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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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BIRD CORPORATION
(NAME OF SUBJECT COMPANY)
BIRD CORPORATION
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, $1 PAR VALUE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
090763103
(CUSIP NUMBER OF CLASS OF SECURITIES)
$1.85 CUMULATIVE CONVERTIBLE PREFERENCE STOCK
(TITLE OF CLASS OF SECURITIES)
090763301
(CUSIP NUMBER OF CLASS OF SECURITIES)
FRANK S. ANTHONY
VICE PRESIDENT
BIRD CORPORATION
1077 PLEASANT STREET
NORWOOD, MA 02062
(617) 551-0656
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE
PERSON FILING STATEMENT)
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ITEM 1. SECURITIES AND SUBJECT COMPANY.
The name of the subject company is Bird Corporation, a Massachusetts
corporation (the "Company"), and the address of its principal executive
offices is 1077 Pleasant Street, Norwood, Massachusetts 02062. The titles of
the classes of equity securities to which this statement relates are (i) the
common stock, par value $1 per share, including the associated common stock
purchase rights issued pursuant to a Rights Agreement (the "Rights Agreement")
between the Company and American Stock Transfer & Trust Company, as amended
(together, the "Common Stock"), of the Company and (ii) the $1.85 Cumulative
Convertible Preference Stock, par value $1 per share (the "Preference Stock"),
of the Company.
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to the tender offer by BI Expansion Corp., a
Massachusetts corporation (the "Purchaser"), which is a wholly owned
subsidiary of CertainTeed Corporation, a Delaware corporation ("CertainTeed"),
which is an indirect wholly owned subsidiary of Compagnie de Saint-Gobain, a
French corporation ("Saint-Gobain"), to purchase all outstanding shares of
Common Stock (the "Common Shares") at a price (the "Common Price") of $7.50
per Common Share net to the seller in cash without interest thereon, and all
outstanding shares of Preference Stock (the "Preference Shares", and, together
with the Common Shares, the "Shares") at a price (the "Preference Price") of
$20 plus all accrued and unpaid dividends through the Expiration Date (as
defined herein) per Preference Share net to the seller in cash without
interest thereon, as disclosed in the Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") dated April 12, 1996 filed by the Purchaser,
CertainTeed and Saint-Gobain with the Securities and Exchange Commission (the
"SEC"), upon the terms and subject to the conditions set forth in the Offer to
Purchase dated April 12, 1996 (the "Offer to Purchase") and the related Letter
of Transmittal (which together constitute the "Offer" and are referred to
collectively herein as the "Offer Documents"). A copy of the Offer to Purchase
and the Letter of Transmittal are attached hereto as Exhibit (a)(1) and
Exhibit (a)(2), respectively.
The Offer to Purchase states that the principal executive offices of the
Purchaser and CertainTeed are located at 750 E. Swedesford Road, Valley Forge,
Pennsylvania 19482.
The Offer is being made pursuant to the Amended and Restated Agreement and
Plan of Merger dated as of April 8, 1996 (the "Merger Agreement"), among
CertainTeed, the Purchaser and the Company pursuant to which, as soon as
practicable following the consummation of the Offer and the satisfaction or
waiver of certain conditions, including approval of the Merger Agreement by
the Company's stockholders, the Purchaser will be merged with and into the
Company (the "Merger"), with the Company (the "Surviving Corporation")
surviving the Merger as a wholly owned subsidiary of CertainTeed. In the
Merger, each Share outstanding on the effective date of the Merger (the
"Effective Date") (other than Shares held by stockholders who perfect their
appraisal rights under Massachusetts law, Shares held in the Company's
treasury and Shares held by the Purchaser or CertainTeed) will be converted
into the right to receive $7.50 (in the case of Common Shares) and $20 plus
all dividends accrued and unpaid through the Effective Date (in the case of
Preference Shares), in each case in cash, without interest. The Merger
Agreement also provides that CertainTeed may elect to cause the Company as
soon as practicable following such election to call for redemption at the
earliest permitted date all outstanding Preference Shares. In the event that
the Purchaser elects to cause the Company to redeem the Preference Shares to
satisfy the Minimum Condition, the Purchaser expects the Company will cause
such redemption to occur at the earliest practicable date following the
Expiration Date. The Merger is subject to a number of conditions, including
the approval and adoption of the Merger Agreement by stockholders of the
Company. See "The Merger Agreement--Conditions to the Merger". The purpose of
the Offer, the Merger Agreement and the Merger is to enable CertainTeed,
through the Purchaser, to acquire control of, and the entire equity interest
in, the Company. The Offer is intended to somewhat accelerate the time when
CertainTeed will acquire control of the Company. The Purchaser has indicated
that it intends, as soon as practicable following consummation of the Offer,
to hold a special meeting of stockholders (the "Special Meeting") to approve
the Merger and, as soon as practicable thereafter, to consummate the Merger.
The Merger Agreement is filed as Exhibit (c)(1) hereto and is hereby
incorporated herein by reference in its entirety.
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The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date such number of Common
Shares that would constitute at least 66 2/3% of all outstanding Common Shares
(determined on a fully diluted basis on the Expiration Date), (ii) either (x)
there being validly tendered and not withdrawn prior to the Expiration Date
such number of Preference Shares that would constitute at least 66 2/3% of all
outstanding Preference Shares or (y) the Purchaser shall have elected to
require the Company to call for redemption all outstanding Preference Shares in
accordance with the Merger Agreement (clauses (i) and (ii) together being the
"Minimum Condition"), (iii) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations thereunder
(the "HSR Act") applicable to the purchase of Shares pursuant to the Offer
having expired or been terminated (the "HSR Condition") and (iv) all consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, any governmental authority required or necessary in connection
with the Offer, the Merger and the Merger Agreement referred to herein and the
transactions contemplated by the Merger Agreement having been obtained and
being in full force and effect (the "Required Consents Condition"). The
Purchaser has reserved the right (subject to obtaining the consent of the
Company, if required, and the applicable rules and regulations of the SEC) to
waive or reduce the Minimum Condition and to elect to purchase, pursuant to the
Offer, fewer than the minimum number of Shares necessary to satisfy the Minimum
Condition. The Purchaser has indicated that it presently does not intend to
waive the Minimum Condition. The conditions to the Offer are more fully
described herein under "The Merger Agreement--Certain Conditions of the Offer"
and in Sections 1 and 14 of the Offer to Purchase, which is filed as Exhibit
(a)(1) hereto, and incorporated herein by reference.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Thursday, May 9, 1996, unless and until the Purchaser 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 the Purchaser, will expire.
As of April 8, 1996, there were 4,124,513 Common Shares outstanding, 436,600
Common Shares authorized for issuance pursuant to the exercise of outstanding
options to purchase Common Shares ("Stock Options"), 731,955 Common Shares
authorized for issuance pursuant to conversion of the Preference Shares at
$22.25 per Common Share (which is substantially above the Common Price) and
814,300 Preference Shares outstanding. For purposes of the Offer, Common Shares
outstanding on a fully diluted basis will not include Common Shares issuable
upon conversion of Preference Shares that have been validly tendered and not
withdrawn prior to the Expiration Date or issuable upon the exercise of any
Stock Options to the extent holders of such Stock Options have agreed not to
exercise such Stock Options as long as the Merger Agreement is in effect. Based
upon the foregoing, the Purchaser has informed the Company that approximately
2,766,800 Common Shares (assuming that all Preference Shares are so validly
tendered and not withdrawn and all holders of Stock Options with an exercise
price above the Common Price so agree) or approximately 3,528,700 Common Shares
(assuming conversion of all outstanding Preference Shares and exercise of all
outstanding Stock Options) and approximately 542,900 Preference Shares
(assuming no conversion or redemption of any Preference Shares) must be validly
tendered and not properly withdrawn prior to the Expiration Date in order for
the Minimum Condition to be satisfied.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the entity filing
this statement, are set forth in Item 1 above.
(b) Certain contracts, agreements, arrangements and understandings between
the Company and certain of its directors, executive officers and affiliates are
described in the Company's Information Statement (as defined below) in the
sections entitled "EXECUTIVE COMPENSATION" and "DIRECTORS' COMPENSATION". The
Company's Information Statement as mailed to the Company's stockholders on
April 12, 1996 (the "Information Statement") is attached hereto as Annex A,
filed as Exhibit (a)(3) hereto, and is incorporated herein by reference. In
addition, certain contracts, agreements, arrangements and understandings
relating to the Company and/or the Company's directors, executive officers and
affiliates are contained in the Merger
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Agreement, filed as Exhibit (c)(1) hereto and incorporated herein by
reference, and are described below under "The Merger Agreement" and
"Additional Agreements, Arrangements and Understandings."
THE MERGER AGREEMENT
The Merger Agreement. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
the Merger", the Purchaser will be merged with and into the Company, and each
then outstanding Share (other than Shares held by stockholders who perfect
their appraisal rights under Massachusetts law, Shares held in the Company's
treasury and Shares held by the Purchaser or CertainTeed) will be converted
into the right to receive an amount in cash equal to (in the case of Common
Shares) $7.50 per Common Share and (in the case of Preference Shares) $20 plus
all accrued and unpaid dividends as of the Effective Date per Preference
Share. All outstanding shares of the Company's 5% Cumulative Preferred Stock,
par value $100 per share (the "5% Stock"), will remain issued and outstanding
after the Merger and will be called for redemption and retirement as soon as
practicable following the Merger at a price equal to $110 per share, plus all
accrued and unpaid dividends thereon as of the date of redemption and
retirement. The Merger Agreement provides that CertainTeed may elect to cause
the Company as soon as practicable following such election to redeem and
retire at the earliest permitted date for redemption all outstanding
Preference Shares. In such case, CertainTeed will provide sufficient funds to
the Company to effect such redemption and retirement in exchange for a number
of Common Shares equal to the amount of funds provided divided by $7.50. The
Purchaser has indicated that it expects that, in the event the Purchaser
elects to cause the Company to call the Preference Shares for redemption to
satisfy the Minimum Condition, the Company will cause such redemption to occur
at the earliest practicable date following the Expiration Date.
(1) Vote Required to Approve Merger. If the Purchaser (i) acquires, through
the Offer or otherwise, at least 66 2/3% of the outstanding Common Shares and
(ii) either acquires at least 66 2/3% of the outstanding Preference Shares or
requires redemption of the Preference Shares, which would be the case if the
Minimum Condition were satisfied, it would have sufficient voting power to
effect the Merger without the vote of any other stockholder of the Company.
(2) Conditions to the Merger.
(A) Conditions to the obligations of CertainTeed and the Purchaser. The
obligations of CertainTeed and the Purchaser under the Merger Agreement are
subject to the satisfaction, on or prior to the closing date of the Merger
(the "Closing Date"), of each of the following conditions, each of which may
be waived by CertainTeed and the Purchaser except as otherwise provided by
law, provided that upon the acceptance of any Common Shares and Preference
Shares, if any, by the Purchaser pursuant to the Offer (the "Consummation of
the Offer") each of the following conditions (other than the conditions set
forth in clauses (iii)(b), (iii)(d) and (iv)(b) below) shall be deemed waived
by the Purchaser and CertainTeed: (i) the representations and warranties of
the Company contained in the Merger Agreement (without regard to any
supplemental information provided after the date of the Merger Agreement) that
are qualified as to materiality shall be true and correct, and the
representations that are not so qualified shall be true and correct in all
material respects, in each case on and as of the date of the Merger Agreement
and on and as of the Effective Date, and between the date of the Merger
Agreement and the Effective Date there shall not have been any event or change
in circumstance causing or reasonably anticipated to cause in the future (a)
any material adverse effect on the business, assets, properties, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole or the Surviving Corporation and its
subsidiaries taken as a whole or (b) any material adverse effect on the
ability of the Company to carry out the transactions contemplated by the
Merger Agreement without significant unanticipated delay or expense (clauses
(a) and (b) together being a "Material Adverse Effect"); (ii) each of the
obligations of the Company to be performed by it on or before the Closing Date
pursuant to the terms of the Merger Agreement shall have been duly performed
or complied with in all material respects by the Closing Date; (iii)(a) all
corporate action necessary by the Company to authorize the execution, delivery
and performance of the Merger Agreement and the consummation of the
transactions contemplated thereby (including the Offer and the Merger) shall
have been duly and validly taken, and the Company and the Purchaser shall have
full right and power to merge on the
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terms provided in the Merger Agreement; (b) the holders of the Common Shares
and the Preference Shares shall have duly approved the Merger at the Special
Meeting (other than if such approval shall not have occurred solely due to the
breach by CertainTeed or the Purchaser of its obligation, upon consummation of
the Offer, to vote its Common Shares and Preference Shares in favor of the
Merger); (c) all consents, approvals and authorizations from third persons and
governmental authorities identified in the Schedules to the Merger Agreement
required to consummate the transactions contemplated by the Merger Agreement
shall have been obtained; and (d) all applicable waiting periods under the HSR
Act shall have expired or been terminated; (iv)(a) there shall not be any
pending or threatened suit, action or proceeding by any governmental authority
(1) challenging the acquisition by CertainTeed or the Purchaser of any Shares,
seeking to restrain or prohibit the consummation of the Merger or any of the
other transactions contemplated by the Merger Agreement that are material in
relation to the Company and its subsidiaries taken as a whole, (2) seeking to
prohibit or limit the ownership or operation by the Company, CertainTeed or
any of their respective subsidiaries of any material portion of the business
or assets of the Company, or any of their respective subsidiaries, or to
compel the Company, CertainTeed or any of their respective subsidiaries to
dispose of or hold separate any material portion of the business or assets of
the Company, CertainTeed or any of their respective subsidiaries, as a result
of the Merger or any of the other transactions contemplated by the Merger
Agreement, (3) seeking to impose limitations on the ability of CertainTeed or
the Purchaser to acquire or hold, or exercise full rights of ownership of, any
shares of common stock of the Surviving Corporation, (4) seeking to prohibit
CertainTeed or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company or its subsidiaries
or of CertainTeed and its subsidiaries or (5) which otherwise is reasonably
likely to have a Material Adverse Effect, (b) no statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order or legal restraint or prohibition enacted, entered,
promulgated, enforced, issued or deemed applicable to the Merger or the
transactions contemplated thereby, or any other action shall be taken by any
governmental authority or court, in each case preventing the consummation of
the Merger or the transactions contemplated thereby, shall be in effect; (v)
all directors of the Company whose resignation is requested by CertainTeed at
least five days before the Closing Date will have submitted their resignations
effective as of the Closing Date; (vi) no more than ten percent of the issued
and outstanding shares of any class of equity securities of the Company
entitled to dissenters rights as of the Closing Date shall be dissenting
shares entitled to receive the fair value of such shares in accordance with
Sections 85 through 98 inclusive of the Massachusetts Business Corporation Law
(the "MBCL"); (vii) each outstanding option (each a "Stock Option") issued
under the Company's 1982 Stock Option Plan, as amended (the "1982 Option
Plan"), the Company's 1992 Stock Option Plan, as amended (the "1992 Option
Plan") and the Company's 1992 Non-Employee Directors Stock Option Plan, as
amended (the "Non-Employee Directors Option Plan") shall have been amended to
effect the transactions contemplated by the Merger Agreement; and (viii) the
Company shall have furnished CertainTeed with such certificates of its
officers and others to evidence compliance with the conditions set forth in
the Merger Agreement as may be reasonably requested by CertainTeed, and the
form and substance of all opinions, certificates and other documents required
by or furnished pursuant to the Merger Agreement shall be satisfactory in all
reasonable respects to CertainTeed and its counsel. On April 11, 1996, the
Company informed the Purchaser that the condition described in clause (vii)
above relating to Stock Options had been satisfied.
(B) Conditions to the Obligations of the Company. The obligations of the
Company under the Merger Agreement are subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, each of which
may be waived by the Company except as otherwise provided by law, provided
that, upon Consummation of the Offer, each of the following conditions (other
than the conditions set forth in clauses (iii) and (iv) below) shall be deemed
waived by the Company: (i) the representations and warranties of CertainTeed
and the Purchaser contained in the Merger Agreement that are qualified as to
materiality shall be true and correct, and the representations that are not so
qualified shall be true and correct in all material respects, in each case on
and as of the date of the Merger Agreement and on and as of the Effective
Date; (ii) each of the obligations of CertainTeed and the Purchaser to be
performed by them on or before the Closing Date pursuant to the terms of the
Merger Agreement shall have been duly performed and complied with in all
material respects by the Closing Date; (iii)(a) all corporate action necessary
by the Purchaser and CertainTeed to authorize the execution, delivery and
performance of the Merger Agreement and the consummation of the transactions
contemplated by the
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Merger Agreement shall have been duly and validly taken, the Purchaser shall
have full right and power to merge on the terms provided in the Merger
Agreement and the Company's stockholders shall have approved the Merger at the
Special Meeting called for that purpose; (b) all consents, approvals and
authorizations from third persons and governmental authorities identified in
the Schedule to the Merger Agreement required to consummate the transactions
contemplated by the Merger Agreement shall have been obtained; and (c) all
applicable waiting periods under the HSR Act shall have expired or been
terminated; (iv) no judicial, administrative or arbitration order, award,
judgment, writ, injunction or decree shall have been entered by a governmental
authority with proper jurisdiction and not revised prohibiting the Merger, and
no legal action shall have been instituted by any governmental authority
challenging the Merger which if successful would prohibit the consummation of
the Merger; and (v) CertainTeed and the Purchaser shall have furnished the
Company with such certificates of their respective officers and others to
evidence compliance with the conditions set forth in the Merger Agreement as
may be reasonably requested by the Company, and the form and substance of all
certificates and other documents required by or furnished pursuant to the
Merger Agreement shall be satisfactory in all reasonable respects to the
Company and its counsel.
(3) Termination of the Merger Agreement. Unless the Consummation of the
Offer shall have occurred and Designated Directors (as defined below) shall
constitute at least a majority of the members of the Board of Directors of the
Company (the "Board"), the Merger Agreement shall be terminated, and the
Merger abandoned, if the requisite vote of the Company's stockholders with
respect to the Merger Agreement is not obtained as contemplated by the Merger
Agreement. Notwithstanding approval of the Merger Agreement and the
transactions contemplated thereby by the stockholders of the Company or by
CertainTeed, the Merger Agreement may be terminated, and the Offer and Merger
abandoned, at any time prior to the Effective Date:
(A) by mutual consent of CertainTeed, the Purchaser and the Company;
(B) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members of
the Board of the Company, by CertainTeed, the Purchaser or the Company at
any time after September 30, 1996;
(C) by CertainTeed or the Purchaser if (a) the Offer terminates without
any Shares being accepted for payment due to (x) failure of the Minimum
Condition or (y) any of the other conditions to the Offer (other than
solely the condition described in paragraph (11)(c) hereof) shall have
become impossible to fulfill and shall not have been waived (see "--Certain
Conditions of the Offer"), (b) any of the conditions to the obligations of
CertainTeed and the Purchaser to consummate the Merger becomes impossible
to fulfill and shall not have been waived or deemed waived in accordance
with the Merger Agreement (it being understood that with respect to any
condition described in clause (iv) (b) of paragraph (2)(A) above, any
condition described therein relating to an order, injunction or judicial
decree shall be deemed not to have become impossible to fulfill until such
order, injunction or decree shall have become final and non-appealable),
(c) the Board of the Company withdraws or modifies its approval or
recommendation of the Merger Agreement, the Offer or the Merger or (d)
unless the Consummation of the Offer shall have occurred and Designated
Directors shall constitute at least a majority of the members of the Board
of the Company, the Company fails to perform in any material respect any of
its obligations under the Merger Agreement or breaches in any material
respect any provision of the Merger Agreement, and the Company has failed
to perform such obligation or cure such breach, within 10 days of its
receipt of written notice thereof from CertainTeed or the Purchaser and
such failure to perform shall not have been waived in accordance with the
terms of the Merger Agreement; or
(D) by the Company if (a) any of the conditions to the obligations of the
Company to consummate the Merger shall become impossible to fulfill and
shall not have been waived in accordance with the terms of the Merger
Agreement, (b) CertainTeed or the Purchaser fails to perform in any
material respect any of its obligations under the Merger Agreement or
breaches in any material respect any provision of the Merger Agreement, and
CertainTeed and the Purchaser have failed to perform such obligation or
cure such breach, within 10 days of its receipt of written notice thereof
from the Company, and such failure to perform shall
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not have been waived in accordance with the terms of the Merger Agreement,
(c)(i) the Board of the Company withdraws or modifies its approval or
recommendation of the Merger Agreement, the Offer or the Merger and (ii)
the Company pays CertainTeed in cash all CertainTeed's Expenses and the
Alternate Transaction Fee (each as defined in the first paragraph under
"Fees and Expenses" below) or (d) if the Purchaser (i) shall have failed to
commence the Offer within the time required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or (ii) shall have failed to
pay for any Shares accepted for payment pursuant to the Offer and, in the
case of clause (ii), the Purchaser shall have failed to make such payment
within three business days of receipt of written notice thereof from the
Company.
Notwithstanding any provisions to the contrary in the Merger Agreement, (i)
the sole remedy of CertainTeed or the Purchaser for a breach by the Company of
any representation or warranty set forth in the Merger Agreement shall be the
termination of the Merger Agreement (if permitted by the Merger Agreement)
unless such breach was made with the actual knowledge of the President and
Chief Executive Officer of the Company, the Vice President of Finance and
Administration of the Company or the General Counsel of the Company, after due
inquiry of other managerial employees of the Company who would be reasonably
expected to have knowledge as to the matter represented (a "Company Willful
Misrepresentation"), and (ii) the sole remedy of the Company for a breach by
CertainTeed or the Purchaser of any representation or warranty set forth in
the Merger Agreement shall be the termination of the Merger Agreement (if
permitted by the Merger Agreement) unless such breach was made with the actual
knowledge of the President, Executive Vice President or Senior Vice President
of CertainTeed, after due inquiry of other managerial employees of CertainTeed
who would be reasonably expected to have knowledge as to the matter
represented (a "CertainTeed Willful Misrepresentation").
(4) Procedure for Termination and Amendment. The Merger Agreement provides
that the termination or amendment of the Merger Agreement pursuant to the
Merger Agreement requires, in the case of the Company, action by its Board or
the duly authorized designee of its Board in order to be effective. In the
event that the Purchaser's designees are appointed or elected to the Board of
the Company as provided in the Merger Agreement, after the Consummation of the
Offer and prior to the time the Merger becomes effective, the affirmative vote
of at least a majority of the Continuing Directors (as defined below) shall be
required for the Company to agree to amend, waive compliance with or terminate
the Merger Agreement.
(5) Takeover Proposals. The Merger Agreement provides that the Company shall
not, nor shall it permit any of its subsidiaries or affiliates to, nor shall
it authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of the Company or any of
its subsidiaries to (a) solicit or initiate, or knowingly encourage the
submission of, any takeover proposal, (b) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, any takeover proposal (except for (i) non-confidential information, or
(ii) filings with the SEC; provided, however, that prior to the earlier of the
Consummation of the Offer or the Special Meeting, to the extent required by
the fiduciary obligations of the Board of the Company, as determined in good
faith by the Board of the Company based on the advice of counsel, the Company
may, (A) in response to an unsolicited request therefor, furnish information
with respect to the Company (pursuant to a confidentiality agreement at least
as restrictive (as determined by the Company's counsel) as the Confidentiality
Agreement dated April 13, 1994, as amended, between the Company and Saint-
Gobain Corporation, a Pennsylvania corporation and an indirect wholly owned
subsidiary of Saint-Gobain) to any person who has indicated to the Company
that it is interested in pursuing a qualified takeover proposal and discuss
such information (but not the terms of any possible takeover proposal) with
such person and (B) upon receipt by the Company of a qualified takeover
proposal, following the delivery to CertainTeed of the notice required
pursuant to the Merger Agreement, participate in discussions or negotiations
regarding such qualified takeover proposal. Without limiting the foregoing, it
is understood that any violation of the restrictions described in the
preceding sentence by any officer of the Company or any of its subsidiaries or
any investment banker, attorney or other advisor or representative of the
Company or its subsidiaries shall be deemed a breach of the Merger Agreement
by the Company. For purposes of this Section under the heading "Takeover
Proposals", "takeover proposal" means any proposal for a merger or other
business combination (regardless of legal form) involving the Company or any
subsidiary or any proposal or offer to acquire in any manner, directly
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or indirectly, a substantial portion of the assets or business of the Company
or a substantial equity interest in, or any substantial amount of voting
securities of, the Company or any subsidiary, or any other transaction outside
the ordinary course of business and not otherwise specifically permitted by
the terms of the Merger Agreement the consummation of which would impede or
prevent the consummation of the Merger pursuant to the terms of the Merger
Agreement; and "qualified takeover proposal" means a takeover proposal having
terms which the Board of the Company determines (based on, among other things,
the advice of a financial advisor of nationally recognized reputation) in its
good faith reasonable judgment to be more favorable to the holders of Common
Shares than the Common Price and to the holders of Preference Shares than the
Preference Price and likely to be fully financed and consummated.
The Merger Agreement provides further that, except as described below,
neither the Company's Board nor any committee thereof shall (i) withdraw or
modify or propose to withdraw or modify, in a manner adverse to CertainTeed or
the Purchaser, the approval or recommendation by such Board or any such
committee of the Merger Agreement, the Offer or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any takeover proposal or (iii)
enter into any agreement with respect to any takeover proposal.
Notwithstanding the foregoing, in the event the Board of the Company receives
a qualified takeover proposal, the Board of the Company or any committee
thereof or the Company may (subject to the limitations (described in this
Section under the heading "Takeover Proposals") in the preceding paragraph)
withdraw or modify its approval or recommendation of the Merger Agreement, the
Offer or the Merger at any time after 48 hours following CertainTeed's receipt
of written notice (a "Notice of Qualified Takeover Proposal") advising
CertainTeed that the Board of the Company has received a qualified takeover
proposal, specifying the material terms and conditions of such qualified
takeover proposal and identifying the person making such qualified takeover
proposal. The Company may take any of the foregoing actions pursuant to the
provision described in the preceding sentence only until the earlier of the
Consummation of the Offer or the approval of the Merger at the Special
Meeting. The Company shall not be prohibited from taking and disclosing to its
stockholders a position contemplated by SEC Rule 14e-2(a) under the Exchange
Act following CertainTeed's receipt of a Notice of Qualified Takeover Proposal
provided that the Company does not withdraw or modify its position with
respect to the Merger or approve or recommend a takeover proposal.
In addition to the obligations of the Company described in the preceding
paragraphs, the Company shall promptly advise CertainTeed orally and in
writing of any request for information or of any takeover proposal, or any
inquiry with respect to any takeover proposal, the material terms and
conditions of such request, takeover proposal or inquiry and the identity of
the person making any such takeover proposal or inquiry. The Company shall
keep CertainTeed fully informed of the status and details of any such request,
takeover proposal or inquiry.
(6) Fees and Expenses. Except with respect to the circumstances described
below, the Merger Agreement provides that each of the Purchaser, CertainTeed
and the Company will bear its own costs, fees and expenses in connection with
the negotiation, execution, delivery and performance of the Merger Agreement
(including the Initial Merger Agreement (as defined herein)) and the
consummation of the Offer and the Merger.
The Merger Agreement provides that in the event that the Board of the
Company wishes to withdraw or adversely modify its approval or recommendation
of the Merger Agreement, the Offer or the Merger, prior to such withdrawal or
modification the Company shall pay in same day funds to CertainTeed (a) its
Expenses (defined below) incurred to date and thereafter shall pay in same day
funds to CertainTeed within one business day after demand therefor all
subsequently incurred Expenses, provided, that the Company shall not be
obligated to pay any such Expenses to the extent they exceed an aggregate of
$1 million, and (b) an alternate transaction fee of $1.5 million (the
"Alternate Transaction Fee"). In the event the Company receives a takeover
proposal from a person other than CertainTeed or one of its affiliates or a
takeover proposal is publicly disclosed prior to the Expiration Date (or in
the case of clauses (ii) and (iii), prior to the Special Meeting) or, if
earlier, termination of the Merger Agreement, and (i) at the Expiration Date a
sufficient number of Shares shall not have been tendered to satisfy the
Minimum Condition (and the Purchaser shall not have elected to cause the
Company to redeem the Preference Shares in order to satisfy the Minimum
Condition), (ii) at the Special Meeting the required approval of the Merger by
the Company's stockholders is not obtained, or (iii) the Merger Agreement is
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terminated (other than by the Company if the Board of the Company withdraws or
modifies its approval or recommendation of the Merger Agreement or the Merger)
prior to a vote on the Merger at the Special Meeting unless the Consummation
of the Offer shall have occurred, the Company shall pay in same day funds to
CertainTeed within two business days after the earlier of such Expiration
Date, Special Meeting or termination of the Merger Agreement (a) all Expenses
incurred to date, and thereafter will pay in same day funds to CertainTeed
within one business day after demand therefor, all subsequently incurred
Expenses, provided, that the Company shall not be obligated to pay any such
Expenses to the extent they exceed an aggregate of $1 million, and (b) the
Alternate Transaction Fee. With regard to clause (a) in the provisos of the
immediately preceding sentence, "Expenses" means all out-of-pocket fees and
expenses (including without limitation all travel expenses and all fees and
expenses of counsel, investment banking firms, accountants, experts and
consultants to CertainTeed or the Purchaser) incurred or paid by or on behalf
of CertainTeed or the Purchaser during or after 1994 in connection with or
leading to the Merger Agreement, the transactions contemplated thereby, and
performing or securing the performance of the obligations of the parties
thereunder, including, without limitation, such fees and expenses related to
preparation and negotiation of documentation and conducting due diligence.
CertainTeed is required within 36 hours after request therefor to advise the
Company of an estimate of its Expenses if the Company wishes to withdraw or
modify its approval or recommendation of the Merger Agreement, the Offer or
the Merger pursuant to the Merger Agreement.
The Merger Agreement also provides that in the event that the Merger
Agreement is terminated, the Offer is terminated or the Merger does not occur
(i) solely due to a breach by CertainTeed or the Purchaser of any of its
covenants or obligations under the Merger Agreement or due to a CertainTeed
Willful Misrepresentation or (ii) solely due to a breach by the Company of any
of its covenants or obligations under the Merger Agreement or due to a Company
Willful Misrepresentation, then in the case of a termination pursuant to
clause (i) above, CertainTeed and the Purchaser shall promptly pay to the
Company, and in the case of termination pursuant to clause (ii) above, the
Company shall promptly pay to CertainTeed and the Purchaser, in same day funds
all Expenses (as defined below) incurred to date (after giving credit for any
reimbursement of expenses already made pursuant to the provisions described in
the immediately preceding paragraph) and thereafter shall pay in same day
funds within one business day after demand therefor all subsequently incurred
Expenses. For purposes of the provisions described in this paragraph,
"Expenses" means all out-of-pocket fees and expenses (including without
limitation all travel expenses and all fees and expenses of counsel,
investment banking firms, accountants, experts and consultants to CertainTeed
or the Company, as the case may be) incurred or paid by or on behalf of
CertainTeed, the Purchaser or the Company, as the case may be, during or after
1994 in connection with or leading to the Merger Agreement, the transactions
contemplated thereby, and performing or securing performance of the
obligations of the parties thereunder, including, without limitation, such
fees and expenses related to preparation and negotiation of documentation and
conducting due diligence. Nothing described in this or the immediately
preceding paragraph limits damages that would otherwise be recoverable for
breaches under the Merger Agreement.
(7) Conduct of Business by the Company. Pursuant to the Merger Agreement,
except as otherwise expressly contemplated or permitted by the Merger
Agreement or otherwise consented to or approved by an authorized officer of
CertainTeed, the Company has agreed that prior to the Effective Date (or, if
earlier, when a majority of the members of the Board of the Company are
designees of the Purchaser in accordance with the Merger Agreement) the
business of the Company and its subsidiaries shall be conducted in the
ordinary course consistent with past practice and: (a) no change will be made
in the respective articles or certificate of organization or incorporation or
by-laws of the Company or any of its subsidiaries; (b) no change shall be made
in the number of shares of the Company's authorized, issued or outstanding
capital stock; nor shall any conversion rights by which the Company or any
subsidiary is or may become bound to issue, transfer, sell, repurchase or
otherwise acquire or retire any shares of capital stock or other ownership
interest of the Company or any subsidiary, or any securities convertible into
or exchangeable or exercisable for any such shares or other ownership interest
be granted, made, redeemed or amended; nor will the Company or any subsidiary
issue, deliver, pledge or sell any such shares, securities or obligations
(except deliveries or pledges in favor of the Company's senior lenders);
provided, however, that the Company is permitted to issue shares or other
securities as contemplated by the
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Company's Employee's Savings and Profit Sharing Plan (the "Savings Plan") as
in effect on the date of the Merger Agreement and is permitted to issue Common
Shares in connection with the due exercise of Stock
Options issued pursuant to the 1982 Option Plan, the 1992 Option Plan, the
Non-Employee Directors Option Plan or any other right or convertible security
outstanding as of the date of the Merger Agreement in accordance with the
existing terms thereof; (c) except as required (including the obligations set
forth in the Merger Agreement) with respect to the Company's 5% Stock or as
permitted by the Merger Agreement with respect to the Preference Shares, (x)
no dividend shall be declared or paid or other distribution (whether in cash,
stock, property or any combination thereof) or payment declared or made in
respect of the Common Shares or any other outstanding capital stock of the
Company, nor shall the Company or any subsidiary (y) purchase, acquire or
redeem any Common Shares, 5% Stock or Preference Shares or (z) split, combine
or reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for shares
of its capital stock; (d) neither the Company nor any subsidiary shall enter
into any material contract, or except in the ordinary course of business
consistent with past practice any other agreement, commitment or instrument;
(e) the Company shall use and shall cause each subsidiary to use its and their
respective reasonable efforts to preserve its and their business organization
intact, to keep available the services of its and their officers and present
key employees and to preserve its and their properties and the goodwill of its
and their suppliers, customers and others with whom business relationships
exist; (f) the Company shall not take, agree to take or permit any subsidiary
to take any action or do or permit to be done anything in the conduct of its
business or that of any subsidiary which would be contrary to or in breach of
any of the terms or provisions of the Merger Agreement or which would cause
any of the representations of the Company contained in the Merger Agreement to
be or become untrue in any material respect; (g) neither the Company nor any
of its subsidiaries shall adopt or amend in any material respect or terminate
any benefit plan, except as required by law, or change any actuarial or other
assumption used to calculate funding obligations with respect to any Company
pension plan (except to the extent that failure to make such change would
result in noncompliance with generally accepted accounting principles
("GAAP"), the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986, as amended (the "Code"), or
change the manner in which contributions to any Company pension plan are made
or the basis on which such contributions are determined, except as required by
applicable law; (h) the Company shall not acquire or agree to acquire (x) 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 or (y) any assets that are material, individually or in the
aggregate, to the Company and its subsidiaries taken as a whole, except
purchases of inventory, raw materials, supplies and similar materials in the
ordinary course of business consistent with past practice and capital
expenditures complying with clause (k) below; (i) the Company shall not sell,
lease, license, mortgage or otherwise encumber or subject to any lien (except
in favor of the Company's senior lenders or certain liens permitted under the
Merger Agreement or otherwise dispose of any of its material properties or
assets, except bona fide sales of inventory in the ordinary course of business
consistent with past practice; (j) the Company shall not (x) incur any
indebtedness for borrowed money or guarantee any such indebtedness of another
person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary course of
business consistent with past practice and routine endorsements in the process
of collection, or (y) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct or
indirect wholly owned subsidiary of the Company or routine travel and similar
advances to employees; (k) the Company shall not make or agree to make any new
capital expenditure or expenditures which, individually, is in excess of
$100,000 or, in the aggregate, are in excess of $250,000; (l) the Company
shall not make any tax election or settle or compromise any income tax
liability; provided that CertainTeed will not unreasonably withhold any
consent or approval of any such tax election, settlement or compromise; and
provided further that the filing of the Company's 1995 Federal income tax
return and 1995 state and local income tax returns shall not constitute the
settling or compromising of any income tax liability for purposes of this
paragraph; (m) the Company will not pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment,
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discharge or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities that are
reflected or reserved against in the Company's balance sheet as of December
31, 1995, or incurred since the date of such balance sheet in the ordinary
course of business consistent with past practice, or waive the benefits of, or
agree to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any of its subsidiaries is a party, except
as permitted by the Merger Agreement; and (n) the Company shall not authorize
any of, or commit or agree to take any of, the foregoing actions.
The Merger Agreement requires CertainTeed to respond within a reasonable
period of time to any request for consent or approval required to take any of
the actions described in the preceding paragraph.
The Merger Agreement also requires that the Company promptly advise
CertainTeed orally and in writing of any change or event of which the Company
has knowledge having, or which, insofar as can reasonably be foreseen, would
have, a Material Adverse Effect.
(8) Directors. Subject to compliance with applicable law (including Section
14(f) of the Exchange Act), upon the acquisition by the Purchaser of at least
a majority of the outstanding Common Shares pursuant to the Offer, the
Purchaser shall be entitled to designate at least a majority of the members of
the Board of Directors of the Company, and the Company and its Board of
Directors shall, at such time, take any and all such action (including to
increase the size of the Board of Directors or to use their best efforts to
cause directors to resign) needed to cause a sufficient number of the
Purchaser's designees to be appointed to the Company's Board of Directors such
that the designees shall constitute such majority (any director so designated
by the Purchaser, a "Designated Director"). It is understood that immediately
after the acquisition by the Purchaser of at least a majority of the
outstanding Common Shares pursuant to the Offer (x) the Company's Board of
Directors shall consist of seven members, (y) the initial designees of the
Purchaser to the Company's Board of Directors are expected to be Michel L.
Besson, Peter R. Dachowski, Thomas A. Decker and James E. Hilyard and (z) the
remaining members of the Company's Board of Directors are expected to be
Robert P. Bass, Jr., Richard C. Maloof and Joseph D. Vecchiolla. In the event
that, after the acquisition by the Purchaser of at least a majority of the
outstanding Common Shares pursuant to the Offer and prior to the Effective
Date, the number of members of the Board of Directors increases (including
pursuant to the provisions of the Preference Shares and the 5% Stock), the
Company and its Board of Directors shall, at such time, take any and all such
additional action (including to increase the size of the Board of Directors,
to use their best efforts to cause additional directors to resign and to
appoint additional designees of the Purchaser) needed to cause a sufficient
number of the Purchaser's designees to be appointed to the Board of Directors
such that the designees shall then constitute at least a majority of the
members of the Board of Directors. The Company, CertainTeed and the Purchasers
shall use their respective best efforts to cause at least three members of the
Company's Board of Directors at all times prior to the Effective Date to be
Continuing Directors. "Continuing Director" means (a) any member of the
Company's Board of Directors on the date of the Merger Agreement, (b) any
member of the Company's Board of Directors who is not an employee or director
or affiliate of, and not a Designated Director or other nominee of, the
Purchaser or CertainTeed or their respective subsidiaries, and (c) any
successor of a Continuing Director who is (i) not an employee or director or
affiliate of, and not a Designated Director or other nominee of, the Purchaser
or CertainTeed or their respective subsidiaries and (ii) recommended to
succeed such Continuing Director by at least a majority of the then Continuing
Directors.
(9) Stock Options. The Merger Agreement provides that, with respect to
unexpired Stock Options, whether or not exercisable at the Effective Date,
including stock appreciation rights relating thereto, outstanding on the
Effective Date which have been issued pursuant to the 1982 Option Plan, the
1992 Option Plan or the Non-Employee Directors Option Plan, each such Stock
Option with an exercise price less than the Common Price (an "Eligible
Option") shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive, for each Common
Share subject thereto, a cash payment without interest equal to $7.50, less
the per share exercise price of each such Stock Option. Such Stock Options
will be canceled upon such cash payment following the Merger. Any Stock Option
with an exercise price equal to or greater than the Common Price (an
"Ineligible Option") shall be canceled upon the Effective Date without payment
of any
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consideration. The Merger Agreement requires the Company to use its best
efforts to amend each outstanding Stock Option issued under the 1982 Option
Plan, the 1992 Option Plan and the Non-Employee Directors Option Plan to
effect the transactions contemplated by the Merger Agreement, including the
cancellation of the Stock Options in connection with the Merger in accordance
with the foregoing. On April 11, 1996 the Company informed the Purchaser that
all such Stock Options had been so amended. Each Common Share issued by the
Company but not yet vested pursuant to the Savings Plan shall, in connection
with the Merger, become vested in the person to whose account such Common
Share was issued and converted into the right to receive the Common Price
pursuant to the Merger Agreement.
The Company has informed the Purchaser that, as of April 8, 1996, there were
no Common Shares held in escrow pursuant to the Company's Long Term Incentive
Compensation Plan (the "LTIP"). Immediately following the Effective Date, the
Company's 1982 Option Plan, 1992 Option Plan, Non-Employee Directors Option
Plan, LTIP and Savings Plan shall be terminated and no further stock awards or
stock options will be granted thereunder from and after the date of the
Merger.
(10) Indemnification and Insurance. In the Merger Agreement, CertainTeed and
the Purchaser have agreed that all rights to indemnification in existence as
of the date of the Merger Agreement in favor of the directors or officers of
the Company and its subsidiaries (the "Indemnified Parties") as currently
provided in their respective certificates or articles of incorporation or
organization and by-laws or in any agreements, contracts or arrangements with
the Company or any of its subsidiaries in effect as of the date of the Merger
Agreement and previously furnished to CertainTeed and to the extent not in
violation of applicable state law, shall survive the Merger and shall continue
in full force and effect for a period of five years from the Effective Date;
provided that, in the event any claim or claims are asserted or made within
such five year period, all rights to indemnification in respect of any such
claim or claims shall continue until the disposition of any and all such
claims. In addition, the Merger Agreement provides that, to the extent
currently provided in the certificates or articles of incorporation or
organization and by-laws of the Company and its subsidiaries and Massachusetts
law, or agreements, contracts or arrangements disclosed to CertainTeed with
the Company or any of the subsidiaries, in the event that any Indemnified
Party becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter, including the transaction
contemplated by the Merger Agreement, occurring prior to, and including, the
Effective Date, or otherwise relating to or arising out of such matters,
CertainTeed or the Surviving Corporation will periodically advance to such
Indemnified Party his or her legal and other expenses (including the costs of
any investigation and preparation incurred in connection therewith).
