160.4 94.2 101.8 107.7
Current liabilities................................. (310.4) (182.3) (152.5) (151.4)
Other liabilities................................... (416.1) (244.4) (250.9) (353.0)
Capital, reserves and minorities.................... (151.0) (88.7) (65.3) (97.1)
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED FOR
-----------------------------------------
<S> <C> <C> <C>
MARCH 27, MARCH 27, MARCH 28,
1999 1999 1998
--------------- ----------- -----------
<CAPTION>
U.S. DOLLARS(1) POUNDS STERLING
--------------- ------------------------
$M LM
<S> <C> <C> <C>
Consolidated Profit and Loss Account Data:
Turnover(2)............................................................... 520.8 321.5 291.3
Operating profit (loss)................................................... 50.9 31.4 26.3
Trading profit (loss)..................................................... 53.1 32.8 26.3
Profit before taxation:................................................... 43.4 26.8 21.7
Profit for the financial year............................................. 40.5 25.0 20.4
Total gains recognized in the Period...................................... 43.6 26.9 16.2
Consolidated Balance Sheet Data (at the end of Period):
Cash at bank and in hand.................................................. 67.6 41.7 68.0
Current assets excluding cash............................................. 335.0 206.8 173.7
Fixed assets.............................................................. 168.8 104.2 94.1
Current liabilities....................................................... (277.7) (171.4) (145.4)
Other liabilities......................................................... (402.7) (248.6) (244.1)
Capital, reserves and minorities.......................................... (109.0) (67.3) (53.7)
</TABLE>
- ------------------------
(1) Pounds Sterling are translated into U.S. Dollars on the basis of the
exchange rate published in the FINANCIAL TIMES for September 26, 1998 of
L1.00=U.S. $1.7025. On March 27, 1999, the exchange rate published in the
FINANCIAL TIMES was L1.00=U.S. $1.62. On July 8, 1999, the exchange rate
published in the FINANCIAL TIMES was L1.00=U.S. $1.56.
(2) Turnover comprises the sum of sales, net receivable and other trading
income, after eliminating intra-group transactions. Turnover does not
include value-added tax.
19
<PAGE>
DIFFERENCES BETWEEN UK GAAP AND US GAAP
While the following is not a comprehensive summary of all differences
between UK GAAP and US GAAP, other differences are unlikely to have a
significant effect on the consolidated income or shareholder's equity of
Berisford.
GOODWILL AND US PURCHASE ACCOUNTING. Under US GAAP and UK GAAP, purchase
consideration in respect of subsidiaries acquired is allocated on the basis of
appraised values to the various net assets of the subsidiaries at the dates of
acquisition and any net balance is treated as goodwill. Prior to September 26,
1998 and in accordance with UK GAAP at that time, Berisford fully wrote off
goodwill arising on acquisitions against shareholders' equity. Since that date,
in accordance with a change in UK GAAP, Berisford has capitalized goodwill over
a period of 20 years. Goodwill previously written off has not been reinstated.
ORDINARY DIVIDENDS. Under UK GAAP, final ordinary dividends are provided
for in the fiscal year in respect of which they are recommended by the Board of
Directors for approval by the shareholders. Under US GAAP, such dividends are
not provided for until declared by the Board of Directors.
10. SOURCES AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required by Purchaser
to consummate the Offer and the Merger, including the fees and expenses of the
Offer and the Merger, is estimated to be approximately $391 million. In
addition, Berisford intends to cause the refinancing of the borrowings of
approximately $348 million of Scotsman and its subsidiaries, as described in
Section 12, at a premium of approximately $11 million. Purchaser will obtain all
such funds from Parent in the form of capital contributions and/or loans. Parent
and Berisford will obtain such funds primarily from bank financing. Parent and
Berisford have received commitments from Barclays Bank PLC ("Barclays") and
National Westminster Bank Plc ("NatWest"; collectively, the "Banks") to provide
approximately $900 million in financing.
Berisford and Parent obtained a Joint Commitment Letter and related
Term-Sheet (collectively, the "Commitment Letter") from the Banks pursuant to
which the Banks have committed (the "Commitment") to provide a $600,000,000 term
acquisition facility (the "Term Facility") and a $300,000,000 revolving facility
(the "Revolving Credit Facility; the Term Facility and the Revolving Credit
Facility, collectively, the "Facilities") the proceeds of which are to be
utilized to finance the cost of the Offer and Merger and related expenses, the
refinancing of certain of the indebtedness of Berisford, the Company and their
respective subsidiaries, working capital and other corporate purposes. The
Facilities will be secured by a pledge of 100% of the capital stock of all U.S.
subsidiaries of Berisford, including, after the consummation of the Merger, the
Company, be guaranteed by Berisford, to the extent Berisford is not the direct
borrower thereof, and be guaranteed by all of Berisford's Material Subsidiaries
(as defined in the Commitment Letter). In connection with the Facilities,
Berisford will be obligated to comply with certain financial covenants, the
breach of which will constitute a default with respect to the Facilities.
Barclays committed to provide 50% of the Facilities and NatWest committed to
provide 50% of the Facilities. Barclays and NatWest intend to syndicate the
Facilities.
The Commitment Letters provide that the final maturity date of the
Facilities is five (5) years from the date of the signing of the Facility
Agreement. The Facilities will bear interest, at Parent's option, (a) at the
rate of interest the higher of (i) the prime rate announced by Barclays for U.S.
dollar loans and (ii) a rate equal to 0.5% above the weighted average of the
overnight Federal funds rate, plus a rate 1% lower than the applicable
Euro-Dollar Margin (initially 1.50%) but in no event less than zero; or (b) at
the reserve adjusted Euro-Dollar Rate plus the applicable Euro-Dollar Margin,
which shall initially be 1.50%, plus (in the case of Sterling advances) certain
mandatory costs.
The Commitment is subject to, among other matters, the following conditions:
(i) there not occurring or becoming known to the Banks any material adverse
change in or affecting the business, property,
20
<PAGE>
financial condition of either (A) Berisford and its subsidiaries taken as a
whole or (B) the Company and its subsidiaries taken as a whole; (ii) the Banks
not becoming aware after the date of the Commitment Letter of any material
information or matter affecting Berisford, the Company or their respective
subsidiaries which is inconsistent in a material and adverse manner with any
material information or matter previously disclosed to the Banks; (iii) the
negotiation, execution and delivery of definitive documentation; (iv) other
customary conditions; (v) not less than a majority of the Shares having been
acquired by Purchaser pursuant to the Tender Offer (or such higher percentage of
the capital stock of the Company that is required in order to, without the
affirmative vote of any other shareholder (a) permit the consummation of the
Merger and (b) immediately appoint a majority of the Company Board as is
required to approve the Merger); and (vi) the receipt of all due diligence
reports as required by the Banks.
Copies of the Commitment Letters have been filed as an exhibit to the
Schedule 14D-1. Reference is made to such exhibit for a more complete
description of the terms and conditions of the Commitment Letters. When the
definitive documentation with respect to the Facilities is executed, copies of
such definitive documentation will be filed as exhibits to the Schedule 14D-1.
It is anticipated that borrowing under the Facilities will be repaid from
funds generated internally by Berisford and its subsidiaries or other sources,
which may include proceeds from bank borrowings or the sale of debt or equity
securities or some combination thereof. Neither Berisford nor Parent has made
any decisions concerning such repayment and will determine the actual source of
funds for such repayments only after the completion of its review of the Company
and its analysis of then prevailing market conditions, including interest rates
and other economic conditions.
11.BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; MERGER
AGREEMENT.
CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER.
In January 1998, Richard C. Osborne, the Chairman of the Board, President
and Chief Executive Officer of the Company, contacted Andrew F. Roake, the Chief
Executive Officer of Parent to express the Company's interest in pursuing an
acquisition of the ice machine business of Berisford. The Company and Parent
executed a confidentiality agreement and the Company received certain
confidential information regarding the business. The Company eventually made an
offer to purchase the business, which offer was not accepted by Berisford.
From time to time in 1998 Mr. Osborne had various telephone conversations
and other discussions at industry trade shows and similar events with Mr. Roake
regarding possible cooperative arrangements between the companies, such as
possible marketing alliances. On November 12, 1998 Mr. Osborne met in London
with Mr. Alan J. Bowkett, who was at that time the Chief Executive Officer of
Berisford, to discuss aspects of a possible marketing alliance and their
respective views of strategies and industry direction.
On November 13, 1998, Schroders met with Mr. Roake and one of his financial
officers to discuss strategic alternatives for Parent and the possible
combination of Berisford and the Company.
On March 11, 1999 Mr. Osborne met with Messrs. Bowkett and Roake in New York
to further discuss potential relationships between the companies. At this
meeting Messrs. Bowkett and Roake indicated that Berisford was interested in
pursuing a possible business combination with the Company and discussed on a
preliminary basis alternative transaction structures, including a possible
acquisition of the Company and a preliminary indication of the price which might
be offered in any possible transaction.
On April 29, 1999 the Company and Berisford executed a confidentiality and
standstill agreement.
On April 30, 1999 Mr. Osborne and Donald D. Holmes, the Vice
President-Finance and Secretary of the Company met outside Birmingham, England
with Mr. Bowkett and Mr. Jonathan Findler, the finance director of Berisford, to
continue the earlier preliminary discussions. Mr. Osborne provided limited
financial information regarding the Company.
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On May 13, 1999 Mr. Osborne and representatives of Morgan Stanley had
various conversations with Mr. David Williams, the Chief Executive Officer of
Berisford and Mr. Roake and representatives of Schroders. In these conversations
they communicated the authorization of the Company Board of Directors (the
"Company Board") and the required basis for continuing discussions, including
the ability of Parent to reach a specified price in excess of the Offer Price
upon completion of due diligence and definitive documentation. Counsel for the
Company provided to counsel for Berisford an outline of certain provisions to be
included in a merger agreement which counsel for the Company indicated that they
believed would provide the Company with a basis for negotiating with Berisford
without first seeking alternative proposals. Berisford indicated that it could
substantially agree in concept to such provisions.
Beginning the week of May 24, 1999, the Company and its counsel made
available to representatives of Berisford a data room of confidential
information and senior management of the Company met with and reviewed with
representatives of Berisford the Company's businesses and results of operations.
Those results indicated that the preliminary estimated operating results for the
Company's quarter ending July 4, 1999 (the "Second Quarter") would likely be
below prior forecasts previously provided to Berisford.
During the week of May 31, 1999 representatives of Berisford and Schroders
continued their due diligence investigation of the Company. In addition, during
that week the Company gathered further information about the preliminary
estimated operating results for the Second Quarter and the projected results of
operations beyond the Second Quarter from the managers of the Company's
principal operating units. Representatives of Berisford confirmed that they
continued to be interested in an acquisition of the Company, but that in light
of those preliminary estimated operating results and Berisford's analysis of
certain contractual obligations of the Company, they might not be able to
achieve the previously indicated price, which was above the Offer Price.
On June 3, 1999 counsel for Berisford delivered to counsel for the Company a
draft merger agreement. Counsel for the Company and Berisford negotiated various
issues relating to the draft merger agreement over the next four weeks.
During the week of June 7, 1999 representatives of Berisford and Schroders
continued their due diligence investigation of the Company.
On June 9, 1999 the Company provided to representatives of Berisford updated
preliminary estimated operating results for the Second Quarter and beyond. On
June 11, 1999, representatives of Schroders indicated to representatives of
Morgan Stanley that Berisford continued to be committed to an acquisition of the
Company but that, in light of the preliminary estimated operating results for
the Second Quarter and beyond, Berisford was not prepared to offer the price
previously indicated, but that they wished to meet with additional members of
management to further discuss the estimated and projected results of operations.
On June 11, 1999 and thereafter representatives of Morgan Stanley contacted
representatives of Schroders to advise them of the Company Board's determination
to continue discussions and to seek a specified price above the Offer Price. On
June 14, 1999 representatives of Schroders indicated that Berisford was prepared
to recommend the price specified by the Board but that Berisford needed
additional information and reiterated Berisford's request for further due
diligence, including meetings with additional members of management and visits
to the Company's principal manufacturing facilities.
On June 15, 1999 counsel for the Company provided to counsel for Berisford
further comments on the draft merger agreement and over the following few days
Mr. Osborne and representatives of Morgan Stanley communicated to
representatives of Berisford and Schroders that the Company would consider their
requests for further due diligence based on the responses to those comments.
On June 18, 1999 counsel for Berisford provided to counsel for the Company
revised sections of the draft merger agreement and as a result Mr. Osborne and
representatives of Morgan Stanley contacted representatives of Berisford and
Schroders to inform them that in light of those revisions the Company would
permit the meetings with additional members of management of the Company.
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On June 21 and June 22, 1999 a series of due diligence meetings were held
between members of the Company's management (including the managers of the
Company's principal business units) and Morgan Stanley and representatives of
Berisford, Schroders and Berisford's accountants.
On June 23 and June 24, 1999 various conversations occurred between
representatives of Morgan Stanley and Schroders. The representatives of
Schroders indicated that Berisford's financial analysis had been completed, that
its financing was in place and that Berisford was willing to offer a specified
price below the Offer Price, subject to satisfactory negotiation of the
remaining outstanding issues on the merger agreement and visits to the Company's
principal manufacturing facilities.
On June 24 and June 25, 1999 Mr. Osborne and representatives of Morgan
Stanley had further conversations and negotiations with representatives of
Berisford and Schroders in an attempt to elicit a higher offer. On June 25,
1999, representatives of Schroders informed representatives of Morgan Stanley
that Berisford was prepared to offer $33 per Share in the transaction, subject
to negotiation of the remaining outstanding issues in the merger agreement and
Berisford's visits to the Company's principal manufacturing facilities.
From June 28 to June 30, 1999 representatives of Berisford visited the
principal manufacturing facilities of the Company and representatives of
Berisford and counsel for Berisford completed their due diligence review of the
Company.
From June 29 to July 1, 1999 the parties concluded their negotiation of the
draft merger agreement and reviewed and finalized a draft joint press release to
announce the transaction.
During the evening of July 1, 1999, the Company, Parent, the Purchaser and
Berisford executed the Merger Agreement.
The transaction was publicly announced on July 2, 1999 prior to the opening
of trading on the New York and London Stock Exchanges.
PURPOSE OF THE OFFER AND THE MERGER.
The purpose of the Offer and the Merger is to enable Parent to acquire
control of, and the entire equity interest in, the Company. The Offer is being
made pursuant to the Merger Agreement and is intended to increase the likelihood
that the Merger will be effected. The purpose of the Merger is to acquire all of
the outstanding Shares not purchased pursuant to the Offer.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
This summary is not a complete description of the terms and conditions of the
Merger Agreement and is qualified in its entirety by reference to the full text
of the Merger Agreement, which is incorporated herein by reference and a copy of
which has been filed with the Commission as an exhibit to the Schedule 14D-1.
Unless otherwise defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Merger Agreement. The Merger Agreement may be
examined, and copies obtained, in the manner set forth in Section 8 of this
Offer to Purchase.
THE OFFER. The Merger Agreement provides for the making of the Offer as
provided in this Offer to Purchase.
THE COMPANY BOARD. The Merger Agreement provides that promptly after the
purchase of and payment for any Shares by Purchaser or any of its affiliates as
a result of which Purchaser and its affiliates own beneficially at least a
majority of the then outstanding Shares, Parent shall be entitled, to the extent
permitted by law, to designate such number of directors, rounded up to the next
whole number, on the Company Board, subject to compliance with Section 14(f) of
the Exchange Act, as is equal to the product of the total number of directors on
such Board (giving effect to the increase in the size of such Board) multiplied
by the percentage that the number of Shares beneficially owned by Purchaser
(including Shares so accepted for payment) bears to the total number of Shares
then outstanding. In furtherance thereof, the
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Company shall, upon request of Parent, use its best efforts promptly either to
increase the size of the Company Board or to secure the resignations of such
number of its incumbent directors, or both, as is necessary to enable such
designees of Parent to be so elected or appointed to the Company Board, and the
Company shall take all reasonable actions available to the Company to cause such
designees of Parent to be so elected or appointed. At such time, the Company
shall, if requested by Parent, also take all action necessary to cause persons
designated by Parent to constitute at least the same percentage (rounded up to
the next whole number) as is on the Company Board of (i) each committee of the
Company Board, (ii) each board of directors (or similar body) of each subsidiary
of the Company and (iii) each committee (or similar body) of each such board.
The Merger Agreement provides that, notwithstanding the foregoing, the
parties thereto shall use their respective reasonable best efforts to ensure
that at least three of the members of the Board shall, at all times prior to the
Effective Time, be Continuing Directors (as defined below) and PROVIDED, that,
in such event, if the number of Continuing Directors shall be reduced below
three for any reason whatsoever, the remaining Continuing Directors shall, to
the fullest extent permitted by law, designate a person to fill such vacancy who
shall be deemed to be a Continuing Director for purposes of the Merger Agreement
or, if no Continuing Directors then remain, the other directors shall designate
three persons to fill such vacancies who shall not be officers or affiliates of
the Company or any of its subsidiaries, or officers or affiliates of Parent or
any of its subsidiaries, and such persons shall be deemed to be Continuing
Directors for purposes of the Merger Agreement. From and after the time, if any,
that Parent's designees constitute a majority of the Company Board, any
amendment, modification or waiver of any term or condition of the Merger
Agreement, any amendment to the Certificate of Incorporation or By-Laws, any
termination of the Merger Agreement by the Company, any extension of time for
performance of any of the obligations of Parent or Purchaser under the Merger
Agreement, any waiver of any condition to the Company's obligations under the
Merger Agreement or any waiver or assertion of the Company's rights under the
Merger Agreement or other action by the Company under the Merger Agreement may
be effected only by the action of a majority of the Continuing Directors of the
Company, which action shall be deemed to constitute the action of the full
Company Board; provided, that if there shall be no Continuing Directors such
actions may be effected by a majority vote of the entire Company Board;
provided, further, that, if there be no such Continuing Directors, Purchaser
shall not decrease the Merger Consideration or change the form of Merger
Consideration. The term "Continuing Directors" means (i) any member of the
Company Board as of the date of the Merger Agreement or (ii) any successor of a
Continuing Director who is (A) unaffiliated with, and not a designee or nominee
of, Parent or Purchaser and (B) recommended to succeed a Continuing Director by
a majority of the Continuing Directors then on the Company Board, and in each
case under clauses (i) and (ii), who is not an employee of the Company.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof and in accordance with the DGCL, Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser will thereupon cease, and the Company will be the surviving
corporation in the Merger. At the Effective Time of the Merger, each Share then
outstanding, other than Shares held by (i) the Company or any of its
subsidiaries (other than by Benefit Plans (as defined in the Merger Agreement)),
(ii) Parent or any of its subsidiaries including Purchaser (other than shares
owned by any employee benefit plan of Parent, Purchaser or any subsidiary of
Parent or Purchaser) and (iii) stockholders who properly perfect their
dissenters' rights under the DGCL, will be converted into the right to receive
$33.00 in cash or any higher price per Share paid in the Offer, without
interest.
OPTIONS. The Merger Agreement provides that at or immediately prior to the
Effective Time, each then outstanding Option, whether or not then vested or
exercisable, shall be cancelled by the Company. In consideration of such
cancellation of Options with an exercise price of less than the Offer Price, the
Company (or, at Parent's option, the Purchaser) shall pay to the holders of such
Options an amount in respect thereof equal to the product of (A) the excess of
the Offer Price over the exercise price of each such Option and (B) the number
of Shares previously subject to the Option immediately prior to its cancellation
(such payment to be net of withholding taxes and without interest). The amounts
payable
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pursuant to this paragraph shall be paid as soon as practicable following the
Closing Date (as defined in the Merger Agreement).
The Merger Agreement provides that the Company shall take all actions
necessary and appropriate so that all stock option or other equity based plans
maintained with respect to the Shares ("Option Plans"), shall terminate as of
the Effective Time and the provisions in any other benefit plan providing for
the issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be deleted as of
the Effective Time, and the Company shall ensure that following the Effective
Time no holder of an Option or any participant in any Option Plan shall have any
right thereunder to acquire any capital stock of the Company, Parent, Purchaser
or the Surviving Corporation (as defined in the Merger Agreement). In addition,
the Company has agreed to obtain all necessary consents from, and mail any
required notices to, holders of Options and take all lawful action as is
necessary to give effect to the foregoing.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things, corporate organization, subsidiaries, capital
stock, options to acquire Shares, authority to enter into the Merger Agreement,
required consents, no conflicts between the Merger Agreement and applicable laws
and certain agreements to which the Company or its assets may be subject,
financial statements, filings with the Commission, disclosures in proxy
statement and tender offer documents, absence of certain changes or events,
litigation, absence of changes in benefit plans, employee benefit plans, tax
matters, no excess non-deductible payments, compliance with applicable laws,
environmental matters, intellectual property, material contracts, labor and
employment matters, product liability, applicability of state takeover statutes,
votes required to approve the Merger Agreement, brokers' and finders' fees,
receipt of the Financial Advisor Opinion, Year 2000 and absence of questionable
payments.
In the Merger Agreement, each of Parent and Purchaser has made customary
representations and warranties to the Company with respect to, among other
things, corporate organization, authority to enter into the Merger Agreement,
required consents, no conflicts between the Merger Agreement and the certificate
of incorporation and by-laws of Parent and Purchaser or laws applicable to
Parent or Purchaser, disclosures in proxy statement and tender offer documents,
prior activities by Purchaser, brokers' and finders' fees and financing.
INTERIM OPERATIONS. The Merger Agreement provides that after the date of
the Merger Agreement and prior to the time the designees of Parent have been
elected to or appointed to, and shall constitute a majority of, the Company
Board pursuant to the applicable provisions of the Merger Agreement, and except
(i) as expressly contemplated by the Merger Agreement, (ii) as set forth in the
applicable section of a disclosure schedule delivered by the Company to Parent
on or prior to the execution of the Merger Agreement (the "Company Disclosure
Schedule") or (iii) as agreed in writing by Parent (which agreement shall not be
unreasonably withheld or delayed):
(a) the Company shall and shall cause its subsidiaries to in all material
respects carry on their respective businesses in the ordinary course;
(b) the Company shall and shall cause its subsidiaries to use all reasonable
efforts to preserve intact their current business organizations, keep available
the services of their current officers and key employees and preserve their
relationships consistent with past practice with customers, suppliers,
licensors, licensees, distributors and others having business dealings with them
to the end that their goodwill and ongoing businesses shall be unimpaired in all
material respects at the Effective Time;
(c) neither the Company nor any of its subsidiaries shall, directly or
indirectly, amend its Certificate of Incorporation or By-laws or similar
organizational documents;
(d) neither the Company nor any of its subsidiaries shall: (i)(A) declare,
set aside or pay any dividend or other distribution payable in cash, stock or
property with respect to the Company's capital stock or that of its
subsidiaries, except for quarterly dividends on Shares of up to $0.025 per share
to be declared and
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paid at customary times and except that a wholly-owned subsidiary of the Company
may declare and pay a dividend or make advances to its parent or the Company or
(B) redeem, purchase or otherwise acquire directly or indirectly any of the
Company's capital stock or that of its subsidiaries; (ii) issue, sell, pledge,
dispose of or encumber any additional shares of, or securities convertible into
or exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of capital stock of any class of the Company or its
subsidiaries, other than Shares issued upon the exercise of Options in
accordance with the Option Plans as in effect on the date of the Merger
Agreement; or (iii) split, combine or reclassify the outstanding capital stock
of the Company or of any of its subsidiaries;
(e) except as permitted by the Merger Agreement, neither the Company nor any
of its subsidiaries shall acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof
(including entities which are subsidiaries of the Company or any of its
subsidiaries) or (ii) any assets, including real estate, except acquisitions in
the ordinary course of business consistent with past practice;
(f) neither the Company nor any of its subsidiaries shall make any new
capital expenditure or expenditures, other than the specific capital
expenditures disclosed and set forth in the applicable section of the Company
Disclosure Schedule and capital expenditures not to exceed $1 million in the
aggregate;
(g) neither the Company nor any of its subsidiaries shall, except in the
ordinary course of business and except as otherwise permitted by the Merger
Agreement, amend or terminate any material contract where such amendment or
termination would reasonably be expected to have a material adverse effect on
the business, properties, assets, prospects, financial condition or results of
operations of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"), or waive, release or assign any material rights or claims;
(h) neither the Company nor any of its subsidiaries shall transfer, lease,
license, sell, mortgage, pledge, dispose of, or encumber any property or assets
other than in the ordinary course of business and consistent with past practice;
(i) neither the Company nor any of its subsidiaries shall: (i) enter into
any employment or severance agreement with or grant any severance or termination
pay to any officer, director or key employee of the Company or any its
subsidiaries except as required by the terms of any plan, agreement or
arrangement in effect on the date of the Merger Agreement or to comply with
applicable law or, with respect to employment agreements, except in the ordinary
course of business and as approved by the Purchaser (which approval will not be
unreasonably withheld); or (ii) hire or agree to hire any new officer or, other
than in the ordinary course of business, consistent with past practice, hire or
agree to hire any additional employees;
(j) neither the Company nor any of its subsidiaries shall, except as
required to comply with applicable law or existing agreements or Benefit Plans
or expressly provided in the Merger Agreement, (i) adopt, enter into, terminate,
amend or increase the amount or accelerate the payment or vesting of any benefit
or award or amount payable under any benefit plan or other arrangement for the
current or future benefit or welfare of any director, officer or current or
former employee, except to the extent necessary to coordinate any such benefit
plans with the terms of the Merger Agreement or other than with respect to
employees in the ordinary course of business, (ii) increase in any respect the
compensation or fringe benefits of, or pay any bonus to, any director, officer
or employee or other than with respect to employees in the ordinary course of
business, (iii) pay any benefit not provided for under any benefit plan, (iv)
grant any awards under any bonus, incentive, performance or other compensation
plan or arrangement or benefit plan (including the grant of stock options, stock
appreciation rights, stock-based or stock-related awards, performance units or
restricted stock, or the removal of existing restrictions in any benefit plans
or agreements or awards made thereunder) or (v) take any action to fund or in
any other way secure the payment of compensation or benefits under any employee
plan, agreement, contract or arrangement or benefit plan;
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(k) neither the Company nor any of its subsidiaries shall: (i) except in the
ordinary course of business and in an aggregate amount not to exceed $8 million,
incur or assume any additional long-term debt or any additional short-term
indebtedness; (ii) incur or modify any material indebtedness or other liability
except as set forth on the applicable section of the Company Disclosure
Schedule; (iii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person, except in the ordinary course of business and consistent with
past practice; (iv) make any loans, advances or capital contributions to, or
investments in, any other person (other than to wholly owned subsidiaries of the
Company or customary loans or advances to employees in the ordinary course of
business consistent with past practice); (v) settle any material claims other
than in the ordinary course of business, in accordance with past practice and
without admission of liability; or (vi) enter into any material commitment or
transaction except in the ordinary course of business consistent with past
practice;
(l) neither the Company nor any of its subsidiaries shall change any of the
accounting principles used by it unless required by U.S. GAAP;
(m) neither the Company nor any of its subsidiaries shall make or change any
tax election, amend any tax return, change an annual tax accounting period,
adopt or change any method of tax accounting, enter into any closing agreement,
settle or compromise any tax claim or assessment, surrender any right to claim a
tax refund, consent to any extension or waiver of the limitations period
applicable to any tax claim or assessment or take or omit to take any other
action relating to taxes except in the ordinary course of business consistent
with past practice;
(n) neither the Company nor any of its subsidiaries shall pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction of any such claims, liabilities or obligations in the
ordinary course of business and consistent with past practice, of claims,
liabilities or obligations reflected or reserved against in, or contemplated by,
the most relevant consolidated financial statements (or the notes thereto) of
the Company and its consolidated subsidiaries included in the Company SEC
Documents (as defined in the Merger Agreement); or except in the ordinary course
of business consistent with past practice, waive the benefits of, or agree to
modify in any material respect, any confidentiality, standstill or similar
agreement to which the Company or any of its subsidiaries is a party unless the
Company Board determines in good faith, after consultation with outside counsel,
that it would be required consistent with its fiduciary responsibilities to the
Company's stockholders under applicable law;
(o) neither the Company nor any of its subsidiaries shall (by action or
inaction) amend, renew, terminate or cause to be extended any material lease,
agreement or arrangement relating to any of the leased properties or enter into
any material lease, agreement or arrangement with respect to real property; and
(p) neither the Company nor any of its subsidiaries will enter into an
agreement, contract, commitment or arrangement to do any of the foregoing, or to
authorize, recommend, propose or announce an intention to do any of the
foregoing.
STOCKHOLDERS' MEETING. If required by applicable law in order to consummate
the Merger, the Company, acting through the Company Board, shall, in accordance
with applicable law, its Certificate of Incorporation and By-laws: (i) as
promptly as practicable following the acceptance for payment and purchase of
Shares by Purchaser pursuant to the Offer, duly call, give notice of, convene
and hold a special meeting of its stockholders (the "Special Meeting") for the
purposes of considering and taking action upon the approval of the Merger and
the approval and adoption of the Merger Agreement and use its reasonable best
efforts to obtain the necessary approvals of the Merger and the Merger Agreement
by its stockholders; (ii) prepare and file with the Commission a preliminary
proxy or information statement relating to the Merger and the Merger Agreement;
(iii) obtain and furnish the information required to be included in the Proxy
Statement (as defined below) and, after consultation with Parent, respond
promptly to any comments made by the Commission with respect to the preliminary
proxy or information statement and cause a definitive proxy or information
statement, including any amendment or supplement thereto
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(the "Proxy Statement") to be mailed to its stockholders at the earliest
practicable date; provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with Parent and its
counsel; and (iv) unless the Merger Agreement has been terminated in accordance
with the provisions of the section summarized under "Termination" below, subject
to its rights pursuant to the section summarized under "No Solicitation" below,
include in the Proxy Statement the recommendation of the Company Board that
stockholders of the Company vote in favor of the approval of the Merger and the
approval and adoption of the Merger Agreement. Parent has agreed to vote, or
cause to be voted, all of the Shares then owned by it, Purchaser or any of its
other subsidiaries in favor of the approval of the Merger and the approval and
adoption of the Merger Agreement.
BERISFORD SHAREHOLDER APPROVAL. The Merger Agreement provides that
Berisford will, as soon as practicable following the date of the Merger
Agreement, duly call, give notice of, convene and hold a meeting of shareholders
for the purpose of obtaining the Berisford Shareholder Approval. The Merger
Agreement provides that Berisford will, through its Board of Directors,
recommend to its shareholders approval of the transactions contemplated by the
Merger Agreement, shall use all reasonable efforts to solicit and obtain such
approval by its shareholders and shall not withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to the Company such
recommendation. Berisford has agreed to be bound by the provisions of the Merger
Agreement specified in this paragraph.
NO SOLICITATION. Pursuant to the Merger Agreement, the Company has agreed
that it shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its officers, directors, authorized representatives
or authorized agents to, directly or indirectly, (i) solicit, initiate or
knowingly encourage (including by way of furnishing non-public information) any
inquiries or the making of any proposal which constitutes, or may reasonably be
expected to lead to, any Takeover Proposal or (ii) participate in any
discussions or negotiations regarding any Takeover Proposal; PROVIDED, HOWEVER,
that if, at any time prior to the acceptance for payment of Shares pursuant to
the Offer, the Company Board determines in good faith, after consultation with
outside counsel, that to do so would be required consistent with its fiduciary
responsibilities to the Company's stockholders under applicable law, the Company
may, in response to a Takeover Proposal, which was not solicited subsequent to
the date hereof, (x) furnish information with respect to the Company to any
person pursuant to a customary confidentiality agreement (as determined by the
Company) and (y) participate in negotiations regarding such Takeover Proposal.
For purposes of the Merger Agreement, "Takeover Proposal" means any inquiry,
proposal or offer from any person relating to any direct or indirect acquisition
or purchase of 20% or more of the assets of the Company and its subsidiaries or
20% or more of the Shares then outstanding, any tender offer or exchange offer
that if consummated would result in any person beneficially owning 20% or more
of the Shares then outstanding, and any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement. Upon execution of the Merger Agreement,
the Company was obligated to immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
Pursuant to the Merger Agreement, except as set forth in this paragraph,
neither the Company Board nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by such Company Board or such committee
of the Offer, the Merger or the Merger Agreement; PROVIDED, HOWEVER, that, the
Company Board may, at any time prior to the consummation of the Offer, modify or
withdraw such recommendation of the Company Board if the Company Board
determines in good faith, after consultation with outside counsel, that it would
be required consistent with its fiduciary responsibilities to the stockholders
of the Company to so modify or withdraw such recommendation (regardless of
existence of a Superior Proposal at such time); PROVIDED, HOWEVER, that, unless
the Merger Agreement shall have been terminated, any such modification or
withdrawal shall not prevent Parent and Purchaser, in its or their discretion,
from consummating the Offer and shall not affect any of the actions required to
be taken by the Company pursuant to the Merger Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Takeover
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Proposal or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement (each,
an "Acquisition Agreement") related to any Takeover Proposal. Notwithstanding
the foregoing, if the Company has received a Superior Proposal, the Company
Board may (x) withdraw or modify its approval or recommendation of the Offer,
the Merger and the Merger Agreement or (y) approve or recommend a Superior
Proposal or, subject to the provisions described in clause (c)(i) of the
paragraph beginning with the heading TERMINATION, terminate the Merger Agreement
(and concurrently with or after such termination, if it so chooses, cause the
Company to enter into an Acquisition Agreement with respect to any Superior
Proposal). For purposes of the Merger Agreement, a "Superior Proposal" means any
bona fide proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, a majority or more of the
Shares then outstanding or all or substantially all the assets of the Company
and otherwise on terms which the Company determines in its good faith judgment
(after consultation with a financial advisor of nationally recognized
reputation, such as Morgan Stanley) to be more favorable to the Company's
stockholders than the Offer and the Merger.
INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that all
rights to indemnification or exculpation, existing in favor of a director,
officer, employee or agent (an "Indemnified Party") of the Company or any of its
subsidiaries (including, without limitation, rights relating to advancement of
expenses and indemnification rights to which such persons are entitled because
they are serving as a director, officer, agent or employee of another entity at
the request of the Company or any of its subsidiaries), as provided in the
Company's Certificate of Incorporation or By-laws or any indemnification
agreement, in each case, as in effect on the date of the Merger Agreement, and
relating to actions or events through the Effective Time, shall survive the
Merger and shall continue in full force and effect, without any amendment
thereto; PROVIDED, HOWEVER, that the Surviving Corporation shall not be required
to indemnify any Indemnified Party in connection with any proceeding (or portion
thereof) to the extent involving any claim initiated by such Indemnified Party
unless the initiation of such proceeding (or portion thereof) was authorized by
the Company Board or unless such proceeding is brought by an Indemnified Party
to enforce rights under this paragraph; PROVIDED FURTHER that any determination
required to be made with respect to whether an Indemnified Party's conduct
complies with the standards set forth under the DGCL, the Company's Certificate
of Incorporation or By-laws or any such agreement, as the case may be, shall be
made by independent legal counsel selected by Parent and reasonably acceptable
to the Indemnified Party (who has not performed services for Parent or its
affiliates within the last three years); and PROVIDED FURTHER that nothing in
this paragraph shall impair any rights of any Indemnified Party. Without
limiting the generality of the preceding sentence, in the event that any
Indemnified Party becomes involved in any actual or threatened action, suit,
claim, proceeding or investigation after the Effective Time, Parent shall, or
shall cause the Surviving Corporation to, promptly advance to such Indemnified
Party his or her legal and other expenses (including the cost of any
investigation and preparation in connection therewith), subject to the providing
by such Indemnified Party of an undertaking to reimburse all amounts so advanced
in the event of a non-appealable determination of a court of competent
jurisdiction that such Indemnified Party is not entitled thereto.
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The Merger Agreement provides that for a period of six years after the
Effective Time, Parent shall cause the Surviving Corporation to maintain in
effect directors' and officers' liability insurance covering those persons who
are currently covered by the Company's directors' and officers' liability
insurance policy on terms (including the amounts of coverage and the amounts of
deductibles, if any) that are no less favorable to such persons than the terms
now applicable to them under the Company's current policies; PROVIDED, HOWEVER
that, in no event shall Parent or the Surviving Corporation be required to
expend in excess of 200% of the annual premium currently paid by the Company for
such coverage; and provided further that, if the premium for such coverage
exceeds such amount, Parent or the Surviving Corporation shall purchase a policy
with the greatest coverage available for such 200% of the annual premium.
CONDITIONS TO THE MERGER. The respective obligations of Parent and
Purchaser, on the one hand, and the Company, on the other hand, to effect the
Merger are subject to the satisfaction of each of the following conditions, any
and all of which may be waived in whole or in part by the Company, Parent or
Purchaser, as the case may be, to the extent permitted by applicable law: (i)
the Merger Agreement and the Merger shall have been approved and adopted by the
requisite vote of the holders of Shares, if required by applicable law and the
Certificate of Incorporation, in order to consummate the Merger; (ii) no
statute, rule, regulation, order, decree or injunction shall have been enacted,
promulgated or issued by any Governmental Entity (as defined below) precluding,
restraining, enjoining or prohibiting consummation of the Merger PROVIDED that
each of the parties shall have used commercially reasonable efforts to prevent
the entry of any such order, decree or injunction and to appeal as promptly as
possible any order, decree or injunction that may be entered; and (iii) Parent,
Purchaser or their affiliates shall have purchased Shares pursuant to the Offer.
The term "Governmental Entity" means any (i) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (ii) federal, state,
local, municipal, foreign or other government; (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal); or (iv)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature.
TERMINATION. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after
approval of matters presented in connection with the Merger by the stockholders
of the Company:
a. By the mutual written consent of Parent and the Company; PROVIDED,
HOWEVER, THAT if Parent shall have a majority of the directors pursuant
to the applicable provisions of the Merger Agreement, such consent of the
Company may only be given if approved by the Continuing Directors.
b. By either of Parent or the Company if (i) a statute, rule or executive
order shall have been enacted, entered or promulgated prohibiting the
transactions contemplated by the Merger Agreement on the terms
contemplated by the Merger Agreement or (ii) any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
(which order, decree, ruling or other action the parties to the Merger
Agreement shall use their reasonable 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;
PROVIDED, HOWEVER, that the right to terminate the Merger Agreement
pursuant to this paragraph (a) shall not be available to any party who
has not used its commercially reasonable efforts to cause such order,
decree, ruling or other action to be lifted.
c. By either Parent or the Company if (i) as a result of the failure of any
of the conditions set forth in Section 14 hereof (other than the Minimum
Condition) the Offer shall have terminated or expired in accordance with
its terms without Purchaser having accepted for payment any Shares
pursuant to the Offer or (ii) Purchaser shall have, consistent with its
obligations hereunder, failed to pay for the Shares prior to the date 120
days after the date of the Merger Agreement (the
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"OUTSIDE DATE"); PROVIDED, HOWEVER, that the right to terminate this
Agreement described in this paragraph (c) shall not be available to any
party whose failure to perform any of its obligations under this
Agreement results in the failure of any such condition or if the failure
of such condition results from facts or circumstances that constitute a
breach of any representation or warranty under the Merger Agreement by
such party; or
d. By the Company: (i) if the Company Board determines in good faith that a
Takeover Proposal constitutes a Superior Proposal or has approved or
recommended a Superior Proposal in accordance with the applicable
provisions of the Merger Agreement; PROVIDED, HOWEVER, that the Company
is not in material breach of the applicable provisions of the Merger
Agreement, and that the Company simultaneously terminates the Merger
Agreement and makes simultaneous payment to the Parent of the Termination
Fee as specified in the applicable provisions of the Merger Agreement; or
(ii) if Parent, Purchaser or any of their affiliates shall have failed to
commence the Offer on the fifth business day following the date of the
initial public announcement of the Offer; (iii) if there shall be a
material breach by Parent or Purchaser of any of their representations,
warranties, covenants or agreements contained in the Merger Agreement
which breach cannot or has not been cured within 15 days after the giving
of written notice to Parent, and which has had or is reasonably likely to
materially impair the ability of Purchaser or Parent to consummate the
transactions contemplated by the Merger Agreement or (iv) if (A) the
Berisford Shareholder Condition shall not have been satisfied within 30
days after the date of the Merger Agreement or (B) Berisford's Board of
Directors shall have withdrawn or modified or changed in a manner adverse
to the Company its approval or recommendation of the Offer, the Merger or
the Merger Agreement.
e. By Parent or Purchaser: (i) if prior to the purchase of the Shares
pursuant to the Offer, the Company Board shall have withdrawn, or
modified or changed in a manner adverse to Parent or Purchaser, its
approval or recommendation of the Offer, the Merger Agreement or the
Merger or shall have recommended or approved a Takeover Proposal; or (ii)
prior to the purchase of Shares pursuant to the Offer, in the event of a
breach by the Company of any representation, warranty, covenant or other
agreement contained in the Merger Agreement which (a) would give rise to
the failure of a condition set forth in paragraph (d) of Section 14 and
(b) cannot be or has not been cured within 15 days after the giving of
written notice to the Company; or (iii) any Person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act), other than Parent,
Purchaser or their affiliates or any group of which any of them is a
member, shall have acquired or announced its intention to acquire
beneficial ownership (as determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the Shares; or (iv) if the
Company receives a Takeover Proposal from any person (other than Parent
or Purchaser), and the Company Board takes a neutral position or makes no
recommendation with respect to such Takeover Proposal after a reasonable
amount of time (and in no event more than ten business days following
such receipt) has elapsed for the Company Board to review and make a
recommendation with respect to such Takeover Proposal.
TERMINATION FEE; EXPENSES. Pursuant to the Merger Agreement, if (x) Parent
or Purchaser terminates the Merger Agreement pursuant to the provisions of the
Merger Agreement described in clauses (e)(i) or (e)(iv) under the heading
"Termination" above or (y) the Company terminates the Merger Agreement pursuant
to the provisions of the Merger Agreement described in clause (d)(i) under the
heading "Termination" above, then in each case, the Company shall pay, or cause
to be paid to Parent, at the time of such termination, an amount equal to $15.6
million (the "Termination Fee").
In addition, if the Merger Agreement is terminated by either Parent or the
Company pursuant to the provisions of the Merger Agreement described in clause
(c) above under the heading "Termination" above (except by reason of such a
termination at a time when the conditions in clauses (ii), (iii) or (iv) of the
first
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paragraph of Section 14 or paragraphs (a), (b), (c) or (f) of Section 14 have
not been satisfied) at any time when there is pending a Takeover Proposal, and
at the time of any such termination, Parent is not in material breach of the
Merger Agreement, and if, within 9 months after any termination referred to in
this paragraph, the Company shall enter into an Acquisition Agreement with
respect to a Takeover Proposal or any person (other than Parent or its
affiliates) shall acquire a majority of the outstanding Shares, then the Company
shall pay the Termination Fee concurrently with entering into any such agreement
or, if sooner, within one day after such acquisition. Any payments required to
be made pursuant to this paragraph shall be made by wire transfer of same day
funds to an account designated by Parent.
CONFIDENTIALITY AGREEMENT.
Pursuant to a Confidentiality Agreement dated as of April 29, 1999 (the
"Confidentiality Agreement"), Berisford agreed to keep confidential certain
information provided by the Company. The Confidentiality Agreement also contains
customary non-solicitation and standstill provisions.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
If, as and to the extent that Purchaser acquires control of the Company,
Parent and Purchaser intend to conduct a review of the Company and its assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel and to consider and determine what, if any, changes
would be desirable in light of the circumstances which then exist. Subsequent to
the consummation of the Merger, Berisford believes that the consolidated
Berisford group, including Senate, will be able to realize annual cost savings
of approximately $16 million (L10 million) within two years. These cost savings
will be derived principally from the elimination of duplicated head office
costs, increased purchasing power and the rationalization of manufacturing
facilities and distribution channels.
The Merger Agreement provides that, promptly after the purchase of and
payment for any Shares by Purchaser or any of its affiliates as a result of
which Purchaser and its affiliates own beneficially at least a majority of the
then outstanding Shares, Parent shall be entitled, to the extent permitted by
law, to designate such number of directors, rounded up to the next whole number,
on the Company Board, subject to compliance with Section 14(f) of the Exchange
Act, as is equal to the product of the total number of directors on such board
multiplied by the percentage that the number of Shares beneficially owned by
Purchaser bears to the total number of Shares then outstanding. See Section 11.
Assuming the Minimum Condition is satisfied and Purchaser purchases Shares
pursuant to the Offer, Parent intends to promptly exercise such rights and
require the Company to elect or appoint to the Company Board its designees from
among Messrs. David W. Williams, Andrew F. Roake, Jonathan Findler, David
Hooper, Patrick M. Clark and Roger H. Kissam. Information with respect to such
directors is contained in Schedule I hereto and in the Information Statement
required by Rule 14f-1 under the Exchange Act included as Schedule I to the
Schedule 14D-9. The Merger Agreement provides that the directors of Purchaser
and the officers of the Company at the Effective Time of the Merger will, from
and after the Effective Time, be the initial directors and officers,
respectively, of the Surviving Corporation.
Purchaser or an affiliate of Purchaser may, following the consummation of
the Offer, seek to acquire additional Shares through open market purchases,
privately negotiated transactions, a tender offer or exchange offer or
otherwise, upon such terms and at such prices as it shall determine, which may
be more or less than the price to be paid pursuant to the Offer. Purchaser and
its affiliates also reserve the right to dispose of any or all Shares acquired
by them, subject to the terms of the Merger Agreement.
Purchaser intends to commence a tender offer and consent solicitation with
regard to the 8 5/8% Senior Subordinated Notes due 2007 (the "Notes") of
Scotsman Group, Inc., a wholly owned subsidiary of the Company, which are
guaranteed by the Company. The consent solicitation will seek consents to
eliminate
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substantially all of the covenants of the Notes. The tender offer for the Notes
will be conditioned upon, among other things, the consummation of the Offer.
Parent intends to cause the Company to refinance amounts outstanding as of
the closing of the Offer under the Credit Agreement, dated March 12, 1997, as
amended, among Scotsman Group, Inc., the Borrowers as named therein, the Lenders
as named therein and The First National Bank of Chicago, as Agent, from amounts
to be made available to Parent pursuant to the Facilities.
Except as disclosed in this Offer to Purchase neither Parent nor Purchaser
has any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation, relocation
of operations, or sale or transfer of a material amount of assets, involving the
Company or any of its subsidiaries, or any material changes in the Company's
capitalization, corporate structure, business or composition of its management
or the Company Board.
STOCKHOLDER APPROVAL. Under the DGCL, the approval of the Company Board and
the affirmative vote of the holders of a majority of the outstanding Shares are
required to adopt and approve the Merger Agreement and the transactions
contemplated thereby. The Company has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval of the Merger Agreement by the
Company's stockholders in accordance with the DGCL. In addition, the Company has
represented that the affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of the holders of any class or series of the
Company's capital stock which is necessary to approve the Merger Agreement and
the transactions contemplated thereby, including the Merger. Therefore, unless
the Merger is consummated pursuant to the short-form merger provisions under the
DGCL described below (in which case no further corporate action by the
stockholders of the Company will be required to complete the Merger), the only
remaining required corporate action of the Company to approve the Merger
Agreement and consummate the Merger will be the approval of the Merger Agreement
and the transactions contemplated thereby by the affirmative vote of the holders
of a majority of the Shares. The Merger Agreement provides that Parent will
vote, or cause to be voted, all of the Shares then owned by Parent or Purchaser
or any of Parent's other subsidiaries in favor of the approval of the Merger and
the adoption of the Merger Agreement. In the event that Parent, Purchaser, and
any of Parent's other subsidiaries acquire in the aggregate at least a majority
of the Shares entitled to vote on the approval of the Merger and the Merger
Agreement, they would have the ability to approve the Merger Agreement and
effect the Merger without the affirmative votes of any other stockholders.
SHORT-FORM MERGER. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the event
that Parent, Purchaser and any of their respective subsidiaries acquire in the
aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the Company Board or the stockholders of the
Company, subject to compliance with the provisions of Section 253 of the DGCL.
In the Merger Agreement, Parent, Purchaser and the Company have agreed that,
notwithstanding that all conditions to the Offer are satisfied or waived as of
the scheduled Expiration Date, Purchaser may extend the Offer for a period not
to exceed 5 business days, subject to certain conditions, if the Shares validly
tendered and not withdrawn pursuant to the Offer equal more than 75% but less
than 90% of the outstanding Shares. Even if Parent and Purchaser do not own 90%
of the outstanding Shares following consummation of the Offer, Parent and
Purchaser could seek to purchase additional shares in the open market or
otherwise in order to reach the 90% threshold and employ a short-form merger.
The per share consideration paid for any Shares so acquired may be greater
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or less than that paid in the Offer. Parent presently intends to effect a
short-form merger if permitted to do so under the DGCL.
APPRAISAL RIGHTS. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of the
Shares at the Effective Time will have certain rights pursuant to the provisions
of Section 262 of the DGCL including the right to dissent and demand appraisal
of, and to receive payment in cash of the fair value of, their Shares. Under
Section 262 of the DGCL, dissenting stockholders of the Company who comply with
the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could be based upon factors other than, or in addition to, the price
per Share to be paid in the Merger or the market value of the Shares. The value
so determined could be more or less than the price per Share to be paid in the
Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE
DGCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE
UNDER THE DGCL. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
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 in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one year following
consummation of the Offer and in the Merger stockholders would receive the same
price per Share as paid in the Offer. If Rule 13e-3 were applicable to the
Merger, it would require, 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 a transaction, be filed with the Commission and disclosed to minority
stockholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that from July 1, 1999
until such time as the designees of Parent have been elected to, and shall
constitute a majority of, the Company Board, without the prior written consent
of Parent, neither the Company nor any of its subsidiaries shall: (i)(A)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to the Company's capital stock or that of its
subsidiaries, except for quarterly dividends on Shares of up to $0.025 per share
to be declared and paid at customary times and except that a wholly owned
subsidiary of the Company may declare and pay a dividend or make advances to its
parent or the Company or (B) redeem, purchase or otherwise acquire directly or
indirectly any of the Company's capital stock or that of its subsidiaries; (ii)
issue, sell, pledge, dispose of or encumber any additional shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its subsidiaries, other than Shares issued upon the
exercise of Options outstanding on July 1, 1999 in accordance with the Option
Plans as in effect on July 1, 1999; or (iii) split, combine or reclassify the
outstanding capital stock of the Company or of any of the subsidiaries of the
Company.
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14. CONDITIONS TO THE OFFER.
Notwithstanding any other provision of the Offer, but subject, in all cases,
to Parent's and Purchaser's obligations set forth under the Merger Agreement,
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule14e-1(c) under
the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer) pay for
any tendered Shares, unless (i) the Minimum Condition has been met, (ii) any
applicable waiting period under the HSR Act shall have expired or been
terminated and any consent required from a foreign Governmental Entity has been
obtained, where the failure to obtain such consent would reasonably be expected
to have a Material Adverse Effect on the Company or Parent, (iii) the Berisford
Shareholder Condition shall have been met, and (iv) approval under any
applicable European antitrust law applicable to the purchase of Shares pursuant
to the Offer has been obtained where the failure to obtain such approval would
reasonably be expected to have a Material Adverse Effect on the Company or
Parent. Furthermore, notwithstanding any other term of the Offer, but subject,
in all cases, to Parent's and Purchaser's obligations set forth under the Merger
Agreement, Purchaser shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate the Offer at any time 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 Parent or any of its Subsidiaries
that constitutes a breach of the Merger Agreement):
a. there shall be threatened or pending by a Governmental Entity any suit,
action or proceeding (i) seeking to prohibit or impose any material
limitations on Parent's or Purchaser's ownership or operation (or that of
any of their respective subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets, taken as a whole,
(ii) seeking to compel Parent or Purchaser or their respective
subsidiaries and affiliates to dispose of or hold separate any material
portion of the business or assets of the Company or Parent and their
respective subsidiaries, in each case taken as a whole, as a result of
the Offer or the transactions contemplated by the Merger Agreement, (iii)
challenging the acquisition by Parent or Purchaser of any Shares pursuant
to the Offer, (iv) seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Merger Agreement, (v) seeking to
obtain from the Company any damages that would reasonably be expected to
have a Material Adverse Effect on the Company, (vi) seeking to impose
material limitations on the ability of Purchaser, or rendering Purchaser
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, (vii) seeking to impose
material limitations on the ability of Purchaser or Parent effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders or (viii) which
otherwise would reasonably be expected to have a Material Adverse Effect
on the Company or, as a result of the Offer or the Merger, Parent and its
subsidiaries;
b. there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, by any Governmental Entity, other than the
application to the Offer or the Merger of applicable waiting periods
under the HSR Act, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(viii) of paragraph (a) above;
c. there shall have occurred after the commencement of the Offer and
continued to exist for not less than three business days (i) any general
suspension of trading in, or limitation on prices for, securities on the
New York or London Stock Exchanges (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges
not related to market conditions and excluding any coordinated trading
halt triggered as a result of a specified decrease in a market index),
(ii) a declaration of a banking moratorium or any suspension of payments
in
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respect of banks in the United Kingdom or United States, (iii) the
commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United Kingdom or
United States, (iv) any limitation (whether or not mandatory) by any
United States governmental authority or agency that has a material
adverse effect generally on the extension of credit by banks or other
financial institutions which in any case would reasonably be expected to
have as a Material Adverse Effect on the Company or materially adversely
affect Parent's or Purchaser's ability to complete the Offer and the
Merger;
d. the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct in each case at the date
of the Merger Agreement and at the date of consummation of the Offer as
though made on or as of such date (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and correct
as of such date or with respect to such period) or the Company shall have
breached or failed to perform or comply with any obligation, agreement or
covenant required by the Merger Agreement to be performed or complied
with by it except, in each case where the failure of such representations
and warranties to be true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth
therein), or the failure to perform or comply with such obligations,
agreements or covenants, do not, individually or in the aggregate, have a
Material Adverse Effect on the Company or a materially adverse effect on
the ability of the Company, Parent or Purchaser to consummate the Offer
or the Merger;
e. the Company Board (i) shall have withdrawn, or modified or changed in a
manner adverse to Parent or Purchaser (including by amendment of the
Schedule 14D-9) its recommendation of the Offer, the Merger Agreement or
the Merger, (ii) shall have recommended a Takeover Proposal, or (iii)
shall have adopted any resolution to effect any of the foregoing;
f. any Person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act), other than Parent, Purchaser or their affiliates or any
group of which any of them is a member, shall have acquired or announced
its intention to acquire beneficial ownership (as determined pursuant to
Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the
Shares; or
g. the Merger Agreement shall have been terminated in accordance with its
terms;
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may, subject to the terms of the Merger Agreement, be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time, in the sole
discretion of Parent or Purchaser. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
15. CERTAIN LEGAL MATTERS.
GENERAL. Except as described in this Section 15, based on information
provided by the Company and the publicly available information concerning the
Company, neither Purchaser nor Parent nor Berisford is aware of any license or
regulatory permit that appears to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
acquisition of Shares by Parent or Purchaser pursuant to the Offer, the Merger
or otherwise or any approval or other action by any governmental, administrative
or regulatory agency or authority, domestic or foreign, that would be required
prior to the acquisition of Shares by Purchaser pursuant to the Offer, the
Merger or otherwise. Should any such approval or other action be required,
Purchaser, Parent and Berisford presently contemplate that such approval or
other action will be sought, except as described below under "State
Anti-takeover Statutes." While, except as otherwise described in this Offer to
Purchase, Purchaser does not presently intend to delay the acceptance for
payment of, or payment for, Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
36
<PAGE>
other action, if needed, would be obtained or would be obtained without
substantial conditions or that failure to obtain any such approval or other
action might not result in consequences adverse to the Company's business or
that certain parts of the Company's business might not have to be disposed of,
or other substantial conditions complied with, in the event that such approvals
were not obtained or such other actions were not taken or in order to obtain any
such approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, Purchaser could decline to accept for
payment, or pay for, any Shares tendered. See Section 14 for certain conditions
to the Offer, including conditions with respect to governmental actions.
STATE ANTI-TAKEOVER STATUTES. Section 203 of the DGCL, in general,
prohibits a Delaware corporation, such as the Company, from engaging in a
"Business Combination" (defined as a variety of transactions, including mergers)
with an "Interested Stockholder" (defined generally as a person that is the
beneficial owner of 15% or more of the outstanding voting stock of the subject
corporation) for a period of three years following the date that such person
became an Interested Stockholder unless, prior to the date such person became an
Interested Stockholder, the board of directors of the corporation approved
either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder. The provisions of Section 203 of
the DGCL are not applicable to any of the transactions contemplated by the
Merger Agreement, including the Offer, since the Merger Agreement and the
transactions contemplated thereby, including the Offer, were approved by the
Company Board prior to the execution thereof.
A number of states have adopted laws and regulations that purport to apply
to attempts to acquire corporations that are incorporated in such states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices or principal places of business in such states. In Edgar v. MITE Corp.,
the Supreme Court of the United States (the "Supreme Court") invalidated on
constitutional grounds the Illinois Business Takeover statute, which, as a
matter of state securities law, made certain corporate acquisitions more
difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
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 acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the state and were incorporated there.
Parent, Purchaser and Berisford do not believe that the anti-takeover laws
and regulations of any state other than the State of Delaware will by their
terms apply to the Offer, and, except as set forth above with respect to Section
203 of the DGCL, neither Parent, Purchaser nor Berisford has attempted to comply
with any state anti-takeover statute or regulation. Purchaser reserves the right
to challenge the applicability or validity of any state law purportedly
applicable to the Offer and nothing in this Offer to Purchase or any action
taken in connection with the Offer is intended as a waiver of such right. If it
is asserted that any state anti-takeover statute is applicable to the Offer and
an appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, Purchaser might be required to file certain information
with, or to receive approvals from, the relevant state authorities, and
Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer or may be delayed in consummating the Offer. In such case,
Purchaser may not be obligated to accept for payment, or pay for, any Shares
tendered pursuant to the Offer. See Section 14.
ANTITRUST. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC")
and certain waiting period requirements have been satisfied.
37
<PAGE>
Parent and the Company intend to promptly file their Notification and Report
Forms with respect to the Offer under the HSR Act. The waiting period under the
HSR Act with respect to the Offer will expire at 11:59 p.m., New York City time,
on the fifteenth day after the date Parent's form is filed unless early
termination of the waiting period is granted. However, the DOJ or the FTC may
extend the waiting period by requesting additional information or documentary
material from Parent or the Company. If such a request is made, such waiting
period will expire at 11:59 p.m., New York City time, on the tenth day after
substantial compliance by Parent with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized by
the HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of Parent. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the DOJ or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. The Purchaser will not accept for payment Shares tendered
pursuant to the Offer unless and until the waiting period requirements imposed
by the HSR Act with respect to the Offer have been satisfied. See Section 14.
The FTC and the DOJ frequently scrutinize the legality under the Antitrust
Laws of transactions such as Purchaser's acquisition of Shares pursuant to the
Offer and the Merger. At any time before or after Purchaser's acquisition of
Shares, the DOJ or the FTC could take such action under the Antitrust Laws as it
deems necessary or desirable in the public interest, including seeking to enjoin
the acquisition of Shares pursuant to the Offer or otherwise seeking divestiture
of Shares acquired by Purchaser or divestiture of substantial assets of Parent
or its subsidiaries. Private parties, as well as state governments, may also
bring legal action under the Antitrust Laws under certain circumstances. Based
upon an examination of information provided by the Company relating to the
businesses in which Parent and the Company are engaged, Parent and Purchaser
believe that the acquisition of Shares by Purchaser will not violate the
Antitrust Laws. Nevertheless, there can be no assurance that a challenge to the
Offer or other acquisition of Shares by Purchaser on antitrust grounds will not
be made or, if such a challenge is made, of the result. See Section 14 for
certain conditions to the Offer, including conditions with respect to litigation
and certain government actions.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
FILING IN AUSTRALIA UNDER THE FOREIGN ACQUISITIONS & TAKEOVERS ACT 1975
(CTH) (THE "FOREIGN ACQUISITIONS ACT").
The Foreign Acquisitions Act governs acquisitions by a foreign person of
shares, amongst other things, in an Australian corporation (whether direct or
indirect). Under the Foreign Acquisitions Act if the Treasurer of the Foreign
Investment Review Board ("FIRB") is notified of the transaction in advance and
does not respond with an objection to the transaction within the period of 40
days from notification, (subject to any extension of time) he is deemed to give
his consent to the acquisition.
Accordingly, on July 6, 1999, Berisford made an application under the
Foreign Acquisition Act to the Treasurer of the FIRB notifying him of the terms
of the Offer and the Merger and requesting his consent to the Merger, whereby
the Company is to acquire the Purchaser, which would result in a change in
ownership of Austral Refrigeration Pty. Limited, a corporation incorporated in
Australia and an indirect majority owned subsidiary of the Company. It is
submitted in the application to the Treasurer that the Merger and the Offer are
not contrary to Australia's national interests in accordance with the criteria
as set out in the FIRB guidelines. Berisford will seek to obtain the consent of
the Treasurer prior to the initial scheduled Expiration Date.
38
<PAGE>
FILING IN IRELAND UNDER MERGERS AND TAKEOVERS (CONTROL) ACTS, 1978 TO 1996
("THE ACT")
The Act provides that a merger must be notified to the Minister for
Enterprise, Trade and Employment ("Minister") where, in the most recent
financial year, either, for each of at least two of the parties involved in the
merger, the value of the gross assets is not less than IRL10 million or the
turnover is not less than IRL20 million. Neither threshold is limited to Ireland
under the Act. According to the Act the Merger satisfies the thresholds and
needs to be notified to the Minister. According to current administrative
practice, the Minister may be willing to confirm that there is no jurisdiction
under the Act if neither the value of the Company's Irish gross assets nor its
Irish turnover exceeds the respective thresholds.
Accordingly, as neither the value of the Company's Irish gross assets nor
its Irish turnover exceeds the thresholds under the Act, Berisford will write to
the Minister asking for confirmation that she does not consider the Merger to be
notifiable under the Act and that accordingly she does not intend to make an
Order under Section 9 of the Act in relation to the Merger.
OTHER FOREIGN LAWS.
Parent, Berisford and the Company conduct operations in a number of
jurisdictions where other regulatory filings or approvals may be required or
advisable in connection with the completion of the Offer or the Merger. Parent,
Purchaser and Berisford are currently in the process of reviewing whether other
filings or approvals may be required or desirable in other jurisdictions which
may be material to Berisford, Parent, Purchaser or the Company. Parent,
Purchaser, Berisford and the Company may not complete some of such filings or
obtain some of such approvals (which may not as a matter of practice be required
to be obtained prior to effectiveness of a merger transaction or the closing of
the Offer) prior to the effective time of the Merger or the consummation or the
Offer.
FEDERAL RESERVE BOARD REGULATIONS. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. All financing for the Offer
will be in full compliance with the Margin Regulations.
OTHER LAWS.
Exon-Florio Act. The Exon-Florio Act applies to all acquisitions proposed or
pending on or after August 23, 1988, by or with foreign persons which could
result in foreign control of persons engaged in interstate commerce in the
United States. The Exon-Florio Act empowers the President of the United States
to prohibit or suspend mergers, acquisitions or takeovers by or with foreign
persons if the President finds, after investigation, credible evidence that the
foreign person might take action that threatens to impair the national security
of the United States and that other provisions of existing law do not provide
adequate and appropriate authority to protect the national security.
The President has designated CFIUS as the agency authorized under the
Exon-Florio Act to receive notices and other information and to conduct a review
process which consists of a determination whether an investigation should be
undertaken and making any such investigation. Any determination by CFIUS that an
investigation is called for must be made within thirty days after its acceptance
of written notification concerning a proposed transaction. In the event that
CFIUS determines to undertake an investigation, such investigation must be
completed within forty-five days after such determination. Upon completion or
termination of any such investigation, CFIUS must report to the President and
present its recommendation. The President then has fifteen days in which to
suspend or prohibit the proposed transaction or to seek other appropriate
relief. In order for the President to exercise his authority to suspend or
prohibit a proposed transactions, the President must make two findings: (i) that
there is credible evidence that leads the President to believe that the foreign
interest exercising control might take
39
<PAGE>
action that threatens to impair national security and (ii) that provisions of
law other than the Exon-Florio Act and the International Emergency Economic
Powers Act do not in the President's judgment provide adequate and appropriate
authority for the President to protect the national security in connection with
the acquisition. Such findings are not subject to judicial review. If the
President makes such findings, he may take action for such time as he considers
appropriate to suspend or prohibit the relevant acquisition. The President may
direct the Attorney General to seek appropriate relief, including divestment
relief, in the District Courts of the United States in order to implement and
enforce the Exon-Florio Act. The Exon-Florio Act does not obligate the parties
to a proposed acquisition to notify CFIUS of a proposed transaction. However, if
notice of a proposed acquisition is not submitted to CFIUS, then the transaction
remains indefinitely subject to review by the President under the Exon-Florio
Act, unless it is determined that CFIUS does not have jurisdiction over the
transaction.
The Purchaser and the Company will make a filing under the Exon-Florio Act.
There can be no assurance that CFIUS will not determine to conduct an
investigation of the proposed acquisition of the Company and, if an
investigation is commenced, there can be no assurance regarding the outcome of
such investigation. If the results of such investigation are adverse to the
Purchaser, the Purchaser is not obligated to accept for payment or pay for any
Shares tendered pursuant to the Offer.
16. FEES AND EXPENSES.
Schroder & Co. Inc. is serving as Dealer Manager in connection with the
Offer and is providing certain financial advisory services to Purchaser, Parent
and Berisford in connection with the Offer and the Merger. Parent has agreed to
pay financial advisory fees of $1.35 million to Schroder & Co. Inc. In addition,
Parent has also agreed to pay an additional fee of approximately $6 million for
such services should a transaction between Parent and the Company be
consummated. Parent has also agreed to reimburse Schroder & Co. Inc. for its
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel and any other advisor retained by Schroder & Co. Inc. in connection with
its engagement and to indemnify Schroder & Co. Inc. and certain related persons
against certain losses, claims, damages, liabilities and actions and certain
expenses related thereto, including certain liabilities and expenses under the
Federal securities laws.
In the ordinary course of its business, Schroder & Co. Inc. engages in
securities trading, market-making and brokerage activities and may, at any time,
hold long or short positions and may trade or otherwise effect transactions in
securities of the Company.
Purchaser, Parent and Berisford have retained D.F. King & Co., Inc. to serve
as the Information Agent and the Harris Trust Company of New York to serve as
the Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by personal interview, mail, telephone, telex, telegraph and
other methods of electronic communication and may request brokers, dealers,
commercial banks, trust companies and other nominees to forward the Offer
materials to beneficial holders. The Information Agent and the Depositary will
each receive reasonable and customary compensation for their services, be
reimbursed for certain reasonable out-of-pocket expenses and be indemnified
against certain liabilities in connection with their services, including certain
liabilities and expenses under the federal securities laws.
Except as set forth above, neither Purchaser, Parent nor Berisford will pay
any fees or commissions to any broker or dealer or other person or entity in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding the Offer
materials to their customers.
40
<PAGE>
17. MISCELLANEOUS.
Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of the Shares pursuant thereto, Purchaser
shall make a good faith effort to comply with such statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) holders of Shares in such
state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER, PARENT OR BERISFORD NOT CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser, Parent and Berisford have filed with the Commission the Schedule
14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer. In
addition, the Company has filed with the Commission the Schedule 14D-9 pursuant
to Rule 14d-9 under the Exchange Act, setting forth its recommendation with
respect to the Offer and the reasons for its recommendation and furnishing
certain additional related information. Such Schedules and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the same manner set forth in Sections 8 and 9 of this
Offer to Purchase (except that such material will not be available at the
regional offices of the Commission).
BERISFORD ACQUISITION CORPORATION
July 9, 1999
41
<PAGE>
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
OF PURCHASER, PARENT AND BERISFORD
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name 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 Parent. Unless otherwise indicated, each such
person is a citizen of the United States of America and the business address of
each such person is c/o Welbilt Corporation, 225 High Ridge Road, Stamford, CT
06905. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent. Unless otherwise indicated,
each such person has held his or her present occupation as set forth below, or
has been an executive officer of Parent for the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Walter Beech Mr. Beech has been the Vice President of Sales of Parent
since 1995.
Patrick Clark Mr. Clark has been the Vice President of Finance of
Parent since 1997. From 1995 to 1997, he was the
Director of Planning and Analysis at John Crane, Inc.
From 1993 to 1995, Mr. Clark was a Regional Finance
Officer (Asean) for Raychem Corporation.
Susan Fegan Ms. Fegan has been the Vice President of Human Resources
of Parent since 1997. In 1996, Ms. Fegan was the Vice
President and Director of Human Resources and Benefits
of Parent. From 1994 through 1996, she was Director of
Benefits of Parent.
Roger Kissam Mr. Kissam has been the Vice President and General
Counsel of Parent since 1993.
John Oros Mr. Oros has been the Treasurer of Parent since 1997.
From 1992 to 1996, he was the Assistant Treasurer of
Parent and from 1991 to 1992 he was a Manager and
Corporate Treasurer of Parent.
Andrew Roake Mr. Roake has been a Director and Chief Executive
Officer of Parent since 1997. From 1994 to 1997, he was
a Vice President of Raychem Corporation. Mr. Roake is a
citizen of the United Kingdom.
Gerald Sank Mr. Sank has been a Vice President of Parent since 1995.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
David Williams Mr. Williams joined Berisford in 1996, became a Director
in 1997 and Chief Executive in 1999. From 1994 to 1996,
he was managing director of the Potterton Myson division
of Blue Circle Industries plc. From 1996 to 1999 he was
managing director of Magnet Limited. Mr. Williams is a
citizen of the United Kingdom.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of the
sole director and executive officer of Purchaser. Such person is a citizen of
the United Kingdom and the business address of each such person is c/o Welbilt
Corporation, 225 High Ridge Road, Stamford, CT 06905.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Andrew Roake Mr. Roake has been a Director and the Chief Executive
Officer of Parent since 1997. From 1994 to 1997, he was
a Vice President of Raychem Corporation. Mr. Roake is a
citizen of the United Kingdom.