The Merger Agreement provides that CertainTeed will use all reasonable
efforts to maintain in effect, or shall cause the Surviving Corporation to use
all reasonable efforts to maintain in effect, for two years after the
Effective Date, directors' and officers' liability insurance ("D&O Insurance")
covering those persons covered by the Company's directors' and officers'
liability insurance on the date of the Merger Agreement or the Effective Date
and which is substantially equivalent in terms of coverage and amount as the
Company has in effect on the Effective Date so long as such insurance is
available and the annual premium therefor would not be in excess of 200% of
the last annual premium paid prior to the date of the Merger Agreement (the
"Maximum Premium"), which the Company informed CertainTeed was $179,000. If
the existing D&O Insurance expires, is terminated or canceled during such two-
year period, CertainTeed shall use all reasonable efforts to cause to be
obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on
terms and conditions no less advantageous than the existing D&O Insurance.
The Merger Agreement further provides that (a) any Indemnified Party wishing
to claim indemnification pursuant to the Merger Agreement, upon learning of
any legal action, suit, investigation, inquiry or proceeding by any
governmental authority or other person, shall promptly notify CertainTeed and
the Surviving Corporation with respect thereto, but the failure to so notify
shall not relieve CertainTeed or the Surviving Corporation of any liability it
may have to such Indemnified Party under the Merger Agreement except to the
extent that CertainTeed and the Surviving Corporation are materially
prejudiced thereby, (b) CertainTeed and the Surviving
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Corporation shall periodically, as requested, advance to such Indemnified
Party his, her or its legal and other expenses (including the cost of
investigation and preparation incurred in connection therewith) to the extent
such
Indemnified Party is indemnified pursuant to the Merger Agreement, unless it
is ultimately determined by a court of competent jurisdiction that such
Indemnified Party is not entitled to indemnification hereunder, and (c)
CertainTeed and the Surviving Corporation shall be subrogated to any rights
any Indemnified Party may have with respect to any amounts paid to or on
behalf of such Indemnified Party by CertainTeed and the Surviving Corporation
pursuant to the Merger Agreement.
(11) Certain Conditions of the Offer. The Merger Agreement provides that
notwithstanding any other term of the Offer or the Merger Agreement, the
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 after the termination or withdrawal of the Offer), to pay for any
Shares tendered pursuant to the Offer unless the Minimum Condition, the HSR
Condition and the Required Consents Condition shall all have been satisfied.
Furthermore, notwithstanding any other term of the Offer or the Merger
Agreement, the 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 if, at any time on or after
the date of the Merger Agreement and before the Consummation of the Offer any
of the following conditions exist:
(a) the representations and warranties of the Company contained in the
Merger Agreement (without regard to any supplemental information provided
pursuant to the Merger Agreement) that are qualified as to materiality
shall not be true and correct, and the representations that are not so
qualified shall not be true and correct in all material respects, in each
case on and as of the date of the Merger Agreement and on and as of the
Expiration Date;
(b) any of the obligations of the Company to be performed by it on or
before the Expiration Date pursuant to the terms of the Merger Agreement
shall not have been duly performed or complied with in all material
respects by that date;
(c) since December 31, 1995, there shall have occurred (or it shall be
reasonably expected that there will be) any event, change or circumstance
causing, or reasonably anticipated to cause in the future, any Material
Adverse Effect;
(d) any consents, approvals and authorizations from third persons and
governmental authorities identified in the Merger Agreement required to
consummate the transactions contemplated by the Merger Agreement shall not
have been obtained;
(e) there shall be pending or threatened any suit, action or proceeding
by any governmental authority (i) challenging the acquisition by
CertainTeed or the Purchaser of any Shares, seeking to restrain or prohibit
the consummation of the Offer, the Merger or any of the other transactions
contemplated by the Merger Agreement or seeking to obtain from the Company,
CertainTeed or the Purchaser any damages related to the Offer, the Merger
or any of the other transactions contemplated by the Merger Agreement that
are material in relation to the Company and its subsidiaries taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by the
Company, CertainTeed or any of their respective subsidiaries of any
material portion of the business or assets of the Company, CertainTeed or
any of their respective subsidiaries, or to compel the Company, CertainTeed
or any of their respective subsidiaries to dispose of or hold separate any
material portion of the business or assets of the Company, CertainTeed or
any of their respective subsidiaries, as a result of the Offer, the Merger
or any of the other transactions contemplated by the Merger Agreement,
(iii) seeking to impose limitations on the ability of CertainTeed or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
common stock of the Surviving Corporation, (iv) seeking to prohibit
CertainTeed or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company or its
subsidiaries or of CertainTeed and its subsidiaries or (v) which otherwise
is reasonably likely to have a Material Adverse Effect;
(f) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
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governmental authority or court, 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 (v) of paragraph (e) above;
(g) the Company's Board or any committee thereof shall have withdrawn or
modified in a manner adverse to CertainTeed its approval or recommendation
of the Offer, the Merger or the Merger Agreement or resolved to take any of
such actions; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and
CertainTeed and may, subject to the terms of the Merger Agreement, be waived
by the Purchaser and CertainTeed in whole or in part at any time and from time
to time. The failure by CertainTeed or the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right,
the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
(12) Representations and Warranties. The Merger Agreement contains various
customary representations and warranties. The Merger Agreement requires that
CertainTeed, the Purchaser and the Company shall each take such action as is
reasonably necessary to render their respective representations and warranties
accurate on and as of the Effective Date. Without limiting the foregoing, the
Merger Agreement provides that the Company shall take any action required by
CertainTeed to ensure the accuracy of its representations pertaining to the
Rights Agreement and Massachusetts' anti-takeover laws.
(13) Confidentiality Agreement. The Merger Agreement provides that the
provisions of the confidentiality agreement dated April 13, 1994 (the
"Confidentiality Agreement"), between the Company and Saint-Gobain Corporation
in connection with the transactions contemplated by the Merger Agreement shall
be incorporated and made a part of the Merger Agreement except that the
termination of the Confidentiality Agreement shall be extended to December 31,
1996.
ADDITIONAL AGREEMENTS, ARRANGEMENTS AND UNDERSTANDINGS
Indemnification of Directors and Officers. Paragraph (d) of Article VI of
the Restated Articles of Organization (the "Restated Articles") of the Company
provides that no director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director notwithstanding any provision of law imposing such liability.
Paragraph (d) provides further, however, that to the extent provided by
applicable law, it will not eliminate or limit the liability of a director (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for distributions
to one or more stockholders of the Company made in violation of the Restated
Articles or which are made when the Company is insolvent or which render it
insolvent, if such distributions are not repaid, (iv) for loans made to
officers or directors of the Company which are not repaid if the director has
voted for such loans and they have not been approved or ratified, as loans
reasonably expected to benefit the Company, by a majority of directors who are
not recipients of such loans or the holders of a majority of voting shares,
which holders are not recipients of such loans, or (v) for any transactions
from which the director derived an improper personal benefit.
Section 13(b)(1 1/2) of the MBCL authorizes the provisions of the Restated
Articles described above, subject to the limitations described above.
Section 1 of Article VI of the Company's By-laws provides that the Company
shall indemnify each of its directors, officers and agents, and persons who
serve at the Company's request as directors, officers or agents of another
organization in which the Company directly or indirectly owns shares or of
which the Company is a creditor, against all liabilities, costs and expenses
(including amounts paid in satisfaction of judgments or in compromise of
claims, penalties, counsel fees and legal costs) reasonably incurred by,
imposed upon or assessed
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to such person in connection with or resulting from any action, suit or
proceeding, to which such person is or may be made a party by reason of such
person's being or having been such a director, officer or agent, except in
relation to matters as to which such person shall have been finally
adjudicated in any proceeding either to be liable for actual misconduct in the
performance of that person's duties or not to have acted in good faith in the
reasonable belief that such person's action was in the best interest of the
Company.
As to any matter disposed of by a compromise payment by any such person,
pursuant to a consent decree or otherwise, Section 1 of Article VI of the
Company's by-laws provides that no indemnification shall be provided to such
person for such payment or for any other expenses unless such compromise has
been approved as in the best interests of the Company, after notice that it
involves such indemnification (i) by a majority of the disinterested directors
then in office or (ii) if there is not such majority of disinterested
directors, by independent legal counsel to whom the question may be referred
by the Board of Directors.
Section 1 of Article VI of the Company's by-laws provides further that a
majority of the directors then in office may authorize payment by the Company
of expenses incurred by any such person in defending any such action or
proceeding in advance of the final disposition thereof, upon receipt of an
undertaking by the person so indemnified to repay to the Company the amounts
so paid if such person is adjudicated to be not entitled to indemnification
under Section 1 of Article VI.
Section 2 of Article VI of the Company's By-laws gives the Board of
Directors of the Company the power to authorize the purchase and maintenance
of insurance on behalf of any person who is or was a director, officer or
agent of the Company, or who is or was serving at the request of the Company
as a director, officer or agent of another organization in which the Company
directly or indirectly owns shares or of which it is a creditor, against any
liability incurred by such person in any such capacity, or arising out of such
person's status as such director, officer or agent, whether or not such person
is entitled to indemnification by the Company pursuant to Section 1 of Article
VI of the Company's by-laws or otherwise and whether or not the Company would
have the power to indemnify the person against such liability. The Company
currently maintains insurance for the benefit and on behalf of its directors
and officers insuring against certain liabilities that may be incurred by any
such director or officer in or arising out of his capacity as a director,
officer or agent of the Company.
Section 67 of the MBCL authorizes the provisions of Article VI of the
Company's by-laws described above, subject to the limitations described above.
Section 65 of the MBCL provides that performance by a director, officer or
incorporator of that person's duties in good faith and in a manner reasonably
believed to be in the best interests of the corporation, and with such care as
an ordinarily prudent person in a like position would use under similar
circumstances, shall be a complete defense to any claim asserted against such
director, officer or incorporator, except as otherwise expressly provided by
statute, by reason of such person's being or having been a director, officer
or incorporator of the corporation.
Pursuant to the Merger Agreement, CertainTeed and the Purchaser have agreed
to keep such indemnification and insurance arrangements described above in
place for a designated period of time subsequent to the Effective Date. See
"The Merger Agreement--Indemnification and Insurance."
Amendment to Rights Agreement. The Company has amended the Rights Agreement
(the "Rights Amendment") between the Company and American Stock Transfer &
Trust Company to provide that neither the (i) execution, delivery and
performance of the Merger Agreement, (ii) the making of the Offer or the
purchase of the Shares pursuant to the Offer nor (iii) the Merger shall (A)
cause or in any way trigger the exercisability of the Rights (as defined in
the Rights Agreement), (B) cause the separation of the Rights from the
certificate representing shares to which they are attached, (C) cause
CertainTeed, the Purchaser or any affiliate thereof to be considered an
Acquiring Person (as defined in the Rights Agreement) or (D) cause the
occurrence of a Stock Acquisition Date, Triggering Event or Distribution Date
(as each term is defined in the Rights Agreement). A
14
<PAGE>
copy of the Rights Amendment is filed as Exhibit (c)(2) hereto, is incorporated
herein by reference and the foregoing summary thereof is qualified in its
entirety by reference thereto.
Discussions with Richard C. Maloof and Frank S. Anthony. CertainTeed has had
preliminary discussions with Richard C. Maloof, the President and Chief
Operating Officer of the Company, and Frank S. Anthony, Vice President, General
Counsel and Corporate Secretary of the Company, regarding their continued
employment with the Surviving Corporation on terms which have yet to be
decided, but these discussions have not yet resulted in any commitments by any
of the parties.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Board of Directors. The Company's Board of
Directors (the "Board") has determined unanimously that the Offer and the
Merger are fair to and in the best interests of the stockholders of the Company
and recommends that all holders of Common Shares and Preference Shares accept
the Offer and tender all of their Shares pursuant to the Offer. This
recommendation is based in part upon an opinion received from Dillon, Read &
Co. Inc. ("Dillon Read") that the $7.50 per Common Share cash consideration to
be received by the holders of Common Shares pursuant to the Offer and the
Merger is fair to such holders from a financial point of view. The full text of
the fairness opinion received by the Company from Dillon Read, which sets forth
the assumptions made, matters considered and limitations of the review
undertaken by Dillon Read, is filed herewith as Exhibit (a)(4) and attached
hereto as Annex B. Stockholders are urged to read such opinion in its entirety.
As set forth in the Offer to Purchase, the Purchaser will purchase Shares
tendered prior to the Expiration Date if the Minimum Condition shall have been
satisfied (or waived under certain circumstances) by that time and if all other
conditions to the Offer have been satisfied (or waived under certain
circumstances). Stockholders considering not tendering their Shares in order to
wait for the Merger should note that the Purchaser is not obligated to purchase
any Shares, and can terminate the Offer and the Merger Agreement and not
proceed with the Merger, if the Minimum Condition is not satisfied or any of
the other conditions to the Offer are not satisfied. Under Massachusetts law,
the approval of the Board and the affirmative vote of the holders of at least
66 2/3% of the issued and outstanding Common Shares and the affirmative vote of
at least 66 2/3% of the issued and outstanding Preference Shares, each voting
as a separate class, are required to approve and adopt the Merger Agreement. If
the Preference Shares are called for redemption and sufficient funds are
deposited for the benefit of the holders of Preference Shares prior to the
Effective Date, the need to receive such vote of the Preference Shares would be
eliminated. Accordingly, if the Minimum Condition is satisfied and the Offer is
consummated, the Purchaser will have sufficient voting power to cause the
approval and adoption of the Merger Agreement and the transactions contemplated
thereby without the affirmative vote of any other stockholder.
The Offer is scheduled to expire at 12:00 Midnight, New York City time, on
May 9, 1996, unless the Purchaser, with the consent of the Company under
certain circumstances, elects to extend the period of time for which the Offer
is open. A copy of the press release issued jointly by the Company and
CertainTeed announcing the Offer is filed as Exhibit (a)(5) hereto and is
incorporated herein by reference in its entirety. A copy of the earlier press
release issued by the Company announcing the signing of the Initial Merger
Agreement is filed as Exhibit (a)(6) hereto and is incorporated herein by
reference in its entirety.
(b) Background and Reasons for the Recommendation.
BACKGROUND
The Offer and the Merger represent the culmination of numerous steps
undertaken by the Company over the past several years in an effort to stem
continuing losses, to reduce debt and to find a strategic partner to invest in
the operations of the Company or a buyer to purchase all or a substantial part
of the Company.
In 1993, the Company experienced severe financial setbacks which caused the
Company to default in the performance of certain operating and other covenants
contained in the Second Amended and Restated Revolving
15
<PAGE>
Credit Agreement with its lending banks and required the Company to classify
the related debt as current on its September 30, 1993 balance sheet. Unless
aggressively addressed, it was possible that such setbacks could threaten the
ongoing viability of the Company. In response to these problems, during 1993,
the Company embarked on a program which included refocusing the Company on its
core business (i.e., its building materials manufacturing businesses), the
elimination of unrelated and nonessential functions, the imposition of strict
cost control measures and the restructuring of its bank lines of credit.
In furtherance of this program, the Company, in the fourth quarter of 1993,
began to eliminate its non-core businesses by (i) withdrawing from its on-site
environmental remediation business pursuant to a series of minor asset sales
and winding down and closing the balance of such business (a process completed
in August 1994) and (ii) seeking a buyer for all of its building materials
distribution business. The sales effort which began in the first quarter of
1994 resulted in the sale of the Company's distribution business to two
subsidiaries of Cameron Ashley, Inc. (each, a "Cameron Subsidiary") for an
aggregate purchase price of approximately $28,000,000 in two transactions which
closed in August and November of 1994, respectively.
In addition, and as part of its restructuring program, the Company
renegotiated its bank lines of credit, entering into further amendments to its
credit facilities in March of 1994. In its effort to focus on its core
business, the Company built a $5.5 million asphalt oxidizing plant at its
Norwood, Massachusetts roofing plant. The oxidizing plant is designed to (i)
reduce the Company's operating costs associated with obtaining processed
asphalt from suppliers in other states, and (ii) provide the Company with a
convenient and reliable source of processed asphalt for use in the Company's
roofing manufacturing operations.
The deterioration of the Company's financial condition continued.
Consequently, in April of 1994, the Company expanded the scope of its
restructuring efforts by commencing an active search to find a buyer or merger
partner for the Company as a whole. Dillon Read, the Company's financial
advisor, was engaged to assist in these efforts. In light of the intensive
nature of these efforts, in May of 1994 the Board formed the Strategic Planning
Committee, a special committee of the Board, to supervise the Company's efforts
to attract a purchaser of the Company's stock or assets and to make appropriate
recommendations and reports to the full Board regarding such process.
As the Company's efforts progressed, the Company's management, the Board, the
Strategic Planning Committee, Dillon Read and the Company's legal advisors met
together and individually on numerous occasions between May and September 1994
to reevaluate the Company's alternatives, including the possibility of a
substantial downsizing of the Company through a sale of the Company's vinyl
business headquartered in Bardstown, Kentucky (the "Vinyl Business") and the
Company's interests in Kensington (as defined below; the Vinyl Business and the
Company's interests in Kensington and such entity's business operations, taken
as a whole, are referred to herein as the "Combined Vinyl Business"). The sale
of the Combined Vinyl Business was proposed to enable the Company to achieve a
significant reduction in, or the elimination of, the Company's debt.
The Offer and Merger represent the culmination of a series of negotiations
between CertainTeed and the Company that began at the Company's initiation in
1994. During the spring and early summer of that year, management of the
Company and of CertainTeed undertook to negotiate a proposed merger at a cash
price of $13 per Common Share (plus a contingent purchase price of up to $1.25
per Common Share). That transaction would also have included the redemption of
the 5% Stock and the Preference Shares. In July of 1994, however, CertainTeed
informed the Company that because CertainTeed's only interest was in acquiring
the Company's roofing manufacturing business, CertainTeed was not prepared to
acquire the Company's assets and contingent liabilities unrelated to its core
roofing business. As a result, the Company and CertainTeed terminated their
negotiations. Shortly thereafter, CertainTeed indicated orally that it remained
interested in acquiring the Company's roofing plant or the entire Company if
all or a substantial portion of its non-roofing assets could be divested prior
to a CertainTeed acquisition of the Company. In September of 1994, the Company
provided additional due diligence materials and suggested continuing
discussions.
16
<PAGE>
During the next several months the Company received various offers from
potential purchasers to acquire the entire Company, the Combined Vinyl
Business or the Company's roofing manufacturing business. The Board and the
Strategic Planning Committee met on several occasions with senior management,
Dillon Read and the Company's independent legal counsel to discuss the
Company's options in light of the various offers presented.
After careful consideration of all available options, in March of 1995 the
Company sold (with prior stockholder approval) the Vinyl Business (the "Vinyl
Sale") to Jannock, Inc. ("Jannock") for $42.5 million plus the assumption by
Jannock of certain specified liabilities of the Vinyl Business. This
transaction also included a grant to Jannock of an option to purchase the
Company's interest in Kensington Partners ("Kensington"), a window fabrication
business. In June 1995 Jannock exercised the option and the Company was
required to pay approximately $1.4 million to divest Kensington.
During the summer of 1995, the Company and CertainTeed renewed discussions,
including a meeting at CertainTeed's headquarters in Valley Forge,
Pennsylvania, at which the status of the Company's asset disposition and
contingent liability management program was discussed. The Company indicated
that all material non-roofing assets, other than its interest in a San Leon,
Texas hydrocarbon waste recycling center, had been divested and that an effort
to sell this interest was underway. During the fall of 1995, CertainTeed
resumed its due diligence investigation of the Company. Discussions between
the parties regarding issues raised during CertainTeed's ongoing due diligence
effort continued on a regular basis through February of 1996.
In November of 1995, the Company caused Bird Environmental Technologies,
Inc. ("BETI") to sell its outstanding capital stock of Bird Environmental Gulf
Coast, Inc. ("BEGCI"), which owned the San Leon, Texas based hydrocarbon waste
recycling center, to GTS Duratek, Inc. for a purchase price of $1.00. In
addition, BETI (the 80% owner of BEGCI and an indirect wholly owned subsidiary
of the Company) agreed to pay the Purchaser the amount by which BEGCI's
current liabilities exceeded its current assets at August 31, 1995, which was
approximately $1.3 million. The sale of the recycling center completed the
Company's withdrawal from the environmental remediation and recycling
industry.
On September 12, 1995, the Company received a notice (the "Notice") from a
prospective purchaser, indicating that it intended to purchase at least 50% of
the Company's Common Stock in open market or privately negotiated
transactions. The purchases contemplated by the Notice required compliance
with the HSR Act pre-merger filing requirements, which requirements were
subsequently satisfied. On March 12, 1996, the Company received a letter from
the Federal Trade Commission stating that its investigation was closed but
reserving the right to take such further action as the public interest may
require. Subsequent to the Notice, no offers or notices have been received
from such party.
During January 1996, another qualified prospective purchaser expressed an
interest in purchasing the Company. Pursuant to such expression of interest,
such party performed extensive due diligence of the Company, its assets and
liabilities but ultimately declined to make an offer due to the existence and
the threat of certain contingent liabilities relating to the Company's current
and prior roofing business.
In late February and early March of 1996, Thomas A. Decker, Executive Vice
President of CertainTeed, spoke by telephone with Joseph D. Vecchiolla, the
Company's Chairman, and Frank S. Anthony, the Company's General Counsel, on a
number of occasions regarding the possibility of CertainTeed making a proposal
to acquire the Company. During those conversations, Mr. Decker was informed
that two other prospective purchasers were conducting due diligence
investigations of the Company.
On March 4, 1996, Mr. Decker telephoned Mr. Vecchiolla to say that
CertainTeed was prepared to propose an acquisition price of $7.50 per Common
Share, subject to negotiation of definitive agreements and agreement upon a
satisfactory arrangement regarding alternate transaction fees and expenses.
Mr. Decker further indicated that, as in 1994, CertainTeed was prepared to
cash out the Preference Shares at their liquidation value, plus all accrued
and unpaid dividends, as well as to redeem the 5% Stock in accordance with its
terms. On March 10, 1996, the Board of Directors of the Company met and
authorized proceeding with further negotiations if
17
<PAGE>
CertainTeed was prepared to indicate its interest in writing. CertainTeed
confirmed its proposal in writing on March 11, 1996. Detailed negotiations
ensued between the Company and CertainTeed, culminating in agreement on the
terms of a merger agreement (the "Initial Merger Agreement"). At a meeting on
March 14, 1996, the Board of the Company unanimously determined that the
Merger is fair to, and in the best interests of, the Company and the Company's
stockholders and approved the Initial Merger Agreement and recommended that
stockholders vote in favor of approval and adoption of the Initial Merger
Agreement. The Initial Merger Agreement was executed and delivered by the
parties that day. The Company issued a press release regarding the Initial
Merger Agreement on March 15, 1996.
On April 3, 1996, CertainTeed proposed to the Company that the parties
discuss amending the Initial Merger Agreement to provide for the Offer.
CertainTeed indicated it desired to acquire control of the Company on the
somewhat more accelerated timetable permitted by a cash tender offer. The
Board of the Company considered CertainTeed's proposal on April 5, 1996. The
parties negotiated amendments to the Initial Merger Agreement (that did not
materially change the fundamental economic terms of the proposed acquisition
of the Company), and on April 8, 1996 the Company, the Purchaser and
CertainTeed executed the Merger Agreement and issued a joint press release
with respect to the Offer. In connection with its approval of the amendments
to the Initial Merger Agreement, the Board of the Company unanimously
determined that the Offer is fair to, and in the best interests of, the
holders of Common Shares and Preference Shares and recommended that the
holders of Shares tender all their Shares pursuant to the Offer.
REASONS FOR THE RECOMMENDATION
In reaching its conclusions described in paragraph (a) above, the Board
considered, among other things, the following factors:
(1) The prospect of continuing to operate the Company's roofing plant at
Norwood, Massachusetts as a single plant roofing operation and the Board's
perception that current industry, economic and market conditions and trends
relative to the roofing industry are negative, as well as concerns about
the impact of increased competition resulting from industry consolidation,
and the Board's view of the Company's projected future value on a stand-
alone basis compared to the consideration available in the Offer. The Board
took into account certain significant competitive advantages enjoyed by
competitors of the Company's roofing manufacturing business, including, but
not limited to, increased purchasing power for raw materials, geographical
diversity resulting in lower vulnerability to seasonality due to weather,
and stronger balance sheets which, among other things, provide them with
opportunities for growth in a capital intensive industry, which
opportunities are not available to the Company.
(2) The fact that (i) only a relatively small number of parties expressed
interest in acquiring all of the Company and (ii) following its extensive
but unsuccessful negotiations with certain of such interested parties in
1994, 1995 and 1996, it was reasonably unlikely that the Company would
receive, in the foreseeable future, offers to engage in alternative
transactions on terms more favorable to the Company and its stockholders
than those offered by CertainTeed.
(3) The proposed terms and structure of the Merger and the terms and
conditions of the Merger Agreement and the Offer. In this regard the Board
specifically considered the ability of the Company to terminate the Merger
Agreement, notwithstanding the non-solicitation provisions contained
therein, upon the occurrence or non-occurrence of certain events (including
upon the failure of the Company's stockholders to approve the Merger), and
the limited application of the provisions contained in the Merger Agreement
pertaining to the $1,500,000 Alternate Transaction Fee, as described more
fully under "The Merger Agreement."
(4) The effect of the Offer and the Merger on the stockholders of the
Company, as well as on the Company's employees.
(5) The written opinion dated April 5, 1996 (the "Opinion") delivered by
Dillon Read to the Board that, subject to the matters set forth therein,
the consideration to be received by the holders of Common
18
<PAGE>
Shares pursuant to the Offer and the Merger is fair to such stockholders
from a financial point of view. A copy of the Opinion, which sets forth the
assumptions made, matters considered and limits of the review by Dillon
Read in rendering the Opinion, is attached as Annex B hereto and filed as
Exhibit (a)(4) hereto. Stockholders are urged to read the Opinion in its
entirety.
(6) The fact that the Company could redeem the Preference Shares for the
same price as is available in the Offer.
(7) The experience, favorable reputation and perceived motivation of
CertainTeed and its executives and CertainTeed's financial condition and
strength, which factors demonstrated CertainTeed's financial ability and
underscored CertainTeed's earnest intent to consummate the Offer and the
Merger.
In light of the Board's uneasiness with operating a single plant roofing
business in an industry that has been consolidating with other participants
that are larger and financially stronger than the Company and the value
available in the Offer, the Board determined that the Offer and the Merger are
in the best interest of the Company and its stockholders.
The Board analyzed and considered all of the foregoing factors in comparing
its alternatives to the Offer and the Merger and in evaluating the merits of
the Offer and the Merger, including the opinion of Dillon Read.
In view of the wide variety of factors considered in connection with its
evaluation of the Offer and the Merger, the Board did not find it practicable
to, and did not, quantify or otherwise attempt to assign relative weights to
the specific factors considered in reaching its respective determinations. For
purposes of the reviews described above, the Board adopted, as its own, the
analyses of Dillon Read as its financial advisor.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Dillon Read is acting as the Company's financial advisor in connection with
the Offer and the Merger. Pursuant to its agreement with the Company, Dillon
Read is entitled to a fee of $150,000, which became payable at the time the
Opinion of Dillon Read referred to in Item 4 was delivered, and to a
transaction fee of $600,000, which shall become payable in cash upon the
earlier of (i) acquisition by the Purchaser of the number of Shares
constituting the Minimum Condition, (ii) the Merger or (iii) the consummation
of another sale, merger, consolidation or other business combination of the
Company with CertainTeed that results in the acquisition of the stock of the
entire Company or substantially all of its assets. In addition, whether or not
the Offer or the Merger is completed, the Company has agreed to reimburse
Dillon Read periodically for its reasonable out-of-pocket expenses, including
the fees and disbursements of its counsel, and to indemnify Dillon Read
against certain expenses and liabilities incurred in connection with its
engagement.
Except as set forth above, neither the Company nor any person acting on its
behalf has employed, retained or agreed to compensate any person to make
solicitations or recommendations to shareholders of the Company concerning the
Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) To the best of the Company's knowledge, during the past sixty days no
transaction in the Shares has been effected by the Company or any subsidiary
or, to the best of the Company's knowledge, by any executive officer,
director, affiliate or subsidiary of the Company.
(b) To the best of the Company's knowledge, all of its executive officers,
directors, affiliates and subsidiaries currently intend to tender pursuant to
the Offer all Shares held of record or beneficially owned by them (other than
Shares issuable upon exercise of options, and Shares, if any, which if
tendered could cause such persons to incur liability under the provisions of
Section 16(b) of the Exchange Act).
19
<PAGE>
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as described in Item 3, no negotiation is being undertaken or is
underway by the Company in response to the Offer which relates to or would
result in (i) an extraordinary transaction, such as a merger or
reorganization, involving the Company or any subsidiary of the Company, (ii) a
purchase, sale or transfer of a material amount of assets by the Company or
any subsidiary of the Company, (iii) a tender offer for or other acquisition
of securities by or of the Company or (iv) any material change in the present
capitalization or dividend policy of the Company.
(b) Except as described under Items 3 and 4, there are no transactions,
board resolutions, agreements in principle or signed contracts in response to
the Offer which relate to or would result in one or more of the matters
referred to in paragraph (a) of this Item 7.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Information Statement attached hereto as Annex A is being furnished in
connection with the possible designation by CertainTeed, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board other than
at a meeting of the Company's stockholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase Dated April 12, 1996.*
(a)(2) Letter of Transmittal.*
(a)(3) Information Statement.*
(a)(4) Fairness Opinion of Dillon Read dated April 5, 1996.*
(a)(5) Press release issued by the Company and CertainTeed on April 8, 1996.
(a)(6) Press release issued by the Company on March 15, 1996.
(a)(7) Letter to shareholders dated April 12, 1996.*
(c)(1) Amended and Restated Agreement and Plan of Merger dated as of April 8,
1996, among the Company, Purchaser and CertainTeed.
(c)(2) Amendment to Rights Agreement, dated April 5, 1996, between the Company
and American Stock Transfer & Trust Company, as Rights Agent.
</TABLE>
- --------
* Included in copies mailed to stockholders.
20
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Bird Corporation
By:/s/ Frank S. Anthony
-----------------------------------
Name: Frank S. Anthony
Title: Vice President
Date: April 12, 1996
21
<PAGE>
Exhibit 99(A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING SHARES OF $1.85 CUMULATIVE CONVERTIBLE PREFERENCE STOCK
OF
BIRD CORPORATION
AT
$7.50 NET PER SHARE OF COMMON STOCK
AND
$20 (PLUS ALL DIVIDENDS ACCRUED AND UNPAID THROUGH THE
EXPIRATION DATE) NET PER SHARE OF $1.85
CUMULATIVE CONVERTIBLE PREFERENCE STOCK
BY
BI EXPANSION CORP.
A Wholly Owned Subsidiary of
CERTAINTEED CORPORATION
An Indirect Wholly Owned Subsidiary of
COMPAGNIE DE SAINT-GOBAIN
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 9, 1996, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF BIRD CORPORATION (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN AND DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN
THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND
RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES (AS DEFINED HEREIN).
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
COMMON SHARES (AS DEFINED HEREIN) THAT WOULD CONSTITUTE AT LEAST 66 2/3% OF
ALL OUTSTANDING COMMON SHARES DETERMINED ON A FULLY DILUTED BASIS, (ii) EITHER
(X) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF
THE OFFER SUCH NUMBER OF PREFERENCE SHARES (AS DEFINED HEREIN) THAT WOULD
CONSTITUTE AT LEAST 66 2/3% OF ALL OUTSTANDING PREFERENCE SHARES OR (Y) THE
PURCHASER (AS DEFINED HEREIN) SHALL HAVE ELECTED TO REQUIRE THE COMPANY TO
CALL FOR REDEMPTION ALL OUTSTANDING PREFERENCE SHARES IN ACCORDANCE WITH THE
MERGER AGREEMENT (AS DEFINED HEREIN), (iii) ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE
OFFER HAVING BEEN EXPIRED OR TERMINATED AND (iv) ALL CONSENTS, APPROVALS,
ORDERS OR AUTHORIZATIONS OF, OR REGISTRATIONS, DECLARATIONS OR FILINGS WITH
ANY GOVERNMENTAL AUTHORITY REQUIRED OR NECESSARY IN CONNECTION WITH THE OFFER,
THE MERGER AND THE MERGER AGREEMENT REFERRED TO HEREIN AND THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT SHALL HAVE BEEN OBTAINED AND SHALL BE IN
FULL FORCE AND EFFECT.
---------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the Letter of Transmittal (or a fax
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 such fax), or, in the case of a book-entry transfer effected
pursuant to the procedure set forth in Section 2, an Agent's Message (as
defined herein), and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal (or fax) or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 2 or (ii) request such
stockholder's broker, dealer, bank, trust company or other nominee to effect
the transaction for such stockholder. A stockholder having Shares registered
in the name of a broker, dealer, bank, trust company or other nominee must
contact such broker, dealer, bank, trust company or other nominee if such
stockholder desires to tender such Shares.
If a stockholder desires to tender Shares and such stockholder's
certificates for 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 effected by following the
procedure for guaranteed delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
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.
---------------
The Dealer Manager for the Offer is:
MCFARLAND DEWEY SECURITIES CO., L.P.
April 12, 1996
<PAGE>
To the Holders of Common Stock and $1.85 Cumulative Convertible Preference
Stock of Bird Corporation:
INTRODUCTION
BI Expansion Corp., a Massachusetts corporation (the "Purchaser") and a
wholly owned subsidiary of CertainTeed Corporation, a Delaware corporation
("CertainTeed") which is an indirect wholly owned subsidiary of Compagnie de
Saint-Gobain, a French corporation ("Saint-Gobain"), hereby offers to purchase
all outstanding shares of Common Stock, par value $1.00 per share, including
the associated Common Stock purchase rights (the "Common Shares"), of Bird
Corporation, a Massachusetts corporation (the "Company"), at $7.50 per Common
Share (the "Common Price") and hereby offers to purchase all outstanding
shares of $1.85 Cumulative Convertible Preference Stock, par value $1.00 per
share (the "Preference Shares"), of the Company at $20 plus all dividends
accrued and unpaid through the Expiration Date (as defined herein) per
Preference Share (the "Preference Price"), in each case net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). The Common Shares and the Preference
Shares are collectively sometimes referred to as "Shares".
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all fees and expenses of McFarland Dewey Securities
Co., L.P. ("McFarland"), which is acting as Dealer Manager (the "Dealer
Manager"), Chemical Mellon Shareholder Services, L.L.C., which is acting as
the Depositary (the "Depositary"), and Georgeson & Company Inc., which is
acting as Information Agent (the "Information Agent"), incurred in connection
with the Offer. See Section 16.
The Board of Directors of the Company (the "Board") has unanimously approved
the Offer and the Merger (as defined below) and determined that the terms of
the Offer and the Merger are fair to, and in the best interests of, the
Company's stockholders and recommends that the Company's stockholders accept
the Offer and tender their Shares pursuant to the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
COMMON SHARES THAT WOULD CONSTITUTE AT LEAST 66 2/3% OF ALL OUTSTANDING COMMON
SHARES (DETERMINED ON A FULLY DILUTED BASIS ON THE EXPIRATION DATE), (II)
EITHER (X) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER SUCH NUMBER OF PREFERENCE SHARES THAT WOULD CONSTITUTE
AT LEAST 66 2/3% OF ALL OUTSTANDING PREFERENCE SHARES OR (Y) THE PURCHASER
SHALL HAVE ELECTED TO REQUIRE THE COMPANY TO CALL FOR REDEMPTION ALL
OUTSTANDING PREFERENCE SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT (AS
DEFINED HEREIN) (CLAUSES (I) AND (II) TOGETHER BEING THE "MINIMUM CONDITION"),
(III) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT")
APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR
BEEN TERMINATED (THE "HSR CONDITION") AND (IV) ALL CONSENTS, APPROVALS, ORDERS
OR AUTHORIZATIONS OF, OR REGISTRATIONS, DECLARATIONS OR FILINGS WITH, ANY
GOVERNMENTAL AUTHORITY REQUIRED OR NECESSARY IN CONNECTION WITH THE OFFER, THE
MERGER AND THE MERGER AGREEMENT REFERRED TO HEREIN AND THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT SHALL HAVE BEEN OBTAINED AND SHALL BE IN
FULL FORCE AND EFFECT (THE "REQUIRED CONSENTS CONDITION"). THE PURCHASER
RESERVES THE RIGHT (SUBJECT TO OBTAINING THE CONSENT OF THE COMPANY, IF
REQUIRED, AND THE APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC")) TO WAIVE OR REDUCE THE MINIMUM CONDITION AND
TO ELECT TO PURCHASE, PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF
SHARES NECESSARY TO SATISFY THE MINIMUM CONDITION. THE PURCHASER CURRENTLY
DOES NOT INTEND TO WAIVE THE MINIMUM CONDITION. SEE SECTIONS 1 AND 14.
The Company has informed the Purchaser that, as of April 8, 1996, there were
4,124,513 Common Shares outstanding, 436,600 Common Shares authorized for
issuance pursuant to the exercise of outstanding options to purchase Common
Shares ("Stock Options"), 731,955 Common Shares authorized for issuance
pursuant to
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conversion of the Preference Shares at $22.25 per Common Share (which is
substantially above the Common Price) and 814,300 Preference Shares
outstanding. For purposes of the Offer, Common Shares outstanding on a fully
diluted basis will not include Common Shares issuable upon conversion of
Preference Shares that have been validly tendered and not withdrawn prior to
the Expiration Date or issuable upon the exercise of any Stock Options to the
extent holders of such Stock Options have agreed not to exercise such Stock
Options as long as the Merger Agreement is in effect. Based upon the
foregoing, the Purchaser believes that approximately 2,766,800 Common Shares
(assuming all Preference Shares are so validly tendered and not withdrawn and
all holders of Stock Options with an exercise price above the Common Price so
agree) or approximately 3,528,700 Common Shares (assuming conversion of all
outstanding Preference Shares and exercise of all outstanding Stock Options)
and approximately 542,900 Preference Shares (assuming no conversion or
redemption of any Preference Shares) must be validly tendered and not properly
withdrawn prior to the Expiration Date in order for the Minimum Condition to
be satisfied. See Section 1.
The Offer is being made pursuant to the Amended and Restated Agreement and
Plan of Merger dated as of April 8, 1996 (the "Merger Agreement"), among
CertainTeed, the Purchaser and the Company pursuant to which, as soon as
practicable following the consummation of the Offer and the satisfaction or
waiver of certain conditions, including approval of the Merger Agreement by
the Company's stockholders, the Purchaser will be merged with and into the
Company (the "Merger"), with the Company (the "Surviving Corporation")
surviving the Merger as a wholly owned subsidiary of CertainTeed. In the
Merger, each outstanding Share (other than Shares held by stockholders who
perfect their appraisal rights under Massachusetts law, Shares held in the
Company's treasury and Shares held by the Purchaser or CertainTeed) will be
converted into the right to receive $7.50 (in the case of Common Shares) and
$20 plus all dividends accrued and unpaid through the effective date of the
Merger (the "Effective Date") (in the case of Preference Shares), in each case
in cash, without interest. The Merger Agreement also provides that CertainTeed
may elect to cause the Company as soon as practicable following such election
to call for redemption at the earliest permitted date all outstanding
Preference Shares. In the event that the Purchaser elects to cause the Company
to redeem the Preference Shares to satisfy the Minimum Condition, the
Purchaser expects the Company will cause such redemption to occur at the
earliest practicable date following the Expiration Date. The Merger is subject
to a number of conditions, including the approval and adoption of the Merger
Agreement by stockholders of the Company. Under Massachusetts law, the
approval of the Board of Directors of the Company and the affirmative vote of
the holders of at least 66 2/3% of the issued and outstanding Common Shares
and the affirmative vote of at least 66 2/3% of the issued and outstanding
Preference Shares, each voting as a separate class, are required to approve
and adopt the Merger Agreement. If the Preference Shares are called for
redemption and sufficient funds are deposited for the benefit of the holders
of the Preference Shares prior to the Effective Date, the need to receive such
vote of the Preference Shares would be eliminated. Accordingly, if the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power to
cause the approval and adoption of the Merger Agreement and the transactions
contemplated thereby without the affirmative vote of any other stockholder.
See Section 12.
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Thursday, May 9, 1996, unless and until the Purchaser 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 the Purchaser, will expire.
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In the Merger Agreement, the Purchaser has agreed that it will not, without
the consent of the Company, waive the Minimum Condition. The Purchaser
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, the Purchaser shall not (a) reduce the
number of Shares to be purchased in the Offer or redeemed, (b) reduce the
Common Price or the Preference Price, (c) modify or add to the conditions to
the Offer, (d) except as provided in the next paragraph, extend the Offer, (e)
change the form of consideration payable in the Offer or (f) amend any other
term of the Offer in any manner adverse in any material respect to the holders
of Shares.
Notwithstanding the foregoing, the Purchaser may, without the consent of the
Company, (a) extend the Offer beyond any scheduled Expiration Date for a
period not to exceed 20 business days, if at such scheduled Expiration Date,
any of the conditions to the Purchaser's obligation to accept for payment, and
pay for, Common Shares or Preference Shares are not satisfied or waived, until
such time as such conditions are satisfied or waived, (b) extend the Offer for
any period required by any rule, regulation, interpretation or position of the
SEC or the staff thereof applicable to the Offer and (c) terminate the Offer
if permitted by the Merger Agreement without prejudice to any of its and
CertainTeed's rights under the Merger Agreement, including to proceed with the
Merger in accordance with, and subject to the terms and conditions of, the
Merger Agreement. 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 (the
"Exchange Act").
Subject to the terms of the Merger Agreement and applicable rules and
regulations of the SEC, the Purchaser reserves the right, in its sole
discretion, at any time and from time to time, and regardless of whether or
not any of the events or facts set forth in Section 14 hereof shall have
occurred, to (a) extend the period of time during which the Offer is open for
a period not to exceed 20 business days, and thereby delay acceptance for
payment of and the payment for any Shares, by giving oral or written notice of
such extension to the Depositary and (b) except as set forth above, amend the
Offer in any other respect by giving oral or written notice of such amendment
to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS
RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Thursday, May 9, 1996 (or any
date or time then set as the Expiration Date), any or all of the conditions to
the Offer have not been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated), subject to the applicable rules and regulations
of the SEC, to (a) terminate the Offer and not accept for payment or pay for
any Shares and return all tendered Shares to tendering stockholders, (b)
except as set forth above with respect to the Minimum Condition, waive all the
unsatisfied conditions and accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (c)
extend the Offer and, subject to the right of stockholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during
the period or periods for which the Offer is extended or (d) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-l(d) under the Exchange Act requires that the announcement be issued
no later than 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment for Shares (whether before or after its
acceptance for payment of Shares) or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may
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retain tendered Shares on behalf of the Purchaser, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to
withdrawal rights as described in Section 3. However, the ability of the
Purchaser to delay payment for Shares that the 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 deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of such bidder's offer, and by the terms of the Merger Agreement,
which require that Purchaser pay for Shares accepted for payment as soon as
practicable after the Expiration Date.