</TABLE>
3. DIRECTORS AND EXECUTIVE OFFICERS OF BERISFORD. The following table sets
forth the name 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 Berisford. Unless otherwise indicated, each
such person is a citizen of the United Kingdom and the business address of each
such person is c/o Berisford, Washington House, 40-41 Conduit Street, London,
England W1R 9FB. Unless otherwise indicated, each occupation set forth opposite
an individual's name refers to employment with Berisford. Unless otherwise
indicated, each such person has held his present occupation as set forth below,
or has been an executive officer of Berisford, or the organization indicated,
for the past five years.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Peter Brooks Mr. Brooks has been a director of Berisford since 1998
and he is also a Member of the Audit and Remuneration
Committees of Berisford. He is also Chairman of European
Corporate Coverage at Clifford Chance. From 1992 to
1996, he was Head of Corporate Practice at Clifford
Chance. From 1997 to 1999 he was General Counsel of
Deutsche Morgan Grenfell, and thereafter General Counsel
to the Board of the Global Corporate and Institutions
Divisions at Deutsche Bank Group.
Jonathan Findler Mr. Findler has been a Director and the Finance Director
of Berisford since 1996. From 1994 to 1996, he was
Finance Director of the John Crane Division of TI Group
plc.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
David Hooper Mr. Hooper has been the Corporate Secretary of Berisford
since 1995 and was the Assistant Secretary of Berisford
from 1991 to 1995.
Penny Hughes Ms. Hughes has been a Director of Berisford since 1996
and is also Chairman of the Remuneration Committee and
Member of the Audit Committee of Berisford. She is also
a Director of Mirror Group plc, The Body Shop
International plc and Vodafone Airtouch Group plc. From
1992 to 1994, Ms. Hughes was a Director of Coca-Cola
Holdings (UK) Limited. From 1994 to 1998 she was a
Director and Trustee of Ronald McDonald Children's
Charities Limited. From 1996 to 1998, she was a Director
of Next plc.
Eryl Morris Mr. Morris has been a Director of Berisford since 1998.
He is also Chairman of the Audit Committee of Berisford.
Mr. Morris is Chairman of Safetynet Limited and a
Director of Blagden plc. From 1981 to 1998, Mr. Morris
was Deputy Chief Executive of Courtaulds plc, and from
1995 to 1999 he was a director of Courtaulds Textiles
plc. From 1990 to 1995, he was Director of Manweb plc.
Denis Mulhall Mr. Mulhall has been a Director of Berisford since 1993
and the Chief Operating Officer of Berisford since 1996.
Andrew Roake Mr. Roake has been a Director and Chief Executive
Officer of Parent since 1997. From 1994 to 1997, he was
a Vice President of Raychem Corporation.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
John Sclater Mr. Sclater has been a Director of Berisford since 1986
and Chairman of Berisford since 1990. He is a member of
the Audit and Remuneration Committees. Mr. Sclater is
also President of The Equitable Life Assurance Society,
Chairman of the Foreign & Colonial Investment Trust PLC
and Deputy Chairman of the Millennium and Copthorne
Hotels PLC. In addition, Mr. Sclater is a Trustee of The
Grosvenor Estate and a Trustee and Member of the Council
of the Duchy of Lancaster, Director of Wates Group
Limited, First Church Estates Commissioner and Freeman
of the City of London. From 1988 to 1997, he was
Director of Yamaichi International (Europe) Limited.
From 1981 to 1996, Mr. Sclater was Director of Union
plc. From 1990 to 1996, he was Chairman of Hill Samuel
Bank.
David Williams Mr. Williams joined Berisford in 1996, became a Director
of Berisford in 1997 and Chief Executive Officer of
Berisford in 1999. From 1994 to 1996, he was managing
director of the Potterton Myson division of Blue Circle
Industries plc. From 1996 to 1999 he was managing
director of Magnet Limited.
</TABLE>
I-4
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at the applicable address set forth below:
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsmile Transmission: By Hand or Overnight Courier:
(for Eligible Institutions
only)
Wall Street Station Receive Window
P.O. Box 1023 (212) 701-7636 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th) Floor
New York, NY 10005
</TABLE>
For Information (call collect):
(212) 701-7624
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the other tender offer materials may be directed to the Information Agent at the
address and telephone number set forth below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8075
The Dealer Manager for the Offer is:
SCHRODER & CO. INC.
The Equitable Center
787 Seventh Avenue
New York, NY 10019
Call Toll Free: (877) 350-4796
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED JULY 9, 1999
OF
BERISFORD ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
WELBILT CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BERISFORD PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
<TABLE>
<S> <C> <C>
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
BY MAIL: BY FACSMILE TRANSMISSION: BY HAND OR OVERNIGHT
(FOR ELIGIBLE COURIER:
INSTITUTIONS ONLY)
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th)
Floor
New York, NY 10005
FOR INFORMATION (CALL
COLLECT):
(212) 701-7624
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Scotsman
Industries, Inc. if certificates for Shares (as such term is defined below) are
to be forwarded herewith or, unless an Agent's Message (as defined in
Instruction 2 below) is utilized, if delivery of Shares is to be made by
book-entry transfer to an account maintained by the Depositary at the Book-Entry
Transfer Facility (as defined in and pursuant to the procedures set forth in
Section 3 of the Offer to Purchase). Stockholders who deliver Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders who deliver shares are referred to herein as "Certificate
Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 3 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) may nevertheless tender
their Shares pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institutions _____________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery _________________________
If delivered by Book-Entry Transfer, check box: / /
Name of Tendering Institution __________________________________________
Account Number _________________________________________________________
Transaction Code Number ________________________________________________
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)(PLEASE FILL IN, IF BLANK, SHARES TENDERED
EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL NUMBER OF
SHARES
REPRESENTED BY
SHARE SHARE
CERTIFICATE CERTIFICATE(S) NUMBER OF SHARES
NUMBER(S) (1) (1) TENDERED (2)
<S> <C> <C> <C>
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
TOTAL SHARES:
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by Share certificates delivered to the Depositary are being tendered hereby.
See Instruction 4.
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Berisford Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of Welbilt
Corporation, a Delaware corporation ("Parent"), which is an indirect wholly
owned subsidiary of Berisford plc, a public limited company organized under the
laws of England and Wales ("Berisford"), the above-described shares of common
stock, par value $0.10 per share (the "Shares"), of Scotsman Industries, Inc., a
Delaware corporation (the "Company"), pursuant to Purchaser's offer to purchase
all of the outstanding Shares at a price of $33.00 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase dated July 9, 1999
and in this Letter of Transmittal (which, together with any amendments or
supplements thereto or hereto, collectively constitute the "Offer"). The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole at any time, or in part from time to time, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer. Receipt of the Offer is hereby
acknowledged.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 1, 1999 (the "Merger Agreement"), by and among Parent, Purchaser and
the Company.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after July 1,
1999 (collectively, "Distributions")) and irrevocably constitutes and appoints
the Depositary 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 any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares (and any 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 any and all Distributions), all in accordance with
the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Andrew Roake in his capacity as an officer of Purchaser, and any
individual who shall thereafter succeed to any such office of Purchaser, and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote at any annual or special meeting of the
Company's stockholders or any adjournment or postponement thereof or otherwise
in such manner as each such attorney-in-fact and proxy or his substitute shall
in his sole discretion deem proper with respect to, to execute any written
consent concerning any matter as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, and to
otherwise act as each such attorney-in-fact and proxy or his substitute shall in
his sole discretion deem proper with respect to, all of the Shares (and any and
all Distributions) tendered hereby and accepted for payment by Purchaser prior
to the time of such vote or other action. This appointment will be effective if
and when, and only to the extent that, Purchaser accepts such Shares for payment
pursuant to the Offer. This power of attorney and proxy are irrevocable and are
granted in consideration of the acceptance for payment of such Shares in
accordance with the terms of the Offer. Such acceptance for payment shall,
without further action, revoke any prior powers of attorney and proxies granted
by the undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if given,
will not be deemed effective). Purchaser reserves the right to require that, in
order for Shares or other securities to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Shares, Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
(and any and all Distributions), including voting at any meeting of the
Company's stockholders.
3
<PAGE>
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, SELL, ASSIGN AND TRANSFER THE SHARES TENDERED
HEREBY AND ALL DISTRIBUTIONS, THAT THE UNDERSIGNED OWNS THE SHARES TENDERED
HEREBY WITHIN THE MEANING OF RULE 14E-4 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), THAT THE TENDER OF THE
TENDERED SHARES COMPLIES WITH RULE 14E-4 UNDER THE EXCHANGE ACT, AND THAT WHEN
THE SAME ARE ACCEPTED FOR PAYMENT BY PURCHASER, PURCHASER WILL ACQUIRE GOOD,
MARKETABLE AND UNENCUMBERED TITLE THERETO AND TO ALL DISTRIBUTIONS, FREE AND
CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES AND THE SAME WILL NOT
BE SUBJECT TO ANY ADVERSE CLAIMS. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE
AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE DEPOSITARY OR PURCHASER 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 PURCHASER 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, PURCHASER SHALL BE ENTITLED TO ALL RIGHTS AND
PRIVILEGES AS OWNER OF EACH SUCH DISTRIBUTION AND MAY WITHHOLD THE ENTIRE
PURCHASE PRICE OF THE SHARES TENDERED HEREBY OR DEDUCT FROM SUCH PURCHASE PRICE,
THE AMOUNT OR VALUE OF SUCH DISTRIBUTION AS DETERMINED BY PURCHASER IN ITS SOLE
DISCRETION.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is extended or amended, the terms or conditions of any such extension
or amendment). Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the terms of the Merger Agreement, the price
to be paid to the undersigned will be the amended price notwithstanding the fact
that a different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price of all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment (and
any accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered." In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
of all Shares purchased and/or return any certificates evidencing Shares not
tendered or not accepted for payment (and any accompanying documents, as
appropriate) in the name(s) of, and deliver such check and/or return any such
certificates (and any accompanying documents, as appropriate) to, the person(s)
so indicated. The undersigned recognizes that Purchaser has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from the
name of the registered holder thereof if Purchaser does not accept for payment
any of the Shares so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
Number of Shares represented by lost, destroyed or stolen certificates: ___
4
<PAGE>
- -----------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in the name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue check and/or Share certificate(s) to:
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
__________________________________________________________________________
(SEE SUBSTITUTE FORM W-9)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned or
to the undersigned at an address other than that shown under "Description of
Shares Tendered."
Mail check and/or Share certificates to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
__________________________________________________________________________
- -----------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(Also Complete Substitute Form W-9 Below)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: _______, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
the Share Certificate(s) or on a security position listing or by any
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
another person acting in a fiduciary capacity or representative capacity,
please provide the following information and see Instruction 5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Name of Firm _______________________________________________________________
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )________________________________________
____________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
(SEE SUBSTITUTE FORM W-9)
____________________________________________________________________________
____________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
__________________________________________________________________________
(AUTHORIZED SIGNATURE)
Authorized Signature _______________________________________________________
Name(s) ____________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facility's systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of 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
Guarantee Program, the Stock Exchange Medallion Program or by any other
"eligible guarantor institution" as such term is defined in Rule 17Ad-15
promulgated under the Exchange Act (each, an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of the
Company either if Share certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made by book-entry
transfer pursuant to the procedures set forth herein and in Section 3 of the
Offer to Purchase. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees or an
Agent's Message (in connection with book-entry transfer) and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date and either (i) certificates for tendered
Shares must be received by the Depositary at one of such addresses prior to the
Expiration Date or (ii) Shares must be delivered pursuant to the procedures for
book-entry transfer set forth herein and in Section 3 of the Offer to Purchase
and a Book-Entry Confirmation must be received by the Depositary prior to the
Expiration Date or (b) the tendering stockholder must comply with the guaranteed
delivery procedures set forth herein and in Section 3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-
entry transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery 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
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Shares, in proper form for transfer (or
a Book-Entry Confirmation with respect to all tendered Shares), together with a
properly completed and duly executed Letter of Transmittal (or a 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 within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day on
which the New York Stock Exchange is open for business.
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 Purchaser
may enforce such agreement against the participant.
7
<PAGE>
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In any such case, new certificate(s) for the remainder of the Shares
that were evidenced by the old certificates will be sent to the registered
holder, unless otherwise provided in the appropriate box on this Letter of
Transmittal, as soon as practicable after the Expiration Date or the termination
of the Offer. 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 face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
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 Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates 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 the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution.
8
<PAGE>
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check for
the purchase price of any Shares accepted for payment is to be issued in the
name of, and/or Share certificates for Shares not accepted for payment or not
tendered are to be issued in the name of and/or returned to, a person other than
the signer of this Letter of Transmittal or if a check is to be sent, and/or
such certificates are to be returned, to a person other than the signer of this
Letter of Transmittal, or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. Any
stockholder(s) delivering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at a Book-Entry Transfer
Facility as such stockholder(s) may designate in the box entitled "Special
Payment Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above as the account from which such Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or 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
directed to the Information Agent at its address and phone number set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. Subject to the Merger Agreement, Purchaser reserves
the absolute right in its sole discretion to waive, at any time or from time to
time, any of the specified conditions of the Offer, in whole or in part, in the
case of any Shares tendered.
10. BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer and a $50 penalty, a
stockholder surrendering Shares in the Offer must, unless an exemption applies,
provide the Depositary with such stockholder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify,
under penalties of perjury, that such TIN is correct and that such stockholder
is not subject to backup withholding.
Backup withholding is not an additional income tax. Rather, the amount
withheld can be credited against the federal income tax liability of the person
subject to the backup withholding, provided that the required information is
given to the IRS. If backup withholding results in an overpayment of tax, a
refund can be obtained by the stockholder upon the filing of a federal income
tax return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
9
<PAGE>
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, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days of a timely
submitted Substitute Form W-9.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and an IRS Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the Share certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER 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 PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
10
<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 correct TIN on Substitute Form W-9 below or, in the case of
certain foreign holders, otherwise establish a basis for exemption from backup
withholding. If such stockholder is an individual, the TIN is his or her social
security number. If a tendering stockholder is subject to backup withholding,
such stockholder must cross out item (2) of the Certification box on the
Substitute Form W-9. If the Depositary is not provided with the correct taxpayer
identification number, the stockholder may be subject to a $50 penalty imposed
by the Internal Revenue Service. In addition, the Depositary may be required to
withhold 31% of any cash payments made to such stockholder with respect to
Shares purchased pursuant to the Offer.
Certain stockholders (including, among others, all corporations, and certain
foreign individual and entities) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that stockholder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. Exempt stockholders, other than
foreign individuals and entities, should furnish their TIN, write "Exempt" on
the face of the Substitute Form W-9 below, and sign, date and return the
Substitute Form W-9 to 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 payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the 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 upon the
filing of a federal income tax return.
PURPOSE OF SUBSTITUTE FORM W-9
To avoid backup withholding on payments that are made to a stockholder with
respect to Shares purchased pursuant to the Offer, the stockholder is required
to notify the Depositary of such stockholder's correct TIN by completing the
form contained herein certifying that the TIN provided on Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN.)
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number to
report. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, such
stockholder should write "Applied For" in the space provided for in the TIN in
Part 1, and sign and date the Substitute Form W-9. If "Applied For" is written
in Part I and the Depositary is not provided with a TIN within 60 days of a
timely submitted Substitute Form W-9, the Depositary will withhold 31% on all
payments of the purchase price until a TIN is provided to the Depositary.
11
<PAGE>
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<C> <S> <C>
- -------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN ON ------------------------
FORM W-9 THE APPROPRIATE LINE TO THE RIGHT Social Security Number
Department of the Treasury AND CERTIFY BY SIGNING AND DATING (If awaiting TIN write "Applied
Internal Revenue Service BELOW For")
OR
------------------------
Employer Identification Number
(If awaiting TIN write "Applied
For")
-----------------------------------------------------------------------
PART 2--CERTIFICATE-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my correct Taxpayer Identification
Payer's Request for Taxpayer Number (or I am waiting for a number and to be issued to me), and
Identification Number ("TIN")
(2) I am not subject to backup withholding either because (a) I am
exempt from backup withholding, (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you
have been notified by the IRS that you are currently subject to backup
withholding because of under-reporting interest or dividends on your
tax returns. However, if after being notified by the IRS that you are
subject to backup withholding, you receive another notification from
the IRS that you are no longer subject to backup withholding, do not
cross out such item (2). (Also see instructions in the enclosed
Guidelines).
-----------------------------------------------------------------------
PART 3--Awaiting TIN / /
-----------------------------------------------------------------------
Signature ------------------------------------------------------------------- Date
-------------------------, 1999
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH 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.
12
<PAGE>
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 by the
time of payment, 31% of all payments made to me on account of the Shares shall
be retained until I provide a taxpayer identification number to the Exchange
Agent and that, if I do not provide my correct taxpayer identification number
within 60 days of the date below, such retained amounts shall be remitted to
the Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a correct taxpayer identification number.
Signature
---------------------------------------------------------- Date
-----------------------, 1999
- --------------------------------------------------------------------------------
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below:
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8075
The Dealer Manager for the Offer is:
SCHRODER & CO. INC.
The Equitable Center
787 Seventh Avenue
New York, NY 10019
Call Toll Free: (877) 350-4796
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
TO
BERISFORD ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
WELBILT CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BERISFORD PLC
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $0.10 per share (the "Shares"),
of Scotsman Industries, Inc., a Delaware corporation, are not immediately
available, if the procedure for book-entry transfer cannot be completed prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase), or if
time will not permit all required documents to reach the Depositary prior to the
Expiration Date. Such form may be delivered by hand, transmitted by facsimile
transmission or mailed to the Depositary. See Section 3 of the Offer to
Purchase.
<TABLE>
<S> <C> <C>
THE DEPOSITARY FOR THE OFFER IS:
HARRIS TRUST COMPANY OF NEW YORK
BY MAIL: BY FACSMILE BY HAND OR OVERNIGHT
TRANSMISSION: COURIER:
(FOR ELIGIBLE
INSTITUTIONS ONLY)
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19(th)
Floor
New York, NY 10005
FOR INFORMATION (CALL
COLLECT):
(212) 701-7624
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above or transmission of instructions via facsimile transmission other
than as set forth above will not constitute a valid delivery.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Berisford Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of Welbilt
Corporation, a Delaware corporation ("Parent"), which is an indirect wholly
owned subsidiary of Berisford plc, a public limited company organized under the
laws of England and Wales ("Berisford"), upon the terms and subject to the
conditions set forth in Purchaser's Offer to Purchase dated July 9, 1999 and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer"), receipt of which is hereby
acknowledged, the number of shares set forth below of common stock, par value
$0.10 per share (the "Shares"), of Scotsman Industries, Inc., a Delaware
corporation, pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase.
Number of Shares: ____________________
Certificate Nos. (if available):
Name(s) of Record Holder(s):
____________________________________
____________________________________
Please Print
Address(es):
Check box if Shares will be ten-
dered by book-entry transfer: / /
Account Number:
____________________________________
____________________________________
Zip Code
Dated: ___________________, 1999
Area Code and Tel. No.:
Signature(s):
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, (A) a participant in the Security Transfer Agents Medallion
Program, the New York
Stock Exchange Guarantee Program, the Stock Exchange Medallion Program, or (B)
an "eligible
guarantor institution" as such term is defined in Rule 17Ad-15 promulgated under
the Securities Exchange
Act of 1934, as amended, guarantees to deliver to the Depositary either
certificates representing the Shares
tendered hereby, in proper form for transfer, or confirmation of book-entry
transfer of such Shares into
the Depositary's accounts at The Depository Trust Company, in each case with
delivery of a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature
guarantees, or an Agent's Message, and any other documents required by the
Letter of Transmittal, within
three trading days (as described in the Offer to Purchase) after the date
hereof. The Eligible Institution
that completes this form must communicate the guarantee to the Depositary and
must deliver the Letter of
Transmittal 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.
Name of Firm:
____________________________________
Authorized Signature
Address:
Name:
Please Print
Zip Code
Title:
Area Code and Tel. No.:
Dated: ___________________, 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
AT
$33.00 NET PER SHARE
BY
BERISFORD ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
WELBILT CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BERISFORD PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
July 9, 1999
To: Brokers, Dealers, Commercial Banks, Trust Companies And Other Nominees:
We have been appointed by Berisford Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Welbilt Corporation,
a Delaware corporation ("Parent"), which is an indirect wholly owned subsidiary
of Berisford plc, a public limited company organized under the laws of England
and Wales ("Berisford"), to act as Dealer Manager in connection with Purchaser's
offer to purchase all outstanding shares of common stock, par value $0.10 per
share (the "Shares"), of Scotsman Industries, Inc., a Delaware corporation (the
"Company"), at $33.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated July 9, 1999
(the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the Offer
to Purchase) that number of Shares which, when added to the Shares beneficially
owned by Parent or Purchaser (if any), represents at least a majority of the
Shares outstanding on a fully diluted basis on the date Shares are accepted for
payment. The Offer is also subject to the other conditions in the Offer to
Purchase. See Section 14 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated July 9, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be delivered
to the Depositary, or if the procedures for book-entry transfer cannot be
completed, by the Expiration Date (as defined in the Offer to Purchase);
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. A letter to stockholders of the Company from Richard C. Osborne,
Chairman and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 dated July 9, 1999,
which has been filed by the Company with the Securities and Exchange
Commission;
<PAGE>
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. A return envelope addressed to Harris Trust Company of New York, Wall
Street Station, P.O. Box 1023, New York, NY 10268-1023 (the "Depositary").
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for Shares which are
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn when, as and if Purchaser gives oral or written notice to the
Depositary of Purchaser'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 of the Offer to Purchase, (ii) a properly completed and
duly executed Letter of Transmittal (or a properly completed and manually signed
facsimile thereof) or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer and (iii) all other documents required
by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer to Purchase) for soliciting tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for customary mailing and handling
costs incurred by them in forwarding the enclosed materials to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), 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 or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
Schroder & Co. Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF PARENT, PURCHASER, BERISFORD, THE COMPANY, THE INFORMATION
AGENT, THE DEPOSITARY, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
AT
$33.00 NET PER SHARE
BY
BERISFORD ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
WELBILT CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BERISFORD PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS EXTENDED.
To: Our Clients: July 9, 1999
Enclosed for your consideration are the Offer to Purchase dated July 9, 1999
and the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer") in connection with the
offer by Berisford Acquisition Corporation, a Delaware corporation ("Purchaser")
and a wholly owned subsidiary of Welbilt Corporation, a Delaware corporation
("Parent"), which is an indirect wholly owned subsidiary of Berisford plc, a
public limited company organized under the laws of England and Wales
("Berisford"), to purchase for cash all outstanding shares of common stock, par
value $0.10 per share (the "Shares"), of Scotsman Industries, Inc., a Delaware
corporation (the "Company"). We are the holder of record of Shares held 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 enclosed 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 us to tender 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 invited to the following:
1. The offer price is $33.00 per Share, net to you in cash without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has, at a meeting duly called
and held, by a vote of all those present, (i) approved the Merger Agreement
(as defined in the Offer to Purchase) and the transactions contemplated
thereby, including the Offer and the Merger (each as defined in the Offer to
Purchase), (ii) determined that the Offer and the Merger are fair to, and in
the best interest of, the Company's stockholders and (iii) resolved to
recommend that the stockholders accept the Offer and tender their Shares
pursuant to the Offer.
4. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on August 13, 1999, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
in the Offer to Purchase) that number of Shares which, when added to the
Shares beneficially owned by Parent or Purchaser (if any), represents at
least a majority of the Shares outstanding on a fully diluted basis on the
date Shares are accepted for payment. The Offer is also subject to the other
conditions in the Offer to Purchase. See Section 14 of the Offer to
Purchase.
<PAGE>
6. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
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 set forth
on the reverse side of this letter. An envelope 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 on the reverse side of this letter. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SCOTSMAN INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated July 9, 1999 and the related Letter of Transmittal in
connection with the Offer by Purchaser, to purchase all outstanding shares of
common stock, par value $0.10 per share (the "Shares"), of Scotsman Industries,
Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
Number of Shares to be Tendered:*
- -----------------------------------------------------------------------------
------------------------------------
Shares
------------------------------------
Dated:
- -------------------, 1999
Signature(s)
------------------------------------
Print Name(s)
------------------------------------
------------------------------------
Address(es)
------------------------------------
Area Code and Telephone Number
------------------------------------
Tax ID or Social Security Number
- ------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
2
<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
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF--
- -------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner
individuals (joint of the account or,
account) if combined funds,
any one of the
individuals(1)
3. Husband and wife The actual owner
(joint account) of the account or,
if joint funds,
either person(1)
4. Custodian account The minor(2)
of a minor
(Uniform Gift to
Minors Act)
5. Adult and minor The adult or, if
(joint account) the minor is the
only contributor,
the minor(1)
6. Account in the The ward, minor,
name of guardian or incompetent
or committee for a person(5)
designated ward,
minor, or
incompetent person
7. a. The usual The grantor-
revocable trustee(1)
savings trust
account (grantor
is also trustee)
7 b. So-called trust The actual
account that is owner(1)
not a legal or
valid trust
under State law
8. Sole The owner(3)
proprietorship
account
- -------------------------------------------------
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT NUMBER OF--
<S> <C> <C>
- -------------------------------------------------
9. A valid trust, The legal entity
estate, or pension (Do not furnish
trust the identifying
number of the
personal
representative or
trustee unless the
legal entity
itself is not
designated in the
account title.)(4)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization
account
12. Partnership The partnership
account held in
the name of the
business
13. Association, club, The organization
or other
tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or
prison) that
receives
agricultural
program payments
</TABLE>
- -------------------------------------------
- -------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
(5) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
BERISFORD PLC AND SCOTSMAN INDUSTRIES, INC. REACH
AGREEMENT ON THE SALE OF SCOTSMAN TO BERISFORD
FOR $33 PER SHARE
LONDON, United Kingdom and VERNON HILLS, Illinois - On July 2, 1999, Berisford
plc (LSE: BRFD) and Scotsman Industries, Inc. (NYSE: SCT) jointly announced that
they have entered into a definitive agreement pursuant to which Scotsman will be
acquired for cash by an indirect subsidiary of Berisford for $33.00 per share.
The aggregate value of the transaction is approximately $712 million on a
fully-diluted basis, including approximately $348 million of Scotsman's net
debt.
In the transaction, Scotsman's shareholders will receive $33.00 per share in
cash, without interest, pursuant to a tender offer for all of Scotsman's
outstanding shares. The tender offer is expected to commence on July 9, 1999,
and is currently scheduled to close after 25 business days have passed.
Scotsman's shares not purchased in the tender offer will be converted into
$33.00 per share in cash in a subsequent merger.
Scotsman's Board of Directors has recommended that stockholders tender their
shares and approve the subsequent merger. The tender offer is subject to a
majority of Scotsman's shares being tendered and not withdrawn, the shareholders
of Berisford approving the transaction, compliance with the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary
conditions.
Berisford is a global manufacturer comprised of two businesses, Welbilt and
Magnet. Magnet is a leading manufacturer of kitchen furniture, doors, windows
and bathroom products. Welbilt is the leading North American supplier of cooking
and warming equipment to the global foodservice industry. Welbilt focuses on
five primary market segments, including: quick service and full service
restaurant chains, hotels, institutional customers and independent restaurant
operators. Scotsman is a leading international manufacturer of commercial
refrigeration ice-making and food preparation products for the foodservice and
food retail industries.
Berisford's acquisition of Scotsman furthers its goal of becoming the leading
10
<PAGE>
global food equipment company. The acquisition of Scotsman also extends
Welbilt's product range, which is predominantly in cooking and warming, into the
cold-side product area, wherein a number of Scotsman's businesses have leading
market positions. Moreover, the acquisition of Scotsman enables Welbilt to
supply customers with a full range of products, which Berisford believes will be
increasingly important for the successful development of global foodservice
equipment business.
Berisford's sales for the last twelve months ended March 27, 1999 were
$1,012.9 million (L621.4 million), with net income of $102.7 million (L63.0
million), or $0.41 (25.3 pence) per share (diluted). Scotsman's sales for the
last twelve months ended April 4, 1999 were $640.6 million, with net income
of $18.9 million, or $1.76 per share (diluted). Since the first quarter,
market conditions for Scotsman have remained mixed and beverage systems in
particular continues to experience subdued levels of demand.
Commenting on the acquisition, David W. Williams, Chief Executive Officer of
Berisford stated, "This is a major strategic move for Berisford that will
immediately transform our existing business into one of the world's largest
foodservice equipment manufacturers. The acquisition of Scotsman will create
significant opportunities to grow revenues aggressively and represents a
substantial step forward in the development of our foodservice equipment
division."
Richard C. Osborne, Chairman and Chief Executive Officer of Scotsman stated,
"The combination of Berisford and Scotsman is powerful. The resulting company
will have approximately $1.5 billion in food equipment sales with exceptional
global capabilities. The combination of strong brands and strategic positions in
both the "hot" and "cold" side will be unparalleled and provide unique
opportunities to create value for our customers. The benefits to our associates
include increased long term business stability and increased prospects for
personal and career growth. In addition, our shareholders receive what we
believe is an attractive price for their shares."
The boards of both companies have approved the merger agreement and the tender
offer. In addition, Berisford plans to tender for the 8.625 percent senior
subordinated notes of Scotsman.
The Scotsman businesses will gradually be integrated with Berisford's
foodservice equipment business, with its North American business reporting
<PAGE>
to Andrew F. Roake, Chief Executive Officer of Welbilt, and its international
operations reporting directly to David W. Williams. Berisford will continue to
use the several Scotsman brands in connection with its foodservice equipment
business.
Schroder & Co. Inc. is serving as financial advisor to Berisford, and Morgan
Stanley Dean Witter is serving as financial advisor to Scotsman. Cadwalader,
Wickersham & Taft is serving as legal advisor to Berisford, and Sidley &
Austin is serving as legal advisor to Scotsman. The acquisition will be
financed through a newly arranged $600 million (L381 million) term loan
facility and a $300 million (L190 million) revolving loan facility which have
been fully underwritten by Barclays Bank PLC and National Westminster Bank
Plc.
Consistent with the terms of the agreement, Scotsman's Board of Directors has
preserved its ability as a fiduciary to provide information and enter into
negotiations where appropriate with a third party.
Part of this news release contains forward-looking statements that involve risks
and uncertainties; actual results could differ materially from those projected
in the forward-looking statements. The risks and uncertainties are detailed from
time to time in the Berisford and Scotsman reports filed with the London Stock
Exchange and Securities and Exchange Commission, respectively.
Contacts: David W. Williams, Berisford plc 44 171 312 2500
Richard C. Osborne, Scotsman Industries, Inc. 847 215 4445
Dick Saunders, Cardew & Co. 44 171 930 0777
<PAGE>
Exhibit 99(a)(8)
FOR IMMEDIATE RELEASE
Contact:
David W. Williams
Berisford plc
(44) 171 312 2500
Dick Saunders
Cardew & Co.
(44) 171 930 0777
Andrew Roake
Welbilt Corporation
(203) 325-8300
BERISFORD PLC ANNOUNCES
COMMENCEMENT OF TENDER OFFER FOR SCOTSMAN INDUSTRIES, INC.
London and Stamford, Conn., July 9, 1999 - Berisford plc
announced today that Berisford Acquisition Corporation, a wholly owned
subsidiary of Welbilt Corporation, an indirect wholly owned subsidiary of
Berisford plc has commenced a cash tender offer to purchase all of the
outstanding shares of Scotsman Industries, Inc. ("Scotsman Industries")
(NYSE: SCT) at a price of $33.00 per share, without interest.
The offer is being made pursuant to the previously announced Merger
Agreement among Welbilt Corporation, an indirect wholly owned subsidiary of
Berisford plc, Berisford Acquisition Corporation and Scotsman Industries,
Inc. The offer is conditioned upon, among other things, the tender of a
majority of the shares outstanding on a fully diluted basis; the Shareholders
of Berisford plc approving the transaction; and the expiration or earlier
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and compliance with applicable foreign
anti-trust related filings. The offer and withdrawal rights are scheduled to
expire at 12:00 midnight, New York City time, on August 13, 1999, unless the
offer is extended. Schroders & Co. Inc. is acting as the Dealer Manager,
D.F. King & Co., Inc. is acting as the Information Agent and Harris Trust
Company of New York is acting as depositary in connection with the offer.
Berisford plc is a holding company owning two principal businesses,
Welbilt and Magnet. Magnet is a leading United Kingdom manufacturer of
kitchen furniture, doors, windows and bathroom products. Welbilt is the
leading North American supplier of cooking and warming equipment to the
global foodservice industry. Welbilt focuses on five primary market segments,
quick service and full service restaurant chains, hotels, institutional
customers and independent restaurant operators.
Scotsman Industries is a leading international manufacturer of
commercial refrigeration ice-making and food preparation products for the
foodservice and food retail industries.
This press release is neither an offer to purchase nor a solicitation
of an offer to sell securities. The tender offer is made only through the Offer
to Purchase and the related Letter of Transmittal which is being mailed to
stockholders today. Additional copies of such documents can be obtained by
contacting the Dealer Manager at 877-350-4796 or the Information Agent at
800-488-8075.
<PAGE>
Exhibit 99(a)(9)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer is made solely by the
Offer to Purchase, dated July 9, 1999, and the related Letter of Transmittal
and any amendments and supplements thereto, and is being made to all holders
of Shares. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction or any administrative or judicial action pursuant
thereto. In any jurisdiction 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 Berisford Acquisition Corporation by Schroder
& Co. Inc. or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
Scotsman Industries, Inc.
at
$33.00 Net Per Share
by
Berisford Acquisition Corporation,
a wholly owned subsidiary of
Welbilt Corporation,
an indirect wholly owned subsidiary of
BERISFORD PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, AUGUST 13, 1999, UNLESS THE OFFER IS
EXTENDED.
Berisford Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Welbilt Corporation, a
Delaware corporation ("Parent"), which is an indirect wholly owned subsidiary
of Berisford plc, a public limited company organized under the laws of
England and Wales ("Berisford"), is offering to purchase all of the
outstanding shares of Common Stock par value $.10 per share (the "Shares"),
of Scotsman Industries, Inc., a Delaware corporation (the "Company"), at a
price of $33.00 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 July 9, 1999 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer").
<PAGE>
The Offer is conditioned upon, among other things, (A) there being
validly tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares which, when added to the Shares
beneficially owned by Parent or Purchaser (if any), represents at least a
majority of the Shares outstanding (on a fully diluted basis) on the date Shares
are accepted for payment and (B) the Berisford Shareholder Condition (as defined
in the Offer to Purchase). The Offer is also subject to the other conditions set
forth in the Offer to Purchase. See Section 14 of the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of July 1, 1999 (the "Merger Agreement"), by and among Parent,
Purchaser and the Company. The Merger Agreement provides that, no later than
the second business day after the completion of the Offer and satisfaction or
waiver, if permissible, of all conditions contained in the Merger Agreement,
and in accordance with the General Corporation Law of the State of Delaware
(the "DGCL"), Purchaser will be merged with and into the Company (the
"Merger"). Following the consummation of the Merger, the Company will
continue as the surviving corporation and will be a direct wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share then outstanding (other than Shares held by the Company or
any of its subsidiaries, Parent or any of its subsidiaries including
Purchaser, and stockholders who properly perfect their dissenters' rights
under the DGCL) will be converted into the right to receive $33.00 in cash
(or such higher price paid pursuant to the Offer) without interest thereon.
The Board of Directors of the Company has, at a meeting duly called and
held, by a vote of all those present, (i) approved the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, (ii) has
determined that the Offer and the Merger are fair to, and in the best interests
of, the Company's stockholders and (iii) has resolved to recommend that the
stockholders accept the Offer and tender their Shares pursuant to the Offer.
The term "Expiration Date" shall mean 12:00 Midnight New York City
time, on Friday, August 13, 1999, unless and until Purchaser (in accordance with
the terms of the Merger Agreement), shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by Purchaser,
shall expire.
Subject to the applicable rules and regulations of the Securities
and Exchange Commission and to applicable law, Purchaser expressly reserves
the right in its sole discretion (subject to the terms of the Merger
Agreement), at any time and from time to time, to extend for any reason the
period of time during which the Offer is open, including by reason of the
occurrence of any of the events specified in Section 14 of the Offer to
Purchase, by giving oral or written notice of such extension to the
Depositary. Any such extension will be followed by a public announcement
thereof by no later than 9:00 am., New York City time, on the next business
day after the previously scheduled Expiration Date. During any such
extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares. Without limiting the manner in which
Purchaser may choose to make any public announcement, Purchaser will have no
obligation to publish, advertise or otherwise communicate any such
announcement other than by issuing a press release to the Dow Jones News
Service or otherwise as may be required by applicable law.
-2-
<PAGE>
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to Purchaser and
not withdrawn, if and when Purchaser gives oral or written notice to the
Depositary (as defined in the Offer to Purchase) of its acceptance for payment
of such Shares. Upon the terms and subject to the conditions of the Offer,
payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from
Purchaser and transmitting payment to tendering stockholders.
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 a 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)), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
stockholder pursuant to the Offer will be the highest per Share consideration
paid to any other stockholder pursuant to the Offer. Under no circumstances will
interest be paid on the purchase price to be paid by Purchaser for such Shares,
regardless of any extension of the Offer or any delay in making such payment.
Except as otherwise provided below, 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 September 6, 1999. For a withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth in the Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of the Shares to be withdrawn, if
different from the name of the person who tendered the Shares. If certificates
evidencing such Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered for the account of an
Eligible Institution (as defined in the Offer to Purchase), the signatures on
the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer
set forth in Section 3 of the Offer to Purchase, 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 otherwise comply with the
Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 3 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by Purchaser, in its sole discretion, whose determination
will be final and binding.
-3-
<PAGE>
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 under the Securities Exchange Act of 1934, as amended, is contained
in the Offer to Purchase and is incorporated herein by reference.
The Company has provided Purchaser with the Company's
stockholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. The Offer to Purchase, the related
Letter of Transmittal and other relevant documents will be mailed to record
holders of Shares whose names appear on the 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 Company's
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal
contain important information and should be read carefully before any decision
is made with respect to the Offer.
Questions and requests for assistance or additional copies of
the Offer to Purchase, Letter of Transmittal and other tender offer documents
may be directed to the Information Agent or the Dealer Manager (each as defined
in the Offer to Purchase), at their respective addresses and telephone numbers
set forth below, and copies will be furnished promptly at Purchaser's expense.
None of Parent, Berisford or Purchaser will pay any fees or commissions to any
broker or dealer or other person other than the Dealer Manager and the
Information Agent for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 488-8075
The Dealer Manager for the Offer is:
Schroder & Co. Inc.
The Equitable Center
787 Seventh Avenue
New York, New York 10019
Call Toll Free: (877) 350-4796
July 9, 1999
-4-
<PAGE>
BARCLAYS BANK PLC NATIONAL WESTMINSTER BANK PLC
222 BROADWAY PARK AVENUE TOWER
NEW YORK, NEW YORK 10038 65 EAST 55TH STREET
NEW YORK, NEW YORK 10022
July 1, 1999
Berisford plc
Washington House
40 Conduit Street
London W1R 9FB
Attention: Mr. Brian Cuthbertson
Re: PROJECT SENATE
Ladies and Gentlemen:
You have advised us that Welbilt Corporation, a corporation
organized and existing under the laws of Delaware (the "BORROWER") and a
wholly-owned subsidiary of Berisford plc (the "PARENT"), intends to acquire,
through an indirectly wholly-owned subsidiary organized under the laws of the
State of Delaware ("Bidco"), all the outstanding capital stock (the
"ACQUISITION") of Scotsman Industries, Inc., a company organized and existing
under the laws of the State of Delaware (the "TARGET"). The Acquisition will be
accomplished by means of a recommended tender offer (the "TENDER OFFER")
followed by a merger (the "MERGER") between the Target, on the one hand, and
Bidco on the other hand, with the Target being the surviving corporation of such
merger. The respective amounts to be expended in connection with the Acquisition
(including fees and expenses) are more specifically described in the Sources and
Uses Table attached as Annex A to this commitment letter (this "COMMITMENT
LETTER"). Unless defined herein terms used herein have the meaning set forth in
the Term Sheet (as defined below).
You also have advised us that, in connection with the
Acquisition the Parent and the Borrower desire to establish senior credit
facilities in an aggregate principal amount of US$900,000,000 (the "Facilities")
for the purpose of financing the cost of the Acquisition and the expenses
related thereto, financing the cost of refinancing existing indebtedness, and
providing funds for working capital and other general corporate purposes. The
Parent and the Borrower have requested each of
<PAGE>
Barclays Capital ("BARCLAY CAPITAL"), the investment banking division of
Barclays Bank PLC, and Greenwich NatWest ("GREENWICH NATWEST") to act as
exclusive advisors for, and to arrange and syndicate, the Facilities. The Parent
and the Borrower also have requested that Barclays Bank PLC serve as the
facility agent for the Facilities.
Each of Barclays Capital and Greenwich NatWest hereby confirms
that it is willing to act, together with the other, as exclusive advisors and
arrangers for the Facilities (in such capacity, the "ARRANGERS"). Barclays Bank
PLC confirms that it will act as the facility agent for the Facilities (in such
capacity, the "FACILITY AGENT"). In their respective capacities as Arrangers and
Facility Agent, each of Barclays Capital, Greenwich NatWest, and Barclays Bank
PLC will perform the duties and exercise the authority customarily performed and
exercised by lenders in such roles. The Parent and the Borrower agree that no
other agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other that expressly contemplated by the Term Sheet
and the Fee Letter referred to below) will be paid in connection with the
Facilities unless the Parent, the Borrower, Barclays Capital and Greenwich
NatWest shall so agree.
Barclays Bank PLC and National Westminster Bank Plc each
hereby commits to provide 50% of the aggregate amount of each of the Facilities
(i.e. an aggregate commitment of US$450,000,000 for Barclays Bank PLC and
US$450,000,000 for National Westminster Bank Plc), in each case, upon the terms
and subject to the conditions set forth or referred to in this Commitment Letter
and in the Summary of Terms and Conditions attached as Exhibit B (the "TERM
SHEET"). As more fully defined in the Term Sheet, the Facilities consist of the
following: (i) Facility A, a US$600,000,000 term acquisition facility with a
final maturity of five years, to be used to finance the costs of the Acquisition
and to refinance Target's existing indebtedness and (ii) Facility B, a
US$300,000,000 revolving facility with a final maturity of five years, to be
used to finance the costs of the acquisition and refinance existing debt (up to
US$200,000,000), for working capital and for other general corporate purposes.
The Facilities will be documented in a definitive Facility Agreement (the
"FACILITY AGREEMENT") and various guarantees, security agreements, and other
agreements and instruments called for by the Term Sheet or which the Arrangers
may require.
The Arrangers intend to syndicate the Facilities (including,
in their discretion, all or part of their commitments hereunder) to financial
institutions and other lenders to be defined in the Term Sheet (the "LENDERS").
Generally, the Arrangers expect that syndication will be conducted in three
stages: (i) a phase one ("PHASE ONE") during which the Arrangers will seek a
United States bank to serve as another Arranger for the Facilities and to
underwrite one-third of the total US$900 million commitment, (ii) a second phase
("PHASE TWO") during which the three Arrangers will seek to obtain a core group
of approximately eight additional banks to serve as co-arrangers (the
"CO-ARRANGERS") of the Facilities, and (iii) a third phase ("PHASE THREE")
during which the three Arrangers and Co-Arrangers will generally syndicate the
facilities in the bank market. The Arrangers expect to commence efforts
<PAGE>
for Phase One and Phase Two promptly upon the execution of this Commitment
Letter and to complete Phase One and Phase Two prior to the Closing Date. The
Arrangers expect to commence Phase Three after the Closing Date.
The Parent and the Borrower agree, and agree to cause their
respective Subsidiaries, to actively assist the Arrangers in completing the
three phases of syndication in a manner that is satisfactory to the Arrangers.
Such assistance shall include (a) the Parent and the Borrower using commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from the existing lending relationships of the Parent and the Borrower, (b) if
requested by the Arrangers, direct contact between senior management and
advisors of the Parent and the Borrower and the proposed Lenders, (c) assistance
in the preparation of a Confidential Information Memorandum and provision of
other marketing and informational materials in order to achieve a successful
syndication and (d) the hosting, with the Arrangers, of one or more meetings of
prospective Lenders.
The Arrangers will manage all aspects of all phases of
syndication including decisions as to the selection of institutions to be
approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocations of the
commitments among the Lenders and the amount and distribution of fees among the
Lenders. The Arrangers will consult with the Parent and the Borrower regarding
the selection of the institutions to be approached.
To assist the Arrangers in their syndication efforts, each of
the Parent and the Borrower agree promptly to prepare and provide to the
Arrangers all information with respect to the Parent, the Borrower and the
Target and the transactions contemplated hereby, including all financial
information and projections (the "PROJECTIONS"), as the Arrangers may reasonably
request in connection with the arrangement and syndication of the Facilities.
The Parent and the Borrower agree to supplement the Projections and such other
information from time to time as the Arrangers may reasonably request so that
the representations and warranties in the following paragraph remain true and
correct until the close of general syndication.
The Parent and the Borrower hereby represent and covenant that
(a) all information other than the Projections (the "INFORMATION") that has been
or will be made available to the Arrangers by the Parent or the Borrower or any
of their representatives is, or will be when furnished (when taken together with
all other Information so made available), complete and correct in all material
respects and does not, and will not when furnished (when taken together with all
other Information so made available), contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made and (b) the Projections that have been or will be
made available to the Arrangers
<PAGE>
by the Parent or the Borrower or any of their representatives have been or will
be prepared in good faith based upon reasonable assumptions. Each of the Parent
and the Borrower understand that in arranging and syndicating the Facilities the
Arrangers will use and rely on the Information and Projections without
independent verification thereof.
As consideration for the commitments and agreements of the
Arrangers hereunder, the Parent and the Borrower agree to pay to the Arrangers
the arrangement and underwriting fees set forth in the Arrangers Fee Letter (the
"ARRANGERS' FEE LETTER") dated the date hereof and delivered herewith. As
consideration for the agreements of Barclays Bank PLC to serve as Facility
Agent, the Parent and the Borrower agree to pay to Barclays Bank PLC the agency
fees set forth in the Agency Fee Letter (the "AGENCY FEE LETTER" and together
with the Arrangers' Fee, the "FEE LETTER" ) dated the date hereof and delivered
herewith.
Subject to the total amount of the Facilities remaining
unchanged, the Arrangers shall be entitled to change the interest rate margin,
fees, structure, and terms of the Facilities, after good faith negotiations with
the Borrower and the Parent, if the Arrangers determine that such changes are
advisable in order to ensure a successful Phase One, Phase Two and Phase Three
syndication of the Facilities. The Arrangers' commitments under this Commitment
Letter are expressly subject to the agreement of the Borrower and the Parent to
such adjustment mechanism.
The commitments of each Barclays Bank PLC, National
Westminster Bank Plc, and the Arrangers hereunder and their respective
agreements to perform the services described herein are subject to the
following:
(a) there not occurring or becoming known to the
Arrangers any material adverse change in or affecting the business,
assets, property, financial condition or operations (whether before the
Acquisition or after giving effect to the Acquisition), in each case of
either (i) the Parent, the Borrower, and their respective Subsidiaries
taken as a whole or (ii) the Target and its Subsidiaries taken as a
whole;
(b) the Arrangers not becoming aware after the date
hereof of any material information or matter affecting the Parent, the
Borrower, the Target, or their respective Subsidiaries, or the
transactions contemplated by this Commitment Letter, including, without
limitation, the Acquisition, which is inconsistent in a material and
adverse manner with any material information or matter disclosed to the
Arrangers prior to the date hereof;
(c) except as agreed by the Arrangers in writing,
satisfaction that on and after the date hereof and prior to and during
the syndication of the Facilities there shall be no competing offering,
placement, arrangement, or syndication of any debt securities or bank
financing by or on behalf of the Parent, the Borrower, or the Target,
or any of their respective Subsidiaries,
(d) the negotiation, execution and delivery on or
before August
<PAGE>
14, 1999 of a mutually acceptable definitive Facility Agreement and
other documentation consistent with the Term Sheet and this Commitment
Letter; and
(e) satisfaction of the other conditions precedent
to the Closing Date set forth or referred to in the Term Sheet.
The Parent and the Borrower agree, jointly and severally, to
indemnify and hold harmless each of Barclays Bank PLC, National Westminster Bank
Plc, the Arrangers, the other Lenders, their respective affiliates and their
respective officers, directors, employees, advisors, and agents (each, an
"INDEMNIFIED PERSON") from and against any and all losses, claims, damages and
liabilities to which any such indemnified person may become subject arising out
of or in connection with this Commitment Letter, the Term Sheet, the Fee Letter,
the Facilities, the use of the proceeds thereof, the Acquisition, or any related
transaction or any claim, litigation, investigation or proceeding relating to
any of the foregoing, regardless of whether any indemnified person is a party
thereto, and to reimburse each indemnified person upon demand for any legal or
other expenses incurred in connection with investigating or defending any of the
foregoing, PROVIDED that the foregoing indemnity will not, as to any indemnified
person, apply to losses, claims, damages, liabilities or related expenses to the
extent they are found by a final, non-appealable judgment of a court to arise
from the willful misconduct or gross negligence of such indemnified person. In
addition, the Parent and the Borrower agree, jointly and severally, to reimburse
each of the Arrangers (but not the Co-Arrangers) and their respective affiliates
on demand for all reasonable out-of-pocket expenses (including due diligence
expenses, syndication expenses, travel expenses, and reasonable fees, charges
and disbursements of counsel) incurred in connection with the Facilities and any
related documentation (including this Commitment Letter, the Term Sheet, the Fee
Letter and the definitive financing documentation) or the administration,
amendment, modification, waiver or enforcement thereof. No indemnified person
shall be liable for any indirect or consequential damages in connection with its
activities related to the Facilities. No indemnified person shall be liable for
any damages arising from the use by others of information or other materials
obtained through electronic, telecommunications or other information
transmission systems or for any special, indirect, consequential or punitive
damages in connection with the Facilities.
This Commitment Letter shall not be assignable by either the
Parent or the Borrower without the prior written consent of each of the
Arrangers (and any purported assignment without such consent shall be null and
void), is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. This Commitment Letter may not be amended
or waived except by an instrument in writing signed by each of the Parent, the
Borrower, Barclays Bank PLC and National
<PAGE>
Westminster Bank Plc. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Commitment Letter by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. This Commitment Letter
(together with the attached Term Sheet) and the Fee Letter are the only
agreements that have been entered into among us with respect to the Facilities
and set forth the entire understanding of the parties with respect thereto.
This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to
conflicts of laws rules thereof (other than Section 5-1401 of the New York
General Obligations Law). The Parent and the Borrower each hereby irrevocably
submits to the jurisdiction of any New York State court or Federal court sitting
in the County of New York, New York in connection with any suit, action or
proceeding arising out of or relating to the provisions of this Commitment
Letter. FURTHERMORE, EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY EXPRESSLY WAIVES ANY RIGHTS SUCH PARTY MAY HAVE TO TRIAL BY
JURY WITH RESPECT TO ANY MATTER CONTAINED IN OR ARISING FROM THIS COMMITMENT
LETTER, THE TERM SHEET, THE FEE LETTER OR THE ACTIONS OF THE PARTIES RELATED
THERETO.
This Commitment Letter is delivered on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to officers, agents and advisors of the Parent and the
Borrower who are directly involved in the consideration of this matter, (b) as
may be compelled in a judicial or administrative proceeding or as otherwise
required by law (in which case the Parent and the Borrower agree to inform the
Arrangers promptly prior to such disclosure), or (c) to the extent it otherwise
becomes publicly available, PROVIDED that the foregoing restrictions shall cease
to apply (except in respect of the Fee Letters) after this Commitment Letter has
been signed and accepted by the Parent and the Borrower.
The Parent and the Borrower each acknowledge that the
Arrangers, Barclays Bank PLC, and National Westminster Bank Plc may be providing
debt financing, equity capital or other services (including financial advisory
services) to other companies in respect of which the Parent or the Borrower may
have conflicting interests regarding the transactions described herein and
otherwise. None of the Arrangers, Barclays Bank PLC, or National Westminster
Bank Plc will use confidential information obtained from the Parent or the
Borrower by virtue of the transactions contemplated by this letter or their
other relationships with the Parent or the Borrower in connection with the
performance by the Arrangers, Barclays Bank PLC, or National Westminster Bank
Plc of services for other companies, and none of
<PAGE>
the Arrangers, Barclays Bank PLC, or National Westminster Bank Plc will furnish
any such information to other companies. The Parent or the Borrower also
acknowledge that the Arrangers, Barclays Bank PLC, and National Westminster Bank
Plc shall have no obligation to use in connection with the transactions
contemplated by this letter, or to furnish to the Parent or the Borrower,
confidential information obtained from other companies.
The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall remain
in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or the commitments of the Arrangers,
Barclays Bank PLC, and National Westminster Bank Plc hereunder.
<PAGE>
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to us executed counterparts hereof and of the Fee Letter,
together with the amounts agreed upon pursuant to the Fee Letter to be payable
upon the acceptance hereof, not later than 2:00 p.m., New York City time, on
July 6, 1999. The commitments of the Arrangers, Barclays Bank PLC, and National
Westminster Bank Plc and the agreements herein will expire (i) on July 6, 1999
in the event the Arrangers have not received such executed counterparts and such
amounts in accordance with the immediately preceding sentence and (ii) on
November 5, 1999, if the Closing Date has not occurred prior to such date.
<PAGE>
Each of the Arrangers, Barclays Bank PLC, and National
Westminster Bank Plc is pleased to have been given the opportunity to assist you
in connection with this important financing.
Very truly yours,
BARCLAYS BANK PLC
By:
--------------------------------
Name:
NATIONAL WESTMINSTER
BANK PLC
By:
--------------------------------
Name:
Accepted and agreed:
BERISFORD PLC
By:
------------------------------
Name:
WELBILT CORPORATION
By:
------------------------------
Name:
<PAGE>
ANNEX A
SOURCES AND USES TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------- -------------- ---------------------- ---------------
USES $M SOURCES $M
- ------------------------------------------------- -------------- ---------------------- ---------------
<S> <C> <C> <C>
Purchase Scotsman Equity 364.27 New Bank 900.00
Facilities
- ------------------------------------------------- -------------- ---------------------- ---------------
*Refinance Existing Scotsman Debt 321.25 Cash 63.15
- ------------------------------------------------- -------------- ---------------------- ---------------
Refinance Existing Brutus Debt 12.15
- ------------------------------------------------- -------------- ---------------------- ---------------
Austral Put Cost 35.00
- ------------------------------------------------- -------------- ---------------------- ---------------
Available Working Capital Facility 194.68
- ------------------------------------------------- -------------- ---------------------- ---------------
Transaction Costs 35.80
- ------------------------------------------------- -------------- ---------------------- ---------------
$ 963.15 $ 963.15
- ------------------------------------------------- -------------- ---------------------- ---------------
</TABLE>
- --------
*Includes re-financing of existing Senate 8 5/8 % Senior Subordinated Notes due
2007
<PAGE>
TERMS AND CONDITIONS
PROJECT SENATE
<TABLE>
<S> <C>
BORROWERS: FACILITY A: Welbilt Corporation.
FACILITY B: Berisford plc (hereinafter "Brutus plc");
Welbilt Corporation.
ADDITIONAL BORROWERS: Other nominated wholly owned
subsidiaries as agreed.
DEFINITIONS: Unless otherwise noted, capitalized terms
have the meanings specified for such terms in
the remainder of this Term Sheet or, with
respect to certain financial terms, as
defined in Schedule A.
GUARANTORS: The obligations of the Borrowers will be
guaranteed on a joint and several basis
pursuant to guarantees ("Guarantees")
provided by Brutus plc and its Material
Subsidiaries (such Material Subsidiaries
taken together with the Borrowers, the
"Obligors"). The Borrowers will ensure that
at all times the Obligors as a group (i) own
at least 75% of the Consolidated Total Assets
of the Group (as defined below) and (ii) earn
at least 75% of the Consolidated EBITDA of
the Group. To ensure compliance with these
tests, non-Material Subsidiaries may from
time to time be required to accede to the
Guarantees as Guarantors.
DETAILS OF THE GUARANTEE STRUCTURE AND
SECURITY (BELOW) TO BE AGREED FOLLOWING
FULL REVIEW OF THE CORPORATE STRUCTURE
AND LEGAL ADVICE.
SECURITY: Subject to compliance with the margin
regulations (in the case of the shares of
Senate (as defined below)), pledge by the
holders (such holders, the "Pledgors") of
100% of the stock / equity interests of all
U.S. subsidiaries of Brutus plc (including
any U.S. subsidiary acquired on or after the
Closing Date).
<PAGE>
The above pledges will be released in the
event that either (i) the long term unsecured
debt of Brutus plc is rated (and continues to
be rated) at least BBB- or Baa3 by Standard &
Poor's and Moody's Investors Service,
respectively, or (ii) the ratio of
Consolidated Total Debt (including the
convertible unsecured loan stock issued by
Brutus plc (the "CULS")) to Consolidated
EBITDA as at the end of any fiscal quarter of
Brutus plc is less than 2.5x.
MATERIAL SUBSIDIARIES: Each subsidiary (including any subsidiary
acquired on the Closing Date) of the
Borrowers which owns 5% or more of the
Consolidated Total Assets of the Group or
earns 5% or more of the Consolidated EBITDA
of the Group will become a party to a
Guarantee on or before the Closing Date (as
defined below), and each subsidiary of the
Borrowers acquired after the Closing Date
which satisfies either of these tests will be
required to accede to the Guarantees as a
Guarantor to the extent it is legally able to
do so.
GROUP: The Borrowers and their subsidiaries.
ARRANGERS: Barclays Capital and Greenwich NatWest.
UNDERWRITERS: Barclays Bank PLC and National Westminster
Bank Plc.
FACILITY AGENT: Barclays Bank PLC.
LOC ISSUING BANK: Barclays Bank PLC.
LENDERS: Barclays Bank PLC, National Westminster Bank
Plc and a syndicate of banks to be formed by
the Arrangers in consultation with Brutus
plc.
TYPE OF FACILITY: FACILITY A: Term Loan Facility
FACILITY B: Revolving Credit Facility
<PAGE>
PURPOSE: FACILITY A: To provide part of the finance
required for the acquisition (the
"Acquisition") of Scotsman Industries, Inc.
("Senate") and its subsidiaries
(collectively, the "Senate Group") by an
indirect wholly-owned Delaware-incorporated
subsidiary of Welbilt Corporation ("Bidco"),
to refinance existing indebtedness of the
Group and the Senate Group, and to pay fees,
costs and other expenses incurred by the
Borrowers in connection with the Acquisition.
FACILITY B: To provide (i) part of the
finance required for the Acquisition and to
refinance existing indebtedness of the Group
and the Senate Group and (ii) finance for the
working capital needs and general corporate
purposes of the Group (including a sub-limit
to be agreed upon for letters of credit to be
issued by the LOC Issuing Bank) and for
permitted future acquisitions (but excluding
the acquisition of the Senate Group and
hostile acquisitions). No more than US$200
million of Facility B may be utilized to
finance the Acquisition and to refinance
existing indebtedness of the Group and the
Senate Group.
FACILITY AMOUNT: FACILITY A: US$600 million term loan
FACILITY B: US$300 million revolving loan.
During the period from the Closing Date to
the Merger Date (as defined below) the amount
available under Facility B will be
temporarily reduced on a dollar for dollar
basis by the aggregate principal amount of
debt of Brutus plc, Senate and their
respective subsidiaries outstanding on the
Closing Date (other than debt under the
Facilities and the permitted retained debt
described in Schedule B), PROVIDED that such
reduction of availability of Facility B shall
not preclude the utilization of Facility B
during such period for the purpose of
refinancing any such debt. Such reduction of
availability of Facility B will become
permanent as of the Merger Date if such debt
has not been repaid on or prior to such date.
FINAL MATURITY DATE: FACILITY A AND FACILITY B: 5 years from the
date of signing of the Facility Agreement.
<PAGE>
CURRENCY: FACILITY A: US Dollars
FACILITY B: US Dollars, Sterling, Euro, and
(subject to the agreement of Lenders) any
readily available and freely transferable
currency.
AVAILABILITY: FACILITY A: Subject to satisfaction of the
applicable Conditions Precedent below,
Facility A will become available for drawing
on the Closing Date until the Final Maturity
Date. Facility A will be available on a
delayed-draw basis for a period of 120 days
after the Closing Date (the "Delayed-Draw
Period") to pay that portion of the
consideration for the Acquisition that
becomes due and payable upon the consummation
of the Merger. Any amount undrawn at the end
of the Delayed-Draw Period will be cancelled.
FACILITY B: Subject to satisfaction of the
applicable Conditions Precedent below,
Facility B will be made available for drawing
on the Closing Date until the Final Maturity
Date.
The Commitments will terminate on November 5,
1999 if the Closing Date has not occurred
prior to such date.
SCHEDULED REPAYMENT: FACILITY A will be repaid in equal
quarterly installments commencing March 31,
2000 in aggregate annual amounts as follows,
PROVIDED that the installment due on March
31, 2000 shall count as two installments and
shall be in the amount of $25 million:
</TABLE>
<TABLE>
<CAPTION>
PERIOD ANNUAL REPAYMENT AMOUNT
------ -----------------------
<S> <C>
Year 1 $ 50 million
Year 2 $125 million
Year 3 $125 million
Year 4 $125 million
Year 5 $175 million
</TABLE>
<TABLE>
<S> <C>
FACILITY B will be repaid on or before the
Facility B Final Maturity Date.
Drawings on letters of credit issued under
Facility B will be reimbursed by the Borrower
on the date of such drawing. Each Lender
shall be irrevocably and unconditionally
obligated to reimburse the LOC Issuing Bank
on a pro rata basis for each drawing not
reimbursed by the Borrowers.
<PAGE>
VOLUNTARY PREPAYMENT At the Borrowers' discretion but subject to
AND COMMITMENT 10 days' prior notice, the Facilities may be
REDUCTIONS: prepaid/cancelled in whole or in part but,
if in part, in integral multiples to be
agreed. Facility A amounts prepaid/cancelled
may not be re-borrowed. Any breakage costs
incurred will be for the account of the
Borrowers.
Voluntary prepayment amounts will be applied
to Facility A in order of maturity.
MANDATORY PREPAYMENTS The Borrowers shall prepay the loans and/or
AND COMMITMENT reduce the commitments first under Facility A
REDUCTIONS: and then under Facility B in amounts equal
to the proceeds described below. Mandatory
prepayment amounts will be applied to
Facility A in inverse order of maturity:
i) All net cash proceeds received from any
issuance by Brutus plc or any of its
subsidiaries of indebtedness where the
aggregate amount of indebtedness exceeds
$25 million.
ii) The net after-tax proceeds of the sale
or other disposition of any property or
assets of Brutus plc or any of its
subsidiaries in excess of $50 million,
other than (a) net cash proceeds of
sales or other dispositions of inventory
in the ordinary course of business and
(b) certain other exceptions to be
negotiated provided there shall be no
carve out for Magnet Ltd.
iii) All net cash proceeds (i) in excess of
$5 million received under any casualty
insurance maintained by Brutus plc or
any of its subsidiaries and (ii)
received as a result of the taking of
any assets of the Group pursuant to the
power of eminent domain or condemnation,
unless, in the case of (i) and (ii),
such proceeds are reinvested in like
assets within 180 days;
<PAGE>
iv) All proceeds in excess of $5 million
received from pension plan reversions in
each case payable on receipt; and
v) 50% of Excess Cash Flow for each fiscal
year (beginning with the fiscal year
ending September 30, 2000) if the ratio
of Consolidated Total Debt to
Consolidated EBITDA as at the end of
such fiscal year is greater than or
equal to 2.5x, and otherwise zero
percent.
Excess Cash Flow defined as the operating
cashflow for the relevant period less the
aggregate of (a) capital expenditures, (b)
dividends, (c) cash interest on Indebtedness,
(d) amounts provided for and paid in respect
of taxes, (e) any scheduled debt repayment
(including Facility A), (f) any voluntary
prepayment of Facility A, and (g) any
voluntary prepayment of Facility B to the
extent the available commitments under
Facility B are permanently reduced in
connection with such repayment.
Notwithstanding the above, in the event that
the long term unsecured debt of Brutus plc is
rated (and continues to be rated) at least
BBB- or Baa3 by Standard & Poor's or Moody's
Investors Service respectively, the Mandatory
Prepayment conditions contained in clauses
(iii), (iv) and (v) shall cease to apply.
INTEREST PAYMENTS: Quarterly for Base Rate Loans; on the last
day of selected interest periods (which shall
be 1, 2, 3 and 6 months) for Euro-Dollar
Loans (and at the end of every three months,
in the case of interest periods of longer
than three months); and upon prepayment,
payable in arrears and computed on the basis
of a 360-day year in the case of Euro-Dollar
loans and a 365-day year in the case of Base
Rate Loans.
No interest period may extend beyond the
Final Maturity Date.
ADVANCES: Advances may be drawn in minimum amounts of
$10 million and integral multiples of $5
million thereafter or such amounts as may be
agreed by the Facility Agent and the Lenders
for other currencies.
<PAGE>
INTEREST: All amounts outstanding under the Facilities
shall bear interest, at the Borrowers'
option, as follows:
(a) at the Base Rate plus the applicable
Base Rate Margin; or
(b) at the reserve adjusted Euro-Dollar Rate
plus the applicable Euro-Dollar Margin
plus (in the case of Sterling advances)
Mandatory Costs.
After the occurrence and during the
continuation of an event of default, interest
shall accrue at a rate equal to the
applicable Base Rate or Euro-Dollar Rate plus
the applicable Margin plus an additional
2.00%.
EURO-DOLLAR RATE: An interest rate per annum (rounded upwards,
if necessary, to the next 1/16th of 1%) as
determined by the Facility Agent on the basis
of the arithmetic average at which
eurocurrency deposits approximately equal in
principal amount and maturity to the
currency, amount and interest period of the
advance being drawn are offered to first
class banks in the London interbank market by
each of two Reference Banks as of
approximately 11:00 a.m. (London time) two
business days prior to the beginning of the
requested interest period.
BASE RATE: For any day, an interest rate per annum
(rounded upwards, if necessary, to the next
1/16th of 1%) equal at all times to the
higher of (a) the Prime Rate of the Facility
Agent and (b) a rate equal to 0.5% above the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.
<PAGE>
EURO-DOLLAR MARGIN: The Initial Margin will be 1.50% per annum
until the Redetermination Date (as defined
below). On the Redetermination Date the
applicable Euro-Dollar Margin will reduce or
increase as set forth in the following table
and as provided in the next paragraph below.
After the Redetermination Date the applicable
Euro-Dollar Margin will reduce or increase as
set forth in the following table based upon
the ratio of Consolidated Total Debt
(including the CULS) to Consolidated EBITDA
as shown in the financial statements
delivered after the end of each fiscal
quarter commencing with the fiscal quarter
ending December 31, 1999:
</TABLE>
<TABLE>
<S> <C>
=Greater than 3.50x 1.750% per annum
=Greater than 3.00x Less than 3.50x 1.500% per annum
=Greater than 2.50x Less than 3.00x 1.25% per annum
=Greater than 2.00x Less than 2.50x 1.00% per annum
Less than 2.0x 0.875% per annum
</TABLE>
<TABLE>
<S> <C>
The Redetermination Date shall be the later
of (i) the Merger Date and (ii) the date
(which shall be no later than September 17,
1999) notified by the Borrowers to the
Facility Agent on which all or part of the
CULS shall have been converted to equity in
accordance with their terms. On the
Redetermination Date, the Borrower shall
calculate the ratio of Consolidated Total
Debt (including unconverted CULS) to
Consolidated EBITDA based on (i) the pro
forma Consolidated EBITDA of the Group as of
June 30, 1999 (or, if later, as of the most
recent fiscal quarter ending prior to the
Merger Date) after giving effect to the
Acquisition and the incurrence of debt in
connection therewith and (ii) the
Consolidated Total Debt of the Group
(determined as of the later of August 28,
1999 and the Merger Date) after giving effect
to (x) the Acquisition and the incurrence of
debt in connection therewith and (y) the
amount of CULS not converted to equity on the
applicable conversion date.
<PAGE>
Any reduction or increase in the applicable
Euro-Dollar Margin provided for above will
become effective for all outstanding loans
and letters of credit on the date on which
the Facility Agent receives a compliance
certificate for the relevant testing date.
Notwithstanding the above, in the event that
Brutus plc is rated (and continues to be
rated) at least BBB- or Baa3 by Standard &
Poor's or Moody's Investors Service
respectively, the applicable Euro-Dollar
Margin shall be 1.00%. Should Brutus plc be
rated investment grade and have a ratio of
Consolidated Total Debt (including CULS) to
Consolidated EBITDA of Less-than 2.0x, the
applicable Euro-Dollar Margin shall be
0.875%.
BASE RATE MARGIN: The Base Rate Margin shall be 1% lower than
the applicable Euro-Dollar Margin but in no
event less than zero.
LOC MARGIN: The Borrower shall pay letter of credit fees
on the stated amount of each outstanding
letter of credit equal to the Euro-Dollar
Margin in effect at such time.
COMMITMENT FEE: 0.375% until the ratio of Consolidated Total
Debt (including CULS) to Consolidated EBITDA
is less than 2.5x and 0.25% thereafter.
The commitment fee shall accrue from the
earlier of (i) the Closing Date and (ii)
August 14, 1999 and be calculated on the
undrawn, uncancelled portion of the
Facilities payable quarterly in arrears for
Facility B, and on or before the end of the
Delayed-Draw Period for Facility A.
ARRANGEMENT AND See accompanying arrangers fee letter.
UNDERWRITING FEE:
AGENCY FEES: See accompanying agency fee letter.
LOC ISSUING 1/8 of 1% of the face amount of each letter
BANK FEE: of credit.
Documentation: The availability of the Facilities will be
subject to negotiation and execution of a
Facility Agreement and related guarantee,
security, and other finance documentation
satisfactory to all parties. The terms will
be customary and appropriate and will
include, but not be limited to, the terms
contained in this Term Sheet.