If the 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
(including a waiver of the Minimum Condition), the 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 an offer must remain open following material changes in
the terms of the offer or information concerning the offer, other than a
change in price or a change in the 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 Company has provided the 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, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished to brokers, dealers, banks, trust companies
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. PROCEDURE FOR TENDERING SHARES AND RIGHTS
Valid Tender. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or fax thereof), together with any required signature guarantees 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 for tendered Shares must be received
by the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
confirmation of such delivery, including an Agent's Message (as defined
below), must be received by the Depositary), in each case prior to the
Expiration Date, or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at The
Depositary Trust Company, Midwest Securities Trust Company and Philadelphia
Depositary Trust Company (the "Book-Entry Transfer Facilities") 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 any of the Book-
Entry Transfer Facilities' systems may make book-entry delivery of Shares by
causing a 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 a Book-
Entry Transfer Facility, the Letter of Transmittal (or fax 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 a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-
ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
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The term "Agent's Message" means a message transmitted by a 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 acknowledgement 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 the Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY 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 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 (a) if the 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 Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of such 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 (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 member firm of a
national securities exchange registered with the SEC or of the National
Association of Securities Dealers, Inc. (the "NASD"), or a commercial bank or
trust company having an office or correspondent in the United States (an
"Eligible Institution"). In all other cases, all signatures on the Letter 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, the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed in the manner described above. See Instructions 1 and
5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or 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 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 the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or fax), 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 Nasdaq National Market (the "Nasdaq National Market") operated
by the NASD is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, fax or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) certificates for (or a timely Book-Entry
Confirmation with respect to such Shares) such Shares, (b) a Letter of
Transmittal (or fax), properly completed
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and duly executed, with any required signature guarantees, or, in the case of
a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to such Shares are actually received by
the Depositary. UNDER NO CIRCUMSTANCES WILL ANY INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser as
such 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 the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after April 8, 1996. All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such stockholder as provided herein. Upon such
appointment, all prior powers of attorney, proxies and consents given by such
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be
deemed effective). The designees of the Purchaser will thereby be empowered to
exercise all voting and other rights with respect to such Shares and other
securities or rights in respect of any annual, special or adjourned meeting of
the Company's stockholders, actions by written consent in lieu of any such
meeting or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares and other securities or rights,
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders determined by it not to be in proper form
or the acceptance for payment of or payment for which may, in the opinion of
the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right to waive any defect or irregularity in the tender of any 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 the Purchaser, Saint-Gobain, CertainTeed,
the Depositary, the Information Agent, the Dealer Manager 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.
The Purchaser's interpretation of the terms and conditions of the Offer
(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, the Merger and/or the
redemption of Preference Shares a stockholder surrendering Shares in the
Offer, the Merger and/or the redemption of Preference Shares 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 penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer, the
Merger and/or the redemption of Preference Shares may be subject to backup
withholding of 31%. All stockholders surrendering Shares pursuant to the
Offer, the Merger and/or the redemption of Preference Shares 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
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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 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, 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 the Purchaser
pursuant to the Offer, may also be withdrawn at any time after Monday, June
10, 1996.
For a withdrawal to be effective, a written, telegraphic or faxed 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 and 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 for Shares 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
procedure for book-entry transfer as set forth in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such 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 2 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 the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Saint-Gobain, CertainTeed, the Depositary, the Information Agent,
the Dealer Manager 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.
4. 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), the Purchaser will accept for payment and will pay for all
Shares validly tendered prior to the Expiration Date, and not properly
withdrawn in accordance with Section 3, promptly after the Expiration Date.
All questions as to the satisfaction of such terms and conditions will be
determined by the Purchaser in its sole discretion, which determination will
be final and binding. See Sections 1 and 14. The 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. Any such delays will be
effected in compliance with Rule 14e-l(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.
Saint-Gobain filed a Notification and Report Form with respect to the Offer
under the HSR Act on April 9, 1996. The waiting period under the HSR Act with
respect to the Offer will expire at 11:59 p.m., New York City time, on April
24, 1996, 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 Saint-Gobain.
If such a request is made, such waiting period will expire at 11:59 p.m., New
York City time, on the 10th day after substantial compliance by Saint-Gobain
with such request. See Section 15 hereof for additional information concerning
the HSR Act and the applicability of the antitrust laws to the Offer.
7
<PAGE>
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates
for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a
Letter of Transmittal (or fax thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and (c) any other documents required by the
Letter of Transmittal. The per Common Share consideration and the per
Preference Share consideration paid to any stockholder pursuant to the Offer
will be the highest per Common Share consideration and per Preference Share
consideration, respectively, paid to any other holder of Common Shares or
Preference Shares, as the case may be, pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the 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 the
Purchaser and transmitting payment to tendering stockholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF ANY SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to 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, and the terms of the Merger Agreement), the Depositary may,
nevertheless, on behalf of the 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 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedure set forth in Section 2, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility) as promptly as practicable after the expiration or termination of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Saint-Gobain, or to one or more direct or indirect
wholly owned subsidiaries of Saint-Gobain, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the 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.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The transfer of Shares pursuant to the Offer or the Merger or through
redemption of Preference Shares 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 stockholder will recognize gain or loss equal to the difference
between the amount of cash received by the stockholder pursuant to the Offer
or the Merger or the redemption and the aggregate tax basis in the Shares
purchased pursuant to the Offer or the Merger or redeemed, as the case may be.
Gain or loss will be calculated separately for each block of Shares tendered
and purchased pursuant to the Offer or in the Merger or redeemed, as the case
may be.
If Shares are held by a stockholder as capital assets, gain or loss
recognized by the stockholder will be capital gain or loss, which will be
long-term capital gain or loss if the stockholder's holding period for the
Shares exceeds one year. Under present law, long-term capital gains recognized
by an individual stockholder will generally be taxed at a maximum Federal
marginal tax rate of 28%, and long-term capital gains recognized by a
corporate stockholder will be taxed at a maximum Federal marginal tax rate of
35%. In addition, under present law the ability to use capital losses to
offset ordinary income is limited.
8
<PAGE>
The Revenue Reconciliation Bill of 1995 (the "Bill"), which was vetoed by
President Clinton, would have generally reduced the maximum Federal marginal
income tax rate on long-term capital gains (for sales after December 31, 1994)
to 19.8% for individual stockholders and to 28% for corporate stockholders. In
addition, the Bill would have further restricted the ability to use capital
losses to offset ordinary income. As budget negotiations between Congress and
the President are ongoing, it cannot be predicted whether any reduction in the
tax rate for capital gains (or any additional restrictions on the ability to
use capital losses against ordinary income) will be enacted or, if enacted,
when any such reduction (or restrictions) will be effective. Stockholders are
urged to consult with their tax advisors regarding the applicable rate of
taxation and their ability to use capital losses against ordinary income.
A stockholder that tenders Shares pursuant to the Offer or surrenders Shares
pursuant to the Merger and/or redemption of Preference Shares may be subject
to 31% backup withholding 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 penalty imposed by the IRS. See""--Backup
Withholding" under Section 2.
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 filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO COMMON 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. PERSONS, LIFE INSURANCE
COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, 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 ON THE COMMON SHARES AND PREFERENCE
SHARES
The Common Shares are quoted on the Nasdaq National Market under the symbol
BIRD, and the Preference Shares are quoted on the Nasdaq SmallCap Market under
the symbol of BIRDP. The principal market for the Common Shares and Preference
Shares is the over-the-counter market.
The following table sets forth, for each of the periods indicated, the range
of high and low last sales prices per Common Share.
BIRD CORPORATION
<TABLE>
<CAPTION>
LAST SALES PRICES OF
COMMON SHARES
-----------------------
CALENDAR YEAR HIGH LOW
------------- ---------- ---------
<S> <C> <C>
1994
First Quarter................................ $12 1/4 $8
Second Quarter............................... 11 1/4 8 1/2
Third Quarter................................ 10 1/2 7
Fourth Quarter............................... 10 8
1995
First Quarter................................ 9 7 3/4
Second Quarter............................... 8 5/8 6 1/4
Third Quarter................................ 8 1/2 5 7/8
Fourth Quarter............................... 6 5/8 4 1/2
1996
First Quarter................................ 7 1/4 4 1/4
Second Quarter (through April 9, 1996)....... 7 1/2 7 3/16
</TABLE>
9
<PAGE>
On March 14, 1996, the last full trading day before the first public
announcement of the Merger, the last reported sale price of the Common Shares
on the Nasdaq National Market was $6 per Common Share. On April 4, 1996, the
last full trading day before the first public announcement of the Offer, the
last reported sales price of the Common Shares on the Nasdaq National Market
was $7- 7/32 per Common Share.
The Company did not pay any cash dividends on the Common Shares in 1994 and
1995 and has not paid any cash dividends on the Common Shares in 1996 through
the date of this Offer to Purchase.
The following table sets forth, for each of the periods indicated, the range
of high and low ask and bid quotations for the Preference Shares.
BIRD CORPORATION
<TABLE>
<CAPTION>
ASK AND BID PRICES OF PREFERENCE SHARES
--------------------------------------------
CALENDAR YEAR HIGH BID LOW BID HIGH ASK LOW ASK
- ------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1994
First Quarter.................... $17 1/2 $14 3/4 $19 $17 1/2
Second Quarter................... 16 3/4 16 18 3/4 17 1/2
Third Quarter.................... 17 16 1/4 18 3/4 18 1/4
Fourth Quarter................... 17 1/4 15 19 17 1/2
1995
First Quarter.................... 18 3/4 16 20 3/4 18
Second Quarter................... 18 1/4 17 1/2 20 18 1/2
Third Quarter.................... 20 19 21 19
Fourth Quarter................... 19 16 20 3/4 17 3/4
1996
First Quarter.................... 20 1/2 16 21 1/2 17 1/2
Second Quarter (through April 9,
1996)........................... 21 20 3/4 22 1/4 21
</TABLE>
On March 14, 1996, the last full trading day before the public announcement
of the Merger, the last reported bid quotation of the Preference Shares on the
Nasdaq Small Cap Market was $18 1/8 per Preference Share. On April 4, the last
full trading day before the public announcement of the Offer, the last
reported bid quotation of the Preference Shares on the Nasdaq SmallCap Market
was $21 per Preference Share.
Dividend payments, if declared, on the Preference Shares are made on
February 15, May 15, August 15 and November 15 of each year. The Company is
currently in arrears with respect to four dividend payments. In light of the
Offer, the Company does not intend to pay any dividend on the Preference
Shares on May 15, 1996. The aggregate amount of accrued and unpaid dividends
on the Preference Shares was $1.85 per Preference Share as of February 15,
1996 and through May 9, 1996 will include an additional $0.43 per Preference
Share, and, if the Expiration Date is extended beyond May 9, 1996, dividends
on each Preference Share will accrue at a rate of $0.0051 per day per
Preference Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON
SHARES AND PREFERENCE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES AND PREFERENCE
SHARES; STOCK QUOTATION; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Stock Quotation.
(1) Common Shares. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Common Shares may no longer meet the requirements
of the NASD for continued inclusion in the Nasdaq
10
<PAGE>
National Market, which among other things require that an issuer have at least
200,000 publicly held shares, held by at least 400 stockholders or 300
stockholders of round lots, with a market value of at least $1,000,000. If
these standards are not met, the Common Shares might nevertheless continue to
be included in the NASD's Nasdaq Stock Market (the "Nasdaq Stock Market") with
quotations published in the Nasdaq "additional list" or in one of the "local
lists", but if the number of holders of the Common Shares were to fall below
300, or if the number of publicly held Common Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Common Shares, the NASD's rules provide that the Common Shares would no
longer be "qualified" for Nasdaq Stock Market reporting and the Nasdaq Stock
Market would cease to provide any quotations. Common Shares held directly or
indirectly by directors, officers or beneficial owners of more than 10% of the
Common Shares are not considered as being publicly held for this purpose.
According to the Company, as of April 8, 1996, there were approximately 2,100
holders of record of Common Shares and there were 4,124,513 Common Shares
outstanding. The issuance to the Purchaser of Common Shares in exchange for
providing funds sufficient to redeem the Preference Shares pursuant to the
Merger Agreement without obtaining stockholder approval (which will not be
sought) may violate the rules of the Nasdaq Stock Market and result in the
Common Shares no longer being eligible for inclusion in any tier of the Nasdaq
Stock Market. If, as a result of the purchase of Common Shares pursuant to the
Offer or otherwise, the Common Shares no longer meet the requirements of the
NASD for continued inclusion in the Nasdaq National Market or in any other
tier of the Nasdaq Stock Market and the Common Shares are no longer included
in the Nasdaq National Market or in any other tier of the Nasdaq Stock Market,
as the case may be, the market for Common Shares could be adversely affected.
In the event that the Common Shares no longer meet the requirements of the
NASD for continued inclusion in any tier of the Nasdaq Stock Market, it is
possible that the Common Shares would continue to trade in the over-the-
counter market and that price quotations would be reported by other sources.
The extent of the public market for the Common Shares and the availability of
such quotations would, however, depend upon the number of holders of Common
Shares remaining at such time, the interests in maintaining a market in Common
Shares on the part of securities firms, the possible termination of
registration of the Common Shares under the Exchange Act, as described below,
and other factors.
(2) Preference Shares. After the Offer, the reduced number of Preference
Shares available for trading may cause the Preference Shares to no longer meet
an additional qualification requirement of the NASD for continued inclusion in
the Nasdaq Stock Market that the issue have at least two registered and active
market makers. Accordingly, after the Offer, the Nasdaq Stock Market may cease
to provide any quotations. According to the Company, as of April 8, 1996,
there were approximately 150 holders of record of Preference Shares and
814,300 Preference Shares outstanding. Although Preference Shares have never
been registered under Section 12 of the Exchange Act and, as a result, do not
meet the qualification requirements of the NASD for inclusion in the Nasdaq
Stock Market, to date the Preference Shares have been so included.
Exchange Act Registration.
The Common Shares are currently registered under Section 12(g) of the
Exchange Act. Registration of the Common Shares under the Exchange Act may be
terminated upon application of the Company to the SEC if the Common 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 Common Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company
to its stockholders and to the SEC 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) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act 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 Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, may be impaired or eliminated. The Purchaser intends to seek to cause
the Company to apply for termination of registration of the
11
<PAGE>
Common Shares under the Exchange Act as soon after the completion of the Offer
as the requirements for such termination are met.
If public quotation and registration of the Common Shares and the Preference
Shares is not terminated prior to the Merger, then the Common Shares and the
Preference Shares will no longer be quoted and the registration of the Common
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Margin Regulations.
(1) Common Shares. The Common Shares are currently "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Shares.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Common 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 any event, the Common Shares will
cease to be "margin securities" if registration of the Common Shares under the
Exchange Act is terminated.
(2) Preference Shares. The Preference Shares are not currently margin
securities.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Massachusetts corporation with its principal offices at
1077 Pleasant Street, Norwood, MA 02062-6714. The Company's current
manufacturing operation consists of one primary business unit engaged in
roofing manufacturing and marketing.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted from the information
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "Company 1995 10-K"). More comprehensive
financial information is included in the Company 1995 10-K and other documents
filed by the Company with the SEC, and the following summary is qualified in
its entirety by reference to the Company 1995 10-K and such other documents
and all the financial information (including any related notes) contained
therein. The Company 1995 10-K and such other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
12
<PAGE>
BIRD CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
SUMMARY OF EARNINGS DATA:
Net sales....................................... $ 54,180 $167,886 $187,745
Earnings (loss) from continuing operations
before cumulative effect of accounting change.. (797) 1,083 (4,641)
Net loss from discontinued operations........... (11,252) (4,766) (26,414)
Cumulative effect of accounting change.......... 0 0 2,733
Net loss........................................ (12,049) (3,683) (28,322)
Net loss per Common Share....................... (3.31) (1.31) (7.29)
BALANCE SHEET DATA(1):
Total assets.................................... $ 43,703 $ 85,705 $123,229
Working capital................................. 5,978 5,627 30,090
Long-term debt, excluding current portion....... 4,869 12,504 43,127
Stockholders' equity............................ 24,416 37,718 40,561
</TABLE>
- --------
(1) At period end.
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 remuneration, 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 SEC.
Such reports, proxy statements and other information should be available for
inspection at the public reference facilities of the SEC at 450 Fifth Street,
N.W., Washington, DC 20549, and at the regional offices of the SEC located at
Seven World Trade Center, 13th 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 SEC's customary
charges, by writing to the SEC's principal office at 450 Fifth Street, N.W.,
Washington, DC 20549. Such material should also be available for inspection at
the offices of Nasdaq Operations, 1735 K Street, N.W., Washington, DC 20006.
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 SEC and other publicly available
information. Although the Purchaser, CertainTeed and Saint-Gobain do not have
any knowledge that any such information is untrue, none of the Purchaser,
CertainTeed or Saint-Gobain 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 of
any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, CERTAINTEED AND SAINT-GOBAIN
The Purchaser, a Massachusetts corporation and a wholly owned subsidiary of
CertainTeed, was organized to acquire the Company and has not conducted any
unrelated activities since its organization. The principal office of the
Purchaser is located at the principal office of CertainTeed. All outstanding
shares of capital stock of the Purchaser are owned by CertainTeed.
The principal executive office of CertainTeed, a Delaware corporation and an
indirect wholly owned subsidiary of Saint-Gobain, is located at 750 East
Swedesford Road, Valley Forge, Pennsylvania 19482. The principal business of
CertainTeed is the manufacture of building materials (roofing, vinyl siding,
vinyl windows, ventilation products and piping products) and fiber glass
products (insulation and reinforcements).
13
<PAGE>
Saint-Gobain, a French corporation, is a publicly owned holding company
whose shares are listed for trading on the monthly settlement market of the
Paris Stock Exchange and on the principal European stock exchanges. Its
principal executive office is located at Les Miroirs, 18 avenue d'Alsace,
92400 Courbevoie, France (Postal Address Cedex 27, 92096 Paris La Defense).
The principal business of Saint-Gobain is holding interests in other
companies. Saint-Gobain has worldwide interests in businesses involving the
manufacture of flat glass, fiber glass insulation and reinforcements, building
materials, pipe, glass containers, industrial ceramics and abrasives.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of Purchaser, CertainTeed, and Saint-Gobain is set forth in
Schedule I hereto and incorporated herein by reference.
Because the only consideration in the Offer and Merger is cash, and in view
of the relatively small amount of consideration payable in relation to the
financial capability of Saint-Gobain and its affiliates, the Purchaser
believes the financial condition of Saint-Gobain and its affiliates is not
material to a decision by a holder of Shares whether to sell, tender or hold
Shares pursuant to the Offer. The following selected consolidated financial
information relating to Saint-Gobain and its subsidiaries, taken or derived
from the audited consolidated financial statements of Saint-Gobain for the
years ended December 31, 1992, 1993 and 1994, is provided for supplemental
information purposes only and is neither intended nor required to comply with
the requirements of the Exchange Act. The following information was prepared
in accordance with accounting principles generally accepted in France and with
International Accounting Standards ("IAS") formulated by the International
Accounting Standards Committee. These principles, as applied to Saint-Gobain
and its subsidiaries, are similar to the accounting principles generally
accepted in the United States ("US GAAP"). There are, however, a few
differences between the accounting standards applied by Saint-Gobain and its
affiliates and US GAAP with respect to certain matters, including translation,
recognition and measurement criteria.
The consolidated financial statements of Saint-Gobain and its subsidiaries
are published in French francs ("FF").
SAINT-GOBAIN AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1994
IN U.S.
DOLLARS(1) 1994 1993 1992
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................ $14,667 FF 74,494 FF 71,539 FF 74,007
Operating income..................... 1,436 7,295 4,978 6,414
Net income........................... 714 3,625 1,314 2,377
BALANCE SHEET DATA (AT END OF PERI-
OD):
Current assets....................... $ 7,975 FF 40,503 FF 39,310 FF 40,658
Total assets......................... 17,869 90,755 93,393 94,850
Long-term debt (including current
portion)............................ 2,421 12,297 17,338 14,134
Net equity of consolidated entities.. 8,294 42,126 35,534 36,326
</TABLE>
- --------
(1) French francs have been translated into U.S. dollars on the basis of the
noon buying rate (as defined below) on April 9, 1996.
On January 25, 1996, Saint-Gobain announced its current estimates of its
1995 operating results, including sales of 70.3 billion FF ($13.8 billion),
operating income of 7.8 billion FF ($1.536 billion) and net income of 4.2
billion FF ($827 million). (French francs have been translated into U.S.
dollars on the basis of the noon buying rate on April 9, 1996.)
14
<PAGE>
The following table sets forth, for the periods and dates indicated, certain
information concerning the exchange rate for French francs into U.S. dollars
based upon the noon buying rate in New York City for cable transfers in
foreign currencies as determined for publicly available sources (the "noon
buying rate"):
(FF PER U.S. DOLLAR)
<TABLE>
<CAPTION>
AT YEAR AVERAGE
PERIOD END RATE* HIGH LOW
------ --------- --------- --------- ---------
<S> <C> <C> <C> <C>
1992................................. FF 5.5270 FF 5.2896 FF 5.6910 FF 4.7390
1993................................. 5.9190 5.6852 6.0560 5.3000
1994................................. 5.3445 5.5106 5.9785 5.1120
1995................................. 4.8975 4.9567 5.3870 4.7755
The noon buying rate on April 9, 1996 was $1=FF 5.0790.
</TABLE>
- --------
* The average of the exchange rates on the last day of each month during the
year.
During 1995, CertainTeed had net sales of $1.35 billion. At the end of 1995,
CertainTeed had $1.27 billion in total assets, $223 million in total current
assets, and $742 million in total stockholder's equity. CertainTeed's
financial statements are prepared in accordance with US GAAP.
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis and to pay fees and expenses related to the Offer will be
approximately $50 million. All funds needed for the Offer and the Merger will
be obtained from working capital of Saint-Gobain and its subsidiaries.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
The Offer and Merger represent the culmination of a series of negotiations
between CertainTeed and the Company that began at the Company's initiation in
1994. During the spring and early summer of that year, management of the
Company and of CertainTeed undertook to negotiate a proposed merger at a cash
price of $13 per Common Share (plus a contingent purchase price of up to $1.25
per Common Share). That transaction would also have included the redemption of
the Company's 5% Cumulative Preferred Stock, par value $100 per share (the "5%
Stock"), and the Preference Shares. In July of 1994, however, CertainTeed
informed the Company that because CertainTeed's only interest was in acquiring
the Company's roofing manufacturing business, CertainTeed was not prepared to
acquire the Company's assets and contingent liabilities unrelated to its core
roofing business. As a result, the Company and CertainTeed terminated their
negotiations. Shortly thereafter, CertainTeed indicated orally that it
remained interested in acquiring the Company's roofing plant or the entire
Company if all or a substantial portion of its non-roofing assets could be
divested prior to a CertainTeed acquisition of the Company. In September of
1994, the Company provided additional due diligence materials and suggested
continuing discussions.
During the summer of 1995, the Company and CertainTeed renewed discussions,
including a meeting at CertainTeed's headquarters in Valley Forge,
Pennsylvania, at which the status of the Company's asset disposition and
contingent liability management program was discussed. The Company indicated
that all material non-roofing assets, other than its interest in a San Leon,
Texas hydrocarbon waste recycling center, had been divested and that an effort
to sell this interest was underway. During the fall of 1995, CertainTeed
resumed its due diligence investigation of the Company. Discussions between
the parties regarding issues raised during CertainTeed's ongoing due diligence
effort continued on a regular basis through February of 1996.
In late February and early March of 1996, Thomas A. Decker, Executive Vice
President of CertainTeed, spoke by telephone with Joseph D. Vecchiolla, the
Company's Chairman, and Frank S. Anthony, the Company's
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General Counsel, on a number of occasions regarding the possibility of
CertainTeed making a proposal to acquire the Company. During those
conversations, Mr. Decker was informed that two other prospective purchasers
were conducting due diligence investigations of the Company. On March 4, 1996,
Mr. Decker telephoned Mr. Vecchiolla to say that CertainTeed was prepared to
propose an acquisition price of $7.50 per Common Share, subject to negotiation
of definitive agreements and agreement upon a satisfactory arrangement
regarding alternative transaction fees and expenses. Mr. Decker further
indicated that, as in 1994, CertainTeed was prepared to cash out the
Preference Shares at their liquidation value, plus all accrued and unpaid
dividends, as well as to redeem the 5% Stock in accordance with its terms. On
March 10, 1996, the Board of Directors of the Company met and authorized
proceeding with further negotiations if CertainTeed was prepared to indicate
its interest in writing. CertainTeed confirmed its proposal in writing on
March 11, 1996. Detailed negotiations ensued between the Company and
CertainTeed, culminating in agreement on the terms of a merger agreement (the
"Initial Merger Agreement"). At a meeting on March 14, 1996, the Board of the
Company unanimously determined that the merger is fair to, and in the best
interests of, the Company and the Company's stockholders and approved the
Initial Merger Agreement and recommended that stockholders vote in favor of
approval and adoption of the Initial Merger Agreement. The Initial Merger
Agreement was executed and delivered by the parties that day. The Company
issued a press release regarding the Initial Merger Agreement on March 15,
1996.
On April 3, 1996, CertainTeed proposed to the Company that the parties
discuss amending the Initial Merger Agreement to provide for the Offer.
CertainTeed indicated it desired to acquire control of the Company on the
somewhat more accelerated timetable permitted by a cash tender offer. The
Board of the Company considered CertainTeed's proposal on April 5, 1996. The
parties negotiated amendments to the Initial Merger Agreement (that did not
materially change the fundamental economic terms of the proposed acquisition
of the Company), and on April 8, 1996 the Company, the Purchaser and
CertainTeed executed the Merger Agreement and issued a joint press release
with respect to the Offer. In connection with its approval of the amendments
to the Initial Merger Agreement, the Board of the Company unanimously
determined that the Offer is fair to, and in the best interests of, the
holders of the Common Shares and the Preference Shares and recommended that
the holders of Shares tender all their Shares pursuant to the Offer.
Except as otherwise set forth in this Offer to Purchase, none of the
Purchaser, CertainTeed, Saint-Gobain or, to the best knowledge of the
Purchaser, CertainTeed and Saint-Gobain, any of the persons listed in Schedule
I, or any associate or majority-owned subsidiary of the Purchaser,
CertainTeed, Saint-Gobain or any of the persons so listed, beneficially owns
or has the right to acquire any equity security of the Company, and none of
the Purchaser, CertainTeed, Saint-Gobain or, to the best knowledge of the
Purchaser, CertainTeed and Saint-Gobain, any of the other persons referred to
above, or any of the respective directors, executive officers or subsidiaries
of any of the foregoing, has effected any transaction in any equity security
of the Company during the past 60 days. The Purchaser, CertainTeed and Saint-
Gobain disclaim beneficial ownership of any Shares owned by any pension plan
of Saint-Gobain or any affiliate of Saint-Gobain.
The Chairman, President and Chief Executive Officer of Mellon Bank
Corporation and Mellon Bank, N.A. is also a director of Saint-Gobain
Corporation, an indirect wholly owned subsidiary of Saint-Gobain and the U.S.
holding company of CertainTeed. Based on information contained in a Schedule
13G amended through January 31, 1996 filed with the SEC, Mellon Bank
Corporation, an affiliate of Mellon Bank, N.A., had beneficial ownership of
309,000 Common Shares representing 7.5% of the outstanding Common Shares,
including sole voting power and sole dispositive power with respect to 20,000
Common Shares and Mellon Bank Corporation together with its subsidiaries,
including Boston Safe Deposit and Trust Company, had shared voting power with
respect to 293,629 Common Shares and shared dispositive power with respect to
289,000 Common Shares, including 274,929 Common Shares held in a trust with
Charles S. Bird, III as co-trustee with shared voting and dispositive power.
Except as otherwise set forth in this Offer to Purchase, (1) there have not
been any contacts, transactions or negotiations between the Purchaser,
CertainTeed, Saint-Gobain, any of their respective subsidiaries or, to the
best knowledge of the Purchaser, CertainTeed and Saint-Gobain, any of the
persons listed in Schedule I, on the one hand, and the Company or any of its
directors, executive officers or affiliates, on the other hand, that are
required to be disclosed pursuant to the rules and regulations of the SEC, (2)
there are no present or proposed material
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contracts, arrangements, understandings or relationships between the
Purchaser, CertainTeed, Saint-Gobain, their respective controlling persons or
subsidiaries or, to the best knowledge of the Purchaser, CertainTeed and
Saint-Gobain, any of the persons listed in Schedule I, on the one hand, and
the Company or any of its controlling persons, subsidiaries, executive
officers or directors, on the other hand, and (3) none of the Purchaser,
CertainTeed, Saint-Gobain or, to the best knowledge of the Purchaser,
CertainTeed and Saint-Gobain, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company. CertainTeed has had preliminary
discussions with Richard C. Maloof, the President and Chief Operating Officer
of the Company, and Frank S. Anthony, Vice President, General Counsel and
Corporate Secretary of the Company, regarding their continued employment with
the Surviving Corporation on terms which have yet to be decided, but these
discussions have not yet resulted in any commitments by any of the parties.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Merger is to enable CertainTeed,
through the Purchaser, to acquire control of, and the entire equity interest
in, the Company. The Offer is intended to accelerate somewhat the time when
CertainTeed will acquire control of the Company. The Purchaser currently
intends, as soon as practicable following consummation of the Offer, to hold a
special meeting of stockholders to approve the Merger (the "Special Meeting")
and, as soon as practicable thereafter, to consummate the Merger.
The Merger Agreement. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
the Merger", the Purchaser will be merged with and into the Company, and each
then outstanding Share (other than Shares held by stockholders who perfect
their appraisal rights under Massachusetts law, Shares held in the Company's
treasury and Shares held by the Purchaser or CertainTeed) will be converted
into the right to receive an amount in cash equal to (in the case of Common
Shares) $7.50 per Common Share and (in the case of Preference Shares) $20 plus
all accrued and unpaid dividends as of the effective date of the Merger per
Preference Share. All outstanding shares of the Company's 5% Stock will remain
issued and outstanding after the Merger and will be called for redemption and
retirement as soon as practicable following the Merger at a price equal to
$110 per share, plus all accrued and unpaid dividends thereon as of the date
of redemption and retirement. The Merger Agreement provides that CertainTeed
may elect to cause the Company as soon as practicable following such election
to redeem and retire at the earliest permitted date for redemption all
outstanding Preference Shares. In such case, CertainTeed will provide
sufficient funds to the Company to effect such redemption and retirement in
exchange for a number of Common Shares equal to the amount of funds provided
divided by $7.50. The Purchaser expects that, in the event the Purchaser
elects to cause the Company to call the Preference Shares for redemption to
satisfy the Minimum Condition, the Company will cause such redemption to occur
at the earliest practicable date following the Expiration Date.
(1) Vote Required to Approve Merger. If the Purchaser (i) acquires, through
the Offer or otherwise, at least 66 2/3% of the outstanding Common Shares and
(ii) either acquires at least 66 2/3% of the outstanding Preference Shares or
requires redemption of the Preference Shares, which would be the case if the
Minimum Condition were satisfied, it would have sufficient voting power to
effect the Merger without the vote of any other stockholder of the Company.
(2) Conditions to the Merger.
(A) Conditions to the obligations of CertainTeed and the Purchaser. The
obligations of CertainTeed and the Purchaser under the Merger Agreement are
subject to the satisfaction, on or prior to the closing date of the Merger
(the "Closing Date"), of each of the following conditions, each of which may
be waived by CertainTeed and the Purchaser except as otherwise provided by
law, provided that upon the acceptance of any Common Shares and Preference
Shares, if any, by the Purchaser pursuant to the Offer (the "Consummation of
the Offer") each of the following conditions (other than the conditions set
forth in clauses (iii)(b), (iii)(d) and (iv)(b) below) shall be deemed waived
by the Purchaser and CertainTeed: (i) the representations and warranties of
the Company contained in the Merger Agreement (without regard to any
supplemental information provided after the date of
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the Merger Agreement) that are qualified as to materiality shall be true and
correct, and the representations that are not so qualified shall be true and
correct in all material respects, in each case on and as of the date of the
Merger Agreement and on and as of the effective date of the Merger (the
"Effective Date"), and between the date of the Merger Agreement and the
Effective Date there shall not have been any event or change in circumstance
causing or reasonably anticipated to cause in the future (a) any material
adverse effect on the business, assets, properties, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as a
whole or the Surviving Corporation and its subsidiaries taken as a whole or
(b) any material adverse effect on the ability of the Company to carry out the
transactions contemplated by the Merger Agreement without significant
unanticipated delay or expense (clauses (a) and (b) together being a "Material
Adverse Effect"); (ii) each of the obligations of the Company to be performed
by it on or before the Closing Date pursuant to the terms of the Merger
Agreement shall have been duly performed or complied with in all material
respects by the Closing Date; (iii)(a) all corporate action necessary by the
Company to authorize the execution, delivery and performance of the Merger
Agreement and the consummation of the transactions contemplated thereby
(including the Offer and the Merger) shall have been duly and validly taken,
and the Company and the Purchaser shall have full right and power to merge on
the terms provided in the Merger Agreement; (b) the holders of the Common
Shares and the Preference Shares shall have duly approved the Merger at the
Special Meeting (other than if such approval shall not have occurred solely
due to the breach by CertainTeed or the Purchaser of its obligation, upon
consummation of the Offer, to vote its Common Shares and Preference Shares in
favor of the Merger); (c) all consents, approvals and authorizations from
third persons and governmental authorities identified in the Schedules to the
Merger Agreement required to consummate the transactions contemplated by the
Merger Agreement shall have been obtained; and (d) all applicable waiting
periods under the HSR Act shall have expired or been terminated; (iv)(a) there
shall not be any pending or threatened suit, action or proceeding by any
governmental authority (1) challenging the acquisition by CertainTeed or the
Purchaser of any Shares, seeking to restrain or prohibit the consummation of
the Merger or any of the other transactions contemplated by the Merger
Agreement that are material in relation to the Company and its subsidiaries
taken as a whole, (2) seeking to prohibit or limit the ownership or operation
by the Company, CertainTeed or any of their respective subsidiaries of any
material portion of the business or assets of the Company, or any of their
respective subsidiaries, or to compel the Company, CertainTeed or any of their
respective subsidiaries to dispose of or hold separate any material portion of
the business or assets of the Company, CertainTeed or any of their respective
subsidiaries, as a result of the Merger or any of the other transactions
contemplated by the Merger Agreement, (3) seeking to impose limitations on the
ability of CertainTeed or the Purchaser to acquire or hold, or exercise full
rights of ownership of, any shares of common stock of the Surviving
Corporation, (4) seeking to prohibit CertainTeed or any of its subsidiaries
from effectively controlling in any material respect the business or
operations of the Company or its subsidiaries or of CertainTeed and its
subsidiaries or (5) which otherwise is reasonably likely to have a Material
Adverse Effect, (b) no statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or other
order or legal restraint or prohibition enacted, entered, promulgated,
enforced, issued or deemed applicable to the Merger or the transactions
contemplated thereby, or any other action shall be taken by any governmental
authority or court, in each case preventing the consummation of the Merger or
the transactions contemplated thereby, shall be in effect; (v) all directors
of the Company whose resignation is requested by CertainTeed at least five
days before the Closing Date will have submitted their resignations effective
as of the Closing Date; (vi) no more than ten percent of the issued and
outstanding shares of any class of equity securities of the Company entitled
to dissenters rights as of the Closing Date shall be dissenting shares
entitled to receive the fair value of such shares in accordance with Sections
85 through 98 inclusive of the Massachusetts Business Corporation Law (the
"MBCL"); (vii) each outstanding option (each a "Stock Option") issued under
the Company's 1982 Stock Option Plan, as amended (the "1982 Stock Option
Plan"), the Company's 1992 Stock Option Plan, as amended (the "1992 Stock
Option Plan") and the Company's 1992 Non-Employee Directors Stock Option Plan,
as amended (the "Director Option Plan") shall have been amended to effect the
transactions contemplated by the Merger Agreement; and (viii) the Company
shall have furnished CertainTeed with such certificates of its officers and
others to evidence compliance with the conditions set forth in the Merger
Agreement as may be reasonably requested by CertainTeed, and the form and
substance of all opinions, certificates and other documents required by or
furnished pursuant to the Merger Agreement shall be satisfactory
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in all reasonable respects to CertainTeed and its counsel. On April 11, 1996,
the Company informed the Purchaser that the condition described in clause
(vii) above relating to Stock Options had been satisfied.
(B) Conditions to the Obligations of the Company. The obligations of the
Company under the Merger Agreement are subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions, each of which
may be waived by the Company except as otherwise provided by law, provided
that, upon Consummation of the Offer, each of the following conditions (other
than the conditions set forth in clauses (iii) and (iv) below) shall be deemed
waived by the Company: (i) the representations and warranties of CertainTeed
and the Purchaser contained in the Merger Agreement that are qualified as to
materiality shall be true and correct, and the representations that are not so
qualified shall be true and correct in all material respects, in each case on
and as of the date of the Merger Agreement and on and as of the Effective
Date; (ii) each of the obligations of CertainTeed and the Purchaser to be
performed by them on or before the Closing Date pursuant to the terms of the
Merger Agreement shall have been duly performed and complied with in all
material respects by the Closing Date ; (iii)(a) all corporate action
necessary by the Purchaser and CertainTeed to authorize the execution,
delivery and performance of the Merger Agreement and the consummation of the
transactions contemplated by the Merger Agreement shall have been duly and
validly taken, the Purchaser shall have full right and power to merge on the
terms provided in the Merger Agreement and the Company's stockholders shall
have approved the Merger at the Special Meeting called for that purpose; (b)
all consents, approvals and authorizations from third persons and governmental
authorities identified in the Schedule to the Merger Agreement required to
consummate the transactions contemplated by the Merger Agreement shall have
been obtained; and (c) all applicable waiting periods under the HSR Act shall
have expired or been terminated; (iv) no judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree shall have been
entered by a governmental authority with proper jurisdiction and not revised
prohibiting the Merger, and no legal action shall have been instituted by any
governmental authority challenging the Merger which if successful would
prohibit the consummation of the Merger; and (v) CertainTeed and the Purchaser
shall have furnished the Company with such certificates of their respective
officers and others to evidence compliance with the conditions set forth in
the Merger Agreement as may be reasonably requested by the Company, and the
form and substance of all certificates and other documents required by or
furnished pursuant to the Merger Agreement shall be satisfactory in all
reasonable respects to the Company and its counsel.
(3) Termination of the Merger Agreement. Unless the Consummation of the
Offer shall have occurred and Designated Directors (as defined below) shall
constitute at least a majority of the members of the Board of the Company, the
Merger Agreement shall be terminated, and the Merger abandoned, if the
requisite vote of the Company's stockholders with respect to the Merger
Agreement is not obtained as contemplated by the Merger Agreement.
Notwithstanding approval of the Merger Agreement and the transactions
contemplated thereby by the stockholders of the Company or by CertainTeed, the
Merger Agreement may be terminated, and the Offer and Merger abandoned, at any
time prior to the Effective Date:
(A) by mutual consent of CertainTeed, the Purchaser and the Company;
(B) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members of
the Board of the Company, by CertainTeed, the Purchaser or the Company at
any time after September 30, 1996;
(C) by CertainTeed or the Purchaser if (a) the Offer terminates without
any Shares being accepted for payment due to (x) failure of the Minimum
Condition or (y) any of the other conditions to the Offer (other than
solely the condition described in paragraph (c) of Section 14 "Certain
Conditions of the Offer") shall have become impossible to fulfill and shall
not have been waived (see Section 14), (b) any of the conditions to the
obligations of CertainTeed and the Purchaser to consummate the Merger
becomes impossible to fulfill and shall not have been waived or deemed
waived in accordance with the Merger Agreement (it being understood that
with respect to any condition described in clause (iv) (b) of paragraph
(2)(A) under The Merger Agreement above in this Section 12, any condition
described therein relating to an order, injunction or judicial decree shall
be deemed not to have become impossible to fulfill until such order,
injunction or decree shall have become final and non-appealable), (c) the
Board of the Company withdraws or modifies
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its approval or recommendation of the Merger Agreement, the Offer or the
Merger or (d) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members of
the Board of the Company, the Company fails to perform in any material
respect any of its obligations under the Merger Agreement or breaches in
any material respect any provision of the Merger Agreement, and the Company
has failed to perform such obligation or cure such breach, within 10 days
of its receipt of written notice thereof from CertainTeed or the Purchaser
and such failure to perform shall not have been waived in accordance with
the terms of the Merger Agreement; or
(D) by the Company if (a) any of the conditions to the obligations of the
Company to consummate the Merger shall become impossible to fulfill and
shall not have been waived in accordance with the terms of the Merger
Agreement, (b) CertainTeed or the Purchaser fails to perform in any
material respect any of its obligations under the Merger Agreement or
breaches in any material respect any provision of the Merger Agreement, and
CertainTeed and the Purchaser have failed to perform such obligation or
cure such breach, within 10 days of its receipt of written notice thereof
from the Company, and such failure to perform shall not have been waived in
accordance with the terms of the Merger Agreement, (c)(i) the Board of the
Company withdraws or modifies its approval or recommendation of the Merger
Agreement, the Offer or the Merger and (ii) the Company pays CertainTeed in
cash all CertainTeed's Expenses and the Alternate Transaction Fee (each as
defined in the first paragraph under "Fees and Expenses" below) or (d) if
the Purchaser (i) shall have failed to commence the Offer within the time
required under the Exchange Act or (ii) shall have failed to pay for any
Shares accepted for payment pursuant to the Offer and, in the case of
clause (ii), the Purchaser shall have failed to make such payment within
three business days of receipt of written notice thereof from the Company.
Notwithstanding any provisions to the contrary in the Merger Agreement, (i)
the sole remedy of CertainTeed or the Purchaser for a breach by the Company of
any representation or warranty set forth in the Merger Agreement shall be the
termination of the Merger Agreement (if permitted by the Merger Agreement)
unless such breach was made with the actual knowledge of the President and
Chief Executive Officer of the Company, the Vice President of Finance and
Administration of the Company or the General Counsel of the Company, after due
inquiry of other managerial employees of the Company who would be reasonably
expected to have knowledge as to the matter represented (a "Company Willful
Misrepresentation") and (ii) the sole remedy of the Company for a breach by
CertainTeed or the Purchaser of any representation or warranty set forth in
the Merger Agreement shall be the termination of the Merger Agreement (if
permitted by the Merger Agreement) unless such breach was made with the actual
knowledge of the President, Executive Vice President or Senior Vice President
of CertainTeed, after due inquiry of other managerial employees of CertainTeed
who would be reasonably expected to have knowledge as to the matter
represented (a "CertainTeed Willful Misrepresentation").