<PAGE>
REPRESENTATIONS To be repeated on the date of each request
AND WARRANTIES: for an Advance and on each Drawdown Date
(and, in respect of Facility A, on the first
day of each Interest Period), including,
without limitation:
(a) Power, status and authority;
(b) Legal validity and enforceability;
(c) Non-contravention with other agreements;
(d) No default;
(e) Relevant consents and authorisations;
(f) Litigation;
(g) Accounts and information provided by
Obligors including but not limited to
that used in the Information Memorandum
including assumptions underlying the
Bank Base Case;
(h) Clear title to properties and liens;
ownership of all subsidiaries;
(i) Perfection and priority of liens
securing the Facilities;
(j) Payment of taxes;
(k) Employee benefit liabilities;
(l) Environmental;
(m) Compliance with laws (including the
margin regulations);
(n) No material adverse change; and
(o) Compliance with Millennium 2000 best
practice.
CONDITIONS PRECEDENT Usual and other conditions precedent for
TO CLOSING DATE: facilities of this nature, in form and
substance satisfactory to the Facility Agent
(acting at the direction of the Lenders),
including, without limitation those listed
below. The "Closing Date" shall be the date
on which all of such conditions shall be
satisfied in a manner satisfactory in form
and substance to the Facility Agent (acting
at the direction of the Lenders):
(a) Receipt by the Facility Agent of
authorising and constitutional
documentation of the Obligors, Bidco,
and the Pledgors, and any other
subsidiary of Brutus plc party to an
agreement referred to in clause (c)
below;
(b) Receipt by the Facility Agent of the
Agreement of Merger, the Offer Documents
contemplated thereby, and all other
documents contemplated thereby,
including all documentation evidencing
the terms and conditions of the
Acquisition (including all filings with
the Securities and Exchange Commission);
<PAGE>
(c) Receipt by the Facility Agent of a
Facility Agreement, Guarantees, pledge
agreements, and all other documents
contemplated hereby evidencing the
Facilities, the Security, and the
Guarantees, in each case, executed and
delivered by each Obligor and each
Pledgor party thereto;
(d) The corporate, capital and ownership
structure of Brutus plc and its
subsidiaries shall be satisfactory to
the Facility Agent (acting at the
direction of the Lenders) in all
respects;
(e) Bidco shall have acquired pursuant to
the Share Tender Offer, not less than a
majority of the common shares of Senate
(or such higher percentage of the
capital stock of Senate as shall be
required in order to, without the
affirmative vote of any other
shareholder (i) permit the Merger to be
consummated and (ii) immediately appoint
a majority of the Senate Board of
Directors or such higher number of
directors as is required to approve the
Merger) and the Share Tender Offer shall
have been consummated pursuant to the
Agreement of Merger and Offer Documents,
no provision of which shall have been
amended, supplemented, waived or
otherwise modified in any material
respect without the prior written
consent of the Facility Agent (acting at
the direction of the Lenders);
(f) Confirmation that all existing bank,
capital markets, and other debt
facilities of Brutus plc and its
subsidiaries have been repaid in full
and that all commitments, obligations,
liens and security interests related
thereto shall have been terminated or
released, PROVIDED that (i) the
permitted retained debt of Brutus plc
and its subsidiaries listed on Schedule
B may remain outstanding in the
principal amounts specified therein and
(ii) $100 million aggregate principal
amount of the 8 5/8% Senior Subordinated
Notes due 2007 (the "Subordinated
Notes") may remain outstanding subject
to satisfaction of clause (g) below;
<PAGE>
(g) Receipt by the Facility Agent of (i) the
Debt Tender Offer Documents evidencing
the Debt Tender Offer to be conducted by
Bidco by and all other documents
contemplated thereby (including all
filings with respect thereto with the
Securities and Exchange Commission) and
(ii) satisfactory evidence that holders
of at least $51,000,000 aggregate
principal amount of the Subordinated
Notes have tendered their Subordinated
Notes pursuant to the Debt Tender Offer
so that on the date on which the Debt
Tender Offer closes (which Brutus plc
covenants shall occur no more than five
business days after the closing of the
Share Tender Offer) the covenants and
other terms and provisions of such
Subordinated Notes will be amended in a
manner satisfactory to the Facility
Agent (acting at the direction of the
Lenders);
(h) Receipt of necessary consents and
approvals in connection with the
Acquisition and the Facilities and
receipt by the Facility Agent of copies
thereof;
(i) Receipt of all governmental, judicial
and regulatory clearances and approvals
necessary or advisable in connection
with the Acquisition and the Facilities
(and receipt by the Facility Agent of
copies thereof) and the lapse, without
action taken, of all waiting periods in
connection with any clearance or
approval;
(j) Receipt by the Facility Agent of all due
diligence reports as required by the
Arrangers including, inter alia,
accountants, tax, solvency,
environmental and legal due diligence,
all addressed to the Arrangers;
(k) Receipt by the Facility Agent on behalf
of the Lenders of perfected first
priority security interests in the
Security (other than the shares of
Senate to the extent required by the
margin regulations) and satisfactory
lien search reports regarding each
Obligors' assets;
(l) Receipt by the Facility Agent of
confirmation from Brutus plc's auditors
of the Borrower's tax position with
regard to the level of outstanding tax
losses;
<PAGE>
(m) No material adverse change in or
affecting the business, assets,
property, financial condition or
operations (whether before the
Acquisition or after giving effect to
the Acquisition), in each case of either
(i) the Parent, the Borrower, and their
respective Subsidiaries taken as a whole
or (ii) Senate and its Subsidiaries
taken as a whole;
(n) Absence of (i) any injunction regarding
the Acquisition or the financing or (ii)
litigation which could reasonably be
expected to result in any injunction or
stay of the Acquisition or the
financing;
(o) Receipt by the Facility Agent of legal
opinions regarding the Acquisition and
the finance documentation;
(p) Receipt by the Facility Agent of the
Base Case Financial Model, pro forma
financial statements, and Deloitte audit
of Base Case Financial Model;
(q) The Acquisition and financing as
documented and consummated will be in
compliance with the margin regulations;
and
(r) Payment by the Borrowers of all fees and
expenses of the Arrangers, the Facility
Agent and the Lenders.
All documents delivered to the Facility Agent
pursuant to the above will be accompanied by
copies for each other Lender.
Conditions Precedent Usual and other conditions precedent for
TO LOANS ON THE MERGER facilities of this nature, in form and
DATE: substance satisfactory to the Facility Agent
(acting at the direction of the Lenders),
including, without limitation, those listed
below. The "Merger Date" shall be the date on
which all of such conditions shall be
satisfied in a manner satisfactory in form
and substance to the Facility Agent (acting
at the direction of the Lenders):
(a) The Merger and all other aspects of the
Acquisition shall have been consummated
pursuant to the Agreement of Merger and
Offer Documents, no provision of which
shall have been amended, supplemented,
waived or otherwise modified in any
material respect without the prior
written consent of the Facility Agent
(acting at the direction of the
Lenders);
(b) If not provided on the Closing Date,
each of Senate and the Subsidiaries of
Senate that are Material Subsidiaries
shall have executed and delivered a
Guarantee;
<PAGE>
(c) If not provided on the Closing Date,
each Pledgor that is a holder of the
stock / equity interests of Senate and
the U.S. Subsidiaries of Senate shall
have entered into agreements to pledge
and shall have pledged the stock /
equity interests of Senate and such U.S.
Subsidiaries;
(d) Confirmation that all existing bank,
capital markets, and debt facilities of
Brutus plc and its subsidiaries have
been repaid in full and that all
commitments, obligations, liens and
security interests related thereto shall
have been terminated or released;
PROVIDED that (i) the permitted retained
debt of Brutus plc and its subsidiaries
listed in Schedule B may remain
outstanding in the principal amounts
specified therein and (ii) no more than
$49,000,000 aggregate principal amount
of the Subordinated Notes may remain
outstanding unless the merger is a short
form merger in which case up to
$100,000,000 of the Subordinated Notes
may remain outstanding for no more than
five business days after the Merger
Date); and
(e) Receipt of all governmental, judicial
and regulatory clearances and approvals
and other consents and approvals
necessary or advisable in connection
with the Merger and receipt by the
Facility Agent of copies thereof.
All documents delivered to the Facility Agent
pursuant to the above will be accompanied by
copies for each other Lender.
CONDITIONS PRECEDENT Usual and other conditions precedent for
TO EACH LOAN facilities of this nature, in form and
(INCLUD-ING INITIAL LOAN substance satisfactory to the Facility Agent
AND MERGER DATE (acting at the direction of the Lenders),
LOAN): including, without limitation:
(a) Truthfulness of all representations and
warranties;
(b) Absence of any Event of Default or
potential Event of Default; and
(c) Receipt of appropriate borrowing
notices.
COVENANTS: Customary and appropriate affirmative and
negative covenants, to include, without
limitation:
(a) Provision of financial and other
information as follows:
<PAGE>
(i) within 75 days after the end of
each fiscal year of Brutus plc,
annual audited consolidated
financial statements of Brutus plc
prepared in accordance with UK
GAAP;
(ii) within 60 days after the end of the
first six months of each fiscal
year of Brutus plc, standard UK
semiannual consolidated disclosure
and financial statements of Brutus
plc prepared in accordance with UK
GAAP;
(iii) within 45 days after the end of
the first and third quarters of
each fiscal year of Brutus plc,
consolidated disclosure and
financial statements of Brutus plc
in the same form as those delivered
pursuant to clause (ii) above and
prepared in accordance with UK GAAP
(iv) financial ratio, covenant
compliance, no default, and other
compliance certificates provided by
the chief financial officer of
Brutus plc at the end of each
quarter;
(v) notice of any Event of Default or
potential Event of Default; and
(vi) other customary reporting
requirements.
All financial statements referred to in
clauses (i) through (iii) above shall be
accompanied by (x) footnotes reconciling
(in Sterling) the UK GAAP preparation of
such statements with US GAAP and (y)
certifications from the chief financial
officer of Brutus plc.
(b) Pari passu ranking with all other
secured and unsubordinated creditors;
(c) Negative pledge prohibiting liens and
transactions similar to security
(subject to agreed exceptions and
limited to the extent required to comply
with the margin regulations);
(d) Restrictions on disposals (subject to
agreed exceptions and limited to the
extent required to comply with the
margin regulations);
(e) Limitations on indebtedness and
guarantees (subject to agreed
exceptions);
(f) Limitations on investments;
(g) No significant change of business;
(h) Restrictions on mergers and acquisitions
(subject to agreed exceptions); and
(i) Notification of default.
<PAGE>
HEDGING: The Borrowers will undertake such interest
rate hedging as is reasonably required by the
Arrangers.
FINANCIAL COVENANTS: Relating to the consolidated Brutus plc:
(a) Adjusted Consolidated Net Worth to be
not less than (pound)135 million at any
time. Such specified amount shall be
increased annually at the end of each
fiscal year by an amount equal to 25% of
the Group's Consolidated Net Income for
such fiscal year commencing with the
fiscal year ending September 30, 2000;
(b) Ratio of Consolidated EBITDA to
Consolidated Net Interest Payable
(including CULS) to be not less than
3.5x, to be tested quarterly on a
trailing 12 month basis.
(c) Ratio of Consolidated Total Debt
(excluding CULS) to Consolidated EBITDA
not to exceed 3.5x for the quarter
ending December 31, 1999; 3.25x for the
quarter ending March 31, 2000; 3.0x for
the two quarters ending June 30, 2000
and September 30, 2000; 2.75x in year
two; and 2.5x thereafter; in each case,
to be tested at the end of each fiscal
quarter commencing with the fiscal
quarter ending December 31, 1999, on a
trailing 12 month basis.
Events of Default: Customary and appropriate, applicable to each
Obligor, including, without limitation:
(a) Cross default (with respect to Group
indebtedness);
(b) Non-payment;
(c) Breach of obligations;
(d) Misrepresentation;
(e) Insolvency events;
(g) Cessation of business;
(h) Material adverse change;
(i) Unlawfulness and effectiveness of
guarantees;
(j) Impairment of security interests in
collateral;
(k) Change of control or ownership;
(l) Invalidity of any financing or security
document;
(m) Failure of Merger to occur within
120 days after the Closing Date.
<PAGE>
OTHER PROVISIONS: (a) Illegality;
(b) Alternative interest rates;
(c) Indemnities (including break funding
costs and stamp duty);
(d) Reimbursement of increased costs of the
Banks or their holding companies
(resulting from the imposition of
capital ratio or reserve requirements or
other measures imposed by regulatory
authorities or by law including any new
requirements imposed as a result of the
proposed new Basel framework).
TRANSFERABILITY: Each Lender may transfer its rights and
obligations without restriction in minimum
amounts of $5 million (or if less, the
remainder of such Lenders commitments and
loans). Transfer may be made on a pro-rata or
non pro-rata basis.
Lenders are entitled to disclose information
to potential transferees.
No transfers of rights and obligations is
permitted by the Borrowers.
SYNDICATION: An information memorandum and bank
presentation(s) will be required for
syndication. The Arrangers will assist the
Borrowers in the preparation of such
materials and the Borrowers will co-operate
with and assist during the syndication
process as necessary. The Borrowers will
agree short continuous Interest Periods until
completion of syndication.
TAXES: All payments shall be made free and clear of
all taxes, withholdings or deductions of any
kind whatsoever present and future. Payments
shall be grossed-up in the event of
withholding tax or other deduction.
EXPENSES: The Borrowers will pay all out-of-pocket
expenses (including legal fees and the cost
of any agreed publicity) plus any appropriate
regulatory tax including VAT thereon incurred
by the Arrangers in connection with the
negotiation, syndication, documentation and
signing of the Facility Agreement, whether
the documentation is signed or not.
<PAGE>
PUBLICITY: Any press/public announcement made in
relation to the Facilities or which refers to
the Arrangers to be agreed.
LENDERS' LEGAL Skadden Arps Slate Meagher & Flom LLP
COUNSEL:
GOVERNING LAW, New York.
SUBMISSION TO
JURISDICTION:
</TABLE>
<PAGE>
SCHEDULE A TO TERM SHEET
CERTAIN DEFINITIONS
"ADJUSTED CONSOLIDATED NET WORTH" means, as of any date, the
amount of (i) total stockholders' equity (including ,without limitation, common
stock, preferred stock, additional paid in capital, and retained earnings or
deficit), of Brutus plc and its subsidiaries on a consolidated basis and (ii)
the aggregate principal amount of the CULS.
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Net
Interest Payable, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income to the extent reflected as a charge or
otherwise deducted from the determination of Consolidated Net Income (other than
any non-cash charges to the extent such charges represent an accrual of or
reserve for cash expenditures in any future period), less (a) other non-cash
items increasing Consolidated Net Income, and (b) the amount for such period of
gains on sales of assets (excluding sales in the ordinary course of business)
and other extraordinary gains, all of the foregoing as determined on a
consolidated basis in conformity with UK GAAP.
"CONSOLIDATED NET INTEREST PAYABLE" means, for any period (as
determined for Brutus plc and its Subsidiaries on a consolidated basis), (i)
total interest expense on all Indebtedness of Brutus plc and its Subsidiaries
(including that portion attributable to capital leases) payable in cash (whether
in that period or any other period), including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements and other Hedge Agreements less (ii) all cash interest received by
Brutus plc and its subsidiaries. Interest on the CULS shall be excluded or
included in Consolidated Net Interest Payable as specified in the relevant
provision in the Term Sheet.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of the Brutus plc and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with UK GAAP; PROVIDED that there shall be excluded therefrom (i) the income (or
loss) of any Person (other than a Subsidiary of Brutus plc) in which any other
Person (other than Brutus plc or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Brutus plc or any of its Subsidiaries by such Person during such period,
(ii) the income of any Subsidiary of Brutus plc to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iii) any after-tax gains
or losses attributable to sales of assets, (iv) all merger, restructuring and
integration related costs and expenses resulting from the Acquisition, and (v)
(to the extent not included in clauses (i) through (iv)
<PAGE>
above) any net extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED TOTAL ASSETS" means the sum of fixed assets
(excluding goodwill) and current assets less liabilities falling due within one
year of Brutus plc and its Subsidiaries on a consolidated basis as determined in
conformity with UK GAAP.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all outstanding
Indebtedness of Brutus plc and its Subsidiaries on a consolidated basis as
determined in conformity with UK GAAP. The CULS shall be excluded or included in
Consolidated Total Debt as specified in the relevant provision in the Term
Sheet.
"INDEBTEDNESS" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with UK GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money
(other than current accounts payable incurred in the ordinary course of business
and accrued expenses incurred in the ordinary course of business), (iv) any
obligation owed for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA and current
trade payables incurred in the ordinary course of business), (v) all obligations
evidenced by notes, bonds, debentures or other similar instruments, (vi) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to any property or assets acquired by such
Person, (vii) all obligations, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities to the extent not
reflected as trade liabilities on the balance sheet of such Person in accordance
with UK GAAP, (viii) all obligations, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any capital stock, (ix) all
guarantee obligations in respect of obligations of the kind referred to in
clauses (i) through (viii) above, and (x) all indebtedness secured by any Lien
on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
NOTE: If any Person is merged into or consolidated with Brutus plc or any of its
Subsidiaries or all or substantially all of such Person's assets are acquired by
Brutus plc or any of its Subsidiaries, Consolidated EBITDA, Consolidated Net
Income, and Consolidated Interest Payable for any relevant twelve month period
shall be calculated on a PRO FORMA basis as if such Person had been so merged,
consolidated, or acquired by Brutus plc or any of its Subsidiaries immediately
prior to the start of such period.
<PAGE>
SCHEDULE B TO THE TERM SHEET
PERMITTED RETAINED DEBT
<TABLE>
<CAPTION>
SENATE
Amount
Borrower (US$ in Maturity Comments
000's)
- --------------------------- ------------ ------------ ----------------------------------------------
<S> <C> <C> <C>
Scotsman Group Inc. 9250 TBD Allendale County IRB
Delfield (U.S.) 3150 TBD Town of Covington IRB
Delfield (U.S.) 350 TBD Isabella County IRB
Frimont (Italy) 787 Long Loan from Italian Min. of Industry, 0-1%
int. rate, unsec., no covenants
Castel MAC (Italy) 684 Long Loan from Italian Min. of Industry, 0-1%
int. rate, unsec., no covenants
Hartek (Germany) 2387 One year Deutsche Bank/Austria Bank, prepayment
penalty, 4.4-4.75% interest in DM,
unsecured, loose assets/equity covenant
Scotsman China 401 Demand Loan fr. BNP, unsec., gty from Senate, no
covenants, competitive interest rate
Misc. Capital Leases 1535
Austral 14,632 Deemed included on this schedule only to the
extent not secured; deleted otherwise
------------
TOTAL 33,176
------------
</TABLE>
<TABLE>
<CAPTION>
BRUTUS PLC
Borrower Amount Maturity Comments
- --------------------------- ------------ ------------ ----------------------------------------------
<S> <C> <C>
Frymaster 6550 2003 Bullet payment, SBLC credit enhancement
Mile High 4500 11/1/99 Fixed at 6.1%
Welbilt Bonds 2175 11/1/99
------------
TOTAL 13,225
------------
------------
GRAND TOTAL 46,401
------------
------------
</TABLE>
<PAGE>
Exhibit 99(c)(1)
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
by and among
WELBILT COPORATION,
BERISFORD ACQUISITION CORPORATION
and
SCOTSMAN INDUSTRIES, INC.
dated as of
July 1, 1999
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
THE OFFER
<S> <C> <C>
Section 1.1 The Offer.......................................................................................2
Section 1.2 Company Actions.................................................................................3
Section 1.3 SEC Documents...................................................................................3
Section 1.4 Directors.......................................................................................5
ARTICLE II
The Merger
Section 2.1 The Merger......................................................................................6
Section 2.2 Effective Time..................................................................................6
Section 2.3 Closing.........................................................................................7
Section 2.4 Conversion of Capital Stock.....................................................................7
Section 2.5 Exchange of Certificates........................................................................7
Section 2.6 Withholding Taxes...............................................................................9
Section 2.7 Stock Options...................................................................................9
Section 2.8 Appraisal Rights................................................................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization, Standing and Corporate Power.....................................................10
Section 3.2 Subsidiaries...................................................................................10
Section 3.3 Capital Structure..............................................................................11
Section 3.4 Authority; Noncontravention; Company Action....................................................12
Section 3.5 SEC Documents; Financial Statements............................................................13
Section 3.6 Schedule 14D-9; Offer Documents; Proxy Statement...............................................13
Section 3.7 Absence of Certain Changes or Events...........................................................14
Section 3.8 Litigation.....................................................................................14
Section 3.9 Absence of Changes in Benefit Plans; SEC Disclosure............................................14
Section 3.10 Employee Benefits; ERISA.......................................................................14
Section 3.11 Taxes..........................................................................................17
Section 3.12 No Excess Nondeductible Payments...............................................................18
Section 3.13 Compliance with Applicable Laws................................................................18
Section 3.14 Environmental Matters..........................................................................19
Section 3.15 Intellectual Property..........................................................................20
Section 3.16 Contracts......................................................................................20
Section 3.17 Labor Relations................................................................................21
Section 3.18 Products Liability; Recalls....................................................................22
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.19 Applicability of State Takeover Statutes.......................................................22
Section 3.20 Voting Requirements............................................................................22
Section 3.21 Brokers........................................................................................22
Section 3.22 Opinion of Financial Advisor...................................................................22
Section 3.23 Year 2000......................................................................................23
Section 3.24 Absence of Questionable Payments...............................................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Section 4.1 Organization, Standing and Corporate Power.....................................................23
Section 4.2 Authority; Noncontravention....................................................................23
Section 4.3 Proxy Statement; Offer Documents...............................................................24
Section 4.4 Operations of Purchaser........................................................................25
Section 4.5 Brokers........................................................................................25
Section 4.6 Sufficient Funds...............................................................................25
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company..............................................................25
Section 5.2 Access; Confidentiality........................................................................28
Section 5.3 Special Meeting, Proxy Statement...............................................................29
Section 5.4 Reasonable Efforts; Notification...............................................................29
Section 5.5 No Solicitation................................................................................31
Section 5.6 Publicity......................................................................................32
Section 5.7 Transfer Taxes.................................................................................32
Section 5.8 State Takeover Laws............................................................................32
Section 5.9 Indemnification and Insurance..................................................................33
Section 5.10 Employees......................................................................................34
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.....................................34
ARTICLE VII
TERMINATION
Section 7.1 Termination....................................................................................35
Section 7.2 Effect of Termination..........................................................................37
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
MISCELLANEOUS
<S> <C> <C>
Section 8.1 Fees and Expenses..............................................................................37
Section 8.2 Amendment and Modification.....................................................................38
Section 8.3 Nonsurvival of Representations and Warranties..................................................38
Section 8.4 Notices........................................................................................38
Section 8.5 Interpretation.................................................................................39
Section 8.6 Counterparts...................................................................................39
Section 8.7 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership............................39
Section 8.8 Severability...................................................................................39
Section 8.9 Governing Law..................................................................................40
Section 8.10 Assignment.....................................................................................40
Section 8.11 Enforcement....................................................................................40
Section 8.12 Extension; Waiver..............................................................................40
Section 8.13 Certain Undertakings of Parent.................................................................41
Section 8.14 Definitions....................................................................................41
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 1, 1999, by and
among WELBILT CORPORATION, a Delaware corporation ("Parent"), BERISFORD
ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned Subsidiary of
Parent ("Purchaser"), and SCOTSMAN INDUSTRIES, INC., a Delaware corporation (the
"Company"). Certain capitalized terms used in this Agreement have the meanings
ascribed to them in Article VIII.
WHEREAS, the Board of Directors of each of Parent, Purchaser
and the Company have approved, and deem it fair to, advisable and in the best
interests of their respective stockholders to consummate, the acquisition of the
Company by Parent and Purchaser upon the terms and subject to the conditions set
forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser
make a cash tender offer to acquire all shares of the issued and outstanding
common stock, $.10 par value, of the Company (the "Shares") for $33.00 per
share, net to the seller in cash, upon the terms and subject to the conditions
set forth herein;
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and the Company have approved this
Agreement and the Merger (as herein defined) following the Offer (as herein
defined) pursuant to which Purchaser shall merge with and into the Company and
outstanding Shares shall be converted into the right to receive the Offer Price
(as herein defined) in cash, without interest, all in accordance with the DGCL
(as herein defined) and upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of the Company has determined
that the consideration to be paid for each Share in the Offer and the Merger is
fair to the holders of such Shares and has resolved to recommend that the
holders of such Shares tender their Shares pursuant to the Offer and approve and
adopt this Agreement and the Merger upon the terms and subject to the conditions
set forth herein; and
WHEREAS, the Company, Parent and Purchaser desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
<PAGE>
ARTICLE I
THE OFFER
SECTION 1.1 THE OFFER. (a) On the fifth business day after the public
announcement of the execution hereof Purchaser shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) a tender offer (the "Offer") for all of the outstanding Shares
at a price of $33.00 per Share, net to the 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 the conditions set forth in Annex A hereto.
(b) The obligations of Purchaser 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
conditions set forth in Annex A hereto, any of which may be waived in whole or
in part by Purchaser in its sole discretion except that Purchaser may not waive
the Minimum Condition without the consent of the Company. The Offer shall be
made by means of an offer to purchase (the "Offer to Purchase") containing the
terms set forth in this Agreement and the conditions set forth in Annex A
hereto.
(c) Purchaser expressly reserves the right to modify the terms
of the Offer; PROVIDED that, without the Company's prior written consent,
Purchaser shall not decrease the Offer Price, change the initial scheduled
expiration of the Offer to a date earlier then the date 25 business days after
the date the Offer is commenced, change the form of consideration to be paid in
the Offer or decrease the number of Shares sought, extend the Offer (except as
otherwise expressly permitted in this Section 1.1(c) or required by Section
1.1(d)) or amend any other condition of the Offer in any manner adverse to the
holders of the Shares or impose additional conditions without the prior written
consent of the Company; PROVIDED FURTHER, HOWEVER, that, if on the initial
scheduled expiration date of the Offer, which shall be 25 business days after
the date that the Offer is commenced, all conditions to the Offer shall not have
been satisfied or waived, Purchaser may, from time to time until such time as
all such conditions are satisfied or waived, extend the expiration date. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by applicable Law in connection with such increase, in each case
without the consent of the Company. Purchaser shall, on the terms and subject to
the prior satisfaction or waiver of the conditions of the Offer, accept for
payment and pay for Shares validly tendered as promptly as practicable (and in
any event within three business days); PROVIDED, HOWEVER, that if, immediately
prior to the initial expiration date of the Offer, the Shares validly tendered
and not withdrawn pursuant to the Offer equal more than 75% but less than 90% of
the outstanding Shares, Purchaser, in its sole judgment, may extend the Offer
for a period not to exceed 5 business days, notwithstanding that all conditions
to the Offer are satisfied as of such expiration date of the Offer. If this
Agreement is terminated, Purchaser shall, and Parent shall cause Purchaser to,
promptly terminate the Offer.
(d) Parent and Purchaser agree that Purchaser will not
terminate the Offer between scheduled expiration dates (except in the event that
this Agreement is terminated pursuant to Section 7.1) and that, in the event
that Purchaser would otherwise be entitled to terminate the Offer at any
scheduled expiration date thereof due to the failure of one or more of the
conditions set forth in Annex A, unless this Agreement shall have been
terminated pursuant to Section 7.1, Purchaser shall, and Parent shall cause
Purchaser to, extend the Offer until such
2
<PAGE>
date as the conditions set forth in Annex A have been satisfied or such later
date as required by applicable law; PROVIDED, HOWEVER, that nothing herein shall
require Purchaser to extend the Offer beyond the Outside Date.
(e) Parent shall provide or cause to be provided to Purchaser
on a timely basis all funds necessary to accept for payment, and pay for, any
Shares that are validly tendered and not withdrawn pursuant to the Offer and
that Purchaser is permitted to accept for payment under applicable law and pay
for, pursuant to the Offer.
SECTION 1.2 COMPANY ACTIONS. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, has (i) by a vote of all those present
determined that each of the Agreement, the Offer and the Merger (as defined in
Section 2.1) are fair to and in the best interests of the stockholders of the
Company, (ii) by a vote of all those present approved this Agreement, the Offer,
the acquisition of Shares pursuant to the Offer and the Merger for purposes of
Section 203 of the DGCL (the "Section 203 Approval"), (iii) received the opinion
of Morgan Stanley & Co. Incorporated ("Morgan Stanley Dean Witter"), financial
advisor to the Company, to the effect that, as of the date of this Agreement,
the Offer Price to be received by holders of Shares pursuant to the Offer and
the Merger Consideration (as defined herein) pursuant to the Merger is fair to
the stockholders of the Company from a financial point of view, (iv) approved
this Agreement and the transactions contemplated hereby and thereby, including
the Offer and the Merger (collectively, the "Transactions") and (v) resolved to
recommend that the stockholders of the Company accept the Offer, tender their
Shares thereunder to Purchaser and approve and adopt this Agreement and the
Merger (it being understood that, notwithstanding anything in this Agreement to
the contrary, if the Company's Board of Directors modifies or withdraws its
recommendation in accordance with the terms of Section 5.5, such modification or
withdrawal shall not constitute a breach of this Agreement).
(b) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to Purchaser mailing labels, security position
listings and any available listings or computer files containing the names and
addresses of all holders of record of the Shares as of a recent date, and shall
furnish Purchaser with such additional information (including, but not limited
to, updated lists of holders of the Shares and their addresses, mailing labels
and lists of security positions) and such assistance as Purchaser or its agents
may reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable Law, and except
for such steps as are necessary to disseminate the Offer Documents (as herein
defined) and any other documents necessary to consummate the Merger, Parent,
Purchaser and their affiliates and associates shall hold in confidence the
information contained in any such labels, listings and files and all other
information delivered pursuant to this Section 1.2(b), will use such information
only in connection with the Offer and the Merger and, if this Agreement shall be
terminated, will promptly deliver to the Company all copies, extracts or
summaries of such information in their possession or the possession of their
agents.
SECTION 1.3 SEC DOCUMENTS. (a) On the date the Offer is commenced,
Parent and Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 in accordance
with the Exchange Act with respect
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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
(collectively, together with any amendments and supplements thereto, the "Offer
Documents"). Concurrently with the filing of the Schedule 14D-1 by Parent and
Purchaser, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 in accordance with the Exchange Act (together with
all amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-9"), which shall, except as otherwise provided herein, contain the
recommendation referred to in clause (v) of Section 1.2(a) hereof (subject to
the right of the Board of Directors of the Company to modify or withdraw such
recommendation in accordance with Section 5.5), and the Company shall also file
therewith the information required to be distributed to the stockholders of the
Company pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder as is necessary to enable Parent's designees to be elected to the
Company's Board of Directors pursuant to Section 1.4 hereof; provided that the
Parent shall have provided to the Company on a timely basis all information
required to be included therein with respect to such designees.
(b) Parent and Purchaser will take all steps necessary to
ensure that the Offer Documents, and the Company will take all steps necessary
to ensure that the Schedule 14D-9 and the information required to be distributed
to the stockholders of the Company pursuant to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder as is necessary to enable Parent's
designees to be elected to the Company's Board of Directors pursuant to Section
1.4 hereof, will comply in all material respects with the provisions of
applicable Federal and state securities Laws. Each of Parent and Purchaser will
take all steps necessary to cause the Offer Documents, and the Company will take
all steps necessary to cause the Schedule 14D-9 and the information required to
be distributed to the stockholders of the Company pursuant to Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors pursuant to
Section 1.4 hereof, 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
and state securities Laws and Parent or Purchaser 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. Each of
Parent and Purchaser, on the one hand, and the Company, on the other hand, will
promptly correct any information provided by it for use in the Offer Documents
and the Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and each of Parent and Purchaser will take
all steps necessary to cause the Offer Documents, and the Company will 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 and state securities Laws. Parent and
its counsel shall be given a reasonable opportunity to review and comment upon
the Schedule 14D-9 and all amendments and supplements thereto prior to their
filing with the SEC or dissemination to stockholders of the Company and the
Company and its counsel shall be given a reasonable opportunity to review and
comment upon the Schedule 14D-1 and the Offer Documents and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Parent and its
counsel with copies of any written comments that the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and each of Parent and Purchaser agrees to
provide the Company and its counsel with copies of any written comments
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that Parent, Purchaser or their counsel may receive from the SEC or its staff
with respect to the Offer Documents promptly after the receipt of such comments.
SECTION 1.4 DIRECTORS. (a) Promptly after the purchase of and payment
for any Shares by Purchaser or any of its affiliates as a result of which
Purchaser and its affiliates own beneficially at least a majority of then
outstanding Shares, Parent shall be entitled, to the extent permitted by law, to
designate such number of directors, rounded up to the next whole number, on the
Company's Board of Directors, subject to compliance with Section 14(f) of the
Exchange Act, as is equal to the product of the total number of directors on
such Board (giving effect to the increase in the size of such Board pursuant to
this Section 1.4) multiplied by the percentage that the number of Shares
beneficially owned by Purchaser (including Shares so accepted for payment) bears
to the total number of Shares then outstanding. In furtherance thereof, the
Company shall, upon request of Parent, use its best efforts promptly either to
increase the size of its Board of Directors or to secure the resignations of
such number of its incumbent directors, or both, as is necessary to enable such
designees of Parent to be so elected or appointed to the Company's Board of
Directors, and the Company shall take all reasonable actions available to the
Company to cause such designees of Parent to be so elected or appointed. At such
time, the Company shall, if requested by Parent, also take all action necessary
to cause Persons designated by Parent to constitute at least the same percentage
(rounded up to the next whole number) as is on the Company's Board of Directors
of (i) each committee of the Company's Board of Directors, (ii) each board of
directors (or similar body) of each Subsidiary of the Company and (iii) each
committee (or similar body) of each such board.
(b) Notwithstanding the provisions of Section 1.4(a), the
parties hereto shall use their respective reasonable best efforts to ensure that
at least three of the members of the Board shall, at all times prior to the
Effective Time (as defined in Section 2.2 hereof) be, Continuing Directors; and
PROVIDED, that, in such event, if the number of Continuing Directors shall be
reduced below three for any reason whatsoever, the remaining Continuing
Directors shall, to the fullest extent permitted by law, designate a person to
fill such vacancy who shall be deemed to be a Continuing Director for purposes
of this Agreement or, if no Continuing Directors then remain, the other
directors shall designate three persons to fill such vacancies who shall not be
officers or affiliates of the Company or any of its Subsidiaries, or officers or
affiliates of Parent or any of its Subsidiaries, and such persons shall be
deemed to be Continuing Directors for purposes of this Agreement. From and after
the time, if any, that Parent's designees constitute a majority of the Company's
Board of Directors, any amendment, modification or waiver of any term or
condition of this Agreement, any amendment to the Company's Certificate of
Incorporation or By-Laws, any termination of this Agreement by the Company, any
extension of time for performance of any of the obligations of Parent or
Purchaser hereunder, any waiver of any condition to the Company's obligations
hereunder or any waiver or assertion of the Compan s rights hereunder or other
action by the Company hereunder may be effected only by the action of a majority
of the Continuing Directors of the Company, which action shall be deemed to
constitute the action of the full Board of Directors of the Company; provided,
that if there shall be no Continuing Directors such actions may be effected by a
majority vote of the entire Board of Directors; PROVIDED FURTHER that, if there
be no such Continuing Directors, Purchaser shall not decrease the Merger
Consideration or change the form
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of Merger Consideration. The provisions of this Section 1.4 are in addition to
and shall not limit any rights which Purchaser, Parent or any of their
affiliates may have as a holder or beneficial owner of Shares as a matter of
applicable Law with respect to the election of directors or otherwise.
ARTICLE II
THE MERGER
SECTION 2.1 THE MERGER. (a) Upon the terms and subject to the
conditions of this Agreement, and in accordance with the DGCL, at the Effective
Time (as defined in Section 2.2 hereof), the Company and Purchaser shall
consummate a merger (the "Merger") pursuant to which (x) Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser shall thereupon cease and (y) the Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the Laws of the State of
Delaware.
(b) Pursuant to the Merger, at the Effective Time, (x) the
certificate of incorporation of Purchaser, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation; PROVIDED, HOWEVER, that Article FIRST of the certificate of
incorporation shall be amended to read in its entirety as follows: "FIRST: The
name of the corporation is Scotsman Industries, Inc." and (y) the by-laws of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
by-laws of the Surviving Corporation, each until thereafter changed or amended
as provided therein and by the DGCL.
(c) The directors of Purchaser at the Effective Time shall be
the initial directors of the Surviving Corporation until their respective
successors are duly elected and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
certificate of incorporation and by-laws. The officers of the Company at the
Effective Time shall be the initial officers of the Surviving Corporation until
their respective successors are duly elected and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
(d) The Merger shall have the effects specified in the
applicable provisions of the DGCL.
SECTION 2.2 EFFECTIVE TIME. Subject to the terms and conditions of
this Agreement, Parent, Purchaser and the Company will cause a certificate of
merger or, if applicable, a certificate of ownership and merger (as applicable,
the "Certificate of Merger"), to be executed and filed on the date of the
Closing (as defined in Section 2.3) (or on such other date as Parent and the
Company may agree) with the Secretary of State of Delaware (the "Secretary of
State") as provided in the DGCL. The Merger shall become effective on the date
on which the Certificate of Merger has been duly filed with the Secretary of
State of the State of Delaware or such other time as is agreed upon by the
parties and specified in the Certificate of Merger, and such time is hereinafter
referred to as the "Effective Time". The filing of the Certificate of Merger
shall be made as soon as practicable after the satisfaction or waiver of the
conditions to the Merger set forth herein.
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SECTION 2.3 CLOSING. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m., local time, on a date to be specified by the parties,
which shall be no later than the second business day after satisfaction or
waiver of all of the conditions set forth in Article VI hereof (the "Closing
Date"), at the offices of Cadwalader, Wickersham & Taft, 100 Maiden Lane, New
York, New York, 10038, unless another date or place is agreed to in writing by
the parties hereto.
SECTION 2.4 CONVERSION OF CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
Shares or any shares of capital stock of Purchaser:
(a) PURCHASER CAPITAL STOCK. Each issued and outstanding share
of common stock, par value $.01 per share, of Purchaser shall be converted into
and become one fully paid and nonassessable share of common stock, par value
$.01 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PURCHASER-OWNED STOCK.
All Shares that are owned by the Company or any Subsidiary of the Company (other
than by Benefit Plans) and any Shares owned by Parent, Purchaser or any
Subsidiary of Parent or Purchaser (other than shares owned by any employee
benefit plan of Parent, Purchaser or any Subsidiary of Parent or Purchaser)
shall be cancelled and retired and shall cease to exist and no consideration
shall be delivered in exchange therefor.
(c) EXCHANGE OF SHARES. Each issued and outstanding Share
(other than Shares to be cancelled in accordance with Section 2.4(b) and
Dissenting Shares (as herein defined)) shall be converted into the right to
receive the Offer Price in cash, without interest (the "Merger Consideration").
All such Shares, 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 2.5,
without interest.
SECTION 2.5 EXCHANGE OF CERTIFICATES. (a) PAYING AGENT. Prior to the
Effective Time, Parent shall designate a bank or trust company reasonably
acceptable to the Company, to act as agent for the holders of the Shares in
connection with the Merger (the "Paying Agent") to receive the funds to which
holders of the Shares shall become entitled pursuant to Section 2.4(c). Parent
shall, from time to time, make available to the Paying Agent funds in amounts
and at times necessary for the payment of the Merger Consideration as provided
herein. Funds made available to the Paying Agent shall be invested by the Paying
Agent as directed by Purchaser or, after the Effective Time, the Surviving
Corporation, PROVIDED that such investments shall only be in obligations of or
guaranteed by the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard &
Poor's Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker's acceptances of commercial banks with capital exceeding $1
billion. All interest earned on such funds shall be paid to Parent.
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(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, Parent shall cause the Paying Agent to mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates") whose Shares
were converted into the right to receive the Merger Consideration pursuant to
Section 2.4, (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 Paying Agent and shall be in such
form not inconsistent with this Agreement as Parent may specify) and (ii)
instructions for use in surrendering the Certificates in exchange for payment of
the Merger Consideration. Upon surrender of a Certificate for cancellation to
the Paying Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Paying Agent, Parent
shall cause the Paying Agent to pay to the holder of such Certificate the Merger
Consideration, and the Certificate so surrendered shall forthwith be cancelled.
In the event of a surrender of a Certificate representing Shares which are not
registered in the transfer records of the Company under the name of the Person
surrendering such Certificate, payment may be made to a Person other than the
Person in whose name the Certificate so surrendered is registered if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the Person requesting such payment shall pay any transfer or other
Taxes required by reason of payment to a Person other than the registered holder
of such Certificate or establish to the satisfaction of the Paying Agent that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.5, each Certificate (other than Certificates representing
Dissenting Shares) shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger Consideration
which the holder thereof has the right to receive in respect of such Certificate
pursuant to the provisions of this Article II. No interest shall be paid or will
accrue on the Merger Consideration payable to holders of Certificates pursuant
to the provisions of this Article II.
(c) TRANSFER BOOKS; NO FURTHER OWNERSHIP RIGHTS IN SHARES. 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 the Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares 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
twelve months after the Effective 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, none of Parent, the Surviving Corporation or 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.
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(e) LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration pursuant to this Agreement.
SECTION 2.6 WITHHOLDING TAXES. Parent and Purchaser shall be entitled
to deduct and withhold, or cause the Paying Agent to deduct and withhold, from
the Offer Price or the Merger Consideration payable to a holder of Shares
pursuant to the Offer or the Merger any withholding and stock transfer Taxes and
such amounts as are required under the Code, or any applicable provision of
state, local or foreign Tax law. To the extent that amounts are so withheld by
Parent or Purchaser, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Shares in respect of
which such deduction and withholding was made by Parent or Purchaser.
SECTION 2.7 STOCK OPTIONS. (a) At or immediately prior to the
Effective Time, each then outstanding option to purchase any shares of capital
stock of the Company (in each case, an "Option"), whether or not then vested or
exercisable, shall be cancelled by the Company. In consideration of such
cancellation of Options with an exercise price of less than the Offer Price, the
Company (or, at Parent's option, the Purchaser) shall pay to such holders of
Options an amount in respect thereof equal to the product of (A) the excess of
the Offer Price over the exercise price of each such Option and (B) the number
of Shares previously subject to the Option immediately prior to its cancellation
(such payment to be net of withholding taxes and without interest). The amounts
payable pursuant to this Section 2.7 shall be paid as soon as practicable
following the Closing Date.
(b) The Company shall take all actions necessary and
appropriate so that all stock option or other equity based plans maintained with
respect to the Shares, including, without limitation, the plans listed in
Section 3.3 hereof ("Option Plans"), shall terminate as of the Effective Time
and the provisions in any other Benefit Plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall be deleted as of the Effective Time,
and the Company shall ensure that following the Effective Time no holder of an
Option or any participant in any Option Plan shall have any right thereunder to
acquire any capital stock of the Company, Parent, Purchaser or the Surviving
Corporation.
(c) Prior to the Effective Time, the Company shall (i) obtain
all necessary consents from, and provide (in a form acceptable to Parent) any
required notices to, holders of Options and (ii) take all lawful action, as is
necessary to give effect to the provisions of paragraphs (a) and (b) of this
Section 2.7.
SECTION 2.8 APPRAISAL RIGHTS. Notwithstanding anything in this
Agreement to the contrary, Shares (the "Dissenting Shares") that are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders who did not vote in favor of the Merger and who comply with all of
the relevant provisions of Section 262 of the DGCL (the
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"Dissenting Stockholders") shall not be converted into or be exchangeable for
the right to receive the Merger Consideration, unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal under the DGCL. The Company shall give Parent (i) prompt
notice of any written demands for appraisal of any Shares, attempted withdrawals
of such demands and any other instruments served pursuant to the DGCL and
received by the Company relating to stockholders' rights of appraisal, and
(ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under the DGCL. Neither the Company nor the
Surviving Corporation shall, except with the prior written consent of Parent,
voluntarily make any payment with respect to, or settle or offer to settle,
any such demand for payment. If any Dissenting Stockholder shall fail to
perfect or shall have effectively withdrawn or lost the right to dissent, the
Shares held by such Dissenting Stockholder shall thereupon be treated as
though such Shares had been converted into the right to receive the Merger
Consideration pursuant to Section 2.4(c) without any interest thereon.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
SECTION 3.1 ORGANIZATION, STANDING AND CORPORATE POWER. Each of the
Company and each of its Subsidiaries is duly organized, validly existing and in
good standing under the Laws of the jurisdiction in which it is organized and
has the requisite power and authority to carry on its business as it is now
being conducted, except, with respect to Subsidiaries, where the failure to be
so existing and in good standing or to have such power and authority would not
reasonably be expected to have a Material Adverse Effect on the Company. Each of
the Company and its Subsidiaries is duly qualified as a foreign corporation or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) would not reasonably be expected to have a Material Adverse Effect on
the Company. The Company has delivered to Parent complete and correct copies of
the Certificate of Incorporation and the By-Laws of the Company, in each case as
amended to the date of this Agreement, and has made available to Parent the
certificates of incorporation and by-laws or other organizational documents of
each of each of its Subsidiaries, in each case as amended to the date of this
Agreement. Except as set forth on Schedule 3.1 of the Company Disclosure
Schedule (as defined below), the Company has delivered to Parent true and
complete copies of all minutes of its Board of Directors since January 1, 1996.
SECTION 3.2 SUBSIDIARIES. (a) Exhibit 21 to the Company's Annual Report
on Form 10-K for the fiscal year ended January 3, 1999 and Schedule 3.2 of the
disclosure schedule delivered by the Company to Parent at or prior to the
execution of this Agreement (the "Company Disclosure Schedule") together include
the names and jurisdictions of incorporation of all of the Subsidiaries of the
Company. Except as set forth in Schedule 3.2 of the Company Disclosure Schedule,
all the outstanding shares of capital stock of, or other equity interests in,
each Subsidiary of the Company have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by the Company, free and
clear of all Liens and free of any
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other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests).
(b) The Company does not directly or indirectly beneficially
own any equity securities or other beneficial ownership interests in any other
entity (including through joint ventures or partnership arrangements) other than
(i) the Subsidiaries of the Company, (ii) as disclosed on Schedule 3.2 of the
Company Disclosure Schedule or (iii) securities or other interests primarily for
investment purposes as part of routine cash management or investments of 1% or
less in publicly traded companies.
SECTION 3.3 CAPITAL STRUCTURE. Except as set forth in Schedule 3.3 of
the Company Disclosure Schedule, the authorized capital stock of the Company
consists of 50,000,000 Shares of Common Stock, $.10 par value (the "Common
Stock") and 10,000,000 shares of preferred stock, par value $1.00 per share (the
"Preferred Shares"). As of the date hereof, (i) 10,627,875 shares of Common
Stock were issued and outstanding and no Preferred Shares were issued and
outstanding, (ii) 1,647,995 shares of Common Stock were reserved for issuance
upon exercise of Options pursuant to Option Plans, (iii) Options were
outstanding exercisable into 886,510 shares of Common Stock with an average
exercise price of $17.74 and (iv) 203,365 shares of Common Stock were issued and
are held in the Company's treasury. Except as set forth above or on Schedule 3.3
of the Company Disclosure Schedule, as of the date of this Agreement: (i) no
shares of capital stock or other voting securities of the Company are issued,
reserved for issuance or outstanding; (ii) there are no stock appreciation
rights, phantom stock units, restricted stock grants, contingent stock grants or
Benefit Plans which grant awards of any of the foregoing, and there are no other
outstanding contractual rights to which the Company is a party the value of
which is based on the value of Shares; (iii) all outstanding shares of capital
stock of the Company are, and all Shares which may be issued will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights; and (iv) there are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which stockholders of the Company may vote. Except as set forth above, as of the
date of this Agreement, there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any kind
to which the Company or any of its Subsidiaries is a party or by which any of
them is bound obligating the Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of the Company or of any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of the Company or any of its Subsidiaries, to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries. Schedule 3.3 of the Company Disclosure
Schedule accurately sets forth information regarding the current exercise price,
date of grant and number of outstanding Options for each holder of Options
pursuant to any Option Plan. Following the Effective Time, no holder of Options
will have any right to receive shares of common stock of the Surviving
Corporation upon exercise of Options.
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SECTION 3.4 AUTHORITY; NONCONTRAVENTION; COMPANY ACTION. The Company
has the requisite corporate power and authority to enter into this Agreement
and, subject to approval of this Agreement by the holders of a majority of the
outstanding Shares (if required), to consummate the Merger contemplated by this
Agreement. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the Transactions have been duly
authorized by all necessary corporate action on the part of the Company,
subject, in the case of the Merger, to approval of this Agreement by the holders
of a majority of the outstanding Shares (if required). This Agreement has been
duly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding obligation of Parent and Purchaser,
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar Laws now or hereafter in effect relating to creditors' rights generally
and (ii) the remedy of specific performance and injunctive relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Except as set forth on Schedule 3.4 of the
Company Disclosure Schedule, the execution, delivery and performance of this
Agreement does not, and the consummation of the Transactions (including the
changes in the composition of the Board of Directors of the Company) and
compliance with the provisions of this Agreement 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 or loss of a material benefit under, or result in
the creation of any Lien upon any of the properties or assets of the Company or
any of its Subsidiaries under, or result in the termination of, or require that
any consent be obtained or any notice be given with respect to, (i) the
Certificate of Incorporation or By-laws of the Company or the comparable charter
or organizational documents of any of its Subsidiaries, (ii) any material loan
or credit agreement note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or Permit applicable to the Company or any of its
Subsidiaries or their respective properties or assets or (iii) any Law
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) or (iii), any such
conflicts, violations, defaults, rights, Liens, losses of a material benefit,
termination, consents or notices that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Company. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity or any other Person, is required by the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of the
Transactions, except for (i) the filings, permits, authorizations, consents and
approvals set forth in Schedule 3.4 of the Company Disclosure Schedule, or as
may be required under, and other applicable requirements of, the Securities Act,
the Exchange Act, the HSR Act, state takeover laws and foreign or supra-national
laws relating to anti-trust and anti-competition clearances, any applicable
state securities or "blue sky" Laws and the DGCL, (ii) such filings and
consents, if any, as may required under any environmental, health or safety law
or regulation pertaining to any notification, disclosure or required approval
triggered by the Offer, the Merger or the transactions contemplated by this
Agreement, (iii) such filings, if any, as may be required in connection with the
Transfer Taxes described in Section 5.7, and (iv) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not reasonably be expected to,
individually or in the aggregate, (x) impair, in any material respect,
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the ability of the Company to perform its obligations under this Agreement, (y)
prevent or significantly delay the consummation of the Transactions or (z) have
a Material Adverse Effect on the Company. The Board of Directors of the Company
has taken all appropriate action so that neither Parent nor Purchaser will be an
"interested stockholder" within the meaning of Section 203 of the DGCL by virtue
of Parent, Purchaser and the Company entering into this Agreement or any other
agreement contemplated hereby or thereby and consummating the Transactions.
SECTION 3.5 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed
all SEC Documents required to be filed by it since March 31, 1996 (the
"Company's SEC Documents"). As of their respective dates, (i) the Company's SEC
Documents complied in all material respects with the requirements of the
Securities Act, or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and (ii) none of the Company's SEC Documents contained at the time of their
filing 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. The financial statements of the Company included in the Company's
SEC Documents, as of the dates of such SEC Documents, were true and complete in
all material respects and complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles in the United States ("GAAP") (except in the case
of the unaudited statements, as permitted by Form 10-Q under the Exchange Act)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly presented the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which in the aggregate are not material and to any
other adjustment described therein). Except as set forth on Schedule 3.5 of the
Company Disclosure Schedule and except as set forth in the Company's SEC
Documents filed and publicly available prior to the date of this Agreement, and
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most recent
consolidated balance sheet included in the Company's SEC Documents filed and
publicly available prior to the date of this Agreement, and liabilities and
obligations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, to the knowledge of
the Company, neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise).
SECTION 3.6 SCHEDULE 14D-9; OFFER DOCUMENTS; PROXY STATEMENT. Neither
the Schedule 14D-9, any other document required to be filed by the Company with
the SEC in connection with the Transactions, nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the respective times the
Schedule 14D-9, any such other filings by the Company, the Offer Documents or
any amendments or supplements thereto are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
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
made therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will not, on the date the Proxy Statement
(including any amendment or supplement thereto) is first mailed to
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stockholders of the Company and at the time of the Special Meeting, contain any
untrue statement of a material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they are made, not misleading. The
Schedule 14D-9, any other document required to be filed by the Company with the
SEC in connection with the Transactions and the Proxy Statement will, when filed
by the Company with the SEC, comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to the statements made in any of the foregoing
documents based on and in conformity with information supplied by or on behalf
of Parent or Purchaser in writing specifically for inclusion therein.
SECTION 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in the Company's SEC Documents or on Schedule 3.7 of the Company Disclosure
Schedule, since January 3, 1999, (i) the Company and its Subsidiaries have
conducted their respective businesses in all material respects only in the
ordinary course, (ii) there has not been any Material Adverse Change in the
Company and its Subsidiaries, taken as a whole and (iii) through the date
hereof, neither the Company nor any of its Subsidiaries has taken any of the
actions prohibited by Section 5.1.
SECTION 3.8 LITIGATION. Except as set forth in the Company's SEC
Documents or on Schedule 3.8 of the Company Disclosure Schedule or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, there are (i) no suits, actions or proceedings
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, (ii) no complaints, lawsuits, charges or other
proceedings pending or, to the Knowledge of the Company, threatened in any forum
by or on behalf of any present or former employee of the Company or any of its
Subsidiaries, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract of employment, any applicable Law
governing employment or the termination thereof or other discriminatory,
wrongful or tortuous conduct in connection with the employment relationship, or
(iii) no judgments, decrees, injunctions or orders of any Governmental Entity or
arbitrator outstanding against the Company or any Subsidiary.
SECTION 3.9 ABSENCE OF CHANGES IN BENEFIT PLANS; SEC DISCLOSURE. Except
as disclosed on Schedule 3.9 of the Company Disclosure Schedule, there has not
been any adoption or material amendment by the Company or any of its
Subsidiaries or any ERISA Affiliate (as defined in Section 3.10 hereof) of any
Benefit Plan (as defined in Section 3.10 hereof) since January 3, 1999. Except
as disclosed on Schedule 3.9 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries has any formal plan or commitment to create
any additional Benefit Plan or modify or change any existing Benefit Plan that
would materially affect any employee or terminated employee of the Company or a
Subsidiary of the Company.
SECTION 3.10 EMPLOYEE BENEFITS; ERISA. (a) Schedule 3.10 of the
Company Disclosure Schedule contains a true and complete list, as of the date of
this Agreement, of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option,
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employment, severance or termination pay, health insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement, other than a non-material fringe benefit plan,
sponsored, maintained or contributed to or required to be contributed to by the
Company or any of its Subsidiaries or by any trade or business, whether or not
incorporated, that is a member of a "controlled group" within the meaning of
section 4001 of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder ("ERISA") of which the
Company or a Subsidiary is a member or which is under "common control" within
the meaning of Section 4001 of ERISA, with the Company or a Subsidiary (an
"ERISA Affiliate"), for the benefit of any employee or terminated employee of
the Company, its Subsidiaries or any ERISA Affiliate, whether formal or informal
(the "Benefit Plans"), excluding any Benefit Plan established or maintained
outside the United States of America primarily for the benefit of employees
residing outside the United States of America (a "Foreign Benefit Plan").
(b) With respect to each Benefit Plan (other than a Foreign
Benefit Plan), the Company has made available a true and complete copy thereof
(including all amendments thereto), as well as a true and complete copy of the
most recent annual report, if required under ERISA, with respect thereto; the
most recent actuarial report, if required under ERISA, with respect thereto; the
most recent report prepared with respect thereto in accordance with Statement of
Financial Accounting Standards No. 87, Employer's Accounting for Pensions; the
most recent Summary Plan Description, together with each subsequent Summary of
Material Modifications, if required under ERISA with respect thereto; if the
Benefit Plan is funded through a trust or any third party funding vehicle, the
trust or other funding agreement (including all amendments thereto) and the
latest financial statements thereof; and the most recent determination letter
received from the Internal Revenue Service with respect to each Benefit Plan
that is intended to be qualified under section 401 of the Code.
(c) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, no liability to the Pension Benefit
Guaranty Corporation ("PBGC") (or any comparable foreign Governmental Entity)
under Title IV of ERISA (or any comparable applicable foreign Law) has been
incurred by the Company, its Subsidiaries or any ERISA Affiliate since the
effective date of ERISA that has not been satisfied in full, and no condition
exists that presents a material risk to the Company, its Subsidiaries or any
ERISA Affiliate of incurring a liability under such Title (or other comparable
applicable foreign Law), other than liability for premiums due the PBGC (or
other comparable foreign Governmental Entity) (which premiums have been paid
when due). Except as would not reasonably be expected to have a Material Adverse
Effect on the Company, each Benefit Plan has been operated and administered in
all material respects in accordance with its terms and applicable Law, including
but not limited to ERISA and the Code.
(d) The PBGC (or other comparable foreign Governmental Entity)
has not instituted proceedings to terminate any Benefit Plan and no condition
exists that presents a material risk that such proceedings will be instituted.
(e) Except as set forth in Schedule 3.10(e) of the Company
Disclosure Schedule, no Benefit Plan is subject to Section 302 of the Code or
Title IV of ERISA.
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(f) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, neither the Company, nor any Subsidiary
of the Company, nor any trust created thereunder, nor any trustee or
administrator thereof has engaged in a transaction in connection with which the
Company or any Subsidiary of the Company, any such trust, or any trustee or
administrator thereof, or any party dealing with any Benefit Plan or any such
trust could be subject to either a civil penalty assessed pursuant to section
409 or 502(i) of ERISA or a tax imposed pursuant to section 4975 or 4976 of the
Code.
(g) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, all employee Benefit Plans that are
subject to the Laws of any jurisdiction outside the United States are in
material compliance with such applicable Laws, including relevant tax Laws, and
the requirements of any trust deed under which they are established.
(h) Each Benefit Plan which is intended to be "qualified"
within the meaning of section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified and the trusts maintained thereunder
are exempt from taxation under section 501(a) of the Code and to the knowledge
of the Company no event has occurred to cause the loss of such qualified or
exempt status.
(i) No Benefit Plan provides health, death or medical benefits
(whether or not insured) with respect to current or former employees of the
Company or its Subsidiaries beyond their retirement or other termination of
service (other than (a) coverage mandated by applicable Law or (b) benefits the
full cost of which is borne by the current or former employee (or his
beneficiary) or (c) as disclosed on Schedule 3.10(i) of the Company Disclosure
Schedule).
(j) Except as set forth in Schedule 3.10(j) of the Company
Disclosure Schedule, the consummation of the Transactions, alone, will not (a)
entitle any current or former employee or officer of the Company or any
Subsidiary to severance pay, unemployment compensation or any other payment, (b)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer, (c) result in any prohibited
transaction described in section 406 of ERISA or section 4975 of the Code for
which an exemption is not available, or (d) require the Company or any ERISA
Affiliate to fund or make any payments to any trust or other funding vehicle in
respect of any Benefit Plan.
(k) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, there are no pending, anticipated or, to
the Knowledge of the Company, threatened claims by or on behalf of any Benefit
Plan, by any employee or beneficiary covered under any such Benefit Plan, or
otherwise involving any such Benefit Plan (other than routine claims for
benefits).
(l) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, with respect to each multiemployer plan
within the meaning of Section 4001(a) (3) of ERISA (a "Multiemployer Plan") in
which the Company, any Subsidiary of the Company or any ERISA Affiliate
participates or has participated, (i) none of the Company, any of its
Subsidiaries or any ERISA Affiliate has withdrawn, partially withdrawn, or
received any notice of any claim or demand for withdrawal liability or partial
withdrawal liability, (ii) none of
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the Company nor any of its Subsidiaries or any ERISA Affiliate has received any
notice that any such plan is in reorganization, that increased contributions may
be required to avoid a reduction in plan benefits or the imposition of any
excise tax, or that any such plan is or may become insolvent, (iii) none of the
Company, any of its Subsidiaries or any ERISA Affiliate has failed to make any
required contributions, (iv) to the Company's knowledge, no such plan is a party
to any pending merger or asset or liability transfer, (v) to the Company's
knowledge, there are no PBGC proceedings against or affecting any such plan, and
(vi) none of the Company, any of its Subsidiaries or any ERISA Affiliate has any
withdrawal liability by reason of a sale of assets pursuant to Section 4204 of
ERISA. With respect to each Multiemployer Plan, as of its last valuation date,
the amount of potential withdrawal liability of the Company, any of its
Subsidiaries and any ERISA Affiliates would not reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 3.11 TAXES. (a) Each of the Company and each of its
Subsidiaries has duly and timely filed (or has had duly and timely filed on its
behalf) all Tax Returns required to be filed by it except where failures to file
such Tax Returns would not reasonably be expected to have a Material Adverse
Effect on the Company, and all such Tax Returns are true, complete and correct,
except where failures to be true, complete and correct would not reasonably be
expected to have a Material Adverse Effect on the Company. Each of the Company
and each of its Subsidiaries has paid (or has had paid on its behalf) all Taxes
due and owing by them and the most recent financial statements contained in the
Company's SEC Documents reflect adequate reserves in accordance with GAAP for
all Taxes payable by the Company or its Subsidiaries for all taxable periods and
portions thereof through the date of such financial statements, except where
failures to pay such Taxes due or reserve for such Taxes payable would not
reasonably be expected to have a Material Adverse Effect on the Company.
(b) Each of the Company and each of its Subsidiaries has
complied with all applicable Laws relating to the payment and withholding of
Taxes (including the withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code or similar provisions under any applicable foreign Laws) and have,
within the time and in the manner prescribed by applicable Laws, withheld from
employee wages and paid to the proper Taxing Authority all amounts required to
be so withheld and paid, or have accrued, reserved against and entered such
amounts on the books of the Company, except where failures to withhold and pay
such amounts or accrue, reserve against and enter such amounts on the books of
the Company would not, individually or in the aggregate, reasonably be expected
to have Material Adverse Effect on the Company.
(c) Except as set forth on Schedule 3.11 of the Company
Disclosure Schedule, (i) to the Company's knowledge, no deficiencies for any
Taxes have been threatened, proposed, asserted or assessed (either in writing or
orally) against the Company or any of its Subsidiaries, (ii) no Taxing Authority
is conducting or has proposed or threatened in writing to conduct an audit with
respect to Taxes or any Tax Returns of the Company or any of its Subsidiaries,
(iii) no extension or waiver of the statute of limitations with respect to Taxes
or any Tax Return has been granted by the Company or any of its Subsidiaries,
which remains in effect, except where such extension or waiver would not
reasonably be expected to have a Material Adverse Effect on the Company, (iv)
neither the Company nor any of its Subsidiaries is a party to any Tax Sharing
Arrangement, (v) there are no Liens for Taxes upon the assets of the Company or
any of its Subsidiaries, except for statutory Liens for current Taxes not yet
due, (vi) to the Company's
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knowledge, no jurisdiction where either the Company or any of its Subsidiaries
does not file a Tax Return has asserted or otherwise made a claim that the
Company or any of its Subsidiaries is required to file a Tax Return for such
jurisdiction, (vii) neither the Company nor any of its Subsidiaries has agreed
to make, or is required to make, any adjustment under Section 481(a) of the Code
(or comparable provision under state, local or foreign Tax Laws) by reason of a
change in accounting method or otherwise and the Company and each of its
Subsidiaries do not have knowledge that the Internal Revenue Service has
proposed any such adjustment or change in accounting method, (viii) neither the
Company nor any of its Subsidiaries has any liability for Taxes under Section
1.1502-6 of the Treasury regulations promulgated under the Code or any
comparable state, local or foreign Tax Laws or by contract or otherwise, (ix)
neither the Company nor any of its Subsidiaries has filed a consent pursuant to
Section 341(f) of the Code (or any predecessor provision) or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by the Company
or any of its Subsidiaries, (x) all Tax deficiencies which have been claimed,
proposed or asserted against the Company or any of its Subsidiaries have been
fully paid or finally settled, and no issue has been raised in any examination
by the Taxing Authority, which by application of similar principles, could be
expected to result in the proposal or assertion of a Tax deficiency against the
Company or any of its Subsidiaries for another year not so examined, except
where such issues would not reasonably be expected to have a Material Adverse
Effect on the Company, (xi) the Company has filed, as a common parent
corporation of an affiliated group (within the meaning of Section 1504(a) of the
Code) a consolidated return for Federal income tax purposes on behalf of such
affiliated group and (xii) no power of attorney has been granted by or with
respect to the Company or any of its Subsidiaries with respect to any matter
relating to Taxes.
(d) Schedule 3.11 of the Company Disclosure Schedule sets
forth the taxable years of the Company or any of its Subsidiaries as to which
the respective statutes of limitations with respect to Taxes have not expired.
SECTION 3.12 NO EXCESS NONDEDUCTIBLE PAYMENTS. (a) Except as set forth
on Schedule 3.12 of the Company Disclosure Schedule, no amounts payable as a
result of the Transactions under the Benefit Plans or any other plans or
arrangements will constitute a "parachute payment" as such term is defined in
Section 280G of the Code, without regard to whether such payment is reasonable
compensation for personal services performed or to be performed in the future.
(b) Except as set forth on Schedule 3.12 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any contract, agreement or other arrangement which could result in the
payment of amounts that could be nondeductible by reason of Section 162(m) of
the Code.
SECTION 3.13 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth on
Schedule 3.13 of the Company Disclosure Schedule:
(a) The Company and each of its Subsidiaries have complied and
are presently complying in all material respects with all applicable Laws, and
neither the Company nor any of its Subsidiaries has received written
notification of any asserted present or past failure
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to so comply, except such non-compliance that (i) has not and will not prevent
the Company from carrying on its business substantially as now conducted, or
(ii) would not be reasonably expected to (x) have a Material Adverse Effect on
the Company or (y) materially impair the ability of the parties hereto to
consummate the Transactions.
(b) Each of the Company and its Subsidiaries has in effect, or
has timely filed applications for, all material Permits necessary for it to own,
lease or operate its properties and assets and to carry on its business
substantially as now conducted except where failure to have in effect or file
would not reasonably be expected to have a Material Adverse Effect on the
Company and there are no appeals nor any other actions pending to revoke any
such Permits, and there has occurred no default or violation under any such
Permits which would reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 3.14 ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 3.14 of the Company Disclosure Schedule or except as disclosed in
the Company's SEC Documents:
(a) the Company and its Subsidiaries and each predecessor
Person of the Company and its Subsidiaries are and have been in compliance with
all federal, state, local and foreign Laws, regulations, standards, ordinances,
codes, orders, judgements, agreements, common law and other requirements
relating to pollution, protection or preservation of human health or the
environment, including, Laws relating to drinking water, ("Environmental Laws")
relating to the generation, treatment, storage, containment, disposal, transport
or handling of solid or liquid hazardous materials, substances, pollutants,
contaminants or wastes ("Hazardous Materials"), including compliance with any
environmental permits or similar governmental authorizations and the terms and
conditions thereof, except in each case for any non-compliance that would not
reasonably be expected, in the aggregate, to have a Material Adverse Effect on
the Company.
(b) there is no pending or, to the knowledge of the Company,
threatened, material claim, investigation, demand, directive, lien, order,
judicial or administrative proceeding or other material claim or liability
against the Company or any of its Subsidiaries related to Hazardous Materials or
for any violation of Environmental Laws, including, for investigation, removal
remediation or other response to a disposal or release, or threatened disposal
or release or migration of Hazardous Materials, or payment therefor or for
natural resource damages, by any third party or any Governmental Entity,
pursuant to any Environmental Law at any location owned or operated by the
Company or any of its Subsidiaries or any predecessor Person of the Company or
any of its Subsidiaries, or at any location to which the Company or any of its
Subsidiaries or any predecessor Person of the Company or any of its Subsidiaries
have sent Hazardous Materials, except for claims, investigations, demands,
directives, liens, orders, proceedings or liabilities which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company;
(c) to the knowledge of the Company, there currently exist no
facts or circumstances that could reasonably be expected to (i) give rise to
proceedings described in subsection (b) above or (ii) prevent the issuance,
renewal or reissuance, on terms reasonably comparable to those in existence, of
any permits or authorizations required for the Company's operations under any
Environmental Law as such Laws currently exist; and
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(d) there are no underground or above ground storage tanks or
impoundments, landfills or other dumpsites at, on, under or within any real
property owned, operated, leased or occupied by the Company or any of its
Subsidiaries, or any portion thereof, except where any resulting liability would
not reasonably be expected to have a Material Adverse Effect on the Company.
(e) the Company has provided to Parent all material
information in its possession or in the possession of its representatives,
agents or consultants, all of which is true and correct, relating to (i) the
Company's and its Subsidiaries' compliance with Environmental Laws; (ii) the
environmental condition of the Company's and its Subsidiaries' currently owned
or leased properties, including, but not limited to, the extent of any on-site
contamination at any of such properties, results of investigations at such
properties, remedial action plans for such properties, and asbestos surveys and
(iii) the environmental condition of any properties formerly owned or operated
by the Company or any of its Subsidiaries, or of any other location at which the
Company or any of its Subsidiaries is subject to an environmental claim,
including, but not limited to, the extent of any on-site contamination at any
such properties, results of investigations at such properties and remedial
action plans at such properties, except, in each case, for information in its
possession or in the possession of its representatives, agents or consultants
relating to any non-compliance, or environmental conditions on current or former
owned or leased property, which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 3.15 INTELLECTUAL PROPERTY. Except for matters which would not
reasonably be expected to have a Material Adverse Effect on the Company, the
Company and its Subsidiaries own or are validly licensed, or otherwise possess
legally enforceable rights, to use the Trademarks and Other Intellectual
Property necessary to carry on their respective businesses. There are no
oppositions, cancellations, invalidity proceedings, interferences or
re-examination proceedings presently pending with respect to the Trademarks and
Other Intellectual Property owned by the Company or its Subsidiaries. The
conduct of the business of the Company and its Subsidiaries and the Trademarks
and Other Intellectual Property do not infringe any rights of any Person that
would reasonably be expected to have a Material Adverse Effect on the Company,
and, except as set forth on Schedule 3.15 of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries has received any written notice
which is still pending from any other Person challenging the right of the
Company or any of its Subsidiaries to use any of the Trademarks or Other
Intellectual Property owned by the Company or its Subsidiaries. To the Company's
knowledge, no third party is infringing upon any of the Trademarks or Other
Intellectual Property owned by the Company or its Subsidiaries. Neither the
Company nor any of its Subsidiaries has made any written claim of a violation or
infringement by others of its rights to or in connection with the Trademarks and
Other Intellectual Property owned by the Company or its Subsidiaries which is
still pending.