(4) Procedure for Termination and Amendment. The Merger Agreement provides
that the termination or amendment of the Merger Agreement pursuant to the
Merger Agreement requires in the case of the Company action by its Board or
the duly authorized designee of its Board in order to be effective. In the
event that the Purchaser's designees are appointed or elected to the Board of
the Company as provided in the Merger Agreement, after the Consummation of the
Offer and prior to the time the Merger becomes effective, the affirmative vote
of at least a majority of the Continuing Directors shall be required for the
Company to agree to amend, waive compliance with or terminate the Merger
Agreement.
(5) Takeover Proposals. The Merger Agreement provides that the Company shall
not, nor shall it permit any of its subsidiaries or affiliates to, nor shall
it authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of the Company or any of
its subsidiaries to (a) solicit or initiate, or knowingly encourage the
submission of, any takeover proposal, (b) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, any takeover proposal (except for (i) non-confidential information, or
(ii) filings with the SEC); provided, however, that prior to the earlier of
the Consummation of the Offer or the Special Meeting, to the extent required
by the fiduciary obligations of the Board of the Company, as determined in
good faith by the Board of the Company based on
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the advice of counsel, the Company may, (A) in response to an unsolicited
request therefor, furnish information with respect to the Company (pursuant to
a confidentiality agreement at least as restrictive (as determined by the
Company's counsel) as the Confidentiality Agreement dated April 13, 1994, as
amended, between the Company and Saint-Gobain Corporation, a Pennsylvania
corporation and an indirect wholly owned subsidiary of Saint-Gobain) to any
person who has indicated to the Company that it is interested in pursuing a
qualified takeover proposal and discuss such information (but not the terms of
any possible takeover proposal) with such person and (B) upon receipt by the
Company of a qualified takeover proposal, following the delivery to
CertainTeed of the notice required pursuant to the Merger Agreement,
participate in discussions or negotiations regarding such qualified takeover
proposal. Without limiting the foregoing, it is understood that any violation
of the restrictions described in the preceding sentence by any officer of the
Company or any of its subsidiaries or any investment banker, attorney or other
advisor or representative of the Company or its subsidiaries shall be deemed a
breach of the Merger Agreement by the Company. For purposes of this Section
under the heading "Takeover Proposals", "takeover proposal" means any proposal
for a merger or other business combination (regardless of legal form)
involving the Company or any subsidiary or any proposal or offer to acquire in
any manner, directly or indirectly, a substantial portion of the assets or
business of the Company or a substantial equity interest in, or any
substantial amount of voting securities of, the Company or any subsidiary, or
any other transaction outside the ordinary course of business and not
otherwise specifically permitted by the terms of the Merger Agreement the
consummation of which would impede or prevent the consummation of the Merger
pursuant to the terms of the Merger Agreement; and "qualified takeover
proposal" means a takeover proposal having terms which the Board of the
Company determines (based on, among other things, the advice of a financial
advisor of nationally recognized reputation) in its good faith reasonable
judgment to be more favorable to the holders of Common Shares than the Common
Price and to the holders of Preference Shares than the Preference Price and
likely to be fully financed and consummated.
The Merger Agreement provides further that, except as described below,
neither the Company's Board nor any committee thereof shall (i) withdraw or
modify or propose to withdraw or modify, in a manner adverse to CertainTeed or
the Purchaser, the approval or recommendation by such Board or any such
committee of the Merger Agreement, the Offer or the Merger, (ii) approve or
recommend, or propose to approve or recommend, any takeover proposal or (iii)
enter into any agreement with respect to any takeover proposal.
Notwithstanding the foregoing, in the event the Board of the Company receives
a qualified takeover proposal, the Board of the Company or any committee
thereof or the Company may (subject to the limitations (described in this
Section under the heading "Takeover Proposals") in the preceding paragraph)
withdraw or modify its approval or recommendation of the Merger Agreement, the
Offer or the Merger at any time after 48 hours following CertainTeed's receipt
of written notice (a "Notice of Qualified Takeover Proposal") advising
CertainTeed that the Board of the Company has received a qualified takeover
proposal, specifying the material terms and conditions of such qualified
takeover proposal and identifying the person making such qualified takeover
proposal. The Company may take any of the foregoing actions pursuant to the
provision described in the preceding sentence only until the earlier of the
Consummation of the Offer or the approval of the Merger at the Special
Meeting. The Company shall not be prohibited from taking and disclosing to its
stockholders a position contemplated by SEC Rule 14e-2(a) under the Exchange
Act following CertainTeed's receipt of a Notice of Qualified Takeover Proposal
provided that the Company does not withdraw or modify its position with
respect to the Merger or approve or recommend a takeover proposal.
In addition to the obligations of the Company described in the preceding
paragraphs, the Company shall promptly advise CertainTeed orally and in
writing of any request for information or of any takeover proposal, or any
inquiry with respect to any takeover proposal, the material terms and
conditions of such request, takeover proposal or inquiry and the identity of
the person making any such takeover proposal or inquiry. The Company shall
keep CertainTeed fully informed of the status and details of any such request,
takeover proposal or inquiry.
(6) Fees and Expenses. Except with respect to the circumstances described
below, the Merger Agreement provides that each of the Purchaser, CertainTeed
and the Company will bear its own costs, fees and expenses in connection with
the negotiation, execution, delivery and performance of the Merger Agreement
(including the Initial Merger Agreement) and the consummation of the Offer and
the Merger.
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The Merger Agreement provides that in the event that the Board of the
Company wishes to withdraw or adversely modify its approval or recommendation
of the Merger Agreement, the Offer or the Merger, prior to such withdrawal or
modification the Company shall pay in same day funds to CertainTeed (a) its
Expenses (defined below) incurred to date and thereafter shall pay in same day
funds to CertainTeed within one business day after demand therefor all
subsequently incurred Expenses, provided, that the Company shall not be
obligated to pay any such Expenses to the extent they exceed an aggregate of
$1 million, and (b) an alternate transaction fee of $1.5 million (the
"Alternate Transaction Fee"). In the event the Company receives a takeover
proposal from a person other than CertainTeed or one of its affiliates or a
takeover proposal is publicly disclosed prior to the Expiration Date (or in
the case of clauses (ii) and (iii), prior to the Special Meeting) or, if
earlier, termination of the Merger Agreement, and (i) at the Expiration Date a
sufficient number of Shares shall not have been tendered to satisfy the
Minimum Condition (and the Purchaser shall not have elected to cause the
Company to redeem the Preference Shares in order to satisfy the Minimum
Condition), (ii) at the Special Meeting the required approval of the Merger by
the Company's stockholders is not obtained, or (iii) the Merger Agreement is
terminated (other than by the Company if the Board of the Company withdraws or
modifies its approval or recommendation of the Merger Agreement or the Merger)
prior to a vote on the Merger at the Special Meeting unless the Consummation
of the Offer shall have occurred, the Company shall pay in same day funds to
CertainTeed within two business days after the earlier of such Expiration
Date, Special Meeting or termination of the Merger Agreement (a) all Expenses
incurred to date, and thereafter will pay in same day funds to CertainTeed
within one business day after demand therefor, all subsequently incurred
Expenses, provided, that the Company shall not be obligated to pay any such
Expenses to the extent they exceed an aggregate of $1 million, and (b) the
Alternate Transaction Fee. With regard to clause (a) in the provisos of the
immediately preceding sentence, "Expenses" means all out-of-pocket fees and
expenses (including without limitation all travel expenses and all fees and
expenses of counsel, investment banking firms, accountants, experts and
consultants to CertainTeed or the Purchaser) incurred or paid by or on behalf
of CertainTeed or the Purchaser during or after 1994 in connection with or
leading to the Merger Agreement, the transactions contemplated thereby, and
performing or securing the performance of the obligations of the parties
thereunder, including, without limitation, such fees and expenses related to
preparation and negotiation of documentation and conducting due diligence.
CertainTeed is required within 36 hours after request therefor to advise the
Company of an estimate of its Expenses if the Company wishes to withdraw or
modify its approval or recommendation of the Merger Agreement, the Offer or
the Merger pursuant to the Merger Agreement.
The Merger Agreement also provides that in the event that the Merger
Agreement is terminated, the Offer is terminated or the Merger does not occur
(i) solely due to a breach by CertainTeed or the Purchaser of any of its
covenants or obligations under the Merger Agreement or due to a CertainTeed
Willful Misrepresentation or (ii) solely due to a breach by the Company of any
of its covenants or obligations under the Merger Agreement or due to a Company
Willful Misrepresentation, then in the case of a termination pursuant to
clause (i) above, CertainTeed and the Purchaser shall promptly pay to the
Company, and in the case of termination pursuant to clause (ii) above, the
Company shall promptly pay to CertainTeed and the Purchaser, in same day funds
all Expenses (as defined below) incurred to date (after giving credit for any
reimbursement of expenses already made pursuant to the provisions described in
the immediately preceding paragraph) and thereafter shall pay in same day
funds within one business day after demand therefor all subsequently incurred
Expenses. With regard to clause (ii) in the preceding sentence, "Expenses"
means all out-of-pocket fees and expenses (including without limitation all
travel expenses and all fees and expenses of counsel, investment banking
firms, accountants, experts and consultants to CertainTeed or the Company, as
the case may be) incurred or paid by or on behalf of CertainTeed, the
Purchaser or the Company, as the case may be, during or after 1994 in
connection with or leading to the Merger Agreement, the transactions
contemplated thereby, and performing or securing performance of the
obligations of the parties thereunder, including, without limitation, such
fees and expenses related to preparation and negotiation of documentation and
conducting due diligence. Nothing described in this or the immediately
preceding paragraph limits damages that would otherwise be recoverable for
breaches under the Merger Agreement.
(7) Conduct of Business by the Company. Pursuant to the Merger Agreement,
except as otherwise expressly contemplated or permitted by the Merger
Agreement or otherwise consented to or approved by an authorized
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officer of CertainTeed, the Company has agreed that prior to the Effective
Date (or, if earlier, when a majority of the members of the Board of the
Company are designees of the Purchaser in accordance with the Merger
Agreement) the business of the Company and its subsidiaries shall be conducted
in the ordinary course consistent with past practice and: (a) no change will
be made in the respective articles or certificate of organization or
incorporation or by-laws of the Company or any of its subsidiaries; (b) no
change shall be made in the number of shares of the Company's authorized,
issued or outstanding capital stock; nor shall any conversion rights by which
the Company or any subsidiary is or may become bound to issue, transfer, sell,
repurchase or otherwise acquire or retire any shares of capital stock or other
ownership interest of the Company or any subsidiary, or any securities
convertible into or exchangeable or exercisable for any such shares or other
ownership interest be granted, made, redeemed or amended; nor will the Company
or any subsidiary issue, deliver, pledge or sell any such shares, securities
or obligations (except deliveries or pledges in favor of the Company's senior
lenders); provided, however, that the Company is permitted to issue shares or
other securities as contemplated by the Company's Employee's Savings and
Profit Sharing Plan (the "Savings Plan") as in effect on the date of the
Merger Agreement and is permitted to issue Common Shares in connection with
the due exercise of Stock Options issued pursuant to the 1982 Stock Option
Plan, the 1992 Stock Option Plan, the Director Option Plan or any other right
or convertible security outstanding as of the date of the Merger Agreement in
accordance with the existing terms thereof; (c) except as required (including
the obligations set forth in the Merger Agreement) with respect to the
Company's 5% Stock or as permitted by the Merger Agreement with respect to the
Preference Shares, (x) no dividend shall be declared or paid or other
distribution (whether in cash, stock, property or any combination thereof) or
payment declared or made in respect of the Common Shares or any other
outstanding capital stock of the Company, nor shall the Company or any
subsidiary (y) purchase, acquire or redeem any Common Shares, 5% Stock or
Preference Shares or (z) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock; (d) neither the
Company nor any subsidiary shall enter into any material contract, or except
in the ordinary course of business consistent with past practice any other
agreement, commitment or instrument; (e) the Company shall use and shall cause
each subsidiary to use its and their respective reasonable efforts to preserve
its and their business organization intact, to keep available the services of
its and their officers and present key employees and to preserve its and their
properties and the goodwill of its and their suppliers, customers and others
with whom business relationships exist; (f) the Company shall not take, agree
to take or permit any subsidiary to take any action or do or permit to be done
anything in the conduct of its business or that of any subsidiary which would
be contrary to or in breach of any of the terms or provisions of the Merger
Agreement or which would cause any of the representations of the Company
contained in the Merger Agreement to be or become untrue in any material
respect; (g) neither the Company nor any of its subsidiaries shall adopt or
amend in any material respect or terminate any benefit plan, except as
required by law, or change any actuarial or other assumption used to calculate
funding obligations with respect to any Company pension plan (except to the
extent that failure to make such change would result in noncompliance with
generally accepted accounting principles ("GAAP"), the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or the Code, or change the
manner in which contributions to any Company pension plan are made or the
basis on which such contributions are determined, except as required by
applicable law; (h) the Company shall not acquire or agree to acquire (x) 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 or (y) any assets that are material, individually or in the
aggregate, to the Company and its subsidiaries taken as a whole, except
purchases of inventory, raw materials, supplies and similar materials in the
ordinary course of business consistent with past practice and capital
expenditures complying with clause (k) below; (i) the Company shall not sell,
lease, license, mortgage or otherwise encumber or subject to any lien (except
in favor of the Company's senior lenders or certain liens permitted under the
Merger Agreement or otherwise dispose of any of its material properties or
assets, except bona fide sales of inventory in the ordinary course of business
consistent with past practice; (j) the Company shall not (x) incur any
indebtedness for borrowed money or guarantee any such indebtedness of another
person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of the
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foregoing, except for short-term borrowings incurred in the ordinary course of
business consistent with past practice and routine endorsements in the process
of collection, or (y) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct or
indirect wholly owned subsidiary of the Company or routine travel and similar
advances to employees; (k) the Company shall not make or agree to make any new
capital expenditure or expenditures which, individually, is in excess of
$100,000 or, in the aggregate, are in excess of $250,000; (l) the Company
shall not make any tax election or settle or compromise any income tax
liability; provided that CertainTeed will not unreasonably withhold any
consent or approval of any such tax election, settlement or compromise; and
provided further that the filing of the Company's 1995 Federal income tax
return and 1995 state and local income tax returns shall not constitute the
settling or compromising of any income tax liability for purposes of this
paragraph; (m) the Company will not 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,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities that are reflected or reserved
against in the Company's balance sheet as of December 31, 1995, or incurred
since the date of such balance sheet in the ordinary course of business
consistent with past practice, or waive the benefits of, or agree to modify in
any manner, any confidentiality, standstill or similar agreement to which the
Company or any of its subsidiaries is a party, except as permitted by the
Merger Agreement; and (n) the Company shall not authorize any of, or commit or
agree to take any of, the foregoing actions.
The Merger Agreement requires CertainTeed to respond within a reasonable
period of time to any request for consent or approval required to take any of
the actions described in the preceding paragraph.
The Merger Agreement also requires that the Company promptly advise
CertainTeed orally and in writing of any change or event of which the Company
has knowledge having, or which, insofar as can reasonably be foreseen, would
have, a Material Adverse Effect.
(8) Directors. Subject to compliance with applicable law (including Section
14(f) of the Exchange Act), upon the acquisition by the Purchaser of at least
a majority of the outstanding Common Shares pursuant to the Offer, the
Purchaser shall be entitled to designate at least a majority of the members of
the Board of Directors of the Company, and the Company and its Board of
Directors shall, at such time, take any and all such action (including to
increase the size of the Board of Directors or to use their best efforts to
cause directors to resign) needed to cause a sufficient number of the
Purchaser's designees to be appointed to the Company's Board of Directors such
that the designees shall constitute such majority (any director so designated
by the Purchaser, a "Designated Director"). It is understood that immediately
after the acquisition by the Purchaser of at least a majority of the
outstanding Common Shares pursuant to the Offer (x) the Company's Board of
Directors shall consist of seven members, (y) the initial designees of the
Purchaser to the Company's Board of Directors are expected to be Michel L.
Besson, Peter R. Dachowski, Thomas A. Decker and James E. Hilyard and (z) the
remaining members of the Company's Board of Directors are expected to be
Robert P. Bass, Jr., Richard C. Maloof and Joseph D. Vecchiolla. In the event
that, after the acquisition by the Purchaser of at least a majority of the
outstanding Common Shares pursuant to the Offer and prior to the Effective
Time, the number of members of the Board of Directors increases (including
pursuant to the provisions of the Preference Shares and the 5% Stock), the
Company and its Board of Directors shall, at such time, take any and all such
additional action (including to increase the size of the Board of Directors,
to use their best efforts to cause additional directors to resign and to
appoint additional designees of the Purchaser) needed to cause a sufficient
number of the Purchaser's designees to be appointed to the Board of Directors
such that the designees shall then constitute at least a majority of the
members of the Board of Directors. The Company, CertainTeed and the Purchasers
shall use their respective best efforts to cause at least three members of the
Company's Board of Directors at all times prior to the Effective Time to be
Continuing Directors. "Continuing Director" means (a) any member of the
Company's Board of Directors on the date of the Merger Agreement, (b) any
member of the Company's Board of Directors who is not an employee or director
or affiliate of, and not a Designated Director or other nominee of, the
Purchaser or CertainTeed or their respective subsidiaries, and (c) any
successor of a Continuing Director who is (i) not an employee or director or
affiliate of, and not a Designated Director or other nominee of, the
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Purchaser or CertainTeed or their respective subsidiaries and (ii) recommended
to succeed such Continuing Director by at least a majority of the then
Continuing Directors.
(9) Stock Options. The Merger Agreement provides that, with respect to
unexpired Stock Options, whether or not exercisable at the Effective Date,
including stock appreciation rights relating thereto, outstanding on the
Effective Date which have been issued pursuant to the 1982 Stock Option Plan,
the 1992 Stock Option Plan, or the Director Option Plan, each such Stock
Option with an exercise price less than the Common Price (an "Eligible
Option") shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive, for each Common
Share subject thereto, a cash payment without interest equal to $7.50, less
the per share exercise price of each such Stock Option. Such Stock Options
will be canceled upon such cash payment following the Merger. Any Stock Option
with an exercise price equal to or greater than the Common Price (an
"Ineligible Option") shall be canceled upon the Effective Date without payment
of any consideration. The Merger Agreement requires the Company to use its
best efforts to amend each outstanding Stock Option issued under the 1982
Stock Option Plan, the 1992 Stock Option Plan and the Director Option Plan to
effect the transactions contemplated by the Merger Agreement, including the
cancellation of the Stock Options in connection with the Merger in accordance
with the foregoing. On April 11, 1996, the Company informed the Purchaser that
all such Stock Options had been so amended. Each Common Share issued by the
Company but not yet vested pursuant to the Savings Plan shall, in connection
with the Merger, become vested in the person to whose account such Common
Share was issued and converted into the right to receive the Common Price
pursuant to the Merger Agreement.
The Company has informed the Purchaser that, as of April 8, 1996, there were
no Common Shares held in escrow pursuant to the Company's Long Term Incentive
Compensation Plan (the "LTIP"). Immediately following the Effective Date, the
Company's 1982 Option Plan, 1992 Option Plan, Director Option Plan, LTIP and
Savings Plan shall be terminated and no further stock awards or stock options
will be granted thereunder from and after the date of the Merger.
(10) Indemnification and Insurance. In the Merger Agreement, CertainTeed and
the Purchaser have agreed that all rights to indemnification in existence as
of the date of the Merger Agreement in favor of the directors or officers of
the Company and its subsidiaries (the "Indemnified Parties") as currently
provided in their respective certificates or articles of incorporation or
organization and by-laws or in any agreements, contracts or arrangements with
the Company or any of its subsidiaries in effect as of the date of the Merger
Agreement and previously furnished to CertainTeed and to the extent not in
violation of applicable state law, shall survive the Merger and shall continue
in full force and effect for a period of five years from the Effective Date;
provided that, in the event any claim or claims are asserted or made within
such five year period, all rights to indemnification in respect of any such
claim or claims shall continue until the disposition of any and all such
claims. In addition, the Merger Agreement provides that, to the extent
currently provided in the certificates or articles of incorporation or
organization and by-laws of the Company and its subsidiaries and Massachusetts
law, or agreements, contracts or arrangements disclosed to CertainTeed with
the Company or any of the subsidiaries, in the event that any Indemnified
Party becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter, including the transaction
contemplated by the Merger Agreement, occurring prior to, and including, the
Effective Date, or otherwise relating to or arising out of such matters,
CertainTeed or the Surviving Corporation will periodically advance to such
Indemnified Party his or her legal and other expenses (including the costs of
any investigation and preparation incurred in connection therewith).
The Merger Agreement provides that CertainTeed will use all reasonable
efforts to maintain in effect, or shall cause the Surviving Corporation to use
all reasonable efforts to maintain in effect, for two years after the
Effective Date, directors' and officers' liability insurance ("D&O Insurance")
covering those persons covered by the Company's directors' and officers'
liability insurance on the date of the Merger Agreement or the Effective Date
and which is substantially equivalent in terms of coverage and amount as the
Company has in effect on the Effective Date so long as such insurance is
available and the annual premium therefor would not be in excess of 200% of
the last annual premium paid prior to the date of the Merger Agreement (the
"Maximum Premium"), which the Company informed CertainTeed was $179,000. If
the existing D&O Insurance expires, is
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terminated or cancelled during such two-year period, CertainTeed shall use all
reasonable efforts to cause to be obtained as much D&O Insurance as can be
obtained for the remainder of such period for an annualized premium not in
excess of the Maximum Premium, on terms and conditions no less advantageous
than the existing D&O Insurance.
The Merger Agreement further provides that (a) any Indemnified Party wishing
to claim indemnification pursuant to the Merger Agreement, upon learning of
any legal action, suit, investigation, inquiry or proceeding by any
governmental authority or other person, shall promptly notify CertainTeed and
the Surviving Corporation with respect thereto, but the failure to so notify
shall not relieve CertainTeed or the Surviving Corporation of any liability it
may have to such Indemnified Party under the Merger Agreement except to the
extent that CertainTeed and the Surviving Corporation are materially
prejudiced thereby, (b) CertainTeed and the Surviving Corporation shall
periodically, as requested, advance to such Indemnified Party his, her or its
legal and other expenses (including the cost of investigation and preparation
incurred in connection therewith) to the extent such Indemnified Party is
indemnified pursuant to the Merger Agreement, unless it is ultimately
determined by a court of competent jurisdiction that such Indemnified Party is
not entitled to indemnification hereunder, and (c) CertainTeed and the
Surviving Corporation shall be subrogated to any rights any Indemnified Party
may have with respect to any amounts paid to or on behalf of such Indemnified
Party by CertainTeed and the Surviving Corporation pursuant to the Merger
Agreement.
(11) Representations and Warranties. The Merger Agreement contains various
customary representations and warranties. The Merger Agreement requires that
CertainTeed, the Purchaser and the Company shall each take such action as is
reasonably necessary to render their respective representations and warranties
accurate on and as of the Effective Date. Without limiting the foregoing, the
Merger Agreement provides that the Company shall take any action required by
CertainTeed to ensure the accuracy of its representations pertaining to the
Rights Agreement and Massachusetts' anti-takeover laws.
(12) Confidentiality Agreement. The Merger Agreement provides that the
provisions of the confidentiality agreement dated April 13, 1994 (the
"Confidentiality Agreement"), between the Company and Saint-Gobain Corporation
in connection with the transactions contemplated by the Merger Agreement shall
be incorporated and made a part of the Merger Agreement except that the
termination of the Confidentiality Agreement shall be extended to December 31,
1996.
Plans for the Company. Saint-Gobain and its affiliates currently intend that
the Company will continue its present manufacturing operations in
Massachusetts and will continue to operate under its present corporate name,
as a wholly owned subsidiary of CertainTeed. CertainTeed has had preliminary
discussions with Richard C. Maloof, the President and Chief Operating Officer
of the Company, and Frank S. Anthony, Vice President, General Counsel and
Corporate Secretary of the Company, regarding their continued employment with
the Surviving Corporation on terms which have yet to be decided, but these
discussions have not yet resulted in any commitments by any of the parties.
Except as otherwise described in this Offer to Purchase, none of the
Purchaser, CertainTeed or Saint-Gobain has any current plans or proposals that
relate to, or would result in, any extraordinary corporate transaction
involving the Company, such as a merger, reorganization or liquidation
involving the Company or any of its subsidiaries to any unaffiliated third
party.
Appraisal Rights. Holders of Shares do not have appraisal rights as a result
of the Offer. However, if the Merger is consummated, holders of outstanding
Common Shares, Preference Shares and 5% Stock on the effective date of the
Merger (other than any Preference Shares called for redemption prior to the
Merger pursuant to the Merger Agreement) will have certain rights pursuant to
the provisions of Sections 85 through 98, inclusive, of the MBCL to dissent
and demand appraisal of their shares. Under Sections 85 through 98, inclusive,
of the MBCL, dissenting stockholders 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
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fair rate of interest, if any. Any such judicial determination of the fair
value of 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 Sections 85 through 98, inclusive, of the MBCL does
not purport to be complete and is qualified in its entirety by reference to
Sections 85 through 98, inclusive, of the MBCL. Failure to follow the steps
required by Sections 85 through 98, inclusive, of the MBCL for perfecting
appraisal rights may result in the loss of such rights.
Going Private Transactions. The SEC has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions. The
Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of
the Offer. If applicable, Rule 13e-3 requires, among other things, that
certain financial information concerning the fairness of the Merger and the
consideration offered to minority stockholders in such transaction be filed
with the SEC and disclosed to stockholders prior to the consummation of the
Merger.
13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two succeeding paragraphs, and
nothing herein shall constitute a waiver by the Purchaser or CertainTeed of
any of its rights under the Merger Agreement or a limitation of remedies
available to the Purchaser or CertainTeed for any breach of the Merger
Agreement, including termination thereof.
If, on or after April 8, 1996, the Company should (a) split, combine or
otherwise change the Shares or its capitalization, (b) acquire or otherwise
cause a reduction in the number of outstanding Shares or other securities
(other than as aforesaid) or (c) issue or sell additional Shares (other than
the issuance of Common Shares under option prior to April 8, 1996, in
accordance with the terms of such options as publicly disclosed prior to April
8, 1996), shares of any other class of capital stock, other voting securities
or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, then, subject to
the provisions of Section 14, the Purchaser, in its sole discretion, may make
such adjustments as it deems appropriate in the Common Price, the Preference
Price and other terms of the Offer, including, without limitation, the number
or type of securities offered to be purchased.
If, on or after April 8, 1996, the Company should declare or pay any cash
dividend on the Common Shares or Preference Shares (including any accrued and
previously unpaid dividends) or other distribution on the Shares, or issue
with respect to the Shares or any additional Shares, shares of any other class
of capital stock, other voting securities or any securities convertible into,
or rights, warrants or options, conditional or otherwise, to acquire, any of
the foregoing, payable or distributable to stockholders of record on a date
prior to the transfer of the Shares purchased pursuant to the Offer to the
Purchaser or its nominee or transferee on the Company's stock transfer
records, then, subject to the provisions of Section 14, (a) the Common Price
and/or the Preference Price may, in the sole discretion of the Purchaser, be
reduced by the amount of any such cash dividend or cash distribution and (b)
the whole of any such noncash dividend, distribution or issuance to be
received by the tendering stockholders will (i) be received and held by the
tendering stockholders for the account of the Purchaser and will be required
to be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights
and privileges as owner of any such noncash dividend, distribution, issuance
or proceeds and may withhold the entire Common Price and/or Preference Price
or deduct from the Common Price and/or the Preference Price the amount or
value thereof, as determined by the Purchaser in its sole discretion.
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The Merger Agreement provides that the Company shall declare and pay or set
apart for payment accumulated dividends on the 5% Stock to the extent required
such that the holders of 5% Stock shall not at any time be entitled to vote
pursuant to the Company's articles of organization. In addition, pursuant to
the Merger Agreement, the Company shall not declare or pay or set apart for
payment any accumulated dividends on the Preference Shares, except that after
the Consummation of the Offer the Company may declare and make such payments
to the extent required to prevent holders of the Preference Shares from at any
time being entitled to vote pursuant to the Company's Certificate of Vote of
Directors Establishing a Series of a Class of Stock with respect to the
Preference Shares, which would entitle the holders of Preference Shares as a
class to elect two additional Directors of the Company.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement, the
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 after the termination or withdrawal of the Offer), to pay for any
Shares tendered pursuant to the Offer unless the Minimum Condition, the HSR
Condition and the Required Consents Condition shall all have been satisfied.
Furthermore, notwithstanding any other term of the Offer or the Merger
Agreement, the 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 if, at any time on or after
the date of the Merger Agreement and before the Consummation of the Offer any
of the following conditions exist:
(a) the representations and warranties of the Company contained in the
Merger Agreement (without regard to any supplemental information provided
pursuant to the Merger Agreement) that are qualified as to materiality
shall not be true and correct, and the representations that are not so
qualified shall not be true and correct in all material respects, in each
case on and as of the date of the Merger Agreement and on and as of the
Expiration Date;
(b) any of the obligations of the Company to be performed by it on or
before the Expiration Date pursuant to the terms of the Merger Agreement
shall not have been duly performed or complied with in all material
respects by that date;
(c) since December 31, 1995, there shall have occurred (or it shall be
reasonably expected that there will be) any event, change or circumstance
causing, or reasonably anticipated to cause in the future, any Material
Adverse Effect;
(d) any consents, approvals and authorizations from third persons and
governmental authorities identified in the Merger Agreement required to
consummate the transactions contemplated by the Merger Agreement shall not
have been obtained;
(e) there shall be pending or threatened any suit, action or proceeding
by any governmental authority (i) challenging the acquisition by
CertainTeed or the Purchaser of any Shares, seeking to restrain or prohibit
the consummation of the Offer, the Merger or any of the other transactions
contemplated by the Merger Agreement or seeking to obtain from the Company,
CertainTeed or the Purchaser any damages related to the Offer, the Merger
or any of the other transactions contemplated by the Merger Agreement that
are material in relation to the Company and its subsidiaries taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by the
Company, CertainTeed or any of their respective subsidiaries of any
material portion of the business or assets of the Company, CertainTeed or
any of their respective subsidiaries, or to compel the Company, CertainTeed
or any of their respective subsidiaries to dispose of or hold separate any
material portion of the business or assets of the Company, CertainTeed or
any of their respective subsidiaries, as a result of the Offer, the Merger
or any of the other transactions contemplated by the Merger Agreement,
(iii) seeking to impose limitations on the ability of CertainTeed or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
common stock of the Surviving Corporation, (iv) seeking to prohibit
CertainTeed or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company or its
subsidiaries or of CertainTeed and its subsidiaries or (v) which otherwise
is reasonably likely to have a Material Adverse Effect;
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(f) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
governmental authority or court, 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 (v) of paragraph (e) above;
(g) the Company's Board or any committee thereof shall have withdrawn or
modified in a manner adverse to CertainTeed its approval or recommendation
of the Offer, the Merger or the Merger Agreement or resolved to take any of
such actions; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and
CertainTeed and may, subject to the terms of the Merger Agreement, be waived
by the Purchaser and CertainTeed in whole or in part at any time and from time
to time. The failure by CertainTeed or the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right,
the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the SEC and other publicly
available information concerning the Company, none of the Purchaser,
CertainTeed or Saint-Gobain 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 Purchaser's
acquisition of Shares (and the indirect acquisition of the stock of the
Company's subsidiaries) as contemplated herein or of any approval or other
action by any governmental entity that would be required or desirable for the
acquisition or ownership of Shares by the Purchaser as contemplated herein.
Should any such approval or other action be required or desirable, the
Purchaser, CertainTeed, and Saint-Gobain currently contemplate that such
approval or other action will be sought, except as described below under
"State Takeover Laws." While, except as otherwise expressly described in this
Section 15, the 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 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 if 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,
the Purchaser could decline to accept for payment or pay for any Shares
tendered. See Section 14 for certain conditions to the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, stockholders, executive offices or places of business in such
states. In Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining stockholders, provided
that such laws were applicable only under certain conditions. Subsequently, a
number of Federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside
the state of enactment.
29
<PAGE>
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser
reserves the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer and nothing in this Offer to Purchase nor
any action taken in connection herewith is intended as a waiver of that right.
In the event that any state takeover statute is found applicable to the Offer,
the Purchaser might be unable to accept for payment or pay for Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer.
In such case, the Purchaser might not be obligated to accept for payment or
pay for any Shares tendered. See Section 14.
Massachusetts Statutes. Massachusetts has enacted a Business Combination
Statute that, in general, prohibits any business combination between a widely
held Massachusetts corporation and an interested stockholder for three years
after that person becomes an interested (i.e., 5%) stockholder unless: (a)
prior to the date that person becomes an interested stockholder, the board of
directors of the corporation approved either the transaction that made the
acquiror an interested stockholder or the proposed business combination; (b)
upon consummation of the transaction that made the acquiror an interested
stockholder, the acquiror owns at least 90 percent of the voting stock,
excluding shares held by directors, officers and employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held by the plan will be tendered; or (c) at or subsequent to
the time the acquiror becomes an interested stockholder, the board of
directors of the corporation and holders of two-thirds of the shares of voting
stock not held by interested stockholders approve the business combination.
Massachusetts has also enacted a Control Share Acquisition Statute that
provides, in general, that shares of a widely-held Massachusetts corporation
acquired in a Control Share Acquisition (as defined in the statute) will not
have voting rights unless, among other things, voting rights for such shares
are approved by a vote of stockholders of the corporation, not including those
holding such shares. Excluded from the definition of "Control Share
Acquisition" is, among other things, an acquisition by merger or tender offer
pursuant to a merger agreement to which the Massachusetts corporation is a
party. Massachusetts has also enacted a Take-Over Bid Statute that imposes
certain procedural requirements and prohibitions in connection with a Take-
Over Bid (as defined in the statute).
PURSUANT TO MASSACHUSETTS LAW, THE COMPANY HAS TAKEN ALL NECESSARY STEPS TO
RENDER THE MASSACHUSETTS BUSINESS COMBINATION STATUTE, CONTROL SHARE
ACQUISITION STATUTE AND TAKE-OVER BID STATUTE INAPPLICABLE TO THE ACQUISITION
OF SHARES IN THE OFFER OR THE MERGER.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by Saint-
Gobain of a Notification and Report Form with respect to the Offer, unless
Saint-Gobain receives a request for additional information or documentary
material from the Antitrust Division or the FTC or unless early termination of
the waiting period is granted. Saint-Gobain made such filing on April 9, 1996.
If, within the initial 15-day waiting period, either the Antitrust Division or
the FTC requests additional information or material from Saint-Gobain
concerning the Offer, the waiting period will be extended and would expire at
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Saint-Gobain 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 Saint-Gobain. In practice,
complying with a request for additional information or material can take a
significant amount of time. In addition, if the Antitrust Division or the FTC
raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental
agency concerning possible means of addressing those issues and may agree to
delay consummation of the transaction while such negotiations continue.
Expiration or termination of the applicable waiting period under the HSR Act
is a condition to the Purchaser's obligation to accept for payment and pay for
Shares tendered pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed
acquisition of the Company. At any time before or after the Purchaser's
acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or the consummation of the Merger or seeking the
divestiture of Shares acquired
30
<PAGE>
by the Purchaser or the divestiture of substantial assets of the Company or
its subsidiaries or Saint-Gobain or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will
not be made or, if such a challenge is made, of the result thereof.
16. FEES AND EXPENSES
McFarland is acting as Dealer Manager in connection with the Offer and is
providing certain financial advisory services to CertainTeed in connection
with the Offer. CertainTeed has agreed to pay McFarland as compensation for
such services (i) financial advisory and other related fees aggregating
$600,000, which are payable or become payable upon the consummation of the
transactions contemplated by the Offer and (ii) a dealer manager fee of
$150,000 payable upon commencement of the Offer. CertainTeed has also agreed
to reimburse McFarland for its out-of-pocket expenses, including the
reasonable fees and expenses of its counsel and any other advisor retained by
McFarland, in connection with its engagement and to indemnify McFarland and
certain related persons against certain liabilities and expenses, including
certain liabilities and expenses under the Federal securities laws.
The Purchaser has retained Georgeson & Company Inc. to act as the
Information Agent and Chemical Mellon Shareholder Services, L.L.C. to serve as
the Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the Federal securities laws.
None of the Purchaser, CertainTeed or Saint-Gobain will pay any fees or
commissions to any broker or dealer or other person (other than the Dealer
Manager and the Information Agent) in connection with the solicitation of
tenders of Shares pursuant to the Offer. Brokers, dealers, banks and trust
companies will be reimbursed by the Purchaser upon request for customary
mailing and handling expenses incurred by them in forwarding material to their
customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. None of the Purchaser, CertainTeed or Saint-Gobain is aware
of any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the laws of such jurisdiction. To the extent
the Purchaser, CertainTeed or Saint-Gobain becomes aware of any state law that
would limit the class of offerees in the Offer, the Purchaser will amend the
Offer and, depending on the timing of such amendment, if any, will extend the
Offer to provide adequate dissemination of such information to holders of
Shares prior to the expiration of the Offer. In any jurisdiction the
securities, blue sky or other laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser
by the Dealer Manager or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER, CERTAINTEED OR SAINT-GOBAIN NOT
CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED.
The Purchaser, CertainTeed and Saint-Gobain have filed with the SEC a
Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with
exhibits, furnishing certain additional information with respect to the Offer,
and may file amendments thereto. In addition, the Company has filed a Schedule
14D-9 pursuant to Rule 14d-9 under the Exchange Act, together with exhibits
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing such additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that such material will not be available at the regional
offices of the SEC).
BI EXPANSION CORP.
April 12, 1996
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
SAINT-GOBAIN, CERTAINTEED AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF COMPAGNIE DE SAINT-GOBAIN
The following table sets forth the name, business address, and present
principal occupation or employment and five-year employment history of the
directors and executive officers of Compagnie de Saint-Gobain. All directors
and officers of Compagnie de Saint-Gobain listed below are citizens of France
except for Mr. Breuer, who is a citizen of Germany, and Mr. Caccini, who is a
citizen of Italy. Directors are indicated by an asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME AND EMPLOYMENT AND FIVE-YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
---------------- -------------------------------
<S> <C>
Jean Louis Beffa*........... Chairman and Chief Executive Officer of Compagnie
Compagnie de Saint-Gobain de Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Dr. Rolf E. Breuer*......... Member of the Management Board of Deutsche Bank
Deutsche Bank (1991-present)
Taunusanlage 12
D-6000 Frankfurt-am-Main
(Germany)
James Bunoust*.............. Coordinator of Transport of Compagnie de Saint-
Compagnie de Saint-Gobain Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Gilles de Cambronne*........ Deputy Manager of the Direction of the Legal and
Compagnie de Saint-Gobain Tax Departments of Compagnie de Saint-Gobain
18 avenue d'Alsace (1990-present)
92400 Courbevoie (France)
Guy Dejouany*............... Chairman and Chief Executive Officer of Compagnie
Compagnie Generale Des Eaux Generale des Eaux (1990-present)
52 rue d'Anjou
75008 Paris (France)
Michel Doze*................ President of the Employees' and former Employees'
Compagnie de Saint-Gobain Shareholders' Association, Chairman of the
(Retired) Supervisory Board of the Investment Funds of the
18 avenue d'Alsace Group Savings Plan (1991-present); Deputy Manager
92400 Courbevoie (France) of the International Development Department of
Compagnie de Saint-Gobain (1990-1993)
Bernard Esambert*........... Vice-Chairman of the Bollore Group (1992-present);
Groupe Bollore Chairman and Chief Executive Officer of Compagnie
51-52 quai de Dion-Bouton Financiere Edmond de Rothschild Banque (1990-1992)
92811 Puteaux Cedex
(France)
Pierre Faurre*.............. Chairman and Chief Executive Officer of SAGEM
SAGEM (1990-present)
6 avenue d'Iena
75016 Paris (France)
Olivier Lecerf*............. Honorary Chairman of Lafarge (1990-present)
Lafarge (Retired)
61 rue des Belles Feuilles
75116 Paris (France)
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME AND EMPLOYMENT AND FIVE-YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
---------------- -------------------------------
<S> <C>
Jacques-Louis Lions*........ Professor at the College de France (Paris) (1990-
College de France present)
5 rue d'Ulm
75005 Paris (France)
Gerard Mestrallet*.......... Chairman and Chief Executive Officer of Compagnie
Compagnie de Suez de Suez (1995-present); Executive Officer of
1, rue d'Astorg Societe Generale de Belgique (1990-1995)
75008 Paris (France)
Michel Pebereau*............ Chairman and Chief Executive Officer of Banque
Banque Nationale de Paris Nationale de Paris (1992-present); Chairman and
16 boulevard des Italiens Chief Executive Officer of Credit Commercial de
75009 Paris (France) France (1990-1992)
Didier Pfeifer*............. Vice Chairman of Compagnie UAP (1994-present);
Compagnie UAP Executive Officer of Compagnie UAP (1990-1994)
9, place Vendome
75001 Paris (France)
Bruno Roger*................ Managing Partner of Lazard Freres & Cie (1990-
Lazard Freres & Cie present)
121 boulevard Haussmann
75008 Paris (France)
Rene Thomas*................ Honorary Chairman of Banque Nationale de Paris
Banque Nationale de Paris (1992-present); Chairman and Chief Executive
(Retired) Officer of Banque Nationale de Paris (1990-1992)
16 boulevard des Italiens
75009 Paris (France)
Marc de Nadaillac........... Senior Vice President of Operations and President
Compagnie de Saint-Gobain of the Pipe Division of Compagnie de Saint-Gobain
18 avenue d'Alsace (1990-present)
92400 Courbevoie (France)
Michel L. Besson............ Senior Vice President of Compagnie de Saint-Gobain
Saint-Gobain Corporation (1994-present); General Delegate of Compagnie de
750 East Swedesford Road Saint-Gobain for North America (1990-present);
Valley Forge, PA 19482 President, Chief Executive Officer and Chief
Operating Officer of Saint-Gobain Corporation
(1990-present)
Robert Pistre............... Head of the Human Resources Department and Senior
Compagnie de Saint-Gobain Vice President of Compagnie de Saint-Gobain (1990-
18 avenue d'Alsace present)
92400 Courbevoie (France)
Bernard Field............... Corporate Secretary and Secretary of the Board of
Compagnie de Saint-Gobain Directors of Compagnie de Saint-Gobain (1990-
18 avenue d'Alsace present)
92400 Courbevoie (France)
Jean-Claude Lehmann......... Director of the Research Department of Compagnie
Compagnie de Saint-Gobain de Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME AND EMPLOYMENT AND FIVE-YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
---------------- -------------------------------
<S> <C>
Jean-Francois Phelizon....... Director of the Finance Department of Compagnie de
Compagnie de Saint-Gobain Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Pierre Tracol................ Director of the International Development
Compagnie de Saint-Gobain Department of Compagnie de Saint-Gobain (1993-
18 avenue d'Alsace present); President of the Fiber Reinforcements
92400 Courbevoie (France) Division (1990-1993)
GianPaolo Caccini............ President of the Insulation and Fiber
Compagnie de Saint-Gobain Reinforcements Divisions of Compagnie de Saint-
18 avenue d'Alsace Gobain (1993-present); President of the Insulation
92400 Courbevoie (France) Division of Compagnie de Saint-Gobain (1991-1993);
Chairman and Chief Executive Officer of Saint-
Gobain Desjonqueres (1990-1991)
Patrice de Cailleux.......... President of the Building Materials Division of
Compagnie de Saint-Gobain Compagnie de Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Emile Francois............... President of the Industrial Ceramics Division of
Compagnie de Saint-Gobain Compagnie de Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Eris d'Hautefeuille.......... President of the Flat Glass Division of Compagnie
Compagnie de Saint-Gobain de Saint-Gobain (1991-present)
18 avenue d'Alsace
92400 Courbevoie (France)
Claude Picot................. President of the Containers Division of Compagnie
Compagnie de Saint-Gobain de Saint-Gobain (1990-present)
18 avenue d'Alsace
92400 Courbevoie (France)
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF CERTAINTEED CORPORATION
The following table sets forth the name, present principal occupation or
employment and five-year employment history of the directors and executive
officers of CertainTeed Corporation. All directors and officers listed below
are citizens of the United States, except for Mr. Besson, who is a citizen of
France, and Mr. Dachowski, who is a citizen of the United Kingdom; and the
business address of each such person is 750 East Swedesford Road, Valley
Forge, Pennsylvania 19482. Directors are indicated by an asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------
<S> <C>
John T. Fey.............. Director of Saint-Gobain Corporation (1991-present)
(Chairman since 1992); Director of CertainTeed
Corporation (1975-1994)
Michel L. Besson*........ President, Chief Executive Officer and Chief Operating
Officer of Saint-Gobain Corporation (1990-present) and
CertainTeed Corporation (1980-present); Senior Vice
President of Compagnie de Saint-Gobain (1994-present)
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------
<S> <C>
Thomas A. Decker*....... Executive Vice President, Chief Legal Officer and General
Counsel of Saint-Gobain Corporation and CertainTeed
Corporation (1994-present); Vice President, Secretary,
Chief Legal Officer and General Counsel of Saint-Gobain
Corporation and CertainTeed Corporation (1990-1994)
Peter R. Dachowski...... Executive Vice President of CertainTeed Corporation
(1994-present); Senior Vice President of CertainTeed
Corporation (1991-1994); Vice President of Saint-Gobain
Corporation (1991-present)
Lloyd C. Ambler......... President, Pipe & Plastics Group of CertainTeed
Corporation and Vice President of CertainTeed Corporation
(1990-present)
George B. Amoss......... Vice President, Finance of Saint-Gobain Corporation and
CertainTeed Corporation (1994-present); Vice President
and Controller of Northern Telecom (1992-1994); Vice
President and General Auditor of DuPont (1991-1992)
Dennis J. Baker......... Vice President, Human Resources of Saint-Gobain
Corporation and CertainTeed Corporation (1993-present);
Vice President, Human Resources of the Abrasives Division
of Norton Company (1990-present)
Jean-Michel Coulon...... Vice President, Operations Support of Saint-Gobain
Corporation (1994-present); President of Vetrotex
CertainTeed Corporation (1990-1994); Vice President of
CertainTeed Corporation (1990-present)
Bruce H. Cowgill........ Vice President of CertainTeed Corporation and President
of the Insulation Group of CertainTeed Corporation (1996-
present); Vice President and General Manager of the
Insulation Group of CertainTeed Corporation (1995-1996);
Vice President, Operations & Technology of the Insulation
Group of CertainTeed Corporation (1993-1995); Vice
President, Manufacturing of the Insulation Group of
CertainTeed Corporation (1990-1993)
Dwight F. Demchik....... Vice President, Internal Audit of Saint-Gobain
Corporation (1991-present) and CertainTeed Corporation
(1990-present)
F. Lee Faust............ Vice President, Tax of Saint-Gobain Corporation and
CertainTeed Corporation (1993-present); Tax Counsel of
Phillips Petroleum (1991-1993)
James F. Harkins, Jr.... Vice President and Treasurer of Saint-Gobain Corporation
and CertainTeed Corporation (1995-present); Assistant
Treasurer of Saint-Gobain Corporation and CertainTeed
Corporation (1990-1995)
James E. Hilyard........ President, Roofing Products Group of CertainTeed
Corporation and Vice President of CertainTeed Corporation
(1991-present)
Thomas M. Landin........ Vice President, Government Affairs of Saint-Gobain
Corporation and CertainTeed Corporation (1993-present);
Vice President and Director. U.S. Government and Public
Affairs of SmithKline Beacham Corporation (1990-1993)
Bradford C. Mattson..... Vice President of Saint-Gobain Corporation (1995-
present); President of Vetrotex CertainTeed Corporation
(1994-present); President of Bay Mills Limited (1990-
present); Vice President of CertainTeed Corporation
(1990-present)
</TABLE>
S-4
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------
<S> <C>
Lawrence J. Mellon, Vice President, Health, Safety and Environmental Affairs
M.D.................... of Saint-Gobain Corporation and CertainTeed Corporation
(1990-present)
John R. Mesher.......... Vice President, Deputy General Counsel and Secretary of
Saint-Gobain Corporation and CertainTeed Corporation
(1994-present); Assistant Secretary and Associate General
Counsel of Saint-Gobain Corporation and CertainTeed
Corporation (1991-1994)
John P. Mikulak......... President, Vinyl Building Products Group of CertainTeed
Corporation and Vice President of CertainTeed Corporation
(1991-present); General Manager, Vinyl Building Products
Group of CertainTeed Corporation (1990-1991)
Robert J. Panaro........ Vice President and Controller of Saint-Gobain Corporation
and CertainTeed Corporation (1995-present); Financial
Controller of Saint-Gobain Corporation and CertainTeed
Corporation (1993-1995); Senior Manager of Price
Waterhouse (1990-1993)
Carl C. Rue............. Vice President, Market Development of Saint-Gobain
Corporation and CertainTeed Corporation (1994-present);
President of the Insulation Group of CertainTeed
Corporation (1990-1994)
John J. Sweeney, III.... Vice President, Benefit Investments of Saint-Gobain
Corporation and CertainTeed Corporation (1995-present);
Assistant Treasurer of Saint-Gobain Corporation and
CertainTeed Corporation (1993-1995); Director of Benefit
Investments of Saint-Gobain Corporation and CertainTeed
Corporation (1991-1993)
Dorothy C. Wackerman.... Vice President, Communications of Saint-Gobain
Corporation and CertainTeed Corporation (1990-present)
Michael J. Walsh........ Vice President, Risk Management of Saint-Gobain
Corporation (1995-present); Vice President and Treasurer
of Saint-Gobain Corporation (1990-1995); Directeur des
Risques et Assurances of Compagnie de Saint-Gobain (1995-
present)
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF BI EXPANSION CORP.
The following table sets forth the name, present principal occupation and
five-year employment history of the directors and executive officers of BI
Expansion Corp. All directors and officers listed below are citizens of the
United States except for Mr. Dachowski, who is a citizen of the United
Kingdom, and the business address of each such person is 750 East Swedesford
Road, Valley Forge, Pennsylvania 19482. Directors are indicated by an
asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------
<S> <C>
Peter R. Dachowski*.. Executive Vice President of CertainTeed Corporation
(1994-present); Senior Vice President of CertainTeed
Corporation (1991-1994); Vice President of Saint-Gobain
Corporation (1991-present); Director and President of BI
Expansion Corp. (1996-present)
Thomas A. Decker*.... Executive Vice President, Chief Legal Officer and General
Counsel of Saint-Gobain Corporation and CertainTeed
Corporation (1994-present); Vice President, Secretary,
Chief Legal Officer and General Counsel of Saint-Gobain
Corporation and CertainTeed Corporation (1990-1994);
Director and Vice President of BI Expansion Corp. (1996-
present)
</TABLE>
S-5
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- -------------------------------
<S> <C>
F. Lee Faust............ Vice President, Tax of Saint-Gobain Corporation and
CertainTeed Corporation (1993-present); Tax Counsel of
Phillips Petroleum (1991-1993); Vice President of BI
Expansion Corp. (1996-present)
James F. Harkins, Jr.... Vice President and Treasurer of Saint-Gobain Corporation
and CertainTeed Corporation (1995-present); Assistant
Treasurer of Saint-Gobain Corporation and CertainTeed
Corporation (1990-1995); Vice President and Treasurer of
BI Expansion Corp. (1996-present)
James E. Hilyard........ President, Roofing Products Group of CertainTeed
Corporation and Vice President of CertainTeed Corporation
(1991-present); Vice President of BI Expansion Corp.
(1996-present)
John R. Mesher.......... Vice President, Deputy General Counsel and Secretary of
Saint-Gobain Corporation and CertainTeed Corporation
(1994-present); Assistant Secretary and Associate General
Counsel of Saint-Gobain Corporation and CertainTeed
Corporation (1991-1994); Vice President, Secretary, Clerk
and Assistant Treasurer of BI Expansion Corp. (1996-
present)
</TABLE>
S-6
<PAGE>
Manually signed fax copies of the Letter of Transmittal 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
such stockholder's broker, dealer, bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Overnight Delivery: By Hand:
P.O. Box 817 120 Broadway, 13th Floor 120 Broadway, 13th Floor
Midtown Station New York, NY 10271 New York, NY 10271
New York, NY 10018 Attention: Reorganization Attention:
Attention: Department Reorganization
Reorganization Department
Department
By Fax Transmission:
(201) 329-8936
Confirm by Telephone:
(201) 296-4100
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and locations listed below. You may also contact
your broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
==============
Wall Street Plaza
New York, New York 10005
Call Toll-Free: (800) 223-2064
Banks and Brokers Call Collect: (212) 440-9800
The Dealer Manager for the Offer is:
MCFARLAND DEWEY SECURITIES CO., L.P.
230 Park Avenue
New York, New York 10169-1450
(212) 867-4949
<PAGE>
EXHIBIT 99.(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED COMMON STOCK
PURCHASE RIGHTS),
AND $1.85 CUMULATIVE CONVERTIBLE PREFERENCE STOCK OF
BIRD CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 12, 1996
BY
BI EXPANSION CORP.
A Wholly Owned Subsidiary of
CERTAINTEED CORPORATION
An Indirect Wholly Owned Subsidiary of
COMPAGNIE DE SAINT-GOBAIN
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 9, 1996, UNLESS THE OFFER IS EXTENDED.
TO: CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
BY MAIL: BY OVERNIGHT DELIVERY: BY HAND:
P.O. Box 817 120 Broadway-13th Floor 120 Broadway-13th Floor
Midtown Station New York, NY 10271 New York, NY 10271
New York, NY 10018 Attention: Attention:
Attention: Reorganization Reorganization
Reorganization Department Department
Department
BY FAX:
(201) 329-8936
CONFIRM BY TELEPHONE:
(201) 296-4100
DESCRIPTION OF SHARES TENDERED
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------- --------------------------------------------------------------
CLASS AND TOTAL
SERIES NUMBER
OF SHARES OF SHARES
SHARE REPRESENTED REPRESENTED NUMBER
CERTIFICATE BY SHARE BY SHARE OF SHARES
NUMBER(S)(/1/) CERTIFICATE(S) CERTIFICATE(S)(/1/) TENDERED(/2/)
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
<S> <C>
TOTAL SHARES OF COMMON STOCK
--------------------------------
TOTAL SHARES OF $1.85 CUMULATIVE CONVERTIBLE
PREFERENCE STOCK
</TABLE>
- ----------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares
described above are being tendered. See Instruction 4.
<PAGE>
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FAX NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at a Book-Entry Transfer Facility (as
defined in and pursuant to the procedures set forth in Section 2 of the Offer
to Purchase). Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders are
referred to herein as "Certificate Stockholders". Stockholders whose
certificates for Shares (as defined below) are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation
(as defined in Section 2 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) must tender
their Shares in accordance with the guaranteed delivery procedures set forth
in Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution _______________________________________________
Check box of Book-Entry Transfer Facility:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Account Number ______________________________________________________________
Transaction Code Number _____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery __________________________
Name of Institution that Guaranteed Delivery ________________________________
If delivered by book-entry transfer check box:
[_] The Depository Trust Company
[_] Midwest Securities Trust Company
[_] Philadelphia Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number _____________________________________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to BI Expansion Corp., a Massachusetts
corporation (the "Purchaser") and a wholly owned subsidiary of CertainTeed
Corporation, a Delaware corporation which is an indirect wholly owned
subsidiary of Compagnie de Saint-Gobain, a French corporation ("Saint-
Gobain"), the above-described shares of Common Stock, par value $1.00 per
share, including the associated Common Stock purchase rights (the "Common
Shares"), of Bird Corporation, a Massachusetts corporation (the "Company"),
and hereby tenders to the Purchaser the above-described shares of $1.85
Cumulative Convertible Preference Stock, par value $1.00 per share (the
"Preference Shares"), of the Company, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated April 12, 1996
(the "Offer to Purchase"), and this Letter of Transmittal (which, together
with any amendments or supplements thereto or hereto, collectively constitute
the "Offer"), receipt of which is hereby acknowledged. The Common Shares and
the Preference Shares are collectively referred to as the "Shares".
Upon the terms of the Offer, 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, the Purchaser all right, title and interest in and
to all the Shares that are being tendered hereby (and any and all other Shares
or other securities or rights issued or issuable in respect thereof on or
after April 8, 1996), and irrevocably constitutes and appoints Chemical Mellon
Shareholder Services, L.L.C. (the "Depositary"), the true and lawful agent and
attorney-in-fact of the undersigned, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to the full extent of the undersigned's rights with respect to such
Shares (and any such other Shares or securities or rights), (a) to deliver
certificates for such Shares (and any such other Shares or securities or
rights) or transfer ownership of such Shares (and any such other Shares or
securities or rights) on the account books maintained by a Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Purchaser, (b) to
present such Shares (and any such other Shares or securities or rights) for
transfer on the Company's books and (c) to receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and any such other
Shares or securities or rights), all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all other Shares or other securities or rights issued or issuable
in respect of such Shares on or after April 8, 1996) and, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances,
and the same will not be subject to any adverse claim. The undersigned will,
upon request, execute any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the tendered Shares (and any and all such other Shares or
securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Carol M. Gray, James F. Harkins,
Jr. and John R. Mesher, and each of them, and any other designees of the
Purchaser, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote at any annual, special or adjourned
meeting of the Company's stockholders or otherwise in such manner as each such
attorney-in-fact and proxy or his or her substitute shall in his or her 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 or her
substitute shall in his or her sole discretion deem proper with respect to,
and to otherwise act as each such attorney-in-fact and proxy or his or her
substitute shall in his or her sole discretion deem proper with respect to,
the Shares tendered hereby that have been accepted for payment by the
Purchaser prior to the time any such action is taken and with respect to which
the undersigned is entitled to vote (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
April 8, 1996). This appointment is effective when, and only to the extent
that, the Purchaser accepts for payment such Shares as provided in the Offer
to Purchase. This power of attorney and proxy are irrevocable and
<PAGE>
are granted in consideration of the acceptance for payment of such Shares in
accordance with the terms of the Offer. Upon such acceptance for payment, all
prior powers of attorney, proxies and consents given by the undersigned with
respect to such Shares (and any such other Shares or securities or rights)
will, without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be
deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered". In the event that both "Special Delivery
Instructions" and "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. Please credit any Shares tendered herewith by book-
entry transfer that are not accepted for payment by crediting the account at
the Book-Entry Transfer Facility designated above. The undersigned recognizes
that the Purchaser has no obligation pursuant to "Special Payment
Instructions" to transfer any Shares from the name of the registered holder
thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
<PAGE>
[_]CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number, class and series of Shares represented by the lost or destroyed
certificates:__________________________________________________________________
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 5, 6 AND 7) (SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certifi- To be completed ONLY if certifi-
cates for Shares not tendered or cates for Shares not tendered or
not accepted for payment and/or not accepted for payment and/or
the check for the purchase price the check for the purchase price
of Shares accepted for payment of Shares accepted for payment
are to be issued in the name of are to be sent to someone other
someone other than the under- than the undersigned, or to the
signed. undersigned at an address other
than that above.
Issue [_] Check Mail [_] Check
[_] Certificate(s) to: [_] Certificates to:
Name _____________________________ Name _____________________________
(PLEASE PRINT) (PLEASE PRINT)
Address __________________________ Address __________________________
__________________________________ __________________________________
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
__________________________________ __________________________________
(EMPLOYER IDENTIFICATION OR (EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER) SOCIAL SECURITY NUMBER)
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
[LEFT ARROW]-------------------------------------------------------[RIGHT ARROW]
[LEFT ARROW]-------------------------------------------------------[RIGHT ARROW]
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: , 1996
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s)________________________________________________
________________________________________________
(PLEASE PRINT)
Capacity (Full title) _________________________________
Address________________________________________________
________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No. ___________________
Employer Identification or
Social Security Number ________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature __________________________________
Name __________________________________________________
(PLEASE PRINT)
Name of Firm __________________________________________
Address________________________________________________
________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No. ___________________
Dated: _________________________________________ , 1996
<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 Facilities' 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 this 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 member
firm of a national securities exchange registered with the Securities and
Exchange Commission or the National Association of Securities Dealers, Inc.
(the "NASD"), or a commercial bank or trust company having an office or
correspondent in the United States (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. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if delivery of Shares is to be
made pursuant to the procedures for book-entry transfer set forth in Section 2
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant
to the Offer, either (a) a Letter of Transmittal (or fax thereof), properly
completed and duly executed, 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 herein prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) and either certificates for tendered Shares must be
received by the Depositary at one of such addresses or Shares must be
delivered pursuant to the procedures for book-entry transfer set forth herein
(and a Book-Entry Confirmation (as defined in the Offer to Purchase) received
by the Depositary), in each case prior to the Expiration Date, or (b) the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below and in Section 2 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 or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase. Pursuant
to such procedures, (a) such tender must be made by or through an Eligible
Institution (b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, must be
received by the depositary prior to the Expiration Date and (c) the
certificates for all tendered Shares in proper form for transfer (or a Book-
Entry Confirmation with respect to all such Shares), together with a Letter of
Transmittal (or fax thereof), properly completed and duly executed, 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 as provided in Section 2 of the Offer to
Purchase. A "trading day" is any day on which the Nasdaq National Market
operated by the NASD is open for business.
"Agent's Message" means a message transmitted by a Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-
Entry Confirmation that states that such Book-Entry Transfer Facility has
received an express acknowledgement 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 the
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 ANY 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 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 execution
of this Letter of Transmittal (or fax hereof), waive any right to receive any
notice of the acceptance of their Shares for payment.
<PAGE>
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
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 certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) 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 acceptance
for payment of, and payment for, the Shares tendered herewith. 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 of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any 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 certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted by payment are to be issued
to, a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as provided below, the Purchaser will pay
any stock transfer taxes with respect to the transfer and sale of Shares to it
or its order pursuant to the Offer. If, however, payment of the purchase price
is to be made to, or if certificates for Shares not tendered or accepted for
payment are to be registered in the name of, any person(s) other than the
registered owner(s), or if tendered certificates are registered in the name(s)
of any person(s) other than the person(s) signing this Letter of Transmittal,
the amount of any stock transfer taxes (whether imposed on the registered
owner(s) or such person(s)) payable on account of the transfer to such
person(s) will be deducted from the purchase price unless satisfactory
evidence 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 CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not accepted for payment are to be
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 must be completed.
<PAGE>
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right (subject
to the provisions of the Merger Agreement) in its sole discretion to waive any
of the specified conditions of the Offer, in whole or in part, in the case of
any Shares tendered.
9. 31% BACKUP WITHHOLDING. In order to avoid backup withholding of Federal
income tax on payments of cash pursuant to the Offer, a stockholder tendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number (i.e., social
security number or employer identification number) ("TIN") on Substitute Form
W-9 below 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. 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 payment
of cash to such stockholder pursuant to the Offer may be subject to backup
withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding may 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 may be obtained by the stockholder upon filing an
income tax return.
The stockholder is required to give Depositary the TIN of the record holder
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.
The box in Part 3 of 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.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders must 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 the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for more instructions.
10. 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 or the Dealer Manager at their respective
addresses set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary by checking the box immediately preceding the special
payment/special delivery instructions and indicating the number of Shares so
lost, destroyed or stolen. The stockholder will then be instructed by the
Depository as to the steps that must be taken in order to replace the
certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
certificates have been followed.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FAX 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.
PAYER'S NAME: CHEMICAL MELLON SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN
IN THE BOX AT RIGHT AND CERTIFY -------------------
FORM W-9 BY SIGNING AND DATING BELOW Social Security
Number(s)
OR
-------------------
Employer
Identification
Number(s)
PART 2--Certification--Under
penalty of perjury, I certify
that:
(1) the number shown on this
form is my correct Taxpayer
Identification Number (or I am Part 3--
waiting for a number to be Awaiting TIN
issued to me) and [_]
(2) I am not subject to backup --------------------
withholding because (a) I am Part 4--
exempt from backup withholding Exempt TIN
or (b) I have not been [_]
notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends or (c) the IRS
has notified me that I am no
longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item
DEPARTMENT OF THE TREASURY (2) in Part 2 above if you have been notified by
INTERNAL REVENUE SERVICE the IRS that you are subject to backup withholding
because of under reporting interest or dividends on
PAYER'S REQUEST FOR TAXPAYER your tax returns. However, if after being notified
IDENTIFICATION NUMBER (TIN) by the IRS that you were subject to backup
withholding you received another notification from
the IRS stating that you are no longer subject to
backup withholding, do not cross out such item (2).
If you are exempt from backup withholding, check
the box in Part 4 above.
- --------------------------------------------------------------------------------
SIGNATURE__________________________________________ DATE _____________, 1996
- --------------------------------------------------------------------------------
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that, if I do not provide a taxpayer identification number to the
Depositary, 31% of all reportable payments made to me will be withheld, but
will be refunded if I provide a certified taxpayer identification number
within 60 days.
----------------------------------------- ________________________, 1996
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 WILL RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
INFORMATION.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
==============
Wall Street Plaza
New York, NY 10005
Call Toll-Free: (800) 223-2064
Banks and Brokers Call Collect:
(212) 440-9800
The Dealer Manager for the Offer is:
MCFARLAND DEWEY SECURITIES CO., L.P.
230 Park Avenue
New York, NY 10169-1450
(212) 867-4949
<PAGE>
Exhibit 99(A)(3)
ANNEX A
BIRD CORPORATION
1077 PLEASANT STREET
NORWOOD, MA 02062
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about April 12, 1996 as
part of Bird Corporation's (the "Company") Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to the holders of record at
the close of business on April 9, 1996 of the Shares. Capitalized terms used
and not otherwise defined herein shall have the meaning ascribed to them in
the Schedule 14D-9. You are receiving this Information Statement in connection
with the possible election of persons to be designated by the Purchaser to a
majority of the seats on the Board of Directors of the Company (the "Board").
Pursuant to the Merger Agreement, upon the acquisition by the Purchaser of at
least a majority of the outstanding Common Shares pursuant to the Offer, the
Purchaser shall be entitled to designate such number of directors to be
appointed to the Company's Board (the "Designated Directors") as is required
in order for the Designated Directors to constitute a majority of the Board.
At such time, the Company and the Board are required to take all such action,
including increasing the size of the Board or using their best efforts to
secure the resignations of incumbent directors, as needed to assure that the
Designated Directors constitute a majority of the Board. In addition, in the
event that after the acquisition by the Purchaser of at least a majority of
the outstanding Common Shares pursuant to the Offer and prior to the Effective
Date, the number of members of the Company's Board increases, the Company and
the Board are required at such time to take all such additional action,
including increasing the size of the Board, using their best efforts to secure
the resignation of incumbent directors or appointing additional Designated
Directors, as needed to assure that the Designated Directors shall then
constitute a majority of the Board. The parties to the Merger Agreement have
agreed to use their respective best efforts to ensure that at least three
members of the Board shall, at all times prior to the Effective Date, be
Continuing Directors.
This Information Statement is required by Section 14(f) of the Exchange Act,
and Rule 14f-1 thereunder. You are urged to read this Information Statement
carefully. However, you are not required to take any action.
Pursuant to the Merger Agreement, on April 12, 1996, the Purchaser commenced
the Offer. The Offer is scheduled to expire on May 9, 1996.
The information contained in this Information Statement (including
information listed in Schedule I to the Purchaser's Offer to Purchase and
information incorporated herein by reference) concerning CertainTeed, the
Purchaser and the Designated Directors has been furnished to the Company by
CertainTeed and the Purchaser, and the Company assumes no responsibility for
the accuracy or completeness of such information.
The Common Shares and the Preference Shares are the only classes of
securities of the Company outstanding which are entitled to vote upon adoption
of the Merger Agreement. Each Common Share and Preference Share has one vote
with respect thereto. As of April 8, 1996, there were 4,124,513 Common Shares
and 814,300 Preference Shares outstanding.
A-1
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The Board currently consists of eight members and there are currently no
vacancies on the Board. The Board is divided into three classes, with each
class to hold office for a term of three years and the term of office of one
class to expire each year.
DESIGNATED DIRECTORS
Pursuant to the Merger Agreement, immediately after the acquisition by the
Purchaser of at least a majority of the outstanding Common Shares pursuant to
the Offer, the Board will consist of seven members, four of whom will be
Designated Directors and three of whom will be Continuing Directors. Upon the
acquisition by the Purchaser of at least a majority of the outstanding Common
Shares pursuant to the Offer, and during the period after such acquisition and
prior to the Effective Date, the Company and the Board are required to take any
and all such action, including increasing the size of the Board, appointing
Designated Directors and using their best efforts to secure the resignations of
incumbent directors, as needed to cause the Designated Directors to constitute
a majority of the Board.
The Purchaser has informed the Company that it currently intends to choose
the following Designated Directors from the directors and executive officers
listed in Schedule I to the Offer to Purchase, a copy of which is being mailed
to the Company's stockholders together with the Schedule 14D-9: Michel L.
Besson, Peter R. Dachowski, Thomas A. Decker and James E. Hilyard. The
Purchaser has informed the Company that each of the Designated Directors has
consented to act as a director. The information on such Schedule I is
incorporated herein by reference. None of the Designated Directors (i) is
currently a director of, or holds any position with, the Company, (ii) has a
familial relationship with any of the directors or executive officers of the
Company or (iii) to the best knowledge of the Purchaser, beneficially owns any
securities (or rights to acquire any securities) of the Company. The Company
has been advised by the Purchaser that, to the best of Purchaser's knowledge,
none of the Designated Directors has been involved in any transaction with the
Company or any of its directors, executive officers or affiliates which are
required to be disclosed pursuant to the rules and regulations of the SEC,
except as may be disclosed herein or in the Schedule 14D-9. The business
address of the Purchaser and CertainTeed is 750 E. Swedesford Road, Valley
Forge, Pennsylvania 19482.
It is expected that the Designated Directors will assume office at any time
following the acquisition by the Purchaser pursuant to the Offer of at least a
majority of the outstanding Common Shares, which acquisition cannot be earlier
than May 9, 1996, and that upon assuming office, the Designated Directors will
thereafter constitute at least a majority of the Board.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The table below sets forth certain information with respect to the current
Board of Directors and executive officers of the Company.
A-2
<PAGE>
<TABLE>
<CAPTION>
EXPIRATION
POSITION WITH THE COMPANY; FIRST OF PRESENT
PRINCIPAL OCCUPATION AND ELECTED OR TERM OF
NAME AND AGE OTHER BUSINESS AFFILIATIONS(1) APPOINTED(2) OFFICE
------------ --------------------------------- ------------ ----------
<S> <C> <C> <C>
Frank S. Anthony, 49........ Vice President, General Counsel 1984 N/A
and Corporate Secretary of the
Company since May 1984; Attorney;
formerly served in the law
department of Westinghouse
Electric Corporation from 1976 to
1983
Robert P. Bass, Jr., 72(3).. Director; Attorney, Counsel to 1961 1997
Cleveland, Waters and Bass, P.A.,
Concord, NH; Director of Bank of
New Hampsire Corp., Manchester,
NH
Charles S. Bird, III, 71(3). Director; Trustee of family 1962 1998
trusts
Francis J. Dunleavy, 81..... Director; Retired Vice Chairman 1982 1997
of ITT Corporation; formerly
President, Chief Operating
Officer and Member of Executive
Committee of ITT Corporation;
Director of AEL Industries, Inc.,
Crown Cork & Seal Company, Inc.,
Quaker Chemical Corporation,
Scan-Graphics, Inc., and Selas
Corp. of America
John T. Dunlop, 80.......... Director; The Lamont University 1984 1996
Professor, Emeritus of Harvard
University, Cambridge, MA;
Harvard Community Health Plan
Chair; Commission on the Future
of Worker/Manager Relations;
formerly Secretary of the U.S.
Department of Labor
Guy W. Fiske, 70............ Director; Chairman of the Board 1984 1996
of Directors of the Company from
May 1994 to April 1995; Chairman
and President, Fiske Associates,
Inc., Hobe Sound, FL, (private
investment firm); formerly
Executive Vice President and
Director of General Dynamics
Corporation, Undersecretary of
the U.S. Department of Energy,
and Deputy Secretary of the U.S.
Department of Commerce; Director,
Graphic Controls Corporation,
Buffalo, NY; Director, Gunther
International and Vice Chairman
and Director, Educational
Publishing Corporation of Oak
Lawn, IL
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
EXPIRATION
POSITION WITH THE COMPANY; FIRST OF PRESENT
PRINCIPAL OCCUPATION AND ELECTED OR TERM OF
NAME AND AGE OTHER BUSINESS AFFILIATIONS(1) APPOINTED(2) OFFICE
------------ --------------------------------- ------------ ----------
<S> <C> <C> <C>
Richard C. Maloof, 51....... Director; President and Chief 1995(4) 1998
Operating Officer of the Company
since April 1995; Vice President
and Chief Operating Officer of
the Company from April 1994 to
April 1995; Vice President of the
Company and President, Roofing
and Distribution Groups of the
Company for more than five years
prior thereto
Joseph D. Vecchiolla, 40.... Director; Executive Vice 1993 1997
President--Corporate Finance of
S. N. Phelps & Company and
affiliates since May 1995;
Chairman of the Board of
Directors of the Company since
April 1995; President and Chief
Executive Officer of the Company
from January 1994 to May 1995;
President, Chief Operating
Officer, Chief Financial Officer
and Acting Chief Executive
Officer of the Company from
November 1993 to January 1994;
Vice President and Chief
Financial Officer of the Company
from June 1993 to November 1993;
formerly Vice President and Chief
Financial Officer of Horizon
Cellular Telephone Company,
Malvern, PA and Executive Vice
President and Chief Financial
Officer of Educational Publishing
Corporation of Oak Lawn, IL
Loren R. Watts, 61.......... Director; Retired Managing 1991 1998
Partner, Management Consultant
Services, Coopers & Lybrand
(certified public accountants)
</TABLE>
- --------
(1) Includes business experience during past five years.
(2) At the 1990 annual meeting, the stockholders approved a reorganization
pursuant to which the then stockholders of Bird Incorporated became
stockholders of Bird Corporation, a newly organized Massachusetts
corporation, and Bird Incorporated became a wholly owned subsidiary of Bird
Corporation. This column indicates the date as of which a person was first
elected a director or appointed an officer of the Company or of Bird
Incorporated.
(3) Robert P. Bass, Jr. and Charles S. Bird, III are first cousins.
(4) Date first elected director.
A-4
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1995 the Board held seven meetings. Each
of the directors attended more than 75% of the aggregate of Board meetings and
meetings of committees of the Board of which he is a member.
The Audit Committee, which consisted during 1995 of Loren R. Watts
(Chairman), John T. Dunlop and Joseph D. Vecchiolla, meets periodically with
the Company's independent accountants to review the scope of the annual audit,
to discuss the adequacy of internal accounting controls and procedures and to
perform general oversight with respect to the accounting principles applied in
the financial reporting of the Company. The Audit Committee also meets with
the Company's internal auditor and reviews the scope of the internal audit
plan and the results of audits performed thereunder. The Audit Committee held
two meetings during 1995.
The function of the Stock Option, Compensation, and Organizational
Development Committee (the "Compensation Committee") is to administer the
Company's stock option plans, to recommend to the full Board the amount,
character, and method of payment of compensation of all executive officers and
certain other key employees of the Company, and to provide for organizational
development and succession planning. During 1995 the Compensation Committee
consisted of Robert P. Bass, Jr. (Chairman), Charles S. Bird, III, Francis J.
Dunleavy and John T. Dunlop. The Compensation Committee held three meetings in
1995.
The Company also has a Nominating Committee which, during 1995, consisted of
Francis J. Dunleavy (Chairman), Robert P. Bass, Jr. and Joseph D. Vecchiolla.
The Nominating Committee makes recommendations to and otherwise assists the
Board in connection with finding, evaluating, and nominating directors of the
Company. The Nominating Committee held one meeting during 1995.
A-5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists the stockholders known to management to be the
beneficial owners of more than 5% of the outstanding Common Shares as of April
1, 1996 (except as otherwise noted).
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- -------------- -------
<S> <C> <C>
The Entwistle Company .. 546,139 shares(1) 13.2%
Bigelow Street
Hudson, MA 01749
S.M. Lorusso & Sons,
Inc. .................. 332,121 shares(2) 8.1%
Antonio J. Lorusso, Jr.
James B. Lorusso
Samuel A. Lorusso
331 West Street
Walpole, MA 02081
Quest Advisory Corp. ... 329,950 shares(3) 8.0%
Charles M. Royce
1414 Avenue of the
Americas
New York, NY 10019
Mellon Bank Corporation
and its Subsidiaries .. 309,000 shares(4)(5) 7.5%
One Mellon Bank Center
Pittsburgh, PA 15258
Charles S. Bird, III ... 305,458 shares(5) 7.4%
13 Proctor Street
Manchester, MA 01944
FMR Corp. .............. 266,753 shares(6) 6.2%
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Dimensional Fund
Advisors Inc. ......... 232,400 shares(7) 5.6%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
R. Keith Long .......... 208,500 shares(8) 5.1%
Financial Institutions
Insurance Group, Ltd.
Joan Greco and John Fyfe
Otter Creek Partners I,
L.P.
400 Royal Palm Way
Suite 400
Palm Beach, Florida
33480
</TABLE>
- --------
(1) Based on information contained in an amended Schedule 13D filed with the
SEC on April 1, 1987. The Schedule 13D reports that The Entwistle Company
had sole voting and dispositive power with respect to all shares
beneficially owned, including 8,539 shares it had the right to acquire
upon conversion of Preference Shares.
(2) Based on information contained in a Schedule 13D amended through January
23, 1996 filed with the SEC. The Schedule 13D reports that S.M. Lorusso &
Sons, Inc. ("Lorusso") had sole voting power and dispositive power with
respect to 230,121 shares. Antonio J. Lorusso, Jr., president, director
and a stockholder of Lorusso, had sole voting and dispositive power with
respect to 20,000 shares and had shared
A-6
<PAGE>
voting and dispositive power with respect to 79,500 shares and James B.
Lorusso, an officer, director and a stockholder of Lorusso, had sole voting
and dispositive power over 1,000 shares and Samuel A. Lorusso, an officer,
director and stockholder of Lorusso, has shared voting and dispositive power
with respect to 1,500 shares.
(3) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports that Quest Advisory
Corp. ("Quest") had sole voting and dispositive power with respect to
329,950 shares and that Charles M. Royce may be deemed a controlling
person of Quest and as such may be deemed to beneficially own the shares
although he disclaims such beneficial ownership.
(4) Based on information contained in a Schedule 13G amended through January
31, 1996 filed with the SEC. The Schedule 13G reports that Mellon Bank
Corporation had sole voting power with respect to 20,000 shares and sole
dispositive power with respect to 20,000 shares and that Mellon Bank
Corporation together with its subsidiaries, including Boston Safe Deposit
and Trust Company, had shared voting power with respect to 293,629 shares,
and shared dispositive power with respect to 289,000 shares, including
274,929 shares referred to in footnote (5), below.
(5) Includes 274,929 shares held in a trust of which Boston Safe Deposit and
Trust Company and Charles S. Bird, III are co-trustees with shared voting
and dispositive power. See footnote (3) to the table below.
(6) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports as follows: FMR
Corp. and Edward C. Johnson 3d, chairman of FMR Corp. (who, with other
family members including Abigail P. Johnson, forms a controlling group
with respect to FMR Corp.), had sole voting power with respect to 8,900
shares, and FMR Corp., Edward C. Johnson 3d and certain investment
companies (the "Fidelity Funds"), which are subsidiaries of FMR Corp.
(including Fidelity Convertible Securities Fund), each had sole
dispositive power with respect to 257,853 shares. The sole power to vote
the 257,853 shares owned by the Fidelity Funds resides with the Fidelity
Funds' Boards of Trustees. Fidelity Management and Research Company, a
wholly owned subsidiary of FMR Corp., acts as investment advisor to the
Fidelity Funds and carries out the voting of the shares under written
guidelines established by the Fidelity Funds' Boards of Trustees. Of the
266,753 shares reported as beneficially owned by FMR Corp., as of December
31, 1995, 192,853 shares could be acquired upon conversion of Preference
Shares.
(7) Based on information contained in a Schedule 13G amended through February
7, 1996 filed with the SEC. The Schedule 13G reports that Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership of 232,400 shares of Bird Corporation stock
as of December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc. (the "Fund"), or in series of the DFA
Investment Trust Company, a Delaware business trust (the "Trust"), each an
open-end management investment company registered under the Investment
Company Act of 1940, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. The Schedule 13G reports
that Dimensional had sole voting power with respect to 154,900 shares
(persons who are officers of Dimensional also serve as officers of the
Fund and the Trust and in their capacities as officers of the Fund and the
Trust, these persons vote 21,700 additional shares which are owned by the
Fund and 55,800 shares which are owned by the Trust) and sole dispositive
power with respect to 232,400 shares. Dimensional disclaims beneficial
ownership of all such shares.
(8) Based on information contained in a Schedule 13D filed on March 8, 1996
jointly by Otter Creek Partners I, L.P. ("Otter Creek"), and R. Keith Long
on his own behalf and on behalf of Financial Institutions Insurance Group,
Ltd. ("FIIG"), and Joan Greco and John Fyfe, joint tenants with rights of
survivorship ("Fyfe") (together, the "Reporting Persons"). The Schedule
13D reports that Otter Creek Management Inc. ("OCM") is the sole general
partner and investment advisor of Otter Creek. Mr. Long is the sole
executive officer, sole director and sole shareholder of OCM and currently
serves as chairman of the Board of Directors of FIIG. Mr. Long also
manages discretionary stock trading accounts for FIIG and Fyfe.
Additionally, the Schedule 13D reports that each of Otter Creek, Mr. Long,
FIIG and Fyfe had sole voting and sole dispositive power with respect to
92,200, 20,000, 39,000 and 57,300 shares, respectively. The Reporting
Persons indicated in their Schedule 13D that they may, through one or more
designees, seek representation on the Board of Directors of the Company.
A-7
<PAGE>
The tables below set forth information provided by the individuals named
therein as to the amount of the Company's Common Shares, Preference Shares and
5% Stock beneficially owned by the directors and executive officers of the
Company, individually, and the directors and executive officers as a group,
all as of April 1, 1996 except as otherwise noted. Unless otherwise indicated
in the footnotes, each of the named persons and members of the group had sole
voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
COMMON
COMMON SHARES SHARES
BENEFICIALLY SUBJECT PERCENT
OWNED (EXCLUD- TO STOCK OF
NAME ING STOCK OPTIONS) OPTIONS(1) TOTAL CLASS
---- ------------------ ---------- ------- -------
<S> <C> <C> <C> <C>
Robert P. Bass, Jr............... 47,086(2) 17,500 64,586 1.6%
Charles S. Bird, III............. 292,858(3) 15,000 307,858 7.4%
Francis J. Dunleavy.............. 1,000(4) 22,500 23,500 *
John T. Dunlop................... 2,000(5) 20,000 22,000 *
Joseph D. Vecchiolla............. 0 150,000 150,000 3.5%
Guy W. Fiske..................... 6,000 22,500 28,500 *
Loren R. Watts................... 1,000 10,000 11,000 *
Frank S. Anthony................. 31,712(6) 31,000 62,712 1.5%
Joseph M. Grigelevich, Jr........ 6,726(7) 0 6,726 *
William C. Kinsey(8)............. 3,795 0 3,795 *
Richard C. Maloof................ 37,563(9) 77,500 115,063 2.7%
All directors and executive
officers as a group (11
persons)........................ 429,740(10) 366,000 795,740 19.1%
</TABLE>
- --------
* Less than 1% of the outstanding Common Shares.
(1) Represents shares which the individual has a right to acquire by exercise
of stock options exercisable on April 1, 1996 or within 60 days thereafter.
(2) Includes 16,000 shares as to which Mr. Bass shares voting and investment
power and 2,696 shares which may be acquired upon conversion of
Preference Shares.
(3) Includes 274,929 shares as to which Mr. Bird shares voting and investment
power (see table on page A-6) and 3,595 shares which may be acquired upon
conversion of Preference Shares. Does not include 100 shares owned by his
wife, as to which he disclaims beneficial ownership.
(4) Does not include ten shares owned by a child of Mr. Dunleavy, as to which
he disclaims beneficial ownership.
(5) Represents shares as to which Mr. Dunlop shares voting and investment
power.
(6) Includes 2,136 shares allocated to Mr. Anthony's account under the
Company's Employees Savings and Profit Sharing Plan (the "Savings Plan")
as of December 31, 1995.
(7) Includes 45 shares which may be acquired upon conversion of Preference
Shares and 6,481 shares allocated to his account under the Savings Plan
as of December 31, 1995. Mr. Grigelevich was an executive officer of the
Company until May 31, 1995, when his employment with the Company
terminated.
(8) Mr. Kinsey was an executive officer of the Company until March 8, 1995,
when his employment with the Company terminated.
(9) Includes 2,551 shares allocated to his account under the Savings Plan as
of December 31, 1995 and 625 shares held jointly with members of his
family.