SECTION 3.16 CONTRACTS. (A) Except as set forth in the Company's SEC
Documents or Schedule 3.16 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a party to or bound (in each case where
the Company has any ongoing obligation) by (i) any "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) any
non-competition agreement or any other agreement or
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obligation which purports to limit in any respect the manner in which, or the
localities in which, all or any material portion of the business of the Company
and its Subsidiaries, taken as a whole, may be conducted, (iii) any transaction,
agreement, arrangement or understanding with any Affiliate that would be
required to be disclosed under Item 404 of regulation S-K under the Securities
Act, (iv) any voting or other agreement governing how any Shares shall be voted,
(v) any material agreement with any stockholders of the Company (in their
capacities as stockholders) or (vi) any acquisition, merger, asset purchase or
sale agreement (all contracts of the type described in clauses (i) - (vi) being
referred to herein as "Company Material Contracts"). Each Company Material
Contract is valid and binding on the Company (or, to the extent a Subsidiary of
the Company is a party, such Subsidiary) and is in full force and effect, and
the Company and each Subsidiary of the Company have, in all material respects,
performed all obligations required to be performed by them to date under each
Company Material Contract, except where such failure to be valid and binding or
to be in full force and effect or where such noncompliance, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company. Neither the Company nor any Subsidiary of the Company
knows of, or has received written notice of, any violation or default under
(nor, to the Knowledge of the Company, does there exist any condition which with
the passage of time or the giving of notice or both would result in such a
violation or default under) any Company Material Contract, except where such
violation or default would not reasonably be expected to have a Material Adverse
Effect on the Company.
(b) Except as disclosed in the Company's SEC Documents or on
Schedule 3.16 of the Company Disclosure Schedule or as provided for in this
Agreement, neither the Company nor any of its Subsidiaries is a party to any
oral or written (i) employment agreements not terminable on thirty (30) days' or
less notice, (ii) agreement with any executive officer or other key employee of
the Company or any of its Subsidiaries the benefits of which are contingent or
vest, or the terms of which are materially altered, upon the occurrence of a
transaction involving the Company or any of its Subsidiaries of the nature
contemplated by this Agreement, (iii) agreement with respect to any executive
officer or other key employee of the Company or any of its Subsidiaries
providing any term of employment or compensation guarantee or (iv) agreement or
plan, including any stock option, stock appreciation right, restricted stock or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the Transactions or the value of any of the benefits of which will be
calculated on the basis of any of the Transactions.
SECTION 3.17 LABOR RELATIONS. Except to the extent set forth in the
Company's SEC Documents or Schedule 3.17 of the Company Disclosure Schedule,
(i) the Company and each of its Subsidiaries is not engaged in any unfair
labor practices as defined in the National Labor Relations Act or other
applicable Law, except where such practices would not reasonably be expected
to have a Material Adverse Effect on the Company; (ii) there is no labor
strike, slowdown, stoppage or lockout actually pending, or, to the knowledge
of the Company, threatened against the Company or any of its Subsidiaries
which would reasonably be expected to have a Material Adverse Effect on the
Company; and (iii) neither the Company nor any of its Subsidiaries is a party
to or bound by any collective bargaining or similar agreement with any labor
organization.
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SECTION 3.18 PRODUCTS LIABILITY; RECALLS. (a) Except as set forth in
Schedule 3.18 of the Company Disclosure Schedule and except for matters which
would not reasonably be expected to have a Material Adverse Effect on the
Company, (i) there is no written notice, written demand, written claim, action,
suit, inquiry, hearing, proceeding, written notice of violation or investigation
of a civil, criminal or administrative nature (collectively, "Notices") pending
or, to the knowledge of the Company, threatened before any Governmental Entity
in which a Product is alleged to have a Defect or relating to or resulting from
any alleged failure to warn or from any alleged breach of express or implied
warranties or representations; (ii) to the knowledge of the Company, no valid
basis exists for any such demand, claim, action, suit, inquiry, hearing,
proceeding, notice of violation or investigation; (iii) there has not been any
recall, rework, retrofit or post-sale warning (collectively, "Recalls") of any
Product, or, to the knowledge of the Company, any investigation or consideration
of or decision made by any person or entity concerning whether to undertake or
not to undertake any Recalls and the Company has received no Notices from any
Governmental Entity or any other person with respect to the foregoing; and (iv)
to the knowledge of the Company, there are no defects in design, manufacturing,
materials, or workmanship, including, without limitation, any failure to warn,
or any breach of express or implied warranties or representations, which involve
any Product.
(b) Schedule 3.18 of the Company Disclosure Schedule sets
forth the amount of reserves provided for all Notices received by the Company or
its Subsidiaries since January 1, 1996.
SECTION 3.19 APPLICABILITY OF STATE TAKEOVER STATUTES. The Section 203
Approval is valid and in full force and effect. Section 203 of the DGCL will not
apply to the Offer, the acquisition of shares of Common Stock pursuant to the
Offer or the Merger. No other state takeover statute or similar statute or
regulation applies or purports to apply to the Offer, the Merger or the other
Transactions.
SECTION 3.20 VOTING REQUIREMENTS. The affirmative vote of the holders
of a majority of all the Shares entitled to vote approving this Agreement is the
only vote of the holders of any class or series of the Company's capital stock
necessary to approve this Agreement and the Transactions.
SECTION 3.21 BROKERS. No broker, investment banker, financial advisor
or other Person, other than Morgan Stanley Dean Witter, the fees and expenses of
which will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of the Company. The
Company has provided Parent true and correct copies of all agreements between
the Company and Morgan Stanley Dean Witter, including, without limitations, any
fee arrangements.
SECTION 3.22 OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of Morgan Stanley Dean Witter, to the effect that, as of the date of
this Agreement, the consideration to be received in the Offer and the Merger by
the Company's stockholders is fair to the Company's stockholders from a
financial point of view, and a complete and correct signed copy of such opinion
has been, or promptly upon receipt thereof will be, delivered to Parent.
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The Company has been authorized by Morgan Stanley Dean Witter to permit the
inclusion of such opinion in its entirety in the Offer Documents and the
Schedule 14D-9 and the Proxy Statement, so long as such inclusion is in form and
substance reasonably satisfactory to Morgan Stanley Dean Witter.
SECTION 3.23 YEAR 2000. The Company has made available to Parent a true
and correct copy of a summary of the Company's Year 2000 compliance plan (the
"Y2K Plan"), and a description of the status of the completion of the Y2K Plan.
Expenditures relating to the Y2K Plan for the three months ended March 31, 1999
are set forth in Schedule 3.23 of the Company Disclosure Schedule. The
out-of-pocket costs and expenses for goods and services, together with any
incremental hiring costs, estimated to be incurred by the Company after March
31, 1999 in order to perform the Y2K Plan are set forth in Schedule 3.23 of the
Company Disclosure Schedule.
SECTION 3.24 ABSENCE OF QUESTIONABLE PAYMENTS. To the Company's
knowledge, neither the Company nor any of its Subsidiaries nor any director,
officer, agent, employee or other person acting on behalf of the Company or any
of its Subsidiaries, has used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act. To the Company's knowledge, neither the Company
nor any of its Subsidiaries nor any current director, officer, agent, employee
or other person acting on behalf of the Company or any of its Subsidiaries, has
accepted or received any unlawful contributions, payments, gifts or
expenditures.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as
follows:
SECTION 4.1 ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Purchaser is duly organized, validly existing and in good standing under the
Laws of the jurisdiction in which each is incorporated and has the requisite
power and authority to carry on its business as now being conducted. Each of
Parent and Purchaser is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not reasonably be expected
to have a Material Adverse Effect on Parent.
SECTION 4.2 AUTHORITY; NONCONTRAVENTION. Parent and Purchaser have the
requisite corporate power and authority to enter into this Agreement and to
consummate the Transactions, subject to the approval of the acquisition of the
Company by the shareholders of Berisford plc, Parent's corporate parent (the "UK
Parent"; such approval, the "UK Shareholder Approval"). The execution, delivery
and performance of this Agreement by Parent and Purchaser and the consummation
by Parent and Purchaser of the Transactions have been, subject to the UK
Shareholder Approval, duly authorized by all necessary corporate action on the
part of
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Parent and Purchaser, as applicable. This Agreement has been duly executed and
delivered by Parent and Purchaser and, assuming this Agreement constitutes the
valid and binding obligation of the Company, constitutes the valid and binding
obligation of each of Parent and Purchaser, enforceable against Parent and
Purchaser in accordance with its terms, except that (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
Laws now or hereafter in effect relating to creditors' rights generally and
(ii) the remedy of specific performance and injunctive relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution, delivery and performance
of this Agreement does not, and the consummation of the Transactions
(including the financing of the Offer and the Merger) and compliance with the
provisions of this Agreement 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 or to any loss of a material benefit under, or result in
the creation of any Lien upon any of the properties or assets of Parent,
Purchaser or any of their Subsidiaries under, or result in the termination
of, or require that any consent be obtained or any notice given with respect
to, (i) the certificate of incorporation or by-laws of Parent or Purchaser,
(ii) any material loan or credit agreement note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or Permit applicable to the
Parent or Purchaser or their respective properties or assets or (iii) any Law
applicable to Parent or Purchaser or their respective properties or assets,
other than, in the cases of clauses (ii) or (iii), any such conflicts,
violations, defaults, rights or Liens, losses of material benefit,
terminations or notices that individually or in the aggregate would not (x)
impair in any material respect the ability of Parent and Purchaser to perform
their respective obligations under this Agreement or (y) prevent or impede
the consummation of any of the Transactions. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity or any other Person is required by Parent or Purchaser in
connection with the execution and delivery of this Agreement or the
consummation by Parent or Purchaser, as the case may be, of any of the
Transactions, except for (i) the filings, permits, authorizations, consents
and approvals set forth in Schedule 4.2 of the disclosure schedule delivered
by Parent to the Company at or prior to the execution of this Agreement (the
"Parent Disclosure Schedule"), or as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, the
Exon-Florio Act, the HSR Act, state takeover laws and foreign or
supra-national laws relating to anti-trust and anti-competition clearances,
any applicable state securities or "blue sky" Laws and the DGCL, and (ii)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would
not, individually or in the aggregate, prevent or significantly delay the
consummation of or materially impair the ability of Parent or Purchaser to
perform its obligations under this Agreement or to consummate the
Transactions.
SECTION 4.3 PROXY STATEMENT; OFFER DOCUMENTS. The Offer Documents and
any other documents to be filed by Parent with the SEC or any other Government
Entity in connection with the Merger and the other Transactions will (in the
case of the Offer Documents and any such other documents filed with the SEC
under the Securities Act or the Exchange Act) comply as to form in all material
respects with applicable provisions of the Exchange Act and the Securities Act,
respectively, and the rules and regulations thereunder. None of the Offer
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Documents, any other documents required to be filed by Parent or Purchaser with
the SEC in connection with the Transactions, nor any information supplied by
Parent or Purchaser for inclusion in the Schedule 14D-9 or in the information
required to be distributed to the stockholders of the Company pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder as is
necessary to enable Parent's designees to be elected to the Company's Board of
Directors pursuant to Section 1.4 hereof shall, at the respective times the
Offer Documents or any amendments and supplements thereto, any such other
filings by Parent or Purchaser are filed with SEC or are first published, sent
or given to stockholders of the Company, as the case may be, or, in the case of
the Proxy Statement, on the date the Proxy Statement is first mailed to
stockholders of the Company and at the time of the Special Meeting, contain any
untrue statement of a material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, neither Parent nor Purchaser makes any
representation or warranty with respect to the statements made in any of the
foregoing documents based on and in conformity with information supplied by or
on behalf of the Company in writing specifically for inclusion therein.
SECTION 4.4 OPERATIONS OF PURCHASER. Purchaser is a wholly owned
Subsidiary of Parent and was formed solely for the purpose of engaging in the
Transactions and has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.
SECTION 4.5 BROKERS. No broker, investment banker, financial advisor or
other Person, other than Schroeder & Co., Inc., the fees and expenses of which
will be paid by Parent or Purchaser, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
SECTION 4.6 SUFFICIENT FUNDS. Parent has a commitment from Barclays
Bank plc and National Westminster Bank plc to provide $600,000,000 of financing
for the Offer and the Merger (the "Commitment") which is sufficient to purchase
the Shares pursuant to the Offer and the Merger. Such Commitment is in the form
provided to the Company on July 1, 1999.
ARTICLE V
COVENANTS
SECTION 5.1 INTERIM OPERATIONS OF THE COMPANY. After the date hereof
and prior to the time the designees of Parent have been elected or appointed to,
and shall constitute a majority of, the Board of Directors of the Company
pursuant to Section 1.4 or the date, if any, on which this Agreement is earlier
terminated pursuant to Section 7.1, and except (i) as expressly contemplated by
this Agreement, (ii) as set forth on Schedule 5.1 of the Company Disclosure
Schedule or (iii) as agreed in writing by Parent (which agreement shall not be
unreasonably withheld or delayed):
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(a) the Company shall and shall cause its Subsidiaries to in
all material respects carry on their respective businesses in the ordinary
course;
(b) the Company shall and shall cause its Subsidiaries to use
all reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and key employees and
preserve their relationships consistent with past practice with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them to the end that their goodwill and ongoing businesses shall
be unimpaired in all material respects at the Effective Time;
(c) neither the Company nor any of its Subsidiaries shall,
directly or indirectly, amend its certificate of incorporation or by-laws or
similar organizational documents;
(d) neither the Company nor any of its Subsidiaries shall:
(i)(A) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to the Company's capital stock or that of
its Subsidiaries, except for quarterly dividends on Shares of up to $0.025 per
share to be declared and paid at customary times and except that a wholly-owned
Subsidiary of the Company may declare and pay a dividend or make advances to its
parent or the Company or (B) redeem, purchase or otherwise acquire directly or
indirectly any of the Company's capital stock or that of its Subsidiaries; (ii)
issue, sell, pledge, dispose of or encumber any additional shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its Subsidiaries, other than Shares issued upon the
exercise of Options in accordance with the Option Plans as in effect on the date
hereof; or (iii) split, combine or reclassify the outstanding capital stock of
the Company or of any of the Subsidiaries of the Company;
(e) except as permitted by this Agreement, neither the Company
nor any of its Subsidiaries shall acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof
(including entities which are Subsidiaries of the Company or any of the
Company's Subsidiaries) or (B) any assets, including real estate, except
acquisitions in the ordinary course of business consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall make
any new capital expenditure or expenditures, other than the specific capital
expenditures disclosed and set forth on Schedule 5.1 of the Company Disclosure
Schedule and capital expenditures not to exceed $1 million in the aggregate;
(g) neither the Company nor any of its Subsidiaries shall,
except in the ordinary course of business and except as otherwise permitted by
this Agreement, amend or terminate any Company Material Contract where such
amendment or termination would reasonably be expected to have a Material Adverse
Affect on the Company, or waive, release or assign any material rights or
claims;
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(h) neither the Company nor any of its Subsidiaries shall
transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any
property or assets other than in the ordinary course of business and consistent
with past practice;
(i) neither the Company nor any of its Subsidiaries shall:
(i) enter into any employment or severance agreement with or grant any
severance or termination pay to any officer, director or key employee of the
Company or any its Subsidiaries except as required by the terms of any plan,
agreement or arrangement in effect on the date hereof or to comply with
applicable Law or, with respect to employment agreements, except in the
ordinary course of business and as approved by the Purchaser (which approval
will not be unreasonably withheld); or (ii) hire or agree to hire any new
officer or, other than in the ordinary course of business, consistent with
past practice, hire or agree to hire any additional employees;
(j) neither the Company nor any of its Subsidiaries shall,
except as required to comply with applicable Law or existing agreements or
Benefit Plans or expressly provided in this Agreement, (A) adopt, enter into,
terminate, amend or increase the amount or accelerate the payment or vesting of
any benefit or award or amount payable under any Benefit Plan or other
arrangement for the current or future benefit or welfare of any director,
officer or current or former employee, except to the extent necessary to
coordinate any such Benefit Plans with the terms of this Agreement or other than
with respect to employees in the ordinary course of business, (B) increase in
any respect the compensation or fringe benefits of, or pay any bonus to, any
director, officer or employee or other than with respect to employees in the
ordinary course of business, (C) pay any benefit not provided for under any
Benefit Plan, (D) grant any awards under any bonus, incentive, performance or
other compensation plan or arrangement or Benefit Plan (including the grant of
stock options, stock appreciation rights, stock based or stock related awards,
performance units or restricted stock, or the removal of existing restrictions
in any Benefit Plans or agreements or awards made thereunder) or (E) take any
action to fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement or Benefit
Plan;
(k) neither the Company nor any of its Subsidiaries shall:
(i) except in the ordinary course of business and in an aggregate amount, not
to exceed $8 million, incur or assume any additional long-term debt or any
additional short-term indebtedness; (ii) incur or modify any material
indebtedness or other liability except as set forth on Schedule 5.1 of the
Company Disclosure Schedule; (iii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise)
for the obligations of any other Person, except in the ordinary course of
business and consistent with past practice; (iv) make any loans, advances or
capital contributions to, or investments in, any other Person (other than to
wholly owned Subsidiaries of the Company or customary loans or advances to
employees in the ordinary course of business and consistent with past
practice); (v) settle any material claims other than in the ordinary course
of business, in accordance with past practice and without admission of
liability; or (vi) enter into any material commitment or transaction except
in the ordinary course of business consistent with past practice;
(l) neither the Company nor any of its Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP;
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(m) neither the Company nor any of its Subsidiaries shall make
or change any Tax election, amend any Tax Return, change an annual Tax
accounting period, adopt or change any method of Tax accounting, enter into any
closing agreement, settle or compromise any Tax claim or assessment, surrender
any right to claim a Tax refund, consent to any extension or waiver of the
limitations period applicable to any Tax claim or assessment or take or omit to
take any other action relating to Taxes except in the ordinary course of
business consistent with past practice;
(n) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of any such claims, liabilities or
obligations, in the ordinary course of business and consistent with past
practice, of claims, liabilities or obligations reflected or reserved against
in, or contemplated by, the most relevant consolidated financial statements (or
the notes thereto) of the Company and its consolidated Subsidiaries included in
the Company SEC Documents; or, except in the ordinary course of business
consistent with past practice, waive the benefits of, or agree to modify in any
material respect, any confidentiality, standstill or similar agreement to which
the Company or any of its Subsidiaries is a party unless the Board of Directors
determines in good faith, after consultation with outside counsel, that it would
be required consistent with its fiduciary responsibilities to the Company's
stockholders under applicable law;
(o) neither the Company nor any of its Subsidiaries shall (by
action or inaction) amend, renew, terminate or cause to be extended any material
lease, agreement or arrangement relating to any of the Leased Properties or
enter into any material lease, agreement or arrangement with respect to any real
property; and
(p) neither the Company nor any of its Subsidiaries will enter
into an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to do
any of the foregoing.
SECTION 5.2 ACCESS; CONFIDENTIALITY. Subject to currently existing
contractual and legal restrictions applicable to the Company or its
Subsidiaries, the Company shall (and shall cause each of its Subsidiaries to)
afford to the Representatives of Parent reasonable access on reasonable prior
notice during normal business hours, throughout the period prior to the earlier
of the Effective Time or the termination of this Agreement, to all of its
properties, offices, employees, contracts, commitments, books and records
(including but not limited to Tax Returns) and any report, schedule or other
document filed or received by it pursuant to the requirements of federal or
state securities Laws and shall (and shall cause each of its Subsidiaries to)
furnish promptly to Parent such additional financial and operating data and
other information as to its and its Subsidiaries' respective businesses and
properties as Parent may from time to time reasonably request. Parent and
Purchaser will make all reasonable efforts to minimize any disruption to the
businesses of the Company and its Subsidiaries which may result from the
requests for data and information hereunder. Except as otherwise agreed to in
writing by the other party, Parent and the Company will be bound by the terms of
a letter agreement (the "Confidentiality Agreement"), dated as of April 29,
1999, by and between
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Parent and the Company and all information obtained by Parent or its
Representatives pursuant to this Section 5.2 shall be kept confidential in
accordance with the Confidentiality Agreement.
SECTION 5.3 SPECIAL MEETING, PROXY STATEMENT. (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, its
Certificate of Incorporation and By-laws:
(i) as promptly as practicable following the acceptance for
payment and purchase of Shares by Purchaser pursuant to the Offer
duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Special Meeting") for the purposes of considering
and taking action upon the approval of the Merger and the approval
and adoption of this Agreement and use its reasonable best efforts
to obtain the necessary approvals of the Merger and this Agreement
by its stockholders;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and
obtain and furnish the information required to be included by the SEC
in the Proxy Statement (as hereinafter defined) and, after consultation
with Parent, 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, including any amendment or
supplement thereto (the "Proxy Statement") to be mailed to its
stockholders at the earliest practicable date; PROVIDED that no
amendment or supplement to the Proxy Statement will be made by the
Company without consultation with Parent and its counsel; and
(iii) unless this Agreement has been terminated in accordance
with Article VII, subject to its rights pursuant to Section 5.5,
include in the Proxy Statement the recommendation of its Board of
Directors that stockholders of the Company vote in favor of the
approval of the Merger and the approval and adoption of this Agreement.
(b) Parent shall vote, or cause to be voted, all of the Shares
then owned by it, Purchaser or any of its other Subsidiaries in favor of the
approval of the Merger and the approval and adoption of this Agreement.
(c) Notwithstanding anything else herein or in this Section
5.3, in the event that Parent, Purchaser and any other Subsidiaries of Parent
shall acquire in the aggregate a number of the outstanding shares of each class
of capital stock of the Company, pursuant to the Offer or otherwise, sufficient
to enable Purchaser or the Company to cause the Merger to become effective under
applicable Law without a meeting of stockholders of the Company, the parties
hereto shall, at the request of Parent and subject to Article VI, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the consummation of such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
SECTION 5.4 REASONABLE EFFORTS; U.K. SHAREHOLDER APPROVAL;
NOTIFICATION. (a) Upon the terms and subject to the conditions set forth in this
Agreement, including without limitation Section 5.5 hereto, each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the
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other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Offer and
the Merger, and the other Transactions, including (i) the preparation and filing
with the SEC of the Offer Documents, the Schedule 14D-9, the information
required to be distributed to the stockholders of the Company pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder as is
necessary to enable Parent's designees to be elected to the Company's Board or
Directors pursuant to Section 1.4 hereof, the preliminary Proxy Statement and
the Proxy Statement and all necessary amendments or supplements thereto; (ii)
the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from any Governmental Entity and the making of all necessary
registrations and filings (including furnishing all information required under
the HSR Act and all other filings with any Governmental Entity, if any) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Entity and
shall promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of their
Subsidiaries in connection with the Offer and the Merger, (iii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iv) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of any of the
Transactions, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (v)
the execution and delivery of any additional instruments necessary to consummate
the Transactions and to fully carry out the purposes of this Agreement. Nothing
contained in this Section 5.4 shall require the Company to take any action (or
forego the taking of any action) if, in the good faith judgment of the Board of
Directors of the Company after consultation with outside counsel, taking such
action (or foregoing the taking of such action) would be inconsistent with its
fiduciary duties to its stockholders under applicable Law.
(b) Parent and Purchaser will use commercially reasonable
efforts to cause all of the conditions to the Commitment to be satisfied.
(c) Each of the Company, Parent and Purchaser shall give
prompt notice to the other of (i) any of their representations or warranties
contained in this Agreement becoming untrue or inaccurate in any material
respect (including receiving knowledge of any fact, event or circumstance which
may cause any representation qualified as to knowledge to be or become untrue or
inaccurate in any material respect) or (ii) the failure by them to comply with
or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by them under this Agreement; PROVIDED, HOWEVER, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(d) UK Parent will, as soon as practicable following the date
of this Agreement, duly call, give notice of, convene and hold a meeting of
shareholders for the purpose of obtaining the U.K. Shareholder Approval. UK
Parent will, through its Board of Directors, recommend to its shareholders
approval of the transactions contemplated hereby, shall use all reasonable
efforts to solicit and obtain such approval by its shareholders and shall not
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to the Company such recommendation.
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SECTION 5.5 NO SOLICITATION. (a) The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any of its
officers, directors, authorized representatives or authorized agents to,
directly or indirectly, (i) solicit, initiate or knowingly encourage (including
by way of furnishing non-public information) any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
Takeover Proposal or (ii) participate in any discussions or negotiations
regarding any Takeover Proposal; PROVIDED, HOWEVER, that if, at any time prior
to the acceptance for payment of Shares pursuant to the Offer, the Board of
Directors of the Company determines in good faith, after consultation with
outside counsel, that to do so would be required consistent with its fiduciary
responsibilities to the Company's stockholders under applicable Law, the Company
may, in response to a Takeover Proposal, which was not solicited subsequent to
the date hereof, (x) furnish information with respect to the Company to any
person pursuant to a customary confidentiality agreement (as determined by the
Company) and (y) participate in negotiations regarding such Takeover Proposal.
For purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal
or offer from any person relating to any direct or indirect acquisition or
purchase of 20% or more of the assets of the Company and its Subsidiaries or 20%
or more of the Shares then outstanding, any tender offer or exchange offer that
if consummated would result in any person beneficially owning 20% or more of the
Shares then outstanding, and any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions contemplated by
this Agreement. Upon execution of this Agreement, the Company will immediately
cease any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
(b) Except as set forth in this Section 5.5, neither the Board
of Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by such Board of Directors or such
committee of the Offer, the Merger or this Agreement; PROVIDED, HOWEVER, that,
the Board of Directors may, at any time prior to the consummation of the Offer,
modify or withdraw such recommendation of the Board of Directors of the Company
if the Board of Directors of the Company determines in good faith, after
consultation with outside counsel, that it would be required consistent with its
fiduciary responsibilities to the stockholders of the Company to so modify or
withdraw such recommendation (regardless of existence of a Superior Proposal at
such time); PROVIDED, HOWEVER, that, unless this Agreement shall have been
terminated, any such modification or withdrawal shall not prevent Parent and
Purchaser, in its or their discretion, from consummating the Offer and shall not
affect any of the actions required to be taken by the Company pursuant to this
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Takeover Proposal.
Notwithstanding the foregoing, if the Company has received a Superior Proposal,
the Board of Directors of the Company may (x) withdraw or modify its approval or
recommendation of the Offer, the Merger and this Agreement or (y) approve or
recommend a Superior Proposal or, subject to the provisions of Section
7.1(d)(i), terminate this Agreement (and concurrently with or after such
termination, if it so chooses, cause the Company to enter into an Acquisition
Agreement with respect to any Superior Proposal). For purposes of this
Agreement, a " Superior Proposal" means any bona fide proposal made by a third
party to acquire, directly or indirectly, for consideration
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consisting of cash and/or securities, a majority or more 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 its good
faith judgment (after consultation with a financial advisor of nationally
recognized reputation, such as Morgan Stanley Dean Witter) to be more favorable
to the Company's stockholders than the Offer and the Merger.
(c) Nothing contained in this Section 5.5 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel, such
disclosure is required consistent with its fiduciary duties to the Company's
stockholders under applicable Law.
(d) Notwithstanding the foregoing provisions of this Section
5.5, it is agreed and understood that the Company (i) will include in its press
release announcing this Agreement a statement to the effect that, consistent
with the terms of this Agreement, the Company's Board of Directors has directed
the Company's management and financial and legal advisors to be available to
receive inquiries from any other parties interested in a possible acquisition of
or merger with the Company and, as appropriate, to provide information to and
enter into negotiations with such parties, (ii) will file this Agreement and
such press release as exhibits to a Current Report on Form 8-K and (iii) may
repeat such statement in other public disclosures and in private communications
with financial analysts, its stockholders and others.
SECTION 5.6 PUBLICITY. Except as required by Law or any listing
agreement with any national exchange or as permitted by Section 5.5, 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 without the prior consultation of the other party; PROVIDED that as
soon as practicable after the execution of this Agreement the Company may file
with the SEC a current report on Form 8-K reporting such execution and
containing a copy of this Agreement.
SECTION 5.7 TRANSFER TAXES. All liability for transfer or other similar
Taxes arising out of or related to the Offer and the Merger or the consummation
of any other Transaction, and due to the property owned by the Company or any of
its Subsidiaries or affiliates ("Transfer Taxes") shall be borne by either the
Parent or the Surviving Corporation (without any liability to any of the
Company's stockholders), and the Company shall file or cause to be filed all Tax
Returns relating to such Transfer Taxes which are due.
SECTION 5.8 STATE TAKEOVER LAWS. Notwithstanding any other provision in
this Agreement, in no event shall the Section 203 Approval be withdrawn, revoked
or modified by the Board of Directors of the Company. If any state takeover
statute other than Section 203 of the DGCL becomes or is deemed to become
applicable to the Offer, the acquisition of Shares pursuant to the Offer or the
Merger, Parent and the Company shall take all action necessary to render such
statute inapplicable to all of the foregoing so that the Transactions may be
consummated as promptly as practicable on the terms contemplated hereby.
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SECTION 5.9 INDEMNIFICATION AND INSURANCE. (a) All rights to
indemnification or exculpation, existing in favor of a director, officer,
employee or agent (an "Indemnified Party") of the Company or any of its
Subsidiaries (including, without limitation, rights relating to advancement of
expenses and indemnification rights to which such persons are entitled because
they are serving as a director, officer, agent or employee of another entity at
the request of the Company or any of its Subsidiaries), as provided in the
Company's Certificate of Incorporation or By-laws or any indemnification
agreement, in each case, as in effect on the date of this Agreement, and
relating to actions or events through the Effective Time, shall survive the
Merger and shall continue in full force and effect, without any amendment
thereto; PROVIDED HOWEVER, that the Surviving Corporation shall not be required
to indemnify any Indemnified Party in connection with any proceeding (or portion
thereof) to the extent involving any claim initiated by such Indemnified Party
unless the initiation of such proceeding (or portion thereof) was authorized by
the Board of Directors of the Company or unless such proceeding is brought by an
Indemnified Party to enforce rights under this Section 5.9; PROVIDED FURTHER
that any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under the
DGCL, the Company's Certificate of Incorporation or Bylaws or any such
agreement, as the case may be, shall be made by independent legal counsel
selected by Parent and reasonably acceptable to the Indemnified Party (who has
not performed services for Parent or its affiliates within the last three
years); and PROVIDED FURTHER that nothing in this Section 5.9 shall impair any
rights of any Indemnified Party. Without limiting the generality of the
preceding sentence, in the event that any Indemnified Party becomes involved in
any actual or threatened action, suit, claim, proceeding or investigation after
the Effective Time, Parent shall, or shall cause the Surviving Corporation to,
promptly advance to such Indemnified Party his or her legal and other expenses
(including the cost of any investigation and preparation in connection
therewith), subject to the providing by such Indemnified Party of an undertaking
to reimburse all amounts so advanced in the event of a non-appealable
determination of a court of competent jurisdiction that such Indemnified Party
is not entitled thereto.
(b) For a period of six years after the Effective Time, Parent
shall cause the Surviving Corporation to maintain in effect, directors' and
officers' liability insurance covering those Persons who are currently covered
by the Company's directors' and officers' liability insurance policy (a copy of
which has been made available to Parent) on terms (including the amounts of
coverage and the amounts of deductibles, if any) that are no less favorable to
the terms now applicable to them under the Company's current policies; PROVIDED
HOWEVER that, in no event shall Parent or the Surviving Corporation be required
to expend in excess of 200% of the annual premium currently paid by the Company
for such coverage; and PROVIDED FURTHER that, if the premium for such coverage
exceeds such amount, Parent or the Surviving Corporation shall purchase a policy
with the greatest coverage available for such 200% of the annual premium.
(c) This Section 5.9 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, the Surviving
Corporation and the Indemnified Parties, shall be binding on all successors and
assigns of Parent, the Company and the Surviving Corporation and shall be
enforceable by the Indemnified Parties, their heirs, or personal
representatives.
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SECTION 5.10 EMPLOYEES. (a) For not less than one year following the
Effective Time, Parent shall maintain, or shall cause the Surviving Corporation
and its Subsidiaries to maintain, compensation and employee benefit plans and
arrangements for employees of the Company and its Subsidiaries ("Affected
Employees") that are, in the aggregate, no less favorable than as provided under
the compensation arrangements and Benefit Plans as in effect on the date hereof.
Without limiting the generality of the foregoing, for not less than one year
following the Effective Time (or such longer period as may be required under the
applicable Benefit Plan), Parent shall provide, or cause the Surviving
Corporation and its Subsidiaries to provide, severance pay and benefits to each
Affected Employee as of the Effective Time that are not less favorable than
under the Benefit Plans and current policies or practices of the Company as in
effect as of the date of this Agreement. Notwithstanding the foregoing, Parent
shall have the right (i) following the Effective Time to transfer to one or more
employee benefit plans maintained by Parent any employee of the Surviving
Corporation or any Subsidiary who becomes an employee of Parent or any of its
respective Subsidiaries and (ii) in the good faith exercise of its managerial
discretion, to terminate the employment of any employee.
(b) Parent shall, or shall cause the Surviving Corporation to,
honor all Benefit Plans and other contractual commitments in effect immediately
prior to the Effective Time between the Company or its Subsidiaries and Affected
Employees or former employees of the Company or its Subsidiaries (including the
severance policy described in the Company Disclosure Schedule). Without limiting
the generality of the foregoing, Parent shall, or shall cause the Surviving
Corporation to, honor all vacation, holiday, sickness and personal days accrued
by Affected Employees and, to the extent applicable, former employees of the
Company and its Subsidiaries ("Former Employees") as of the Effective Time.
(c) Employees and, to the extent applicable, Former Employees
shall be given credit for all services with the Company and its Subsidiaries (or
service credited by the Company or such Subsidiaries) under all employee benefit
plans and arrangements currently maintained by Parent or any of its Subsidiaries
in which they are or become participants for purposes of eligibility, vesting,
level of participant contributions and benefit accruals (but subject to an
offset, if necessary, to avoid duplication of benefits) to the same extent as if
rendered to Parent or any of its Subsidiaries. Parent shall cause to be waived
any pre-existing condition limitation under its welfare plans that might
otherwise apply to an Affected Employee or, to the extent applicable, a Former
Employee. Parent agrees to recognize (or cause to be recognized) the dollar
amount of all expenses incurred by Affected Employees or, to the extent
applicable, Former Employees, during the calendar year in which the Effective
Time occurs for purposes of satisfying the calendar year deductions and
co-payment limitations for such year under the relevant benefit plans of Parent
and its Subsidiaries.