(10) Includes 293,554 shares as to which persons included in the group have
shared voting and investment power, 6,336 shares which may be acquired
upon conversion of Preference Shares, and 11,168 shares allocated to the
accounts of officers under the Savings Plan as of December 31, 1995.
A-8
<PAGE>
<TABLE>
<CAPTION>
PREFERENCE
SHARES PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------
<S> <C> <C>
Robert P. Bass, Jr................................... 3,000 *
Charles S. Bird, III................................. 4,000 *
All directors and executive officers as a group (2
persons)............................................ 7,000 *
</TABLE>
--------
* Less than 1% of the outstanding Preference Stock.
<TABLE>
<CAPTION>
SHARES OF
5% STOCK PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------
<S> <C> <C>
Charles S. Bird, III................................. 1,815 31%
All directors and executive officers as a group (1
person)............................................. 1,815 31%
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who hold more than 10% of the Company's Common
Shares to file with the SEC reports of ownership and changes in ownership of
the Company's equity securities. Based on reports received by the Company and
representations of certain reporting persons that no Forms 5 were required,
the Company believes that all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners with respect to fiscal year
1995 were complied with.
A-9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued for services in all capacities to the Company during each of the
last three fiscal years to each person who served as chief executive officer
during 1995 and to each of the other four most highly compensated executive
officers of the Company who served as such during 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION__
---------------------------
ANNUAL
COMPENSATION OTHER
------------------ ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND COMPEN- STOCK UNDERLYING STOCK LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) AWARDS OPTIONS/SARS(#) PAYOUTS(1) SATION($)
- ------------------ ---- --------- -------- --------- ---------- ---------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph D. Vecchiolla.... 1995 87,692 227,222 -- -- -- -- 663,781(2)
President and 1994 229,077 240,000 -- -- 50,000 37,449(3)
Chief Executive 1993 91,903 50,000 -- -- 100,000 39,912
Officer(4)
Richard C. Maloof....... 1995 195,962 46,416 -- -- 50,000 81,938 0
Vice President and 1994 180,223 45,450 17,992(5) -- 25,000 7,843(3)
Chief Operating 1993 161,629 11,300 8,873 -- -- 10,784
Officer(6)
William C. Kinsey....... 1995 29,600 36,919 -- -- -- 45,885 411,754(2)
Vice President; 1994 148,000 43,000 10,076(5) -- -- 9,986(3)
President, Bird 1993 138,792 10,000 5,460 -- -- 18,159
Vinyl Products(7)
Frank S. Anthony........ 1995 135,000 27,509 -- -- -- 49,163 150,000(2)
Vice President and 1994 141,750 30,000 10,795(5) -- -- 8,496(3)
General Counsel 1993 128,350 5,000 5,850 -- -- 11,381
Joseph M. Grigelevich,
Jr..................... 1995 46,069 31,476 -- -- -- -- 213,048(2)
Vice President Finance 1994 96,192 36,700 -- -- 20,000 5,943(3)
and Administration(8)
</TABLE>
- --------
(1) In 1995 restrictions on all stock held in escrow pursuant to the Company's
Long Term Incentive Plan (the "LTIP") lapsed as a result of the Vinyl Sale
and shares were distributed to each of the persons named in the table except
Mr. Vecchiolla and Mr. Grigelevich.
(2) Represent severance payments received in connection with the "change in
control" which occurred pursuant to the Vinyl Sale. Also includes, in the
case of Mr. Vecchiola, $47,300 representing additional incentive
compensation related to the Vinyl Sale, the amount of which was deducted
from a severance payment which he received as a result of the Vinyl Sale.
(3) Represents contributions by the Company to the Savings Plan or in Mr.
Anthony's case to a separate trust established by the Company with a bank
trustee to which amounts in excess of those permitted to be contributed to
the Savings Plan under limits imposed by the Internal Revenue Code of 1986,
as amended (the "Code") are contributed. Also includes, in the case of Mr.
Vecchiolla, $31,825 representing additional incentive compensation related
to asset sales, the amount of which was deducted from a severance payment
which Mr. Vecchiolla received as a result of the change in control of the
Company which was deemed to have occurred upon consummation of the Vinyl
Sale. See "Employment Contracts and Termination of Employment and Change in
Control Arrangements", below.
(4) Mr. Vecchiolla was hired as Vice President and Chief Financial Officer
effective June 1, 1993 and was elected President and Chief Operating
Officer in November 1993. He served as acting Chief Executive Officer
during November and December 1993 and was elected Chief Executive Officer
on January 25, 1994. He resigned as President on April 1, 1995 and on that
date was elected Chairman of the Board. He resigned his full-time
employment and his office as Chief Executive Officer on May 25, 1995.
(5) Represents reimbursement for withholding taxes arising from the lapse of
restrictions on restricted stock held by each officer in accordance with
provisions of the LTIP. Does not include perquisites and other personal
benefits, the cost of which to the Company was below the disclosure
thresholds established by the SEC.
(6) Mr. Maloof was elected Chief Operating Officer in April 1994 and President
in April, 1995. Prior to that time he served as Vice President and
President of the Company's Roofing and Distribution Groups.
(7) Mr. Kinsey's employment with the Company was terminated on March 8, 1995 as
a result of the Vinyl Sale.
(8) Mr. Grigelevich first became an executive officer of the Company on March
21, 1994. Prior to that time he was treasurer of the Company. Mr.
Grigelevich's employment with the Company was terminated on May 31, 1995.
A-10
<PAGE>
The following tables provide information concerning grants during 1995 to,
and exercises of stock options and stock appreciation rights ("SARs") during
1995 by, the executive officers named in the Summary Compensation Table above
and the value of unexercised stock options and SARs held by them at December
31, 1995.
OPTION/SAR GRANTS IN LASTS FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING PERCENT OF TOTAL EXERCISE GRANT DATE
OPTIONS OPTIONS GRANTED PRICE EXPIRATION PRESENT
NAME GRANTED(#) TO ALL EMPLOYEES ($/SHARE) DATE VALUE($)(1)
---- ---------- ---------------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Richard C. Maloof....... 50,000(2) 100% 8.125 Apr. 3, 2005 $272,000
</TABLE>
- --------
(1) This value was calculated using the Black-Scholes option pricing model and
the following assumptions, which were representative of conditions existing
when the options were granted: stock price volatility of 42.02%; risk free
rate of return of 7.32%; dividend yield of 0%; and time of exercise, ten
years. The actual value, if any, to be realized will depend on the excess of
the market price of the Company's Common Stock over the exercise price on
the date the option is exercised; there is no assurance that the value
realized will be at or near the value estimated by the Black-Scholes model.
(2) These options, which (when granted) were exercisable in five equal annual
installments commencing one year after the date of grant, will become
exercisable in full upon the consummation of the earlier of the Offer or the
Merger. The Company and Mr. Maloof have amended these options so that they
will be canceled upon the Effective Date without payment of any
consideration.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT YEAR- IN-THE-MONEY OPTIONS/SARS
END(#) AT YEAR-END($)
-------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED EXERCISABLE EXERCISABLE
NAME EXERCISE(#) ($)(1) (2) UNEXERCISABLE (2) UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph D. Vechiolla..... 0 0 150,000 0 0 N/A
Richard C. Maloof....... 0 0 67,500 50,000 0 0
William C. Kinsey....... 2,000 6,500 0(3) 0 0 N/A
Frank S. Anthony........ 0 0 31,000 0 0 0
Joseph M. Grigelevich,
Jr. ................... 0 0 0(3) 0 0 N/A
</TABLE>
- --------
(1) Based on the difference between the fair market value of the securities
underlying the options at date of exercise and the exercise price of the
options.
(2) Upon consummation of the Vinyl Sale on March 8, 1995, the vesting schedule
of all unvested options as of such date was accelerated and the holders
thereof became entitled to exercise such options in full or, in certain
cases in lieu of such exercise, cash out some or all of such options.
(3) Mr. Kinsey's and Mr. Grigelevich's employment with the Company terminated
as of March 8, 1995 and May 31, 1995, respectively. All options were
forfeited 90 days after termination of employment with the Company.
A-11
<PAGE>
STOCK OPTION PLANS
Employee Stock Option Plans. The Company's executive officers currently
participate in the 1992 Option Plan. Prior to the approval of the 1992 Option
Plan by the Company's stockholders on May 27, 1993 the Company's executive
officers participated in the Company's 1982 Option Plan, which was terminated
by the Board on May 27, 1993. To the extent options or stock appreciation
rights granted under the 1982 Option Plan remain outstanding, such options and
stock appreciation rights are governed by the terms of the 1982 Option Plan.
The following is a general description of the 1992 Option Plan and the 1982
Option Plan (together, the "Plans").
The Plans permit the grant of options that qualify as incentive stock
options under Section 422 of the Code, non-qualified stock options and stock
appreciation rights. Options and rights to purchase up to 450,000 Common
Shares, plus any unused Common Shares under the 1982 Option Plan, may be
granted under the 1992 Option Plan. The 1982 Option Plan had permitted the
issuance of 900,000 Common Shares, as adjusted, pursuant to options and rights
granted under such plan. Any Common Shares subject to an option or right
granted under the 1992 Option Plan which expires or is terminated without
being exercised in full may again be subject to an option or right.
The 1992 Option Plan is administered by a committee of non-employee members
of the Board (the "Committee"). Members of the Committee are required to be
"disinterested persons" within the meaning of Rule 16b-3 of the Exchange Act.
Within specified guidelines, the Committee has the authority under the 1992
Option Plan to determine the terms and conditions under which options and
rights may be granted and generally to interpret, construe and implement the
provisions of the 1992 Option Plan.
Options or rights under the 1992 Option Plan may be granted to officers and
other selected key employees of the Company and its subsidiaries and to any
other person who is determined by the Committee to contribute to the success
of the Company or any subsidiary.
The exercise price of any option granted under the Plans may not be less
than the fair market value of the Common Shares subject to the option on the
date the option is granted (or, in the case of an incentive stock option
granted to an employee who owns more than 10% of the outstanding Common
Shares, 110% of such fair market value). The maximum term of an option granted
under the 1992 Option Plan is 15 years, and the maximum term of an option
granted under the 1982 Option Plan is 10 years. Each optionee (except non-
employee director optionees under the 1982 Option Plan) must remain in the
continuous employ of the Company for one year after the date of grant of an
option under the Plans before exercising any part of the option.
The Merger Agreement provides that immediately following the Effective Date,
the 1992 Option Plan will be terminated and that no further rights or options
may be granted under the 1992 Option Plan subsequent to the date of the Merger
Agreement.
Non-Employee Directors Option Plan. The Non-Employee Directors Option Plan
was approved by the Company's stockholders on May 27, 1993. The following is a
general description of the Non-Employee Directors Option Plan.
Options granted under the Non-Employee Directors Option Plan are non-
statutory options not intended to qualify under Section 422 of the Code. An
aggregate of 100,000 Common Shares are available for grants under the Non-
Employee Directors Option Plan. Common Shares subject to options which
terminate unexercised will be available for future option grants.
The Non-Employee Directors Option Plan automatically provides annual grants
of options to each director who is serving on the Board at the time of such
grant and who is not also an employee of the Company or any subsidiary. The
exercise price of options granted under the Non-Employee Directors Option Plan
are equal to the fair market value of Common Shares subject thereto on the
date of grant. Options are exercisable in full one year after the date of
grant.
The Merger Agreement provides that immediately following the Effective Date,
the Non-Employee Directors Option Plan will be terminated and that no further
options may be granted thereunder subsequent to the date of the Merger
Agreement.
A-12
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Employment Contracts
Joseph D. Vecchiolla had been employed by the Company pursuant to a one-year
employment agreement dated December 21, 1993 which automatically renewed for
successive one-year terms as of December 1 each year unless either the Company
or Mr. Vecchiolla gave the other party at least six months' prior notice that
the agreement will not be so extended. Under the agreement, Mr. Vecchiolla was
initially employed to serve as President and Chief Operating Officer of the
Company. Effective January 25, 1994 his duties were expanded to include those
of Chief Executive Officer. His compensation under the agreement included a
base salary of not less than $200,000 per year, plus participation in the
Company's management incentive compensation plan (the "MICP") and other
employee benefit plans and programs generally available to its executive
officers. Mr. Vecchiolla was also granted a stock option under the employment
agreement and was entitled to certain relocation expenses incurred in
connection with his employment by the Company.
On April 4, 1995 Guy W. Fiske resigned as Chairman of the Board, and Mr.
Vecchiolla resigned as President and was elected Chairman of the Board. Mr.
Vecchiolla resigned as Chief Executive Officer and terminated his employment
with the Company in early May 1995, but continues to serve as an outside
director and as Chairman of the Board. Richard C. Maloof was elected President
and Chief Operating Officer of the Company on April 4, 1995. Subsequent to his
resignation as Chief Executive Officer Mr. Vecchiolla entered into a
consulting arrangement with the Company providing for an annual compensation
of $100,000, which included any fees payable to him for serving as a director.
Mr. Vecchiola's compensation was reduced to $60,000 per year on January 1,
1996.
Mr. Anthony entered into a one-year employment contract with the Company,
commencing April 1, 1995, at the same annual rate of compensation ($135,000
plus a bonus of 35% of such amount if MICP targets are obtained) and with the
same fringe benefit package (participation in the Company's Savings Plan and
customary health insurance and life insurance benefits) as he received prior
to the Vinyl Sale. As a result of the "change in control" which was deemed to
have occurred as a result of the Vinyl Sale, Mr. Anthony became entitled to
severance benefits. Pursuant to the terms of his employment contract, Mr.
Anthony received $150,000 as a partial severance payment and agreed to defer
the payment of the balance thereof until the expiration of his employment
contract. Pursuant to the terms of his contract, the balance of Mr. Anthony's
severance payment, approximately $315,000, became payable on March 31, 1996.
As of April 9, 1996, the Company had paid Mr. Anthony $267,000 and expects to
pay the balance of his severance payment by the end of June 1996.
On April 1, 1996 Mr. Anthony's employment contract automatically converted
to an oral employment agreement on the same terms, terminable by either party
upon 60 days notice.
Upon consummation of the Vinyl Sale, William C. Kinsey, a former vice
president of the Company and former president of Bird Vinyl Products, was
terminated by the Company due to a change in control. Mr. Kinsey received a
severance benefit payment of approximately $412,000. Similarly, the employment
of Joseph M. Grigelevich, Jr., a former vice president and treasurer of the
Company, was terminated on May 31, 1995 as a result of such change in control.
Mr. Grigelevich received a severance payment of approximately $213,048.
Termination of Employment and Change in Control Arrangements
The Company's 1982 Option Plan, 1992 Option Plan and Non-Employee Director
Option Plan provide for accelerated benefits, and the Executive Severance
Contract (defined below) provides for severance payments, following the
occurrence of a "change in control" of the Company. For purposes of these
plans and such contract, a "change in control" is deemed to have occurred if,
among other things, any person is or becomes the beneficial owner of
securities of the Company representing 30% or more of the combined voting
power of the securities of the Company then outstanding or in the event of a
merger or consolidation of the Company with
A-13
<PAGE>
another corporation resulting in either (i) the shareholders of the Company,
immediately prior to the merger or consolidation, not beneficially owning,
immediately after the merger or consolidation, shares of the surviving entity
representing 50% or more of the combined voting power of the securities of the
surviving entity then outstanding or (ii) the members of the Board,
immediately prior to the merger or consolidation, not constituting,
immediately after the merger or consolidation, a majority of the Board of
Directors of the surviving entity.
Executive Severance Contract. The Company has entered into a severance
agreement with Richard C. Maloof, the Company's President and Chief Operating
Officer, dated as of October 14, 1984, as amended, April 1, 1986, May 24, 1990
and August 21, 1995 (as so amended, the "Executive Severance Contract") the
terms of which provide for severance benefits to be paid to Mr. Maloof in the
event that his employment with the Company is terminated subsequent to a
"change in control" of the Company. Severance benefits are payable if, after a
"change in control," (i) the employment of Mr. Maloof is terminated either by
the Company (other than for "Disability" or "Cause") or by Mr. Maloof for
"Good Reason" (which term includes, but is not limited to a substantial
alteration in the nature of Mr. Maloof's responsibilities from those in effect
immediately prior to a "change in control") or (ii) Mr. Maloof negotiates in
good faith an employment agreement with a person to whom substantially all of
the Company's Common Shares are sold providing for his employment commencing
on the date of sale on such terms and conditions not less generous than those
on which he is then employed by the Company (regardless of whether or not any
such employment agreement is ever executed).
If the Offer and/or the Merger is consummated, and either (i) the employment
of Mr. Maloof is terminated (either by the Company (other than for "Disability
or Cause") or by Mr. Maloof), or (ii) Mr. Maloof honors the obligation of
negotiating in good faith (regardless of whether or not his employment is
actually terminated), Mr. Maloof would be entitled to severance benefits under
the Executive Severance Contract.
If the right to receive severance benefits is triggered under the Executive
Severance Contract, Mr. Maloof will be entitled to receive severance pay in
the amount of two times the sum of (i) Mr. Maloof's current annual base salary
and (ii) the amount of any bonus paid (which for severance purposes, includes
any distributions made under the terms of the LTIP and any discretionary
bonuses awarded to Mr. Maloof by the Compensation Committee of the Board based
solely on Mr. Maloof's performance against management objectives, and the
amount paid to Mr. Maloof pursuant to the MICP) to Mr. Maloof and the amount
paid to Mr. Maloof pursuant to the LTIP in the year preceding termination. In
addition, Mr. Maloof would also receive a lump sum benefit equal to any
incentive compensation or other award allocated, but not paid, to Mr. Maloof
for any prior year and a pro rata portion of all contingent bonus awards to
which Mr. Maloof might be entitled in the year of termination.
The Company estimates that if the right to receive severance benefits under
the Executive Severance Contract is triggered, Mr. Maloof would be entitled to
receive approximately $750,000.
Stock Option Plans and Non-Employee Directors Option Plan. Under the Plans,
the vesting of all options to purchase Common Shares outstanding but not yet
exercisable will be accelerated upon a "change in control." Each optionee will
have, for a period of thirty (30) days after the change in control occurs, the
right (the "Cash-Out Right"), with respect to all or a part of the shares
subject to the options or stock appreciation rights of such person, to receive
an amount in cash in lieu of such optionee's right to exercise all options in
full, equal to the product of (i) the number of shares as to which the
employee exercises the Cash-Out Right and (ii) the amount by which the
purchase price of each such share under the applicable option or stock
appreciation right is exceeded by the greater of (x) the fair market value of
such shares on the date the employee exercises the Cash-Out Right or (y) the
highest purchase price paid or offered per share in any bona fide transaction
related to the "change in control" of the Company at any time during the
preceding 60-day period (as determined by the Compensation Committee of the
Board). In addition, if the employment of any employee terminates after the
expiration of the applicable waiting period for the exercise of an option or
right granted to such employee under the Plans, such employee may for up to
three months after the date of termination (or for up to one year if
A-14
<PAGE>
termination is on account of long-term disability), exercise such option or
right. The Plans provide for a similar one-year period to exercise options or
rights subsequent to the death of an employee occurring while in the employ of
the Company or of any subsidiary or within any period after termination of
employment during which such employee has the right to exercise such options
or rights.
The vesting schedules of options held by Mr. Maloof to purchase 50,000
shares of Common Stock in the aggregate would be accelerated if the Offer
and/or the Merger is consummated. Such options have an exercise price of
$8.125 per share.
Under the Non-Employee Directors Option Plan, any non-employee director
whose service on the Board is terminated by reason of disability, death or a
"change in control" will have the right to exercise all outstanding options
during the one-year period following such termination. In the event that
service on the Board is terminated for any reason other than disability, death
or a "change in control," such non-employee director will have the right to
exercise all outstanding options for a period of 90 days from the date of such
termination.
The vesting schedule of options to purchase 2,500 shares of Common Stock,
which were granted on May 25, 1995 to each non-employee director, would be
accelerated for each such non-employee director, if the Offer and/or Merger is
consummated. Such options have an exercise price of $6.625 per share.
The Company and each holder of outstanding options issued under the Plans
and the Non-Employee Directors Option Plan have amended such options so that
(i) unexpired options outstanding on the Effective Date, whether or not
exercisable at the Effective Date, including stock appreciation rights
relating thereto, with an exercise price less than $7.50 will by virtue of the
Merger be converted into the right to receive a cash payment without interest
equal to $7.50 for each Common Share subject thereto, less the per share
exercise price of each such option, and will be canceled upon the Effective
Date, and (ii) options outstanding on the Effective Date with an exercise
price equal to or greater than $7.50 will be canceled upon the Effective Date
without payment of any consideration.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Robert P. Bass, Jr.
(Chairman), Charles S. Bird III, Francis J. Dunleavy and John T. Dunlop. None
of these individuals, other than Mr. Bird, is or was formerly an officer or
employee of the Company, and no "compensation committee interlocks" existed
during 1995. Mr. Bird has not been an officer or employee of the Company since
1966.
DIRECTORS' COMPENSATION
Mr. Fiske received compensation through April 1, 1995 at the rate of
$100,000 per year for serving as Chairman of the Board and of the Executive
Committee. From April 1, 1995 through year-end, Mr. Vecchiolla received
compensation at the rate of $100,000 per year. As stated earlier, his
compensation was reduced to an annual rate of $60,000. During 1995 other non-
employee members of the Board received an annual retainer of $14,000, a fee of
$750 for each Board meeting attended ($375 for a telephonic Board meeting) and
a fee of $750 for each committee meeting attended ($375 for a telephonic
meeting). The chairman of each of the Audit and Compensation Committees
received an annual retainer of $2,000. Expenses incurred in attending meetings
are reimbursed. As of January 1, 1996 the annual retainer for all non-employee
Board members was reduced to $7,000 and the annual retainer for the chairman
of each of the Audit and Compensation Committees was reduced to $1,000.
A-15
<PAGE>
Pursuant to the Non-Employee Directors Option Plan non-employee directors
are also entitled to receive each year a non-qualified stock option to acquire
2,500 shares of the Company's Common Stock (provided that the maximum number
of shares subject to options granted to any director may not exceed 30,000
shares). Such options are granted on the date of the annual meeting each year
and become exercisable in full one year later. During 1995 each non-employee
director was granted such an option at an exercise price of $6.625 per share.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for compensation decisions with
respect to senior management of the Company, as well as for organizational
development and succession planning within the Company.
The Compensation Committee's compensation philosophy and policies applicable
to executive officers emphasize pay for performance and increased stockholder
value within a framework of compensation levels comparable to companies of
similar size. Base salary, annual MICP awards, and long-term incentive awards
are structured to provide total compensation levels for executive officers
that are intended to be below competitive compensation amounts when operating
results are at or below acceptable levels and above average levels when
results are outstanding or other targets or personal goals are achieved. The
Compensation Committee has used outside consulting assistance for plan design
and consultant and independent survey data in setting compensation levels and
has relied, in the case of officers other than the Chief Executive Officer, on
recommendations of the Chief Executive Officer which are reviewed and modified
where appropriate by the Committee.
Long-term awards have primarily in recent years taken the form of stock
option grants, which are designed to align the interests of executives with
those of the stockholders and reward executives when shareholder value
increases. Stock options are granted at an exercise price equal to the market
price of the Company's Common Stock on the date of grant. Prior to 1992,
options were usually granted with a ten-year term, exercisable in five equal
annual installments beginning one year after the date of grant. However,
options awarded in 1992 and one option granted in 1993 were granted with a 15-
year term, exercisable prior to the last six months of the term only if the
price of the Company's Common Stock achieved a substantial increase above the
price on the date of grant. In the case of 1992 and 1993 grants, a minimum
price increase in Company Common Stock from $12 per share to $18 per share was
required in order for any part of the option to become exercisable prior to
the last six months of the term of the option. This approach was designed as
an incentive for future performance by the creation of shareholder value over
the long term, since the benefit of the stock options could not be realized
unless and until significant price appreciation in the Company's Common Stock
occurred. Options granted in 1994 were in the form used prior to 1992. All
options outstanding at the time of the Vinyl Sale automatically vested upon
consummation of the sale, which was deemed a "change in control" of the
Company under the terms of the option plans. No stock options were granted in
1995, other than to the non-employee Directors and to Mr. Maloof.
Salaries for the Chief Executive Officer and other executive officers are
based in part upon a range of salaries for each office developed from a survey
of compensation practices at competitive companies. Mr. Vecchiolla served as
Chief Executive Officer from January 25, 1994 until his resignation in early
May of 1995. Mr. Vecchiolla's base salary during 1995 was the same as his 1994
base salary of $240,000 annually. Subsequent to Mr. Vecchiolla's resignation
the position of Chief Executive Officer has remained vacant.
During 1995 merit increases in base salary were made only for Mr. Maloof.
The merit increase in Mr. Maloof's salary, from $185,000 to $200,000 annually,
was based primarily on increased scope of responsibility as a result of Mr.
Maloof's appointment as President.
In 1995 Mr. Maloof was the only executive officer granted stock options. He
received 50,000 stock options on April 4, 1995, which were granted in
connection with his appointment as President.
A-16
<PAGE>
One of the principal elements of variable compensation for senior executive
officers is found in the annual MICP awards. In 1994, the possible pay-out for
1995 was set at 60% of base salary in the case of the Chief Executive Officer,
35% of base salary in the case of the Chief Financial Officer, between 20% and
35% of base salary in the case of other members of the Corporate staff, and
45% of base salary in the case of Presidents of operating divisions. In 1994
the MICP targets were modified to promote cash flow as well as profitability
in order to reflect the Company's financial condition and were maintained at
such 1994 levels in 1995. 1995 awards to the Chief Executive Officer and
corporate staff and officers were based upon individual specific objectives,
both financial and non-financial, and satisfactory improvements in cash flow
and profitability through the management of current assets and the disposition
of non-core assets. At the operating level, management incentives were tied to
achievement of goals with respect to increased cash flow and profitability on
an equal 50/50 basis. For corporate personnel, including the Chief Executive
Officer, goals with respect to cash flow and profits were weighted at 40% each
with specific objectives making up the balance of the target.
During 1994 the Committee approved an additional bonus arrangement for Mr.
Vecchiolla to provide him with an incentive to maximize the value of the
Company's Common Stock. This arrangement provided compensation to Mr.
Vecchiolla equal to one-tenth of one percent of the gross sales price realized
on the sale of the Company's assets after the approval of the bonus. However,
in recognition of the fact that the sale of a substantial part of the
Company's assets would be treated as a change in control of the Company which
would trigger certain severance payments to Mr. Vecchiolla, the Committee
provided that this bonus would be considered as an advance against such
severance payments and that the amount of the severance payments otherwise
payable to him would be reduced by the amount of the bonus paid. In 1995 Mr.
Vecchiolla received $47,300 pursuant to this bonus arrangement. This amount
was subsequently deducted from a severance payment received by him in
connection with the Vinyl Sale.
The Committee believes that the combination of salary increases and bonus
rewards was appropriate based upon the substantial progress made by management
in 1995 in turning around the Company's performance, stabilizing its financial
condition, disposing of its non-core assets and managing its contingent
liabilities.
Based on current compensation levels and the present structure of the
Company's executive compensation programs, the Committee believes that the
compensation payable to executives will not be subject to the limitation on
deductibility imposed by the Omnibus Budget Reconciliation Act of 1993. If
such limitation should become applicable in the future, the Committee and the
Company will determine whether any changes in the Company's compensation
programs are advisable.
Stock Option, Compensation, and
Organizational Development
Committee:
Robert P. Bass, Jr., Chairman
Charles S. Bird, III Francis J.
Dunleavy John T. Dunlop
A-17
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common Stock
of the Company for the last five fiscal years with the cumulative total
returns of the Russell 2000 index and the Value Line Building Materials
Industry Index, assuming an investment of $100 in the Company's Common Stock
and each index at the close of trading on December 31, 1990 and the
reinvestment of all dividends. The total shareholder return data for the
Russell 2000 Index and the Value Line Building Materials Index is provided by
Value Line Institutional Services.
BIRD CORPORATION
CUMULATIVE TOTAL SHAREHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1995
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG BIRD CORPORATION, RUSSELL 2000 INDEX AND VL BULIDING MATERIAL INDEX
<CAPTION>
VL BUILDING
Measurement period BIRD RUSSELL 2000 MATERIAL
(Fiscal year Covered) CORPORATION Index Index
- --------------------- --------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
December 31...
1990 $ 100.00 $ 100.00 $ 100.00
FYE 1991 $ 108.36 $ 146.05 $ 131.25
FYE 1992 $ 84.28 $ 172.94 $ 168.41
FYE 1993 $ 62.34 $ 205.64 $ 233.98
FYE 1994 $ 63.74 $ 201.56 $ 178.10
FYE 1995 $ 34.43 $ 258.89 $ 245.71
</TABLE>
A-18
<PAGE>
EXHIBIT 99(a)(4)
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
212-906-7000
April 5, 1996
Board of Directors
Bird Corporation
1077 Pleasant Street
Norwood, MA 02062
Dear Sirs:
You have requested our opinion as to the fairness, from
a financial point of view, of the per share consideration to be
received by the holders (the "Shareholders") of common stock,
each with par value $1.00 per share ("Common Stock") of Bird
Corporation ("Bird") in connection with the proposed tender offer
for the Common Stock and subsequent acquisition of Bird (the
"Transaction") by BI Expansion Corp. ("BE"), a wholly owned
subsidiary of CertainTeed Corporation ("CertainTeed").
The terms of the tender offer and acquisition are to be
set forth in an Amended and Restated Agreement and Plan of Merger
by and among Bird, CertainTeed and BE (the "Agreement").
Subject to the terms and conditions in the Agreement, in the
tender offer, each issued and outstanding share of Common Stock
validly tendered and not withdrawn will be purchased by BE for
cash consideration, without interest, of $7.50 net to the seller,
and in the event the acquisition is consummated, each issued and
outstanding share of Common Stock shall be converted into the
right to receive cash, without interest, in the amount of $7.50
net to the seller.
Dillon, Read & Co. Inc. ("Dillon Read") has acted as
financial advisor to Bird in connection with the Transaction. At
the request of Bird, we acted as agent in soliciting offers for
the purchase of Bird. Dillon Read has previously performed
investment banking services for Bird, for which we received
compensation customary for such services. For services we per-
formed in connection with the Transaction (including the ren-
dering of this opinion), Dillon Read will receive a fee upon
closing of the Transaction.
In arriving at our opinion, we have reviewed a draft of
the Agreement and certain business and financial information
relating to Bird and its subsidiaries, including audited con-
solidated financial statements, unaudited business segment
<PAGE>
financial information, certain financial projections, estimates
and analyses provided to us by Bird management, and have reviewed
and discussed the businesses and prospects of Bird and its
subsidiaries with representatives of Bird management and have
compared that information to similar data for other publicly-held
companies in lines of business generally comparable to that of
Bird. We have also considered the trading history of the Common
Stock.
In arriving at our opinion, we have also considered the
financial terms of certain other mergers and acquisitions which
we believe to be generally comparable to the Transaction and have
considered such other information, financial studies and
analyses, and financial, economic and market criteria as we
deemed relevant.
In connection with our review, we have not indepen-
dently verified any of the foregoing information and have, at
your direction, relied on its being complete and accurate in all
material respects. We have not made an independent evaluation or
appraisal of any assets of liabilities (contingent or otherwise)
of Bird or any of its subsidiaries. With respect to the
financial projections, estimates and analyses provided to us by
Bird, we have assumed, at your direction, that such information
was reasonably prepared on bases reflecting the best currently
available estimates and judgments of management of Bird as to its
future financial performance. Our opinion is based on economic,
monetary and market conditions existing on the date hereof and
the information made available to us through the date hereof.
In rendering this opinion, we are not making any rec-
ommendation regarding whether or not it is advisable for Share-
holders to vote in favor of the Transaction.
Based upon and subject to the foregoing, we are of the
opinion, as of the date hereof, that the consideration to be
received by the Shareholders pursuant to the Transaction is fair,
from a financial point of view, to the Shareholders.
Very truly yours,
Dillon, Read & Co. Inc.
<PAGE>
Exhibit 99(A)(5)
PRESS RELEASE
Bird Corporation CertainTeed Corporation
1077 Pleasant Street 750 East Swedesford Road
Norwood, MA 02062-6714 Valley Forge, PA 19482
Contact: Joseph Vecchiolla, Contact: Dorothy C. Wackerman,
Chairman Vice President
Phone: (203) 622-4880 Phone: (610) 341-7428
BIRD CORPORATION AND CERTAINTEED CORPORATION,
A SUBSIDIARY OF SAINT-GOBAIN CORPORATION, AGREE
TO ACCELERATE PLANNED MERGER BY CONVERTING TO
TENDER OFFER AT SAME PRICE
Norwood, Mass.--April 8, 1996--In an effort to accelerate consummation of their
previously announced agreement, Bird Corporation (NASDAQ:BIRD) and CertainTeed
Corporation, a subsidiary of Saint-Gobain Corporation, today jointly announced
an amendment to their previous merger agreement into a two-step transaction on
substantially the same terms. The first step will be an all cash tender offer to
purchase all outstanding shares of Bird's common stock for $7.50 per share and
Bird's $1.85 cumulative convertible preference stock for $20 per share plus all
accrued and unpaid dividends to the expiration of the offer. In anticipation of
the cash tender offer, Bird will not declare or pay any dividend on the
preference stock on May 15, 1996, the next scheduled dividend payment date. As
of April 1, 1996, there were approximately 4.1 million shares of Bird common
stock outstanding and approximately 814,000 shares of Bird preference stock
outstanding.
The cash tender will commence by Friday, April 12, 1996 and will be scheduled
to expire 20 business days later. Although the offer is subject to certain
regulatory approvals and other customary conditions, it is expected to be
completed in the middle of May 1996. The transaction is not subject to
financing. Bird's Board of Directors has received a fairness opinion from its
investment bankers regarding the acquisition by CertainTeed.
The second step of the transaction will be a merger of a subsidiary of
CertainTeed into Bird. As a result, CertainTeed will acquire all shares of
common stock not purchased in the offer for $7.50 per share. In addition,
CertainTeed will acquire or redeem at their liquidation preference all
outstanding shares of 5% cumulative preferred stock for $110.00 per share and
all outstanding $1.85 cumulative convertible preference stock not purchased in
the Offer for $20.00 per share. Payment for preferred and preference stock
will include any previously accrued but unpaid dividends. Assuming
consummation of the offer, the merger is anticipated to be completed at the end
of the second quarter following distribution of proxy materials to Bird's
shareholders and approval at a special meeting. As previously announced, the
total consideration for the transaction is expected to exceed $50 million,
including common and preferred equity plus debt.
Bird Corporation, founded in 1795, is primarily a manufacturer of asphalt
shingles and roll-roofing goods with annual sales of more than $50 million.
CertainTeed Corporation, headquartered in Valley Forge, Pennsylvania, is a
leading producer of fiber glass products (insulation and reinforcements) and
building materials (roofing, ventilation products, vinyl siding, vinyl windows
and piping products).
<PAGE>
Exhibit 99(A)(6)
Bird Corporation [LOGO] PRESS RELEASE
Bird Corporation
1077 Pleasant Street
Norwood, MA 02062-6714
Contact: Joseph Vecchiolla,
Chairman
Phone (203) 622-4880
Bird Corporation Agrees to Merge
with CertainTeed Corporation
a Subsidiary of Saint-Gobain Corporation
Norwood, Mass.--March 15, 1996--The Board of Directors of Bird Corporation
(NASDAQ:BIRD) today announced the signing of a definitive agreement with
CertainTeed Corporation, a subsidiary of Saint-Gobain Corporation, providing
for CertainTeed to acquire in a merger transaction all of Bird's outstanding
common, preferred and preference shares.
CertainTeed will pay $7.50 per share for the common stock. As of March 1,
1996 there were approximately 4.1 million shares of Bird common stock
outstanding.
The Bird/CertainTeed merger provides for the acquisition or redemption at their
liquidation preference of all outstanding 5% cumulative preferred stock for
$110.00 per share and all outstanding $1.85 cumulative convertible preference
stock for $20.00 per share. Payment for preferred and preference stock will
include any previously accrued but unpaid dividends. The total consideration
for the transaction exceeds $50 million, including common and preferred equity
plus debt.
Completion of the transaction is subject to approval by Bird's shareholders,
appropriate governmental approvals and other customary conditions. The
transaction is not subject to a financing contingency. Bird's Board of Directors
has received a fairness opinion from its investment bankers regarding the
merger. Closing of the Bird/CertainTeed merger is anticipated at the end of the
second quarter following distribution of proxy materials to Bird's shareholders
and approval at a special meeting.
Commenting on today's announcement, Joseph D. Vecchiolla, Bird's Chairman stated
that, "Bird has enjoyed a rich and innovative history since its founding over
200 years ago. However, during the past year it became apparent that greater
progress could be made if Bird became part of a larger, financially strong
orqanization with similar goals and philosophies. The agreement reached with
CertainTeed is the culmination of several months of negotiations with a number
of candidates and meets our criteria. There is an excellent fit between our
organizations, as we are both producers of high quality asphalt roofing
shingles. Integrating Bird's resources with CertainTeed will strengthen our
core manufacturing operations".
Bird Corporation, founded in 1795, is primarily a manufacturer of asphalt
shingles and roll-roofing goods with annual sales of more than $50 million.
<PAGE>
Exhibit 99(A)(7)
[LOGO]
BIRD
CORPORATION
April 12, 1996
Dear Stockholder:
I am pleased to report that on April 8, 1996, Bird Corporation (the
"Company") entered into an amended and restated merger agreement (the "Merger
Agreement") with CertainTeed Corporation ("CertainTeed") and its wholly owned
subsidiary, BI Expansion Corp. (the "Purchaser"), that provides for the
acquisition of the Company by CertainTeed through the acquisition by the
Purchaser of all the outstanding shares of the common stock, $1 par value per
share, of the Company (the "Common Shares") and all the outstanding shares of
the $1.85 Cumulative Convertible Preference Stock, $1 par value per share, of
the Company (the "Preference Shares", and together with the Common Shares, the
"Shares"). Pursuant to the Merger Agreement, the Purchaser has today commenced
a cash tender offer (the "Offer") for all outstanding Common Shares and
Preference Shares at a price of $7.50 per Common Share and $20 plus all accrued
and unpaid dividends through the expiration date of the Offer per Preference
Share. The tender offer is currently scheduled to expire at 12:00 midnight, New
York City time, on Thursday, May 9, 1996.
Following the successful completion of the Offer, upon approval by
stockholder vote, the Purchaser will be merged (the "Merger") with and into the
Company, and all Shares not purchased in the Offer will be converted into the
right to receive in cash $7.50 per Common Share and (unless the Preference
Shares have previously been redeemed) $20 plus all accrued and unpaid dividends
through the effective date of the Merger per Preference Share.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS. ACCORDINGLY, THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES.
In arriving at its recommendations, the Board of Directors gave consideration
to a number of factors. These factors included the opinion of Dillon, Read &
Co. Inc., financial advisor to the Company, that the consideration of $7.50 per
share in cash to be received by the holders of Common Shares pursuant to the
Offer and the Merger is fair to such holders from a financial point of view.
All of the factors considered by the Board of Directors are more fully
described in the Solicitation/Recommendation Statement on Schedule 14D-9 filed
by the Company with the Securities and Exchange Commission and enclosed with
this letter. We urge you to read carefully the Schedule 14D-9 in its entirety
so that you will be fully informed as to the Board's recommendations.
Also accompanying this letter is a copy of CertainTeed's and the Purchaser's
Offer to Purchase and related materials, including a Letter of Transmittal for
use in tendering Shares. These documents set forth the terms and conditions of
the Offer and provide instructions as to how to tender your Shares. We urge you
to read each of the enclosed materials carefully.
The Board of Directors and management of the Company thank you for the
support you have given the Company.
On behalf of the Board of Directors,
Sincerely,
/s/ Joseph D. Vecchiolla
Joseph D. Vecchiolla
Chairman of the Board of Directors
<PAGE>
Exhibit 99(c)(1)
EXECUTION COPY
===============================================================================
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
by and among
CERTAINTEED CORPORATION,
BI EXPANSION CORP.
and
BIRD CORPORATION
Dated as of April 8, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
The Offer and the Merger
------------------------
SECTION 1.01. The Offer............................................. 1
SECTION 1.02. Company Actions....................................... 3
SECTION 1.03. Surviving Corporation................................. 5
SECTION 1.04. Articles of Organization.............................. 5
SECTION 1.05. By-Laws............................................... 5
SECTION 1.06. Directors............................................. 5
SECTION 1.07. Officers.............................................. 5
SECTION 1.08. Effective Date........................................ 5
SECTION 1.09. Additional Actions.................................... 6
SECTION 1.10. Company Common Stock, Preferred Stock and Preference
Stock............................................... 6
SECTION 1.11. Conversion of Acquisition Sub Common Stock............ 7
SECTION 1.12. Dissenting Shares..................................... 7
SECTION 1.13. Surrender of Shares................................... 8
SECTION 1.14. Certain Benefit Plans................................. 9
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
SECTION 2.01. Corporate Organization................................ 10
SECTION 2.02. Capitalization of the Company......................... 11
SECTION 2.03. Subsidiaries.......................................... 12
SECTION 2.04. Authorization......................................... 12
SECTION 2.05. Absence of Conflicts; Consents........................ 13
SECTION 2.06. Compliance with Laws.................................. 14
SECTION 2.07. Financial Statements.................................. 15
SECTION 2.08. Absence of Material Changes........................... 16
SECTION 2.09. Litigation............................................ 16
SECTION 2.10. Patents and Trademarks................................ 16
SECTION 2.11. Material Contracts; Permits........................... 17
SECTION 2.12. Title to Properties and Related Matters............... 19
SECTION 2.13. Taxes................................................. 20
SECTION 2.14. Labor Agreements...................................... 23
SECTION 2.15. Benefit Plans......................................... 23
SECTION 2.16. Labor Disputes; Unfair Labor Practices................ 27
<PAGE>
Contents, p. 2
Page
----
SECTION 2.17. Product Warranties.................................... 27
SECTION 2.18. Environmental Matters................................. 28
SECTION 2.19. Insurance............................................. 30
SECTION 2.20. SEC Filings........................................... 30
SECTION 2.21. Brokers and Finders................................... 31
SECTION 2.22. Rights Agreement; Antitakeover........................ 31
SECTION 2.23. Opinion of Financial Advisor.......................... 31
SECTION 2.24. Asbestos Claims....................................... 32
ARTICLE III
Representations and Warranties of Parent
----------------------------------------
SECTION 3.01. Corporate Organization................................ 32
SECTION 3.02. Authorization......................................... 32
SECTION 3.03. Absence of Conflicts; Consents........................ 32
SECTION 3.04. Litigation............................................ 33
SECTION 3.05. Brokers and Finders................................... 34
ARTICLE IV
Representations and Warranties of Acquisition Sub
-------------------------------------------------
SECTION 4.01. Corporate Organization................................ 34
SECTION 4.02. Authorization......................................... 34
SECTION 4.03. Absence of Conflicts; Consents........................ 35
SECTION 4.04. Litigation............................................ 36
SECTION 4.05. Capitalization........................................ 36
SECTION 4.06. Brokers and Finders................................... 36
<PAGE>
Contents, p. 3
Page
----
ARTICLE V
Covenants
---------
SECTION 5.01. Access and Information................................ 36
SECTION 5.02. Proxy Statement....................................... 37
SECTION 5.03. Stockholders' Meeting................................. 38
SECTION 5.04. Supplemental Information.............................. 38
SECTION 5.05. Further Assurances.................................... 38
SECTION 5.06. Conduct of Company Business Prior to the Effective
Date................................................ 38
SECTION 5.07. Consents.............................................. 41
SECTION 5.08. Filings............................................... 41
SECTION 5.09. Filing of Articles of Merger.......................... 42
SECTION 5.10. Interim Financial Statements.......................... 42
SECTION 5.11. Public Announcements.................................. 42
SECTION 5.12. No Solicitation....................................... 43
SECTION 5.13. Validity of Representations........................... 44
SECTION 5.14. Employees; Benefits................................... 45
SECTION 5.15. Indemnification and Insurance......................... 45
SECTION 5.16. Redemption of 5% Stock and Preference Stock........... 46
SECTION 5.17. Material Contracts.................................... 47
SECTION 5.18. Tax Matters........................................... 47
SECTION 5.19. Dividend Payments..................................... 47
SECTION 5.20. Satisfaction of Conditions............................ 47
SECTION 5.21. Directors............................................. 47
ARTICLE VI
Conditions to the Obligations of Parent
---------------------------------------
and Acquisition Sub
-------------------
SECTION 6.01. Representations and Warranties True................... 49
SECTION 6.02. Company's Performance................................. 49
SECTION 6.03. Authorization of Merger............................... 49
SECTION 6.04. Absence of Litigation................................. 49
SECTION 6.05. Directors............................................. 50
SECTION 6.06. Dissenting Shares..................................... 50
SECTION 6.07. Options............................................... 50
SECTION 6.08. Certificates.......................................... 50
<PAGE>
Contents, p. 4
Page
----
ARTICLE VII
Conditions to the Obligations of the Company
--------------------------------------------
SECTION 7.01. Representations and Warranties True................... 51
SECTION 7.02. Parent's and Acquisition Sub's Performance............ 51
SECTION 7.03. Authorization of Merger............................... 51
SECTION 7.04. Absence of Litigation................................. 51
SECTION 7.05. Certificates.......................................... 52
ARTICLE VIII
Closing
-------
SECTION 8.01. Time and Place........................................ 52
SECTION 8.02. Deliveries at the Closing............................. 52
ARTICLE IX
Termination and Abandonment of the Merger
-----------------------------------------
SECTION 9.01. Termination........................................... 53
SECTION 9.02. Effect of Termination................................. 54
SECTION 9.03. Procedure for Termination and Amendment............... 55
ARTICLE X
Miscellaneous
-------------
SECTION 10.01. Expenses; Alternate Transaction Fee................. 55
SECTION 10.02. Non-Survival of Representations and Warranties...... 57
SECTION 10.03. Headings............................................ 57
SECTION 10.04. Notices............................................. 58
SECTION 10.05. Assignment.......................................... 59
SECTION 10.06. Complete Agreement.................................. 59
SECTION 10.07. Amendments and Waivers.............................. 59
SECTION 10.08. Counterparts........................................ 60
SECTION 10.09. Governing Law....................................... 60
SECTION 10.10. Accounting Terms.................................... 60
<PAGE>
Contents, p. 5
Page
----
SECTION 10.11. Parties............................................. 60
Exhibits
- --------
EXHIBIT A Conditions to the Offer
EXHIBIT B Articles of Merger
<PAGE>
Contents, p. 5
Schedules
- ---------
SCHEDULE 2.01 Foreign Jurisdictions
SCHEDULE 2.02 Capitalization
SCHEDULE 2.03 Subsidiaries
SCHEDULE 2.05 Conflicts, Consents, Approvals and Authorizations
SCHEDULE 2.07 Company Financial Statements
SCHEDULE 2.08 Absence of Material Changes
SCHEDULE 2.09 Litigation
SCHEDULE 2.10 Patents and Trademarks
SCHEDULE 2.11 Material Contracts
SCHEDULE 2.12 Real Property
SCHEDULE 2.13 Taxes
SCHEDULE 2.14 Labor Agreements
SCHEDULE 2.15 Benefit Plans
SCHEDULE 2.17 Product Warranties
SCHEDULE 2.18 Environmental Matters
SCHEDULE 2.19 Insurance
SCHEDULE 2.20 SEC Filings
SCHEDULE 5.06 Conduct of Business
<PAGE>
INDEX OF DEFINITIONS
Definition Section
---------- -------
"Acquisition Sub" .......................... Introduction
"Acquisition Sub Common Stock".............. Section 1.11
"Alternate Transaction Fee"................. Section 10.01(b)
"Antitrust Division"........................ Section 2.05(e)
"Applicable Laws"........................... Section 2.05(d)
"Articles of Merger"........................ Section 1.08
"Balance Sheet"............................. Section 2.07(a)
"Balance Sheet Date"........................ Section 2.07(a)
"Benefit Plans"............................. Section 2.15(i)
"CERCLA".................................... Section 2.18
"Certificates".............................. Section 1.13(b)
"Closing"................................... Section 8.01
"Closing Date".............................. Section 8.01
"Code"...................................... Section 2.13
"Commonly Controlled Entity"................ Section 2.15(i)
"Company"................................... Introduction
"Common Stock Offer Price".................. Introduction
"Company Common Stock"...................... Section 1.10(a)(i)
"Company Estimates"......................... Section 2.18(g)
"Company Financial Statements".............. Section 2.07(a)
"Company Pension Plan"...................... Section 2.15(iii)
"Company Property".......................... Section 2.12(a)
"Company Willful Misrepresentation"......... Section 9.02(b)
"Confidentiality Agreement"................. Section 5.01(b)
"Consummation of the Offer"................. Section 5.02
"Continuing Directors"...................... Section 5.21
"Conversion Rights"......................... Section 2.02(c)
"Covered Taxes"............................. Section 2.13(c)
"Defined Benefit Plan"...................... Section 2.15(vi)
"Defined Benefit Pension Plan".............. Section 2.15(vi)
"Designated Director"....................... Section 5.21
"Director Option Plan"...................... Section 1.14(a)(i)
"Dissenting Consideration".................. Section 1.12
"Dissenting Shares"......................... Section 1.12
"D&O Insurance"............................. Section 5.15(a)
"Effective Date"............................ Section 1.08
"Effective Time"............................ Section 1.08
"Eligible Option"........................... Section 1.14(a)(i)
"Environmental Laws"........................ Section 2.18
<PAGE>
Definitions, p. 2
Definition Section
---------- -------
"ERISA".................................... Section 2.15(i)
"Exchange Act"............................. Section 1.01(b)
"Exchange Agent"........................... Section 1.13(a)
"Expenses"................................. Section 10.01(b)
"5% Stock"................................. Section 1.10(b)
"5% Stock Consideration"................... Section 1.10(b)
"French parcel"............................ Section 2.04(d)
"FTC"...................................... Section 2.05(e)
"GAAP"..................................... Section 2.07(a)
"Governmental Authority"................... Section 2.05(d)
"Hazardous Materials"...................... Section 2.18
"HSR Act".................................. Section 2.05(e)
"Inactive Subsidiary"...................... Section 2.03(a)
"Indemnified Parties"...................... Section 5.15(a)
"Ineligible Option"........................ Section 1.14(a)(ii)
"Information Statement".................... Section 2.20(b)
"Interim Financial Statements"............. Section 2.07(b)
"Judgment"................................. Section 2.05(d)
"Leased Real Property"..................... Section 2.12(a)
"Legal Action"............................. Section 2.09
"Lien"..................................... Section 2.05(b)
"LTIP"..................................... Section 1.14(b)
"Material Adverse Effect".................. Section 2.01
"Material Contracts"....................... Section 2.11
"Maximum Premium".......................... Section 5.15(a)
"MBCL"..................................... Section 1.03
"Merger"................................... Introduction
"Minimum Condition"........................ Exhibit A
"1982 Stock Option Plan"................... Section 1.12(a)(i)
"1992 Stock Option Plan"................... Section 1.12(a)(i)
"Notice of Qualified Takeover Proposal".... Section 5.12(b)
"Offer".................................... Introduction
"Offer Document"........................... Section 1.01(b)
"Options".................................. Section 1.14a)(i)
"Owned Real Property"...................... Section 2.12(a)
"Parent"................................... Introduction
"Parent Willful Misrepresentation"......... Section 9.02(c)
"Paying Agent"............................. Section 1.13
"PBGC"..................................... Section 2.15(i)
"Pension Plan"............................. Section 2.15(i)
"Permits".................................. Section 2.06
"Permitted Liens".......................... Section 2.12(b)
"Person"................................... Section 2.05(c)
<PAGE>
Definitions, p. 3
Definition Section
---------- -------
"Preference Stock"......................... Section 1.10(c)
"Preference Stock Consideration"........... Section 1.10(c)
"Preference Stock Offer Price"............. Introduction
"Proxy Statement".......................... Section 5.02(a)
"Qualified Takeover Proposal".............. Section 5.12(a)
"Release".................................. Section 2.18
"Rights"................................... Section 2.02(a)
"Rights Agent"............................. Section 2.02(a)
"Rights Agreement"......................... Section 2.02(a)
"Return"................................... Section 2.13(a)
"Savings Plan"............................. Section 1.14(c)
"Schedule 14D-9"........................... Section 1.02(b)
"SEC"...................................... Section 1.01(a)
"SEC Documents"............................ Section 2.20(a)
"Securities Act"........................... Section 2.20(a)
"Special Meeting".......................... Section 5.03(a)
"Subsidiary"............................... Section 2.01
"Surviving Corporation".................... Section 1.03
"Surviving Corporation Common Stock"....... Section 1.11
"Takeover Proposal"........................ Section 5.12(a)
"Tax"...................................... Section 2.13(a)
"Taxing Authority"......................... Section 2.13(a)
"Total Merger Consideration"............... Section 1.10(a)(i)
"Transmittal Letter"....................... Section 1.13(b)
<PAGE>
EXECUTION COPY
This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
dated as of April 8, 1996, is entered into by and among
CERTAINTEED CORPORATION, a Delaware corporation ("Parent"), BI
EXPANSION CORP., a Massachusetts corporation ("Acquisition
Sub"), and BIRD CORPORATION, a Massachusetts corporation (the
"Company"), and amends and restates in its entirety the
Agreement and Plan of Merger among Parent, Acquisition Sub and
the Company dated as of March 14, 1996 (the "Prior
Agreement").
WHEREAS the respective Boards of Directors of Parent, Acquisition
Sub and the Company approved the Prior Agreement and have approved the making
by Acquisition Sub of a tender offer from time to time (the "Offer") to
purchase all outstanding shares of Company Common Stock (as defined below) at a
price per share equal to the Total Merger Consideration (as defined below) (the
"Common Stock Offer Price") and all outstanding shares of Preference Stock (as
defined below) at a price per share equal to $20 plus all accrued and unpaid
dividends thereon as of the date of the expiration of the Offer (the
"Preference Stock Offer Price") along with the merger of Acquisition Sub with
and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth herein, as a result of which the Company will become a
wholly owned subsidiary of Parent and the stockholders of the Company (other
than stockholders who perfect appraisal rights) will be entitled to receive the
consideration provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and of the representations, warranties, covenants
and agreements hereinafter contained, Parent, Acquisition Sub and the Company
agree as follows:
ARTICLE I
The Offer and the Merger
------------------------
SECTION 1.01. The Offer. (a) Subject to the provisions of
----------
this Agreement, as promptly as practicable, but in no event later than five
business days after the public announcement of the Offer, Acquisition Sub shall
commence the Offer. The obligation of Acquisition Sub to commence the Offer
and accept for payment, and pay for, any shares of Company Common Stock
tendered pursuant to the Offer shall be
<PAGE>
2
subject to the conditions set forth in Exhibit A (any of which may be waived in
whole or in part by Acquisition Sub in its sole discretion) and to the
terms and conditions of this Agreement; provided, however, that
-------- -------
Acquisition Sub shall not, without the Company's consent, waive the Minimum
Condition if Parent shall have requested that the Company redeem the
Preference Stock in accordance with Section 5.16). Acquisition Sub expressly
reserves the right to modify the terms of the Offer, except that, without the
consent of the Company, Acquisition Sub shall not (i) reduce the number of
shares of Company Common Stock or Preference Stock (unless, with respect to the
Preference Stock, Parent shall have requested that the Company redeem the
Preference Stock in accordance with Section 5.16) to be purchased in the Offer,
(ii) reduce the Common Stock Offer Price or the Preference Stock Offer Price,
(iii) modify or add to the conditions set forth in Exhibit A, (iv) except as
provided in the next sentence, extend the Offer, (v) change the form of
consideration payable in the Offer or (vi) amend any other term of the Offer in
a manner adverse in any material respect to the holders of Company Common Stock
or Preference Stock. Notwithstanding the foregoing, Acquisition Sub may,
without the consent of the Company, (i) extend the Offer beyond any scheduled
expiration date (the initial scheduled expiration date being 20 business days
following commencement of the Offer) for a period not to exceed 20 business
days, if at any scheduled expiration date of the Offer, any of the conditions
to Acquisition Sub's obligation to accept for payment, and pay for, shares of
Company Common Stock or Preference Stock shall not be satisfied or waived,
until such time as such conditions are satisfied or waived, (ii) extend the
Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer and (iii) terminate the Offer without prejudice
to any of its and Parent's rights under this Agreement, including to proceed
with the Merger in accordance with, and subject to the terms and conditions of,
this Agreement. Subject to the terms and conditions of the Offer and this
Agreement, Acquisition Sub shall accept for payment, and pay for, all shares of
Company Common Stock and Preference Stock validly tendered and not withdrawn
pursuant to the Offer that Acquisition Sub becomes obligated to accept for
payment, and pay for, pursuant to the Offer as soon as practicable after
expiration of the Offer, subject to compliance with Rule 14e-1(c) under the
Exchange Act (as defined below).
(b) On the date of commencement of the Offer, Parent and
Acquisition Sub shall file with the SEC a Tender Offer Statement on Schedule
14D-1 with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule 14D-1
and the documents included therein pursuant to which the Offer will be made,
together with any supplements or
<PAGE>
3
amendments thereto, the "Offer Documents"). Parent and Acquisition Sub agree
that the Offer Documents shall comply as to form in all material respects with
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act") and, on the date first published,
sent or given to the Company's stockholders, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except that no
representation is made by Parent or Acquisition Sub with respect to information
regarding the Company or its subsidiaries or provided by the Company for
inclusion or incorporation by reference in the Offer Documents. Each of
Parent, Acquisition Sub and the Company agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect, and each of Parent and Acquisition Sub further agrees to take all
steps necessary to amend or supplement the Offer Documents and to cause the
Offer Documents as so amended or supplemented to be filed with the SEC and to
be disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Offer Documents and all amendments and supplements thereto prior to their
filing with the SEC or dissemination to stockholders of the Company. Parent
and Acquisition Sub agree to provide the Company and its counsel any comments
or requests for additional information Parent, Acquisition Sub or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments and shall provide the Company and
its counsel an opportunity to participate, including by way of discussion with
the SEC or its staff, in the response of Parent and/or Acquisition Sub to such
comments.
(c) Parent shall provide or cause to be provided to Acquisition
Sub on a timely basis the funds necessary to accept for payment, and pay for,
any shares of Company Common Stock and Preference Stock that Acquisition Sub
accepts for payment, and becomes obligated to pay for, pursuant to the Offer.
SECTION 1.02. 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, adopted
resolutions approving this Agreement (as amended), the Offer, the Merger and
the transactions contemplated hereby, determining that the terms of the Offer
and the Merger are fair to, and in the best interests of, the Company's
stockholders and recommending that the Company's stockholders approve and adopt
this Agreement, accept the Offer and tender their shares pursuant to the Offer
and/or vote their shares of Company Common Stock and Preference Stock in favor
of the Merger. The Company has been advised by each of its directors and by
each executive officer who as of the date hereof is aware of the
<PAGE>
4
transactions contemplated hereby, that each such person either intends to tender
pursuant to the Offer all shares of Company Common Stock and Preference Stock
owned by such person or vote all shares of Company Common Stock and Preference
Stock owned by such person in favor of the Merger.
(b) Not later than the date the Offer Documents are filed with the
SEC, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (which shall include the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder with
respect to the persons to be named directors of the Company pursuant to Section
5.21) with respect to the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendation described in Section
1.02(a) and shall mail the Schedule 14D-9 to the stockholders of the Company.
The Schedule 14D-9 shall comply as to form in all material respects with the
Exchange Act and the rules and regulations promulgated thereunder and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information provided by
Parent or Acquisition Sub for inclusion or incorporation by reference in the
Schedule 14D-9. Each of the Company, Parent and Acquisition Sub agrees
promptly to correct any information provided by it for use in the Schedule
14D-9 if and to the extent that such information shall have become false or
misleading in any material respect, and the Company further agrees to take all
steps necessary to amend or supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable Federal securities laws. Parent and its counsel shall
be given a reasonable opportunity to review 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. The Company agrees to provide
Parent and its counsel in writing with any comments or requests for additional
information 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 shall provide Parent and its counsel an opportunity to participate,
including by way of discussions with the SEC or its staff, in the response of
the Company to such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Acquisition Sub promptly with mailing labels
containing the names and addresses of the record holders of Company Common
Stock and of the record holders of Preference Stock as of a recent date and of
those persons becoming record holders
<PAGE>
5
subsequent to such date, together with copies of all lists of stockholders,
security position listings and computer files and all other information in the
Company's possession or control regarding the beneficial owners of Company
Common Stock and the beneficial owners of Preference Stock, and shall furnish to
Acquisition Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent may
request in communicating the Offer to holders of Company Common Stock and
Preference Stock.
SECTION 1.03. Surviving Corporation. In accordance with the
----------------------
provisions of this Agreement and the Massachusetts Business Corporation Law, as
amended (the "MBCL"), at the Effective Date (as defined in Section 1.08),
Acquisition Sub shall be merged with and into the Company, and the Company
shall be the surviving corporation in the Merger (hereinafter sometimes called
the "Surviving Corporation"). At the Effective Date, the separate existence of
Acquisition Sub shall cease.
SECTION 1.04. Articles of Organization. (a) The Articles of
-------------------------
Organization of the Company as amended pursuant to the Articles of Merger (as
defined in Section 1.08), shall be the Articles of Organization of the
Surviving Corporation.
(b) The purposes of the Surviving Corporation shall be as set
forth in the Articles of Organization of Acquisition Sub as in effect on the
date hereof until such time as such purposes may be amended as provided in the
Articles of Organization of the Surviving Corporation and by applicable law.
SECTION 1.05. By-Laws. The By-Laws of Acquisition Sub as in
--------
effect at the Effective Date shall be the By-Laws of the Surviving Corporation,
until thereafter amended or repealed as provided by law.
SECTION 1.06. Directors. The directors of Acquisition Sub at
----------
the Effective Date shall, from and after the Effective Date, be the directors
of the Surviving Corporation and shall hold office from the Effective Date
until their respective successors are duly elected or appointed and qualified
in the manner provided in the Articles of Organization and By-Laws of the
Surviving Corporation, or as otherwise provided by law.
SECTION 1.07. Officers. The officers of Acquisition Sub at
---------
the Effective Date shall, from and after the Effective Date, be the officers of
the Surviving Corporation and shall hold office from the Effective Date until
their respective successors are duly elected or appointed and qualified in the
manner provided in the
<PAGE>
6
Articles of Organization and By-Laws of the Surviving Corporation, or as
otherwise provided by law.
SECTION 1.08. Effective Date. The Merger shall become
---------------
effective at the time of filing of articles of merger (substantially in the
form set forth in Exhibit B annexed hereto) with the Secretary of State of the
Commonwealth of Massachusetts in accordance with the provisions of Section 78
of the MBCL (the "Articles of Merger"). The Articles of Merger shall be filed
with the Secretary of State of the Commonwealth of Massachusetts on the Closing
Date. The date and time when the Merger becomes effective shall be herein
referred to as the "Effective Date" and the "Effective Time", respectively.
SECTION 1.09. Additional Actions. If, at any time after the
-------------------
Effective Date, the Surviving Corporation determines that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of the Company or its Subsidiaries acquired or to
be acquired by reason of, or as a result of, the Merger, or (b) otherwise to
carry out the purposes of this Agreement, the Surviving Corporation and its
proper officers and directors shall be authorized to execute and deliver, in
the name and on behalf of the Company and its Subsidiaries, all such deeds,
bills of sale, assignments and assurances and to do, in the name and on behalf
of the Company and its Subsidiaries, all such other acts and things necessary
or desirable to vest, perfect or confirm any and all right, title or interest
in, to or under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out the purposes of this Agreement.
SECTION 1.10. Company Common Stock, Preferred Stock and
------------------------------------------
Preference Stock. (a) Company Common Stock. (i) Each share of Common
---------------------
Stock of the Company, par value $1 per share (including Rights as defined in
Section 2.02(a)) (the "Company Common Stock") actually issued and outstanding
at the Effective Date (except for Dissenting Shares, as defined in Section
1.12) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive $7.50 (the "Total Merger
Consideration").
(ii) Each share of Company Common Stock held by Parent or
Acquisition Sub or in the Company's treasury at the Effective Date shall, by
virtue of the Merger, be canceled without payment of any consideration therefor
and without any conversion thereof.
(b) 5% Cumulative Preferred Stock. Each share of the
------------------------------
Company's 5% Cumulative Preferred Stock, par value $100 per share (the "5%
Stock"), actually
<PAGE>
7
issued and outstanding at the Effective Date, shall remain issued and
outstanding after the Merger and shall be called for redemption and retirement
as soon as practicable following the Merger (except for Dissenting Shares, as
defined in Section 1.12), in accordance with the terms of Section 5.16(a), at a
price equal to $110, plus all accrued and unpaid dividends thereon as of the
date of redemption and retirement (the "5% Stock Consideration"), in accordance
with the terms of the 5% Stock.
(c) $1.85 Cumulative Convertible Preference Stock. (i)
----------------------------------------------
Unless called for redemption prior to the Closing pursuant to Section 5.16, each
share of the Company's $1.85 Cumulative Convertible Preference Stock, par value
$1 per share (the "Preference Stock"), actually issued and outstanding at the
Effective Date (except for Dissenting Shares, as defined in Section 1.12) shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $20 plus all accrued and unpaid
dividends thereon as of the Effective Date (whether redeemed or converted, the
"Preference Stock Consideration").
(ii) Each share of Preference Stock held by Parent or Acquisition
Sub or in the Company's treasury at the Effective Date shall, by virtue of the
Merger, be cancelled without payment of any consideration therefor and without
any conversion thereof.
SECTION 1.11. Conversion of Acquisition Sub Common Stock. All
-------------------------------------------
issued and outstanding shares of Common Stock, par value $1 per share, of
Acquisition Sub (the "Acquisition Sub Common Stock") at the Effective Date
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and exchangeable for, in the aggregate, 4,123,178
fully paid and nonassessable shares of Common Stock, par value $1 per share, of
the Surviving Corporation (the "Surviving Corporation Common Stock"). From and
after the Effective Date, each outstanding certificate theretofore representing
shares of Acquisition Sub Common Stock shall be deemed for all purposes to
evidence ownership of, and to represent the number of shares of, Surviving
Corporation Common Stock into which such shares of Acquisition Sub Common Stock
shall have been converted.
SECTION 1.12. Dissenting Shares. Notwithstanding anything in
------------------
this Agreement to the contrary, shares of Company Common Stock, 5% Stock and
Preference Stock issued and outstanding on the Effective Date (other than any
called for redemption pursuant to Section 5.16) which are held of record by
stockholders who shall not have voted such shares in favor of the Merger, if
applicable, and who shall have properly exercised rights to demand payment of
the fair value of such shares in accordance with Sections 86 through 98,
inclusive, of the MBCL ("Dissenting Shares") shall not be converted into the
right to receive the consideration specified in Section 1.10(a), 1.10(b), or
1.10(c), respectively, but the holders thereof instead shall
<PAGE>
8
be entitled to payment of the fair value of such shares in accordance with the
provisions of Sections 86 to 92, inclusive, of the MBCL (the "Dissenting
Consideration"); provided, however, that (i) if such a holder fails to file a
-------- -------
notice of election to dissent in accordance with Section 86 of the MBCL or,
after filing such notice of election, subsequently delivers an effective written
withdrawal of such notice or fails to establish his entitlement to appraisal
rights as provided in Sections 87 through 98, inclusive, of the MBCL, if he or
she be so required, or (ii) if a court shall determine that such holder is not
entitled to receive payment for his shares or such holder shall otherwise lose
his or her appraisal rights, then in either of such cases, each share of Company
Common Stock, 5% Stock or Preference Stock, respectively, held of record by such
holder or holders shall automatically be converted into and represent only the
right to receive the Total Merger Consideration, the 5% Stock Consideration or
the Preference Stock Consideration, respectively, upon the surrender of the
certificate or certificates representing such Dissenting Shares. The Company
shall give Parent prompt notice of any demands received by the Company for
payment of the fair value of such shares, and Parent shall have the right to
participate in all the negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of Parent,
make any payment (except to the extent that any such payment is made pursuant to
a court order) with respect to, or settle or offer to settle, any such demands.
SECTION 1.13. Surrender of Shares. (a) At and after the
--------------------
Effective Date, Parent shall make available on a timely basis, by transferring
to Chemical Mellon Shareholder Services, Inc. (the "Paying Agent") for the
benefit of former stockholders of the Company, such funds as and when necessary
to make the payments provided for in Section 1.10 herein with respect to the
outstanding shares of Company Common Stock and Preference Stock (other than any
called for redemption pursuant to Section 5.16). The Paying Agent shall agree
to hold such funds in trust for the benefit of the former stockholders of the
Company and deliver such funds in accordance with the terms hereof and the
terms of a Paying Agency Agreement to be entered into by and between the Paying
Agent and Parent.
(b) Prior to or at the Effective Date, the Paying Agent shall mail
or cause to be mailed to each record holder of an outstanding certificate or
certificates which, immediately prior to the Effective Date, represented shares
of Company Common Stock or Preference Stock (other than any called for
redemption pursuant to Section 5.16) (the "Certificates"), a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) (the "Transmittal Letter") and instructions
for use in effecting the surrender of the Certificates for payment therefor.
Upon surrender to the Paying Agent of a Certificate, together with such
Transmittal Letter duly executed, the holder of such Certificate shall be
entitled to
<PAGE>
9
receive in exchange for each share of Company Common Stock or
Preference Stock (other than any called for redemption pursuant to Section
5.16) represented by such Certificate, the Total Merger Consideration or
Preference Stock Consideration, respectively, and such Certificate shall
forthwith be canceled upon receipt by the holder of such Certificate of the
Total Merger Consideration or Preference Stock Consideration, respectively. No
interest will be paid or accrued on the Total Merger Consideration or
Preference Stock Consideration payable upon the surrender of such Certificates.
(c) If payment is to be made to a person other than the person in
whose name the Certificate surrendered in exchange therefor is registered, it
shall be a condition of payment of the Total Merger Consideration or Preference
Stock Consideration, as the case may be, that the Certificate so surrendered be
properly endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name of the record holder appears on such Certificate, and
is otherwise in proper form for transfer, and that the Person requesting such
payment shall pay any transfer or other taxes required by law as a result of
such payment to a Person other than the record holder of the Certificate
surrendered, or shall establish to Parent's satisfaction that such tax has been
paid or is not applicable.
(d) After the Effective Date, there shall be no further transfers
on the stock transfer books of the Surviving Corporation of the shares of
Company Common Stock or Preference Stock which are outstanding at the Effective
Date. If, after the Effective Date, Certificates are presented to the
Surviving Corporation or the Paying Agent for transfer, they shall be canceled
and there shall be issued to the transferee in exchange for each share of
Company Common Stock the Total Merger Consideration and in exchange for each
share of Preference Stock the Preference Stock Consideration in accordance with
Section 1.10 hereof.
(e) The consideration payable upon the surrender for exchange of
Certificates in accordance with the terms of this Article I shall be deemed to
have been paid in full satisfaction of all rights pertaining to the shares of
Company Common Stock or Preference Stock theretofore represented by such
Certificates, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock or Preference Stock which were outstanding immediately prior to
the Effective Date.
(f) None of Parent, Acquisition Sub, the Company or the Paying
Agent shall be liable to any person in respect of any cash delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to
seven years after the Effective Date (or immediately prior to such earlier date
on which any payment pursuant to this
<PAGE>
10
Article I would otherwise escheat to or become the property of any Governmental
Authority), the payment in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
SECTION 1.14. Certain Benefit Plans. (a) (i) With respect to
----------------------
unexpired options ("Options"), whether or not exercisable at the Effective Date,
including stock appreciation rights relating thereto, outstanding on the
Effective Date which have been issued pursuant to the Company's 1982 Stock
Option Plan, as amended (the "1982 Stock Option Plan"), the Company's 1992 Stock
Option Plan, as amended (the "1992 Stock Option Plan"), or the Company's 1992
Non-Employee Directors Stock Option Plan, as amended (the "Director Option
Plan"), each such Option with an exercise price less than the Total Merger
Consideration (an "Eligible Option") shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into the right to
receive, for each share of Company Common Stock subject thereto, a cash payment
without interest equal to the Total Merger Consideration, less the per share
exercise price of each such Option. Such Options shall be canceled upon such
cash payment following the Merger.
(ii) Any Option with an exercise price equal to or greater than
the Total Merger Consideration (an "Ineligible Option") shall be canceled upon
the Effective Date without payment of any consideration.
(iii) The Company shall use its best efforts to amend each
outstanding Option issued under the 1982 Stock Option Plan, the 1992 Stock
Option Plan and the Director Option Plan to effect the transactions
contemplated by this Agreement, including the cancellation of the Options in
connection with the Merger in accordance with this Section 1.14.
(b) There are no shares of Company Common Stock held in escrow
pursuant to the Company's Long Term Incentive Compensation Plan (the "LTIP").
(c) Each share of Company Common Stock issued by the Company but
not yet vested pursuant to the Company's Employees' Savings and Profit Sharing
Plan (the "Savings Plan") shall, in connection with the Merger, become vested
in the Person to whose account such share of Company Common Stock was issued
and converted into the right to receive the Total Merger Consideration as
provided in Section 1.10(a).
(d) Immediately following the Effective Date, the Company's 1982
Stock Option Plan, 1992 Stock Option Plan, Director Option Plan, LTIP and
Savings Plan shall be terminated and no further stock awards or stock options
shall be granted thereunder from and after the date of this Agreement.
<PAGE>
11
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
The Company hereby represents and warrants to Parent and
Acquisition Sub as follows with respect to the Company and its Subsidiaries:
SECTION 2.01. Corporate Organization. The Company is a
-----------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now being conducted. The Company is qualified to do business and is in good
standing in each jurisdiction set forth in Schedule 2.01, which are the only
jurisdictions in which such qualification is necessary except where failure to
be qualified could not reasonably be expected to have a Material Adverse Effect.
For purposes of this Agreement, a "Material Adverse Effect" is (a) a material
adverse effect on the business, assets, properties, condition (financial or
other) or results of operations of the Company and its Subsidiaries taken as a
whole or the Surviving Corporation and its Subsidiaries taken as a whole or (b)
a material adverse effect on the ability of the Company to carry out the
transactions contemplated by this Agreement without significant unanticipated
delay or expense. For purposes of this Agreement, a "Subsidiary" of any Person
is any corporation of which a majority of all outstanding shares of capital
stock (the holders of which are ordinarily and generally entitled to vote in the
election of a majority of the members of the board of directors thereof) is
owned, directly or indirectly, by such Person and/or other Subsidiaries of such
Person. The Company has delivered to Parent complete and correct copies of its
Articles of Organization and By-Laws, as amended to the date hereof.
SECTION 2.02. Capitalization of the Company. (a) The
------------------------------
authorized capital stock of the Company consists of 15,000,000 shares of
Company Common Stock, 15,000 shares of 5% Stock and 1,500,000 shares of
Preference Stock. As of February 29, 1996, 4,123,178 shares of Company Common
Stock, 5,820 shares of 5% Stock and 814,300 shares of Preference Stock were
issued and are outstanding, 275,100 shares of Company Common Stock were held in
the Company's treasury and 687,197 shares of Company Common Stock were reserved
for issuance in connection with the rights (the "Rights") to purchase shares of
Company Common Stock issued pursuant to the Rights Agreement dated as of
November 25, 1986 (as amended from time to time, the "Rights Agreement")
between the Company and The First National Bank of Boston (the "Rights Agent").
The Company has delivered to Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date hereof. All issued and
outstanding shares of Company Common Stock, 5%
<PAGE>
12
Stock and Preference Stock are duly and validly issued and outstanding, fully
paid and nonassessable. The aggregate amount of accrued and unpaid dividends on
the 5% Stock is zero and on the Preference Stock is $1,506,455.
(b) As of the date hereof, there are outstanding unexercised,
unexpired Options to purchase 288,100 shares of Company Common Stock, in each
case with the exercise or "strike" price and other terms as set forth on
Schedule 2.02 hereto.
(c) Except as set forth in this Section 2.02 or on Schedule 2.02
hereto, there are no other shares of capital stock of the Company, or
securities convertible into or exchangeable or exercisable for shares of
capital stock of the Company or any of its Subsidiaries, outstanding, and there
are no outstanding options, warrants, rights, contracts, commitments,
understandings, arrangements or claims of any character by which the Company or
any Subsidiary is or may become bound to issue, transfer, sell, repurchase or
otherwise acquire or retire any shares of capital stock or other ownership
interest of the Company or any Subsidiary, or any securities convertible into
or exchangeable or exercisable for any such shares or other ownership interest
(all of the foregoing being called "Conversion Rights") and, except as set
forth in Section 2.02(a) and as reserved for issuance upon exercise of the
Options described in Section 2.02(b) or the other Conversion Rights described
in Schedule 2.02, no shares of capital stock of the Company are reserved for
issuance. There are no voting trusts or other agreements or understandings to
which the Company is a party with respect to the voting of the capital stock of
the Company or any Subsidiary. Following consummation of the Merger no holder
or beneficiary of any Conversion Rights shall be entitled to receive any
securities of the Surviving Corporation or any other consideration not
expressly contemplated by this Agreement.
SECTION 2.03. Subsidiaries. (a) Schedule 2.03 hereto sets
-------------
forth each Subsidiary and the jurisdiction of incorporation of such Subsidiary.
Schedule 2.03 also sets forth each inactive Subsidiary (an "Inactive
Subsidiary") of the Company. No Inactive Subsidiary has any assets or
liabilities valued in excess of $5,000 or any business operations or real
property nor has any Inactive Subsidiary conducted any business during the
two-year period prior to the date of this Agreement. Except as disclosed on
Schedule 2.03 hereto, all of the outstanding shares of capital stock and other
ownership interest of the Company's Subsidiaries are owned, directly or
indirectly, by the Company. Except as disclosed on Schedule 2.03, none of the
shares or other ownership interests of the Subsidiaries owned or held by the
Company, directly or indirectly, is subject to any pledge, Lien (as defined
below) or claim of any kind.
(b) Each Subsidiary (excluding each Inactive Subsidiary) is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of
<PAGE>
13
incorporation of each such Subsidiary, with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now being conducted. Each Subsidiary (excluding each Inactive Subsidiary) is
also qualified to do business and is in good standing in each jurisdiction in
which such qualification is necessary, except where failure to be so qualified
would not have a Material Adverse Effect. The Company has delivered to Parent
complete and correct copies of the respective articles or certificates of
incorporation or organization or By-Laws, as amended to the date hereof, of each
of its Subsidiaries.
(c) Except for its Subsidiaries, the Company does not directly or
indirectly own any capital stock of or other equity interest in any
corporation, partnership or other person and neither the Company nor any of its
Subsidiaries is a member of or participant in any partnership, joint venture or
similar person.
SECTION 2.04. Authorization. (a) The Company has requisite
--------------
corporate power and authority to execute and deliver this Agreement, and
subject to the approval by the stockholders of the Company, to execute, deliver
and file the Articles of Merger and, subject to the satisfaction of the
conditions set forth herein and therein, to consummate the transactions
contemplated hereby and thereby.
(b) This Agreement, the Offer, the Merger and the other
transactions contemplated hereby have been approved by the Board of Directors
of the Company and, except for the approval of the Merger by the stockholders
of the Company, no other corporate proceeding on the part of the Company is
necessary to authorize this Agreement, the Offer, the Merger or the other
transactions contemplated hereby or to consummate the Offer, the Merger and the
other transactions contemplated hereby. The affirmative vote of the holders of
(i) two-thirds of the outstanding shares of Company Common Stock and (ii)
unless called for redemption pursuant to Section 5.16, two-thirds of the
outstanding shares of the Preference Stock, approving the Merger are the only
votes of the holders of any class or series of the Company's capital stock
necessary to approve any of the transactions contemplated by this Agreement.
(c) This Agreement has been duly and validly executed and
delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, and the Articles
of Merger when executed and delivered pursuant hereto will be a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, except in each case as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws in effect now or hereafter in effect relating to creditors' rights
generally, and by equitable principles (whether considered in a proceeding at
law or in equity).
<PAGE>
14
(d) The transfer of the Company's granule crushing equipment to
the Company's Wrentham and Franklin, MA quarry (at least with respect to the
"French parcel" of such quarry) and its operation at such location will not
conflict with, constitute a default under, result in the termination or in a
right of termination of, or violate or be in conflict with, provide a basis for
increased rights under, or result in a breach of any term or provision of, any
term or provision of any Material Contract.
SECTION 2.05. Absence of Conflicts; Consents. Except as set
-------------------------------
forth in Schedule 2.05, neither the execution and delivery by Company of this
Agreement and the Articles of Merger nor the consummation by the Company of
the transactions contemplated hereby and thereby will:
(a) assuming the approvals set forth in Section 2.04(b) have been
obtained, conflict with or result in a breach of any provision of the
respective articles or certificate of incorporation or organization or
By-Laws of the Company or any Subsidiary;
(b) to the knowledge of the Company, result in the creation of any
lien, mortgage, agreement, right of way, charge, option, security
interest, claim, restriction, easement, covenant, lease or encumbrance
("Lien") upon any of the properties of the Company or any of its
Subsidiaries;
(c) with or without giving of notice or the passage of time, or
both, violate, or conflict with, or constitute a default under, or result
in the termination or in a right of termination of, violate or be in
conflict with, result in a breach of any term or provision of, or
constitute a default under, or accelerate or permit the acceleration of
the performance required by, or give any other natural person,
corporation, trust, association, company, partnership, joint venture or
other entity or any government, governmental agency, instrumentality or
political subdivision ("Person") a basis for increased rights or
termination or nonperformance under, or require any consent,
authorization or approval under, any term or provision of any material
Lien or any Material Contract to which the Company or any Subsidiary is a
party or by which any of them are or their respective properties are
subject or bound;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of the Company, violate any provision of,
or, except as set forth in Section 2.05(e), require any consent,
authorization or approval under, any statute, law, ordinance, or
administrative rule or regulation, Permit, order or license
(collectively, but excluding Environmental Laws, "Applicable Laws") of
any governmental agency, body or instrumentality (whether Federal, state,
local or foreign) ("Governmental Authority"), or any
<PAGE>
15
judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree (collectively, "Judgment") in each case applicable to
the Company or any Subsidiary; or
(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority, to
be made or obtained by or on behalf of the Company except (i) as required
by the Exchange Act, (ii) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the MBCL, or in
connection with the maintenance of qualification to do business in other
jurisdictions, such other jurisdictions, and (iii) filings with the
Federal Trade Commission ("FTC") and with the Antitrust Division of the
U.S. Department of Justice (the "Antitrust Division") pursuant to Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the
rules and regulations thereunder (the "HSR Act").
SECTION 2.06. Compliance with Laws. Neither the Company nor
---------------------
any Subsidiary has been or is presently in violation of any provision of their
respective certificates or articles of organization or incorporation or
By-Laws, or of any Applicable Law or Judgment that would have a Material
Adverse Effect. Except where the failure thereof would not cause a Material
Adverse Effect, the Company and its Subsidiaries possess, and are in compliance
in all material respects with the terms and provisions of all licenses,
permits, certificates, authorizations, rights and other approvals of
Governmental Authorities ("Permits") necessary for the operation
of the business of the Company and its Subsidiaries. Except as set forth in
Schedule 2.09 or 2.18, neither the Company nor any Subsidiary has been given
written notice by any Governmental Authority of, or to the knowledge of
Company, is under investigation by any Governmental Authority with respect to,
any violation of any Applicable Law, Judgment or Permit. This Section 2.06
does not relate to environmental representations and warranties, which matters
are exclusively the subject of Section 2.18.
SECTION 2.07. Financial Statements. (a) Set forth on
---------------------
Schedule 2.07 are the consolidated balance sheets of Company and its
Subsidiaries as at December 31, 1994, and December 31, 1995, and the related
consolidated statements of income, stockholders' equity and cash flows for the
respective years then ended, including the notes thereto, and the report
thereon of Price Waterhouse, independent certified public accountants (the
"Company Financial Statements"). The Company Financial Statements present
fairly in all material respects the consolidated financial position and the
results of operations of the Company and its Subsidiaries as of the dates and
for the periods indicated on the Company Financial Statements, in each case in
conformity with generally accepted accounting principles ("GAAP"), consistently
applied during such periods. Except as expressly contemplated or permitted by
this Agreement or
<PAGE>
16
disclosed in the Schedules hereto, to the knowledge of the Company, the Company
and its Subsidiaries do not have any material liabilities of any nature (whether
accrued, absolute, contingent, unasserted or otherwise) except (1) as disclosed,
reflected or reserved against in the balance sheet (the "Balance Sheet") dated
December 31, 1995 (the "Balance Sheet Date"), included in the Company Financial
Statements and the notes thereto, and (2) as incurred in the ordinary course of
business consistent with past practice and not in violation of this Agreement.
(b) The inventory of the Company and its Subsidiaries, whether
reflected on the Balance Sheet or subsequently acquired, is, and will be as of
the Effective Date, generally of a quality and quantity usable and saleable
consistent in all material respects with past practice, in the ordinary course
of business. The inventory of the Company and its Subsidiaries is reflected on
the Balance Sheet and in their respective books and records in accordance with
GAAP applied on a basis consistent with past practice.