ARTICLE VI
CONDITIONS
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or prior to the Effective Time of each of the following
conditions, any and all of which may be waived in whole or in part by the
Company, Parent or Purchaser, as the case may be, to the extent permitted by
applicable Law:
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(a) this Agreement and the Merger shall have been approved and
adopted by the requisite vote of the holders of Shares, if required by
applicable Law and the Certificate of Incorporation, in order to consummate the
Merger;
(b) no statute, rule, regulation, order, decree or injunction
shall have been enacted, promulgated or issued by any Governmental Entity
precluding, restraining, enjoining or prohibiting consummation of the Merger
PROVIDED that each of the parties shall have used commercially reasonable
efforts to prevent the entry of any such order, decree or injunction and to
appeal as promptly as possible any order, decree or injunction that may be
entered; and
(c) Parent, Purchaser or their affiliates shall have purchased
Shares pursuant to the Offer.
ARTICLE VII
TERMINATION
SECTION 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 approval of matters presented in connection with
the Merger by the stockholders of the Company:
(a) By the mutual written consent of Parent and the Company;
PROVIDED, HOWEVER, that if Parent shall have a majority of the directors
pursuant to Section 1.4, such consent of the Company may only be given if
approved by the Continuing Directors.
(b) By either of Parent or the Company if (i) a statute, rule
or executive order shall have been enacted, entered or promulgated prohibiting
the Transactions on the terms contemplated by this Agreement or (ii) any
Governmental Entity 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 reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the Transactions and such order,
decree, ruling or other action shall have become final and non-appealable;
provided, however, that the right to terminate this Agreement pursuant to this
Section 7.1(b) shall not be available to any party who has not used its
commercially reasonable efforts to cause such order, decree, ruling or other
action to be lifted.
(c) By either Parent or the Company if (i) as a result of the
failure of any of the conditions set forth in Annex A (other than the Minimum
Condition) the Offer shall have terminated or expired in accordance with its
terms without Purchaser having accepted for payment any Shares pursuant to the
Offer or (ii) Purchaser shall have, consistent with its obligations hereunder,
failed to pay for the Shares prior to the date 120 days after the date hereof
(the "OUTSIDE DATE"); PROVIDED, HOWEVER, that the right to terminate this
Agreement pursuant to this Section 7.1(c) shall not be available to any party
whose failure to perform any of its obligations under this Agreement results in
the failure of any such condition or if the failure of such condition results
from facts or circumstances that constitute a breach of any representation or
warranty under this Agreement by such party; or
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(d) By the Company:
(i) if the Board of Directors of the Company
determines in good faith that a Takeover Proposal
constitutes a Superior Proposal or has approved or
recommended a Superior Proposal in accordance with
Section 5.5(b); PROVIDED, HOWEVER, that the Company
is not in material breach of the provisions of
Section 5.5, and that the Company simultaneously
terminates this Agreement and makes simultaneous
payment to the Parent of the Termination Fee as
specified in Section 8.1; or
(ii) if Parent, Purchaser or any of their affiliates
shall have failed to commence the Offer on the fifth
business day following the date of the initial public
announcement of the Offer;
(iii) if there shall be a material breach by Parent
or Purchaser of any of their representations,
warranties, covenants or agreements contained in this
Agreement which breach cannot or has not been cured
within 15 days after the giving of written notice to
Parent, and which has had or is reasonably likely to
materially impair the ability of Purchaser or Parent
to consummate the Transactions.
(iv) if (A) the U.K. Shareholder Approval shall not
be granted within 30 days after the date hereof or
(B) U.K. Parent's Board of Directors shall have
withdrawn or modified or changed in a manner adverse
to the Company its approval or recommendation of the
Offer, the Merger or this Agreement.
(e) By Parent or Purchaser:
(i) if prior to the purchase of the Shares pursuant
to the Offer, the Board of Directors of the Company
shall have withdrawn, or modified or changed in a
manner adverse to Parent or Purchaser, its approval
or recommendation of the Offer, this Agreement or the
Merger or shall have recommended or approved a
Takeover Proposal; or
(ii) prior to the purchase of Shares pursuant to the
Offer, in the event of a breach by the Company of any
representation, warranty, covenant or other agreement
contained in this Agreement which (i) would give rise
to the failure of a condition set forth in paragraph
(d) of Annex A and (ii) cannot be or has not been
cured within 15 days after the giving of written
notice to the Company; or
(iii) any Person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act), other than
Parent, Purchaser or their affiliates or any group of
which any of them is a member, shall have acquired or
announced its intention to acquire beneficial
ownership (as determined
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pursuant to Rule 13d-3 promulgated under the Exchange
Act) of 25% or more of the Shares; or
(iv) if the Company receives a Takeover Proposal from
any Person (other than Parent or Purchaser), and the
Company's Board of Directors takes a neutral position
or makes no recommendation with respect to such
Takeover Proposal after a reasonable amount of time
(and in no event more than ten business days
following such receipt) has elapsed for the Company's
Board of Directors to review and make a
recommendation with respect to such Takeover
Proposal.
SECTION 7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent or Purchaser as provided in Section
7.1, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Purchaser or the Company, other
than the provisions of Sections 3.21 and 4.5, the last sentence of Section 5.2,
this Section 7.2 and Article VIII and the last sentence of Sections 1.1(c) and
1.2(b); provided that nothing herein shall relieve any party for liability for
any willful breach hereof.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 FEES AND EXPENSES. (a) Except as provided below, all fees
and expenses incurred in connection with the Offer, the Merger, this Agreement
and the Transactions shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated.
(b) If (x) Parent or Purchaser terminates this Agreement
pursuant to Section 7.1(e)(i) or 7.1(e)(iv) or (y) the Company terminates this
Agreement pursuant to Section 7.1(d)(i) then in each case, the Company shall
pay, or cause to be paid to Parent, at the time of such termination, an amount
equal to $15.6 million (the "Termination Fee").
(c) In addition, if this Agreement is terminated by either
Parent or the Company pursuant to Section 7.1(c) (except by reason of such a
termination at a time when the conditions in clauses (ii), (iii) or (iv) of the
first paragraph of Annex A or paragraphs (a), (b), (c) or (f) of Annex A have
not been satisfied) at any time when there is pending a Takeover Proposal, and
at the time of any such termination, Parent is not in material breach of this
Agreement, and if, within 9 months after any termination referred to in this
paragraph (c), the Company shall enter into an Acquisition Agreement with
respect to a Takeover Proposal or any Person (other than Parent or its
Affiliates) shall acquire a majority of the outstanding Shares, then the Company
shall pay the Termination Fee concurrently with entering into any such agreement
or, if sooner, within one day after such acquisition.
(d) Any payments required to be made pursuant to this Section
8.1 shall be made by wire transfer of same day funds to an account designated by
Parent.
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SECTION 8.2 AMENDMENT AND MODIFICATION. Subject to Section 1.4 and to
applicable Law, this Agreement may be amended, modified and supplemented in any
and all respects, by action taken or authorized by their respective Boards of
Directors whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto (which in the
case of the Company shall include approvals as contemplated in Section 1.4(c)),
at any time prior to the Closing Date with respect to any of the terms contained
herein; PROVIDED, HOWEVER, that after the approval of this Agreement by the
stockholders of the Company, no such amendment, modification or supplement shall
reduce the amount or change the form of the Merger Consideration or otherwise
adversely affect the rights of stockholders.
SECTION 8.3 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time. This Section 8.3 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time.
SECTION 8.4 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon receipt, and shall be given
to the parties at the following addresses or telecopy numbers (or at such other
address or telecopy number for a party as shall be specified by like notice):
(a) if to Parent or Purchaser, to:
Welbilt Corporation
225 High Ridge Road
Stamford, CT 06905
Attention: Andrew Roake, President
Telecopy: (203) 325-9800
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10022-3897
Attention: Brian Hoffmann, Esq.
Telecopy: (212) 504-6666
(b) if to the Company, to:
Scotsman Industries, Inc.
820 Forest Edge Drive
Vernon Hills, IL 60061
Attention: R.C. Osborne, President
Telecopy: (847) 913-9844
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with a copy to:
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Attention: Thomas A. Cole, Esq.
Steven Sutherland, Esq.
Telecopy: (312) 853-7036
SECTION 8.5 INTERPRETATION. (a) 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." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented prior to the date
hereof, including (in the case of agreements and instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
(b) 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 the date first written above. 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.
SECTION 8.6 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.
SECTION 8.7 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF
OWNERSHIP. This Agreement and the Confidentiality Agreement: (a) constitute the
entire agreement and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (b) except as provided in Sections 5.9 and 5.10, are not intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
SECTION 8.8 SEVERABILITY. Any term or provision of this Agreement that
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any
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situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction or
other authority declares that any term or provision hereof is invalid, void or
unenforceable, the parties agree that the court making such determination shall
have the power to reduce the scope, duration, area or applicability of the term
or provision, to delete specific words or phrases, or to replace any invalid,
void or unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.
SECTION 8.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OR CHOICE OF LAW THEREOF OR OF ANY OTHER
JURISDICTION.
SECTION 8.10 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other parties, except that Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned Subsidiary of Parent but no
such assignment shall relieve Purchaser of any of its obligations hereunder.
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 successors
and assigns.
SECTION 8.11 ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE DAMAGE
WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT
PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT
IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR
INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY
THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY COURT OF THE UNITED STATES
LOCATED IN THE STATE OF DELAWARE OR IN DELAWARE STATE COURT, THIS BEING IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN
ADDITION, EACH OF THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR
ANY DELAWARE STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS, (B) AGREES THAT IT WILL NOT ATTEMPT TO DENY OR
DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM ANY
SUCH COURT AND (C) AGREES THAT IT WILL NOT BRING ANY ACTION RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS IN ANY COURT OTHER THAN A FEDERAL OR STATE
COURT SITTING IN THE STATE OF DELAWARE.
SECTION 8.12 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties, by action taken or authorized by their respective Boards of
Directors, may, subject to the
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provisions of Section 1.4, (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 8.2, waive compliance by the other parties with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
SECTION 8.13 CERTAIN UNDERTAKINGS OF PARENT. Parent shall perform, or
cause to be performed, any obligation of Purchaser under this Agreement which
shall have been breached by Purchaser.
SECTION 8.14 DEFINITIONS. For purposes of this Agreement:
"Acquisition Agreement" has the meaning assigned thereto in
Section 5.5(b).
"Affected Employees" has the meaning assigned thereto in
Section 5.10(a).
"Affiliate" has the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Benefit Plans" has the meaning assigned thereto in Section
3.10.
"By-laws" means the by-laws of the Company as in effect on the
date of this Agreement.
"Certificate of Incorporation" means the certificate of
incorporation of the Company as in effect on the date of this Agreement.
"Certificate of Merger" has the meaning assigned thereto in
Section 2.2.
"Certificates" has the meaning assigned thereto in Section
2.5.
"Closing" has the meaning assigned thereto in Section 2.3.
"Closing Date" has the meaning assigned thereto in Section
2.3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" has the meaning assigned thereto in Section 4.6.
"Common Stock" has the meaning assigned thereto in Section
3.3.
"Company" means Scotsman Industries, Inc., a Delaware
corporation.
"Company Disclosure Schedule" has the meaning assigned thereto
in Article III.
"Company Material Contract" has the meaning assigned thereto
in Section 3.17.
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"Company's SEC Documents" has the meaning assigned thereto in
Section 3.5.
"Computer Programs" means:
(i) any and all computer software programs, whether in all
source or object code,
(ii) databases and compilations, including any and all data
and collections of data, whether machine readable or otherwise,
(iii) billing, reporting, engineering and other management
information systems,
(iv) all descriptions, flow-charts and other work product used
to design, plan, organize and develop any of the foregoing,
(v) all content contained on any Internet site(s), and
(vi) all documentation, including user manuals and training
materials, relating to any of the foregoing.
"Confidentiality Agreement" has the meaning assigned thereto
in Section 5.2.
"Continuing Director" means (i) any member of the Board of
Directors of the Company as of the date hereof or (ii) any successor of a
Continuing Director who is (A) unaffiliated with, and not a designee or nominee
of, Parent or Purchaser, and (B) recommended to succeed a Continuing Director by
a majority of the Continuing Directors then on the Board of Directors of the
Company, and in each case under clauses (i) and (ii), who is not an employee of
the Company.
"Defect" means a material defect or impurity of any kind,
whether in design, manufacture, processing, or otherwise, including, without
limitation, any dangerous propensity associated with any reasonably foreseeable
use of a Product, or the failure to warn of the existence of any defect,
impurity, or dangerous propensity.
"DGCL" means the Delaware General Corporation Law, as amended.
"Dissenting Shares" has the meaning assigned thereto in
Section 2.8.
"Dissenting Stockholders" has the meaning assigned thereto in
Section 2.8.
"Effective Time" has the meaning assigned thereto in Section
2.2.
"Environmental Law" has the meaning assigned thereto in
Section 3.14(a).
"ERISA" has the meaning assigned thereto in Section 3.10.
"ERISA Affiliate" has the meaning assigned thereto in Section
3.10.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
42
<PAGE>
"Fee Properties" means all real property and interests in real
property owned in fee by the Company or one of its Subsidiaries.
"Former Employees" has the meaning assigned thereto in Section
5.10(b).
"GAAP" has the meaning assigned thereto in Section 3.5.
"Governmental Entity" means any (i) nation, state, county,
city, town, village, district or other jurisdiction of any nature; (ii) federal,
state, local, municipal, foreign or other government; (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal); or (iv)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature.
"Hazardous Materials" has the meaning assigned thereto in
Section 3.14(a).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnified Parties" has the meaning assigned thereto in
Section 5.9.
"Knowledge" or "knowledge" means, with respect to the Company
and/or any Subsidiary thereof, the actual knowledge of the president, chief
financial officer, controller, and any officer superior to any of the foregoing.
"Law" means any administrative order, constitution, law,
ordinance, principle of common law, rule, regulation, statute, treaty, judgment,
decree, license or permit enacted, promulgated, issued, enforced or entered by
any Governmental Entity.
"Leased Properties" means all real property and interests in
real property leased by the Company or one of its Subsidiaries.
"Lien" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, lien, mortgage, pledge,
reservation, restriction, security interest, title retention or other security
arrangement, or any charge or claim of any nature whatsoever of, on, or with
respect to, any asset, property or property interest.
"Material Adverse Change" or "Material Adverse Effect" means,
when used in connection with the Company or Parent, any change or effect that is
materially adverse to the business, properties, assets, prospects, financial
condition or results of operations of such party and its Subsidiaries taken as a
whole, PROVIDED, HOWEVER, that (i) any adverse change, effect or development
that is caused by or results from conditions affecting the United States economy
generally or the economy of any nation or region in which the Company or Parent,
as the case may be, or its Subsidiaries conducts business that is material to
the business of the Company or Parent, as the case may be, and its Subsidiaries,
taken as a whole, shall not be taken into account in determining whether there
has been (or whether there could reasonably be foreseen) a "Material Adverse
Change" or "Material Adverse Effect" with respect to the Company or Parent, as
the case may be, (ii) any adverse change, effect or development that is caused
by or results
43
<PAGE>
from conditions generally affecting the industries in which the Company or
Parent, as the case may be, conducts its business shall not be taken into
account in determining whether there has been (or whether there could reasonably
be foreseen) a "Material Adverse Change" or "Material Adverse Effect" with
respect to the Company or Parent, as the case may be, and (iii) any adverse
change, effect or development that is caused by or results from the announcement
or pendency of this Agreement, the Offer, the Merger or the transactions
contemplated hereby shall not be taken into account in determining whether there
has been (or whether there could reasonably be foreseen) a "Material Adverse
Change" or "Material Adverse Effect" with respect to the Company or Parent, as
the case may be.
"Merger" has the meaning assigned thereto in Section 2.1.
"Merger Consideration" has the meaning assigned thereto in
Section 2.4.
"Minimum Condition" has the meaning assigned thereto in Annex
A.
"Notices" has the meaning assigned thereto in Section 3.19.
"Offer" has the meaning assigned thereto in Section 1.1.
"Offer Documents" has the meaning assigned thereto in Section
1.3.
"Offer Price" has the meaning assigned thereto in Section 1.1.
"Offer to Purchase" has the meaning assigned thereto in
Section 1.1.
"Option Plans" has the meaning assigned thereto in Section
2.7.
"Option" has the meaning assigned thereto in Section 2.7.
"Other Intellectual Property" shall mean all patents and
patent applications; copyrights, copyright registrations and applications
(including copyrights in Computer Programs); Computer Programs; technology,
trade secrets, know-how, confidential information, proprietary processes and
formulae; and "semiconductor chip product" and "mask works" (as such terms are
defined in 17 U.S.C. 901).
"Outside Date" has the meaning assigned thereto in Section
7.1(c).
"Paying Agent" has the meaning assigned thereto in Section
2.5(a).
"Parent" means Welbilt Corporation.
"Parent Disclosure Schedule" has the meaning assigned thereto
in Section 4.2.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permit" means any Federal, state, local and foreign
governmental approval, authorization, certificate, filing, franchise, license,
notice, permit or right.
44
<PAGE>
"Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, labor
union, estate, trust, unincorporated organization or other entity, including any
Governmental Entity.
"Preferred Shares" has the meaning assigned thereto in Section
3.3.
"Product" means any product designed, manufactured, shipped,
sold, marketed, distributed and/or otherwise introduced into the stream of
commerce by or on behalf of the Company or any of its past or present
Subsidiaries.
"Proxy Statement" has the meaning assigned thereto in Section
5.3.
"Purchaser" means Berisford Acquisition Corporation, a
Delaware corporation.
"Real Property" means the Leased Properties and the Fee
Properties.
"Recalls" has the meaning assigned thereto in Section 3.19.
"Representative" means, with respect to any Person, such
Person's officers, directors, employees, agents and representatives (including
any investment banker, financial advisor, accountant, legal counsel, agent,
representative or expert retained by or acting on behalf of such Person or its
Subsidiaries).
"Schedule 14D-1" has the meaning assigned thereto in Section
1.3.
"Schedule 14D-9" has the meaning assigned thereto in Section
1.3.
"SEC" means the United States Securities and Exchange
Commission or any successor agency.
"SEC Documents" means reports, proxy statements, forms, and
other documents required to be filed with the SEC under the Securities Act and
the Exchange Act.
"Secretary of State" has the meaning assigned thereto in
Section 2.2.
"Section 203 Approval" has the meaning assigned thereto in
Section 1.2.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" has the meaning assigned thereto in the recitals.
"Special Meeting" has the meaning assigned thereto in Section
5.3.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, joint venture or other entity, whether incorporated or
unincorporated, of which such Person or any other Subsidiary of such Person (i)
owns, directly or indirectly, 50% or more of the outstanding voting securities
or equity interests, (ii) is entitled to elect at least a majority of the Board
of Directors or similar governing body or (iii) is a general partner (excluding
such
45
<PAGE>
partnerships where such Person or any Subsidiary of such Person do not have a
majority of the voting interests in such partnership).
"Superior Proposal" has the meaning assigned thereto in
Section 5.5.
"Surviving Corporation" has the meaning assigned thereto in
Section 2.1.
"Takeover Proposal" has the meaning assigned thereto in
Section 5.5.
"Tax" or "Taxes" mean all taxes, charges, fees, levies,
penalties or other assessments imposed by any federal, state, local or foreign
Taxing Authority including but not limited to net income, gross income,
receipts, windfall profit, severance, property, production, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem, transfer, stamp or environmental tax, or any other tax,
custom, duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or additional
amount imposed by any Governmental Entity.
"Taxing Authority" shall mean a governmental authority or any
subdivision, agency, commission or authority thereof, any judicial body, or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including, without
limitation, the Internal Revenue Service).
"Tax Returns" mean all returns, reports or statements required
to be filed with any Governmental Entity with respect to any Tax (including any
attachments thereto), including, without limitation, any consolidated, unitary
or similar return, information return, claim for refund, amended return or
declaration of estimated Tax.
"Tax Sharing Arrangement" means any written or unwritten
arrangement for the allocation, indemnification or payment of Tax liabilities or
payment for Tax benefits, including with respect to a consolidated, combined or
unitary Tax Return which Tax Return includes or has included the Company or any
Subsidiary of the Company.
"Termination Fee" has the meaning assigned thereto in Section
8.1(b).
"Trademarks" shall mean all United States and foreign
trademarks (including service marks and trade names, whether registered or at
common law), registrations and applications therefor.
"Transactions" has the meaning assigned thereto in Section
1.2(a).
"Transfer Taxes" has the meaning assigned thereto in Section
5.7.
"U.K. Shareholder Approval" has the meaning assigned thereto
in Section 4.2.
46
<PAGE>
IN WITNESS WHEREOF, Welbilt Corporation, Berisford Acquisition
Corporation and Scotsman Industries, Inc. have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the date
first written above.
WELBILT CORPORATION
By:
---------------------------------
Name: Andrew Roake
Title: Chief Executive Officer
BERISFORD ACQUISITION CORPORATION
By:
---------------------------------
Name: Andrew Roake
Title: President and Secretary
SCOTSMAN INDUSTRIES, INC.
By:
---------------------------------
Name:
Title:
The undersigned has reviewed the foregoing Agreement and Plan of Merger
and agrees to be bound by the provisions of Section 5.4(d) thereof.
BERISFORD PLC
By:
---------------------------------
Name: David Williams
Title: Chief Executive Officer
<PAGE>
ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the
meanings set forth in the Agreement and Plan of Merger of which this Annex A is
a part. Notwithstanding any other provision of the Offer, but subject, in all
cases, to Parent's and Purchaser's obligations set forth under the Merger
Agreement, Purchaser 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 Purchaser s obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for
any tendered Shares, unless (i) there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares which, when
added to the Shares, if any, beneficially owned by Parent or Purchaser, would
constitute at least a majority of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"), (ii) any applicable waiting period under the
HSR Act shall have expired or been terminated and any consent required from a
foreign Governmental Entity has been obtained, where the failure to obtain such
consent would reasonably be expected to have a Material Adverse Effect on the
Company or Parent, (iii) the U.K. Shareholder Approval shall have been granted,
and (iv) approval under any applicable European antitrust law applicable to the
purchase of Shares pursuant to the Offer has been obtained where the failure to
obtain such approval would reasonably be expected to have a Material Adverse
Effect on the Company or Parent. Furthermore, notwithstanding any other term of
the Offer, but subject, in all cases, to Parent's and Purchaser's obligations
set forth under the Merger Agreement, Purchaser shall not be required to accept
for payment or, subject as aforesaid, to pay for any Shares not theretofore
accepted for payment or paid for, and may terminate the Offer at any time 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 Parent or
any of its Subsidiaries that constitutes a breach of the Merger Agreement):
(a) there shall be threatened or pending by a Governmental
Entity any suit, action or proceeding (i) seeking to prohibit or impose any
material limitations on Parent's or Purchaser's ownership or operation (or that
of any of their respective Subsidiaries or Affiliates) of all or a material
portion of their or the Company's businesses or assets, taken as a whole, (ii)
seeking to compel Parent or Purchaser or their respective Subsidiaries and
Affiliates to dispose of or hold separate any material portion of the business
or assets of the Company or Parent and their respective Subsidiaries, in each
case taken as a whole, as a result of the Offer or the Transactions, (iii)
challenging the acquisition by Parent or Purchaser of any Shares pursuant to the
Offer, (iv) seeking to restrain or prohibit the making or consummation of the
Offer or the Merger or the performance of any of the other Transactions, (v)
seeking to obtain from the Company any damages that would reasonably be expected
to have a Material Adverse Effect on the Company, (vi) seeking to impose
material limitations on the ability of Purchaser, or rendering Purchaser unable,
to accept for payment, pay for or purchase some or all of the Shares pursuant to
the Offer and the Merger, (vii) seeking to impose material limitations on the
ability of Purchaser or Parent effectively to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented
i
<PAGE>
to the Company's stockholders, or (viii) which otherwise would reasonably be
expected to have a Material Adverse Effect on the Company or, as a result of the
Transactions, Parent and its Subsidiaries; or
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger by any Governmental Entity, other than the
application to the Offer or the Merger of applicable waiting periods under the
HSR Act, that is reasonably likely to result, directly or indirectly, in any of
the consequences referred to in clauses (i) through (viii) of paragraph (a)
above; or
(c) there shall have occurred after the commencement of the
Offer and continued to exist for not less than three business days (1) any
general suspension of trading in, or limitation on prices for, securities on the
New York or London Stock Exchanges, (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges not
related to market conditions and excluding any coordinated trading halt
triggered as a result of a specified decrease in a market index), (2) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United Kingdom or the United States, (3) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United Kingdom or the United States, (4) any limitation
(whether or not mandatory) by any United States governmental authority or agency
that has a material adverse effect generally on the extension of credit by banks
or other financial institutions, which in any case would reasonably be expected
to have a Material Adverse Effect on the Company or materially adversely affect
Parent's or Purchaser's ability to complete the Offer and the Merger; or
(d) the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct in each case at the
date of the Merger Agreement and at the date of consummation of the Offer as
though made on or as of such date (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and correct as of
such date or with respect to such period) or the Company shall have breached or
failed to perform or comply with any obligation, agreement or covenant required
by the Merger Agreement to be performed or complied with by it except, in each
case, where the failure of such representations and warranties to be true and
correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein), or the failure to perform or
comply with such obligations, agreements or covenants, do not, individually or
in the aggregate, have a Material Adverse Effect on the Company or a materially
adverse effect on the ability of the Company, Parent or Purchaser to consummate
the Offer or the Merger; or
(e) the Company's Board of Directors (i) shall have withdrawn,
or modified or changed in a manner adverse to Parent or Purchaser (including by
amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement, or the Merger, (ii) shall have recommended a Takeover Proposal, or
(iii) shall have adopted any resolution to effect any of the foregoing; or
(f) any Person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act), other than Parent, Purchaser or their affiliates
or any group of which any of them
ii
<PAGE>
is a member, shall have acquired or announced its intention to acquire
beneficial ownership (as determined pursuant to Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of the Shares; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms.
The foregoing conditions are for the sole benefit of Parent
and Purchaser and may, subject to the terms of the Merger Agreement, be waived
by Parent or Purchaser, in whole or in part, at any time and from time to time,
in the sole discretion of Parent or Purchaser. The failure by Parent or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
iii
<PAGE>
[LETTERHEAD OF SCOTSMAN INDUSTRIES, INC.]
Richard C. Osborne
Chairman of the Board
President & CEO
April 29, 1999
Berisford plc
Washington House
40/41 Conduit Street
London
W1R 9FB
Attention: Mr. Alan J. Bowkett
Gentlemen:
You have requested information regarding Scotsman Industries
(the "Company") for the purposes of your consideration of a possible
acquisition by you of the Company (a "Transaction"). It is understood and
agreed that this agreement creates no obligation to enter into any
Transaction or any agreement relating to a Transaction. To induce the Company
to furnish information to you, you hereby agree as follows:
1. As used herein:
"ACT" means the Securities Exchange Act of 1934, as amended;
"AFFILIATE" means any Person that (i) directly or indirectly
controls you, (ii) directly or indirectly is controlled by you or (iii)
is under direct or indirect common control with you;
"INFORMATION" means information regarding the Company or any
of its subsidiaries or their respective assets or businesses which is
furnished to you, directly or indirectly, by the Company or its
representatives;
"PERSON" shall have the meaning contained Section 3(a)(9) of
the Act; and
"RESTRICTED PERIOD" means the eighteen month period commencing
on the date hereof.
2. All Information will be kept confidential by you, except
that you may disclose or make available Information to your directors,
officers and employees and to representatives of your advisors and of
potential financing sources for the exclusive purpose of
<PAGE>
assisting you in the evaluation of a possible Transaction, all of whom shall
be specifically informed by you or your representatives of the confidential
character of such Information and that by receiving such information they are
agreeing to be bound by the terms of this agreement relating to the
confidential treatment of such Information. You will not use, or permit any
of your representatives to use, any of the Information for any purpose other
than the evaluation of a possible Transaction, and you will not make any
Information available to any Person for any other purpose whatsoever.
3. You hereby acknowledge that you are aware (and that prior
to the disclosure of any Information to any Person pursuant to paragraph 2
such Person will be advised) that the United States securities laws prohibit
any Person who has material non-public information about a company from
purchasing or selling securities of such company or from communicating such
information to any other Person under circumstances in which it is reasonably
foreseeable that such Person is likely to purchase or sell such securities.
In the event that you disclose any Information to any Person, whether or not
such disclosure is permitted under paragraph 2, you shall be liable to the
Company for any failure by such Person to treat such Information in the same
manner as you are obligated to treat such Information under the terms of this
agreement.
4. Except in response to the request made by the Company that
during May 1999 you provide to its Board of Directors a confidential
indication of interest in a Transaction, without the prior written consent of
the Company, you will not at any time during the Restricted Period (and you
will not at any time during the Restricted Period assist or encourage others
to):
(a) acquire or agree, offer, seek or propose to
acquire, directly or indirectly, alone or in concert with any
other Person, by purchase or otherwise, beneficial ownership
as defined in Rule 13d-3 under the Act, of any of the shares
of common stock or preferred stock of the Company (the
"Securities"), or any rights or options to acquire Securities
(including from any third party);
(b) solicit proxies (as such terms are defined in
Rule 14a-1 under the Act), whether or not such solicitation is
exempt under Rule 14a-2 under the Act, with respect to any
matter from holders of any Securities, or make any
communication to such holders relating to the Company which is
exempted from the definition of solicitation by Rule
14a-1(l)(2)(iv) under the Act;
(c) initiate, or induce or attempt to induce any
other Person, entity or group (as defined in Section 13(d)(3)
of the Act) to initiate, any stockholder proposal or tender
offer for any Securities, any change of control of the Company
or the convening of a stockholders' meeting of the Company;
(d) otherwise seek or propose to influence or
control the management or policies of the Company;
(e) enter into any discussions, negotiations,
arrangements or understandings with any other Person with
respect to any matter described in the foregoing subparagraphs
(a) through (d);
<PAGE>
(f) directly or indirectly request, other than by
means of a confidential communication to the Board of
Directors, that the Company amend or waive any provision of
this paragraph 4;
(g) knowingly take any action inconsistent with any
of the foregoing subparagraphs (a) through (f); or
(h) take any action with respect to any of the
matters described in this paragraph 4 that requires public
disclosure.
The restrictions of this paragraph 4 shall terminate in the event (i) a third
party has publicly announced its intention to acquire or make an offer for an
acquisition of all or substantially all of the Securities or assets of the
Company (on a consolidated basis) or (ii) the Company makes a public
announcement that it has entered into a definitive written agreement with a
third party for any of the foregoing.
5. If at any time during the course of discussions relating to
the indication of interest to be provided in May 1999, any officer or
director of, or financial advisor to, Berisford plc or Welbilt Corporation is
approached by any Person concerning your or their participation in a
transaction involving any material portion of the assets, businesses or
securities of the Company or any subsidiary thereof, you will promptly inform
us of the nature of such contact and the parties thereto.
6. During the Restricted Period except with the Company's
prior written approval, you will not disclose, and you will not permit your
representatives to disclose, to any Person other than the Persons described
in paragraph 2, the fact that you are engaged in discussions with the Company
regarding a Transaction, the fact that the Information has been made
available to you or that you have inspected any portion of the Information or
the fact that you are subject to any of the restrictions described in
paragraph 4; PROVIDED, however, that you may make such disclosure to the
extent necessary if you have received the advice of your outside counsel that
such disclosure must be made by you in order (i) that you not commit a
violation of law or violate any rules or regulations of any stock exchange on
which your securities are listed or any order applicable to you of any court
or administrative body having jurisdiction or (ii) to permit the continued
trading of your securities on such stock exchange.
7. In the event that you are requested in any proceeding to
disclose any Information received by you or any matter subject to paragraph
6, you will give us prompt notice of such request so that we may seek an
appropriate protective order. If in the absence of a protective order you are
nonetheless compelled to disclose any such Information or matter, you may
disclose such Information or matter without liability hereunder; provided
that you give us written notice of the Information or matter to be disclosed
as far in advance of its disclosure as is practicable and use your best
efforts to obtain assurances that confidential treatment will be accorded to
such Information or matter.
8. Information shall not include any Information furnished to
you by the Company or its representatives which you demonstrate (i) is on the
date hereof or hereafter becomes generally available to the public other than as
a result of a disclosure, directly or
<PAGE>
indirectly, by you or your representatives or (ii) was known or was available
to you prior to its disclosure to you by the Company or its representatives
or becomes available to you on a nonconfidential basis, from a source other
than the Company or its representatives, which source was not known to you
(after inquiry) to be bound by a confidentiality agreement with the Company
or its representatives and had not received such information, directly or
indirectly, from a Person so bound.
9. The Company does not make any representation or warranty as
to the accuracy or completeness of the Information provided to you. Neither
the Company nor any of its representatives shall have any liability resulting
from the use of the Information by you or any of your representatives.
10. Upon our request at any time, you will promptly redeliver
to us all copies of documents containing Information and will promptly
destroy all memoranda, notes and other writings prepared by you or by any
Person referred to in paragraph 2 based on such Information.
11. During the Restricted Period commencing on the date hereof,
(i) you will not (and will not assist or encourage others to) solicit the
services, as employee, consultant or otherwise, of any employee of the
Company or any of its subsidiaries and (ii) the Company will not (and will
not assist or encourage others to) solicit the services as employee,
consultant or otherwise, any employee of yours or any of your Affiliates;
provided, however, that the foregoing restrictions shall not apply to any
general advertisement of employment opportunities.
12. You shall cause each of your Affiliates to comply with the
terms of paragraphs 2, 3, 4, 5, 6, 7, 8, 10 and 11 (construing such
paragraphs for such purposes to refer also to such Affiliates in each
instance where there is a reference to you).
13. You acknowledge that irreparable damage would occur to the
Company in the event any of the provisions of this agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, the Company shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States of America or any state thereof, in
addition to any other remedy to which the Company may be entitled at law or
in equity.
14. If any term or provision of this agreement or any
application hereof shall be invalid or unenforceable, the remainder of this
agreement and any other application of such term or provision shall not be
affected thereby.
15. This agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but such counterparts shall constitute one and the same instrument.
16. This agreement contains the entire understanding of the
parties hereto with respect to the matters covered hereby and may be amended
only by an agreement in writing executed by the Company and you.
<PAGE>
17. This agreement shall be binding upon, inure to the benefit
of and be enforceable by our respective successors and assigns.
18. This agreement shall be governed by and construed in
accordance with the internal laws (as opposed to conflict of law provisions)
of the State of Illinois.
19. The confidentiality provisions contained in paragraphs 2
and 3 shall cease to have affect upon expiry of a period of two years from
the date hereof.
* * * * * *
If the foregoing correctly sets forth our agreement as to the
matters set forth herein, please confirm our agreement by executing and
returning a copy of this agreement to the undersigned.
Very truly yours,
SCOTSMAN INDUSTRIES, INC.
By: /s/ Richard C. Osborne
-----------------------------------
Name: Richard C. Osborne
Title: Chairman, President & C.E.O.
The foregoing terms are agreed to:
BERISFORD PLC
By: /s/ Alan J. Bowkett
---------------------------------
Name: A. J. Bowkett
Title: C.E.O.