(c) All accounts receivable of the Company and its Subsidiaries,
whether reflected on the Balance Sheet or subsequently created, have arisen
from bona fide transactions in the ordinary course of business. To the
knowledge of the Company, all accounts receivable reflected on the Balance
Sheet are good and collectible at the aggregate recorded amounts thereof, net
of any applicable reserves for doubtful accounts reflected on the Balance Sheet
and all customer accounts receivable created since the Balance Sheet Date are
and will be as of the Effective Date good and collectible at the aggregate
recorded amounts thereof, net of any applicable reserves for doubtful accounts
reflected on the Balance Sheet or subsequently created consistent with past
practice and experience.
SECTION 2.08. Absence of Material Changes. Except as set
----------------------------
forth in Schedule 2.08 or as permitted by Section 5.06 or set forth in Schedule
5.06 or as expressly contemplated or permitted by this Agreement, since the
Balance Sheet Date, each of the Company and its Subsidiaries has conducted its
business in the ordinary course, and there has not been (and it is not
reasonably expected there will be) (i) any event, change or circumstance
causing, or reasonably anticipated to cause in the future, any Material Adverse
Effect, except as otherwise disclosed to Parent in writing prior to the date of
this Agreement, (ii) any declaration, setting aside or payment of any dividend
(whether in cash, stock or property) with respect to any of the Company's
capital stock, other than the minimum required dividends declared on the 5%
Stock or the Preference Stock, (iii) (x) any granting by the Company or any of
its Subsidiaries to any executive officer or director of the Company or any of
its Subsidiaries of any increase in compensation, except as was required under
employment agreements in effect as of the Balance Sheet Date, (y) any granting
by the Company or any of its Subsidiaries to any such executive officer or
director of any increase in severance or
<PAGE>
17
termination pay, except as was required under employment, severance or
termination agreements in effect as of the Balance Sheet Date or (z) any entry
by the Company or any of its Subsidiaries into any employment, severance or
termination agreement with any such executive officer or director, (iv) any
damage, destruction or loss, whether or not covered by insurance, that has or
could have a Material Adverse Effect, (v) any change in accounting methods,
principles or practices by the Company materially affecting its assets,
liabilities or business, except insofar as may have been required by a change in
GAAP or (vi) any other action that would be prohibited by Section 5.06 on and
after the date of this Agreement.
SECTION 2.09. Litigation. Except as set forth in Schedule
-----------
2.09 and other than routine warranty claims against the Company that do not in
the aggregate exceed in any material respect the level of such claims
experienced historically by the Company in the ordinary course, neither the
Company nor any Subsidiary is engaged in, and there is not to the knowledge of
the Company pending, nor has the Company or any Subsidiary received written
notice of, any legal action, suit, investigation, inquiry or proceeding by any
Governmental Authority or other Person ("Legal Action").
SECTION 2.10. Patents and Trademarks. To the knowledge of the
-----------------------
Company, the Company and its Subsidiaries own all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary for their business as now conducted without any conflict
with or infringement of the rights of others. Except as set forth in Schedule
2.10, there are no outstanding options, licenses or agreements of any kind
relating to the foregoing, nor is the Company nor any Subsidiary bound by or a
party to any material options, licenses or agreements of any kind with respect
to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes of any other Person.
Except as set forth in Schedule 2.10 or relating to any matter that has been
resolved or that the Company reasonably believes has been abandoned, none of the
Company nor any Subsidiary has received any written communications alleging that
the Company or any Subsidiary has violated any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other Person.
SECTION 2.11. Material Contracts; Permits. Schedule 2.11(a)
----------------------------
sets forth a complete and accurate list of any of the following to which the
Company or any Subsidiary is a party or by which Company or any Subsidiary is
bound (collectively, "Material Contracts"):
(a) all deeds, indentures, leases, subleases or other instruments
by which an ownership, leasehold or other interest in real property is
held by the Company or any Subsidiary;
<PAGE>
18
(b) all contracts, commitments or agreements, including contracts
or licenses pertaining to the payment of royalties (but excluding
customer purchase orders, purchase orders for raw materials and
warranties), to the extent such agreements include provisions that do or
could involve payments or commitments (whether fixed or contingent) to or
from the Company or any Subsidiary (i) for an amount (or potential
amount) in excess of $200,000 or (ii) have a term longer than twelve (12)
months in duration (except for such contracts, commitments or agreements
terminable by the Company or the appropriate Subsidiary of the Company
without penalty upon notice of 90 days or less);
(c) all written management, compensation or employment contracts or
contracts entered into with any executive officer or director of the
Company or any Subsidiary;
(d) all contracts or agreements under which the Company or any
Subsidiary has any outstanding indebtedness, obligation or liability for
borrowed money or the deferred purchase price of property or has the
right or obligation to incur any such indebtedness, obligation or
liability, in each case in an amount greater than $200,000;
(e) all bonds or agreements of guarantee or indemnification in
which the Company or any Subsidiary acts as surety, guarantor or
indemnitor with respect to any obligation (fixed or contingent) in an
amount or potential amount greater than $200,000;
(f) all secrecy, noncompete or other agreements which (i) restrict
the right of the Company or any Subsidiary to engage in any business
reasonably related to its present activities or (ii) would restrict the
right of Parent to engage in any business after the consummation of the
transactions contemplated by this Agreement;
(g) all current bank accounts that contain balances and safe
deposit arrangements;
(h) all agreements relating to preemptive or other preferential
rights relating to capital stock, restrictions on the disposition of
capital stock and registration rights;
(i) all partnership and joint venture agreements;
<PAGE>
19
(j) all agreements relating to material business acquisitions or
dispositions during the last five years, including any separate tax or
indemnification agreements; and
(k) all material customer and supply agreements and all material
sales representative, marketing, agency or distributorship agreements, to
the extent such agreements include provisions that do or could involve
payments or commitments (whether fixed or contingent) to or from the
Company or any Subsidiary (i) for an amount in excess of $200,000 or (ii)
have a term (including renewals that do not require the Company's or a
Subsidiary's consent) longer than twelve months in duration (except for
such contracts, commitments or agreements terminable by the Company or
the appropriate Subsidiary of the Company without penalty upon notice of
90 days or less).
Except as set forth on Schedule 2.11(a), (i) neither the Company
nor any Subsidiary is in default under the terms of any Material Contract,
which default permits the other party to adversely alter or terminate any
rights of the Company or any Subsidiary or accelerate the obligations of the
Company or any Subsidiary under such Material Contract or to collect damages,
(ii) to the knowledge of the Company, no other party thereto is in default
under the terms of any Material Contract and (iii) each Material Contract is in
full force and effect.
In order for the Company or any Subsidiary to perform its payment
obligations noted under each of the Material Contracts set forth on Schedule
2.11(b), the only required payment will be the payment of the outstanding
principal amount (and accrued interest thereon) owed by the Company under each
such Material Contract which as of the date of this Agreement is set forth on
Schedule 2.11(b) for each such Material Contract, without the payment of any
premium or penalty, other than accrued interest or default interest. Upon the
making of such payment under each such Material Contract, the Company will have
no further obligation or liability under any such Material Contract, except for
immaterial expenses relating to the termination of such Material Contracts.
SECTION 2.12. Title to Properties and Related Matters. (a)
----------------------------------------
Schedule 2.12(a) sets forth all of the real property owned by the Company and
each Subsidiary (the "Owned Real Property"). Schedule 2.12(b) sets forth all
of the real property and interests in real property leased by the Company and
each Subsidiary (the "Leased Real Property", and together with the Owned Real
Property, the "Company Property"). Each of the Company or its Subsidiaries, as
the case may be, has good and marketable fee title to the Owned Real Property,
subject only to Permitted Liens (as defined in Section 2.12(b) below). Each of
the Company or its Subsidiaries, as the case may be, has a valid and existing
leasehold interest in all
<PAGE>
20
Leased Real Property, subject only to Permitted Liens (as defined in Section
2.12(b) below).
(b) All Company Property and personal properties owned by the
Company or any Subsidiary are owned free and clear of all Liens (other than
mortgages securing the Company's existing credit facility described in Schedule
2.11(b)) or leased free and clear of all Liens, except for (A) Liens for taxes
and assessments or governmental charges or levies which are not at the time of
Closing due or payable, (B) Liens in respect of pledges or deposits under
workers' compensation laws or similar legislation, carriers', warehousemen's,
mechanics', laborers' and materialmen's and similar Liens, which have been
incurred in the ordinary course of business, so long as the obligations secured
by such Liens are not then delinquent, (C) Liens incidental to the conduct of
the business of the Company and its Subsidiaries (other than arising out of
claims of infringement) which were not incurred in connection with the
borrowing of money or the obtaining of advances or credits and which do not
individually or in the aggregate materially detract from the value or
materially impair the use and operation of the Company Property to which it
relates or the value and operation of the business of the Company as presently
conducted, (D) covenants, conditions, restrictions, easements and other similar
matters of record existing as of the Effective Date which do not, individually
or in the aggregate, impair the use and operation of the Company Property to
which it relates in the business of the Company as presently conducted and (E)
Liens set forth on Schedule 2.18 arising pursuant to Environmental Laws (the
liens described in the foregoing clauses (A), (B), (C), (D) and (E) being
"Permitted Liens") and (ii) the Owned Real Property and personal properties
owned by the Company or any Subsidiary are not subject to any Liens, building
or use restrictions, exceptions, variances, reservations or limitations of any
nature whatsoever which interfere with or are violated by the existence of the
improvements thereon or the current use and operation of each such Owned Real
Property or personal properties, respectively, to which it relates in the
business of the Company as currently conducted.
SECTION 2.13. Taxes. (a) For purposes of this Agreement, (A)
------
"Tax" or "Taxes" shall mean all Federal, state, provincial, county,
-----
local, municipal, foreign and other taxes, assessments, duties or similar
charges of any kind whatsoever, including all corporate franchise, income,
sales (including bulk sales), use, ad valorem, intangibles, receipts, value
added, profits, license, withholding, payroll, employment, excise, premium,
real property, personal property, customs, net worth, estimated, capital,
gains, transfer, stamp, documentary, social security, alternative minimum,
accumulated earnings, goods and services, recapture, recording, severance,
environmental (including but not limited to, taxes under Section 59A of the
Code), occupation and other taxes, and including any interest, penalties and
additions imposed with respect to such amounts; (B) "Code" shall mean the
----
Internal Revenue Code of 1986, as amended, and reference to any Section of the
Code shall refer to that Section
<PAGE>
21
in effect at the date hereof; (C) "Taxing Authority" shall mean any domestic,
----------------
foreign, federal, national, state, provincial, county or municipal or other
local government, any subdivision, agency, commission or authority thereof, or
any quasi-governmental body exercising any taxing authority or any other
authority exercising Taxregulatory authority; and (D) "Return" or "Returns"
------ -------
shall mean all returns, declarations of estimated tax payments, reports,
estimates, information returns and statements, including any related or
supporting information filed with respect to any of the foregoing, maintained,
filed or to be filed with any Taxing Authority in connection with the
determination, assessment, collection or administration of any Taxes.
(b) Except as set forth on Schedule 2.13, the Company and each of
the Subsidiaries has timely filed or will timely file, as the case may be, with
the appropriate Taxing Authority all Returns required to be filed on or prior
to the date hereof or the Closing Date, as the case may be, and each such
Return was or will be, as the case may be, complete and correct in all material
respects at the time of filing.
(c) Except as set forth on Schedule 2.13, all Taxes (including
Taxes for which no Returns are required to be filed and including payroll and
wage withholding Taxes) of the Company and any of the Subsidiaries or for which
the Company or any of the Subsidiaries is or could otherwise be held liable, or
which are or could otherwise become chargeable as an encumbrance upon any
property or assets of the Company or any of the Subsidiaries ("Covered Taxes"),
have been duly and timely paid. The amount of "accrued Taxes" shown on the
Balance Sheet adequately reflects the liability for unpaid Taxes (including
deferred Taxes) of Company and the Subsidiaries as of the Balance Sheet Date.
(d) Except as set forth on Schedule 2.13, the Company has made
available for inspection by Parent (A) complete and correct copies of all
Returns of the Company and each of the Subsidiaries, with respect to Federal,
state, provincial, county, local, municipal, foreign and other income, profits,
corporate franchise, receipts, sales, excise, property, net worth and all other
material Taxes, that are or have been required to be filed (except as noted in
(b) above) for taxable periods ending with or within the last five calendar
years and for such longer period as Parent has requested not to exceed the
period of the relevant statute of limitations and (B) complete and correct
copies of all ruling requests, private letter rulings, revenue agent reports,
information document requests and responses thereto, notices of proposed
deficiencies, deficiency notices, applications for changes in method of
accounting, protests, petitions, closing agreements, settlement agreements, and
any similar documents submitted by, received by or agreed to by or on behalf of
the Company or any of the Subsidiaries and relating to material Covered Taxes.
<PAGE>
22
(e) Except as set forth on Schedule 2.13, no liens for Taxes exist
with respect to any of the assets or properties of any of the Subsidiaries or
Company. The Returns of the Company and each of the Subsidiaries with respect
to Federal income Taxes have been examined by the Internal Revenue Service, or
the statute of limitations with respect to the relevant Tax liability has
expired, for all taxable periods through and including the year ended December
31, 1982. All Returns with respect to state, county, local, municipal,
provincial, foreign and other income, profits, corporate franchise, receipts,
sales, excise, property, net worth, and capital Taxes, and with respect to all
other material Taxes, have been examined by the appropriate Taxing Authority,
or the statute of limitations with respect to the relevant Tax liability has
expired, for all taxable periods through and including the taxable period
listed with respect to each such jurisdiction. Except as set forth on Schedule
2.13, each deficiency resulting from any audit or examination relating to
Covered Taxes by any Taxing Authority has been paid and no material issues were
raised in writing by the relevant Taxing Authority during any such audit or
examination that might apply to taxable periods other than the taxable period
to which such audit or examination related. Except as set forth on Schedule
2.13, (A) no Returns with respect to Federal income Taxes are currently under
audit or examination by the Internal Revenue Service and any other Taxing
Authority, (B) no audit or examination relating to Covered Taxes is currently
being conducted by the Internal Revenue Service or any other Taxing Authority
and (C) neither the Internal Revenue Service nor any other Taxing Authority has
given notice in writing that it will commence any such audit or examination.
(f) Except as set forth in Schedule 2.13, no Taxing Authority is
now asserting (in writing), or, to the knowledge of the Company or any of the
Subsidiaries, threatening to assert (in writing), any deficiency or claim for
Covered Taxes or any adjustment to any item of income, gain, deduction, loss,
credit, or tax basis entering into the computation of Covered Taxes and there
is no reasonable basis for any such assertion.
(g) Except as set forth in Schedule 2.13, (A) no person has made
with respect to the Company or any of the Subsidiaries, or with respect to any
property held by the Company or any of the Subsidiaries, any consent under
Section 341 of the Code, (B) no property of Company or any of the Subsidiaries
constitutes "tax-exempt use property" (as defined in Section 168(h) of the
Code), (C) neither the Company nor any of the Subsidiaries is a party to any
lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954,
as amended and in effect prior to the date of enactment of the Tax Equity and
Fiscal Responsibility Act of 1982 and (D) none of the assets of Company or any
of the Subsidiaries is subject to a lease under Section 7701(h) of the Code or
under any predecessor.
<PAGE>
23
(h) There is no agreement or other document extending, or having
the effect of extending, the period of assessment or collection of any Covered
Taxes and no unrevoked power of attorney with respect to any Covered Taxes has
been executed or filed with the Internal Revenue Service or any other Taxing
Authority.
(i) The Company has never been a member of any affiliated,
consolidated, combined, unitary or aggregate group for purposes of filing
Returns or paying Taxes at any time.
(j) Except as set forth in Schedule 2.13, none of the Company or
any of the Subsidiaries is a party to or is bound by any Tax sharing agreements
(whether formal or informal) with any of its affiliates, or with any Taxing
Authority.
(k) None of the Company or any of the Subsidiaries will be
required to include in a taxable period on or after the Closing Date taxable
income attributable to income that economically accrued in a taxable period
ending on or before the Closing Date, including, without limitation, as a
result of the installment method of accounting, the completed contract method
of accounting or the cash method of accounting.
(l) Except as set forth on Schedule 2.13, none of the Company or
any of the Subsidiaries will be required in a taxable period beginning on or
after the Closing Date to include any amount in income pursuant to Section 481
of the Code (or any comparable provisions of state, local or foreign law), by
reason of a change in accounting methods or otherwise, as a result of actions
taken prior to the Closing Date.
(m) Schedule 2.13 lists each state, county, local, municipal or
foreign jurisdiction in which Company or any of the Subsidiaries files, has
filed, is required to file or has been required to file a Return or is or has
been liable for Tax on a "nexus" basis for the current and preceding five
years.
(n) The Company is not, and has not been during the five-year
period ending on the date hereof or the Closing Date, as the case may be, a
"United States real property holding corporation" within the meaning of Section
897 of the Code.
(o) Schedule 2.13 provides true and correct descriptions of the
following: items for which amounts for taxes have been reserved on the Balance
Sheet in excess of reserves necessary to currently pay its operating tax
liabilities. The Company has a consolidated net operating loss carryover for
regular Federal income tax purposes as of December 31, 1995, of approximately
$44 million. The Company has no material net operating loss carryovers in
states other than New York (in which it has a net operating loss carryover of
$198,000 as of December 31, 1995). The Company has tax credit carryforwards as
of December 31, 1995, of approximately
<PAGE>
24
$1.2 million for regular Federal income tax purposes, and no tax credit
carryforwards for state tax purposes. In addition, the Company had approximately
$1.1 million of minimum tax carryovers.
(p) Schedule 2.13 sets forth the Company's best estimates, made in
good faith, of the excess loss accounts for the Company and its Subsidiaries as
of December 31, 1995. The Company estimates in good faith that neither it nor
its Subsidiaries had positive balances in any deferred intercompany gain
accounts as of December 31, 1995.
(q) The schedules of the Company's best estimates, made in good
faith, of the temporary and permanent differences as of December 31, 1995,
previously submitted to the Company are true, correct and complete in all
materials respects.
(r) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has made any election under Section 13261(g)(2) or
Section 13261(g)(3) of the Revenue Reconciliation Act of 1993.
(s) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has available any foreign tax credits.
SECTION 2.14. Labor Agreements. Except as identified on
-----------------
Schedule 2.14, neither the Company nor any Subsidiary is a party to any union,
collective bargaining, works council or similar agreement or arrangement.
SECTION 2.15. Benefit Plans. (i) Schedule 2.15 is a list of
--------------
each "employee pension benefit plan" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan"), and each other plan,
arrangement or policy relating to stock options, stock purchases, compensation,
deferred compensation, severance, fringe benefits or other employee benefits,
in each case maintained or contributed to, or required to be maintained or
contributed to, by the Company and its Subsidiaries or any other person or
entity that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each a "Commonly Controlled
Entity") for the benefit of any present or former employees of the Company or
any of its Subsidiaries (all the foregoing being herein called "Benefit Plans").
The Company has made available to Parent true, complete and correct copies of
(1) each Benefit Plan, (2) the most recent annual report on Form 5500 as filed
with the Internal Revenue Service with respect to each applicable Benefit Plan,
(3) the most recent summary plan description (or similar document) with respect
to each applicable
<PAGE>
25
Benefit Plan and (4) each trust agreement and insurance or annuity contract
relating to any Benefit Plan.
(ii) Except as disclosed in Schedule 2.15, to the knowledge of the
Company, each Benefit Plan has been administered in all material respects in
accordance with its terms. Except as disclosed in Schedule 2.15, to the
knowledge of the Company, the Company, its Subsidiaries and all the Benefit
Plans are in compliance in all material respects with the applicable provisions
of ERISA, the Code, and all other Applicable Laws. Except as disclosed in
Schedule 2.15, to the knowledge of the Company, there are no investigations by
any governmental agency, termination proceedings or other claims (except claims
for benefits payable in the normal operation of the Benefit Plans), suits or
proceedings against or involving any Benefit Plan or asserting any rights to or
claims for benefits under any Benefit Plan that could give rise to a Material
Adverse Effect, and to the knowledge of the Company, there are not any facts
that could give rise to a Material Adverse Effect in the event of any such
investigation, claim, suit or proceeding.
(iii) Except as disclosed on Schedule 2.15, to the knowledge of
the Company: (1) all contributions to the Benefit Plans required to be made by
the Company or any of its Subsidiaries in accordance with the terms of the
Benefit Plans, any applicable collective bargaining agreement and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have been timely
made, (2) there has been no application for or waiver of the minimum funding
standards imposed by Section 412 of the Code with respect to any Benefit Plan
that is a Pension Plan, excluding any Pension Plan which is a multiemployer
pension plan as defined in Section 4001(a)(3) of ERISA (hereinafter a "Company
Pension Plan") and (3) no Company Pension Plan had an "accumulated funding
deficiency" within the meaning of Section 412(a) of the Code as of the end of
the most recently completed plan year. All such contributions to the Benefit
Plans for any period ending before the Balance Sheet Date are properly accrued
and reflected in the Balance Sheet and such contributions since such Balance
Sheet Date will be reflected on subsequent balance sheets.
(iv) Except as disclosed on Schedule 2.15, to the knowledge of the
Company, (1) each Company Pension Plan that is intended to be a tax-qualified
plan has been the subject of a determination letter from the Internal Revenue
Service to the effect that such Company Pension Plan and each related trust is
qualified and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, (2) no such determination letter has been revoked,
and revocation has not been threatened, (3) no event has occurred and no
circumstances exist that would adversely affect the tax-qualification of such
Company Pension Plan and (4) such Company Pension Plan has not been amended
since the effective date of its most recent determination letter in any respect
that might adversely affect its qualification,
<PAGE>
26
materially increase its cost or require security under Section
307 of ERISA. The Company has made available to Parent a copy of the most
recent determination letter received with respect to each Company Pension Plan
for which such a letter has been issued, as well as a copy of any pending
application for a determination letter. The Company has also provided to
Parent a list of all Company Pension Plan amendments as to which a favorable
determination letter has not yet been received.
(v) Schedule 2.15 discloses whether: (1) to the knowledge of the
Company, any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Code or Section 406 of ERISA) has occurred that involves the assets of any
Benefit Plan; (2) to the knowledge of the Company, any Company Pension Plan has
been terminated or has been the subject of a "reportable event" (as defined in
Section 4043 of ERISA and the regulations thereunder) for which the 30-day
notice requirement has not been waived by the Pension Benefit Guaranty
Corporation ("PBGC"); and (3) to the knowledge of the Company, the Company, any
of its Subsidiaries or any trustee, administrator or other fiduciary of any
Benefit Plan has engaged in any transaction or acted in a manner that could, or
has failed to act so as to, subject the Company, any such Subsidiary or any
trustee, administrator or other fiduciary to any material liability for breach
of fiduciary duty under ERISA or any other applicable law.
(vi) Except as disclosed on Schedule 2.15, to the knowledge of the
Company, as of the most recent valuation date for each Company Pension Plan
that is a "defined benefit pension plan" (as defined in Section 3(35) of ERISA
(hereinafter a "Defined Benefit Plan")), there was not any amount of "unfunded
benefit liabilities" (as defined in Section 4001(a)(18) of ERISA) under such
Defined Benefit Plan, and the Company is not aware of any facts or
circumstances that would materially change the funded status of any such
Defined Benefit Plan. The Company has made available to Parent the most recent
actuarial report or valuation with respect to each Defined Benefit Plan.
(vii) Except as disclosed on Schedule 2.15, to the knowledge of
the Company, no Commonly Controlled Entity has incurred any liability to a
Pension Plan (other than for contributions not yet due) or to the PBGC (other
than for the payment of premiums not yet due) that, when aggregated with other
such liabilities, would result in a Material Adverse Effect to the Company,
which liability has not been fully paid as of the date hereof if due and
payable.
(viii) No Commonly Controlled Entity has (a) engaged in a
transaction described in Section 4069 of ERISA that could subject the Company
to a material liability at any time after the date hereof or (b) acted in a
manner that could, or failed to act so as to, result in material fines,
penalties, taxes or related charges under (x)
<PAGE>
27
Section 502(c), (i) or (l) of ERISA, (y) Section 4071 of ERISA or (z) Chapter
43 of the Code.
(ix) Except as disclosed in Schedule 2.15, to the knowledge of the
Company, no Commonly Controlled Entity has announced an intention to withdraw,
but has not yet completed withdrawal, from a "multiemployer pension plan" (as
defined in Section 4001(a)(3) of ERISA). Except as disclosed on Schedule 2.15,
to the knowledge of the Company, no action has been taken, and no circumstances
exist, that could result in either a partial or complete withdrawal from such a
multiemployer pension plan by any Commonly Controlled Entity. Schedule 2.15
also lists for each Benefit Plan that is a multiemployer pension plan
(excluding the multiemployer pension plan in respect of the Company's former
New York Building Products, Inc. operations) the Company's best estimate, based
upon the information supplied to it by each multiemployer pension plan, of the
amount of withdrawal liability that would be incurred if each Commonly
Controlled Entity were to make a complete withdrawal from each such plan as of
the dates specified in Schedule 2.15. Schedule 2.15 also lists for each
Benefit Plan that is a multiemployer pension plan (excluding the multiemployer
pension plans in respect of the Company's former New York Building Products,
Inc., and Bardstown operations) the Company's best estimate, based upon the
information supplied to it by each multiemployer pension plan, of the amount of
"unfunded vested benefits" (within the meaning of Section 4211 of ERISA) as of
the dates specified in Schedule 2.15. As of the most recent valuation date for
the multiemployer pension plan in respect of the Company's former New York
Building Products Inc. operations, to the knowledge of the Company, based upon
the information supplied to it by such multiemployer pension plan, there was
not any amount of "unfunded vested benefits" under such plan.
(x) The list of Welfare Plans in Schedule 2.15 discloses whether
each Welfare Plan is (i) unfunded, (ii) funded through a "welfare benefit
fund", as such term is defined in Section 419(e) of the Code, or other funding
mechanism or (iii) insured. Except as disclosed on Schedule 2.15, to the
knowledge of the Company, apart from the written provisions of the Welfare
Plans disclosed to Parent, there are no understandings, agreements or
undertakings, written or oral, that would prevent any such Welfare Plan from
being amended or terminated at any time after the Closing Date. The Company
and its Subsidiaries comply with the applicable requirements of Section
4980B(f) of the Code with respect to each Benefit Plan that is a group health
plan, as such term is defined in Section 5000(b)(1) of the Code.
(xi) Except as provided in Section 1.14 with respect to the 1982
Stock Option Plan, the 1992 Stock Option Plan, the Director Option Plan, the
LTIP and the Savings Plan, and as provided in the employment and severance
agreements listed in Schedules 2.11(a) and 2.15, no employee of the Company or
any of its Subsidiaries
<PAGE>
28
will be entitled to any additional material benefits or any acceleration of the
time of payment or vesting of any material benefits under any Benefit Plan as a
result of the transactions contemplated by this Agreement.
(xii) During the period beginning on January 1, 1995, and ending
on the date of this Agreement, there has been no change (a) in any actuarial or
other assumption used to calculate funding obligations with respect to any
Company Pension Plan or (b) in the manner in which contributions to any Company
Pension Plan are made or the basis on which such contributions are determined.
(xiii) Except as disclosed on Schedule 2.15, to the knowledge of
the Company and based upon its best estimate, any amount that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transactions contemplated by this Agreement by any employee, officer or
director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or Benefit Plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(B)(1) of the Code). Schedule 2.15 sets forth (i) the Company's
best estimate of the maximum amount that could be paid to each executive
officer of Company as a result of the transactions contemplated by this
Agreement under all employment, severance and termination agreements, other
compensation arrangements and Benefit Plans currently in effect and (ii) the
Company's best estimate of the "base amount" (as such term is defined in
Section 280(b)(3) of the Code) for each such executive officer calculated as of
the date of this Agreement.
SECTION 2.16. Labor Disputes; Unfair Labor Practices. (a)
---------------------------------------
There is neither pending nor, to the knowledge of the Company, threatened any
labor dispute which could materially adversely affect the facility that is the
subject of such dispute, or any strike or work stoppage involving the Company
or any Subsidiary.
(b) There is not now pending or, to the knowledge of the Company,
threatened any charge or complaint against the Company or any Subsidiary by the
National Labor Relations Board, any state or local labor or employment agency
or any representative thereof.
SECTION 2.17. Product Warranties. (a) The standard forms of
-------------------
product warranties and guarantees used by the Company and each Subsidiary
during the past five (5) years are attached as Schedule 2.17 hereto. Neither
the Company nor any Subsidiary has authorized any product warranty or guaranty
during such period of time other than pursuant to such forms.
<PAGE>
29
(b) Other than as set forth on Schedule 2.17 or relating to any
matter that has been resolved or that the Company reasonably believes has been
abandoned, as of date of this Agreement, the Company has not received written
notice of any product warranty or similar claims with an actual or alleged
liability to the Company or any Subsidiary other than routine warranty claims
against the Company that do not in the aggregate exceed in any material respect
the level of such claims historically experienced by the Company in the ordinary
course. The Company does not believe that the Assurance of Discontinuance dated
November 1995 between the Commonwealth of Massachusetts and Bird, Inc. will
result in an increase in liability for claims under product warranties over the
level historically experienced by the Company in the ordinary course.
SECTION 2.18. Environmental Matters. Except as disclosed in
----------------------
Schedule 2.18, with respect to the business and operations of the Company and
its Subsidiaries and to the Owned Real Property and Leased Real Property:
(a) No Hazardous Material has been used, possessed, Released,
generated, manufactured or treated, on or under such Owned Real Property or
Leased Real Property, as the case may be, by the Company or any Subsidiary in
material violation of any Environmental Law.
(b) The Company and each Subsidiary, as the case may be, has
through the date hereof (i) secured and maintained compliance with all permits,
certificates, licenses, approvals, registrations or authorizations required for
the conduct of their respective businesses under Environmental Laws and (ii)
maintained such Owned Real Property or Leased Real Property and conducted their
respective business thereon in accordance in all material respects with all
Environmental Laws.
(c) No written notice, written request for information pursuant to
common law, law or regulation, citation, summons, complaint or order has been
received by the Company or any Subsidiary, and no penalty has been assessed
and, to the knowledge of the Company, no investigation or review is pending or
threatened by any Governmental Authority or other Person, with respect to the
business and operations of the Company and its Subsidiaries or to such Owned
Real Property or Leased Real Property, as the case may be, other than relating
to any matter that has been resolved or that the Company reasonably believes
has been abandoned, regarding (i) any alleged violation by the Company or any
Subsidiary of any Environmental Laws, (ii) any alleged failure by the Company
or any Subsidiary to have any environmental permit, certificate, license,
approval, registration or authorization required under any Environmental Law,
or (iii) any use, possession, spill, Release, threatened Release, storage,
generation, manufacture, treatment, deposit, discharge, transportation
<PAGE>
30
or disposal by or on behalf of the Company or any Subsidiary of any Hazardous
Material.
(d) Neither the Company nor any Subsidiary has entered into or
agreed to any court decree or order nor are any of them subject to any judgment,
decree or order relating to compliance with any Environmental Law or to
investigation or cleanup under any Environmental Law.
(e) There are no aboveground or underground storage tanks on any
such Owned Real Property or Leased Real Property.
(f) Neither the Company nor any Subsidiary has received any
written notice of non-compliance with any applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Authority that
relate to occupational health and safety, other than relating to any matter
that has been resolved or that the Company reasonably believes has been
abandoned.
(g) The investigation, remediation, cleanup and other costs of the
Company relating to compliance with any Environmental Law will not exceed an
amount equal to 205% of the Company's estimates of such amounts (the "Company
Estimates") provided to Parent by the Company in a letter dated January 30,
1996. The Company has used its best efforts in preparing the Company Estimates
consistent with all recognized best engineering practices.
As used in this Agreement, the term "Environmental Laws" means any
and all applicable treaties, laws, regulations, enforceable requirements,
binding determinations, orders, decrees, judgments, injunctions, permits,
approvals, authorizations, licenses or variances, promulgated or entered into
by any Governmental Authority, relating to the environment, conservation,
preservation or reclamation of natural resources, or to the management, Release
or threatened Release of Hazardous Materials, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Section Section 9601 et seq. ("CERCLA"), the Federal Water Pollution
-- ---
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Section
Section 1251 et seq., Clean Air Act of 1970, as amended, 42 U.S.C. Section
-- ---
Section 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
-- ---
Section Section 2601 et seq., the Occupational Safety and Health Act of 1970,
-- ---
as amended, 29 U.S.C. Section Section 651 et seq., the Emergency Planning and
-- ---
Community Right-to-Know Act of 1986, 42 U.S.C. Section Section 11001 et seq.,
-- ---
the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section Section
300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section
-- ---
Section 1801 et seq., and any similar or implementing state or local law, and
-- ---
all amendments or regulations promulgated thereunder.
<PAGE>
31
As used in this Agreement, the term "Hazardous Materials" means all
explosive or regulated radioactive materials or substances, hazardous or toxic
substances, wastes or chemicals, petroleum (including crude oil or any faction
thereof) or petroleum distillates, asbestos or asbestos containing materials,
including materials listed in 49 C.F.R. Section 172.101 and materials defined
as hazardous substances pursuant to Section 101(14) of the CERCLA.
As used in this Agreement, the term "Release" means any spilling,
emitting, leaking, pumping, pouring, emptying, injecting, depositing,
disposing, discharging, dispersing, leaching, emanating or migrating of any
Hazardous Materials in, into, onto, or though the environment (including
ambient air, surface water, groundwater, soils, land surface, subsurface
strata, workplace or structure).
SECTION 2.19. Insurance. The Company and each Subsidiary has
----------
been and is insured by financially sound and reputable insurers unaffiliated
with the Company with respect to its and their properties and the conduct of
its and their business in such amounts and against such risks as are consistent
with industry practice. The insurance coverage provided by such policies of
insurance will be continued through the Effective Date and will not terminate
or lapse by reason of the transactions contemplated by this Agreement. The
Company has provided to Parent copies of such policies of insurance. Except as
set forth in Schedule 2.19, neither the Company nor any Subsidiary has been
denied insurance coverage by any carrier in the last three years.
SECTION 2.20. SEC Filings. (a) Schedule 2.20 sets forth all
------------
of the documents filed since January 1, 1994 through the date of this Agreement
by the Company with the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), or the Exchange Act. The
documents listed in Schedule 2.20 (the "SEC Documents") are all the documents
the Company was required to file under the Securities Act or the Exchange Act
since January 1, 1994, and at the time they were filed and when supplemented or
amended, the SEC Documents complied with the requirements of the Securities Act
and the Exchange Act, as applicable, and at such time, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Documents, at the time they were filed and when
supplemented or amended, 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 GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may
be
<PAGE>
32
indicated in the notes thereto) and fairly present in all material respects
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 therein indicated (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
(b) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (i) the Offer Documents
or (ii) the information to be filed by the Company in connection with the Offer
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder (the "Information Statement"), will, at the respective times the
Offer Documents and the Information Statement are filed with the SEC and first
published, sent or given to holders of shares of Company Common Stock or
Preference Stock, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Information Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder.
SECTION 2.21. Brokers and Finders. The Company has not
--------------------
employed any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the Merger contemplated herein except for Dillon, Read & Co. Inc.
The Company has delivered to Parent a copy of its engagement letter with
Dillon, Read & Co. Inc. The estimated investment banking and legal fees and
expenses incurred and to be incurred by the Company in connection with this
Agreement and the Merger contemplated by this Agreement have been disclosed to
Parent in writing on the date hereof.
SECTION 2.22. Rights Agreement; Antitakeover. (a) The
-------------------------------
Company has taken all necessary action to (i) amend the Rights Agreement to
render the Rights inapplicable to the Offer and the Merger and the other
transactions contemplated by this Agreement and (ii) ensure that (y) neither
Parent nor any of its affiliates is an Acquiring Person (as defined in the
Rights Agreement) and (z) a Stock Acquisition Date, a Distribution Date or a
Triggering Event (as such terms are defined in the Rights Agreement) does not
occur by reason of the announcement or consummation of the Offer and the Merger
or any of the other transactions contemplated by this Agreement.
(b) The Company has taken or will take prior to Closing all action
necessary to approve the Offer and the Merger such that the approval (along
with the stockholder approval required pursuant to Section 6.03) is sufficient
to render entirely inapplicable to the Offer and the Merger or Parent or
Acquisition Sub the provisions of
<PAGE>
33
Chapter 110C, 110D, 110E and 110F of the Massachusetts General Laws. No other
antitakeover or similar statute or regulation applies or purports to apply to
the transactions contemplated by this Agreement.
SECTION 2.23. Opinion of Financial Advisor. The Company
-----------------------------
has received the opinion of Dillon, Read & Co. Inc. to the effect that 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, a copy of which opinion has been delivered to Parent.
SECTION 2.24. Asbestos Claims. The Agreement of Settlement
----------------
dated March 8, 1993, between Employers Insurance of Wausau and the Company with
respect to insurance coverage for the Company's exposure for future asbestos
expenses and liabilities is in full force and effect.
ARTICLE III
Representations and Warranties of Parent
----------------------------------------
Parent hereby represents and warrants to the Company as follows:
SECTION 3.01. Corporate Organization. Parent is a corporation
-----------------------
duly incorporated, validly existing and in good standing under the laws of
Delaware with all requisite power and authority to own, operate and lease its
properties and to carry on its business as now being conducted. Parent is
qualified to do business and is in good standing in each jurisdiction in which
such qualification is necessary, except where failure to be qualified would not
reasonably be expected to have a material adverse effect on the ability of
Parent to carry out the transactions contemplated hereby without significant
unanticipated delay.
SECTION 3.02. Authorization. (a) Parent has requisite
--------------
corporate power and authority to execute and deliver this Agreement and,
subject to the satisfaction of the conditions set forth herein and therein, to
consummate the transactions contemplated hereby and thereby.
(b) This Agreement has been approved by the Board of Directors of
Parent and upon such approval no other corporate proceeding on the part of
Parent is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
<PAGE>
34
(c) This Agreement has been duly and validly executed and
delivered by Parent and is a valid and binding agreement of Parent, enforceable
against Parent in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws in effect now or hereafter in effect relating to
creditors' rights generally and by equitable principles (whether considered in
a proceeding at law or in equity).
SECTION 3.03. Absence of Conflicts; Consents. Neither the
-------------------------------
execution and delivery by Parent of this Agreement nor the consummation by
Parent of the transactions contemplated hereby will:
(a) conflict with or result in a breach of any provision of the
certificate of incorporation or By-Laws of Parent which would have a
material adverse effect on the ability of Parent to carry out the
transactions contemplated hereby without significant unanticipated delay;
(b) result in the creation of any Lien upon any of the properties
of Parent which would have a material adverse effect on the ability of
Parent to carry out the transactions contemplated hereby without
significant unanticipated delay;
(c) with or without giving of notice or the passage of time, or
both, violate, or conflict with, or constitute a default under, or result
in the termination or in a right of termination of, violate or be in
conflict with, result in a breach of any term or provision of, or
constitute a default under, or accelerate or permit the acceleration of
the performance required by, or give any other Person a basis for
accelerated or increased rights or termination or nonperformance under,
or require any consent, authorization or approval under, any term or
provision of any Lien, lease, license or other agreement or instrument to
which Parent or any of its Subsidiaries is a party or by which it or they
are bound, except to the extent that such circumstance would not have a
material adverse effect on the ability of Parent to carry out the
transactions contemplated hereby without significant unanticipated delay;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of Parent, violate any provision of, or
require any consent, authorization or approval under, any Applicable Laws
of any Governmental Authority, or any Judgment applicable to Parent or
any of its Subsidiaries, except to the extent that such circumstance
would not have a material adverse effect on the ability of Parent to
carry out the transactions contemplated hereby without significant
unanticipated delay; or
<PAGE>
35
(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority, to
be made or obtained by or on behalf of Parent except (i) as required by
the Exchange Act, (ii) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the laws of the
Commonwealth of Massachusetts or, in connection with the maintenance of
qualification to do business in other jurisdictions, such other
jurisdictions and (iii) filings with the FTC and with the Antitrust
Division under the HSR Act.
SECTION 3.04. Litigation. Neither Parent nor any of its
-----------
Subsidiaries is engaged in, and there is not, to the knowledge of Parent,
pending, nor has Parent or any of its Subsidiaries received any written notice
of, any Legal Action which would prevent Parent from consummating the
transactions contemplated hereby.
SECTION 3.05. Brokers and Finders. Parent has not employed
--------------------
any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the transactions contemplated hereby except for McFarland Dewey &
Co. In the event that the Company shall be obligated to pay Parent's Expenses
pursuant to Article X, Parent will deliver to the Company a copy of its
engagement letter with McFarland Dewey & Co.
ARTICLE IV
Representations and Warranties of Acquisition Sub
-------------------------------------------------
Acquisition Sub hereby represents and warrants to the Company as
follows:
SECTION 4.01. Corporate Organization. Acquisition Sub is a
-----------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has not engaged in any operations
or incurred any obligations other than incident to its organization and the
performance of this Agreement.
SECTION 4.02. Authorization. (a) Acquisition Sub has all
--------------
requisite corporate power and authority, if necessary, to execute, deliver and
file the Articles of Merger and to execute and deliver this Agreement and,
subject to the satisfaction of the conditions set forth herein, to consummate
the transactions contemplated hereby. This Agreement has been approved by the
Board of Directors of Acquisition Sub, and no other corporate proceeding on the
part of Acquisition Sub is necessary to authorize this
<PAGE>
36
Agreement or to consummate the transactions contemplated hereby without
significant unanticipated delay.
(b) The Agreement has been duly and validly executed and delivered
by Acquisition Sub and is a valid and binding agreement of Acquisition Sub,
enforceable against Acquisition Sub in accordance with its terms, enforceable
against Acquisition Sub in accordance with its terms, except in each case as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws in effect now or hereafter in
effect relating to creditors' rights generally and by equitable principles
(whether considered in a proceeding at law or in equity).
SECTION 4.03. Absence of Conflicts; Consents. Neither the
-------------------------------
execution and delivery by Acquisition Sub of this Agreement nor the
consummation by Acquisition Sub of the transactions contemplated hereby will:
(a) conflict with or result in a breach of any provision of the
Articles of Organization or By-Laws of Acquisition Sub which would have a
material adverse effect on the ability of Acquisition Sub to carry out
the transactions contemplated hereby without significant unanticipated
delay;
(b) result in the creation of any Lien upon any of the properties
of Acquisition Sub which would have a material adverse effect on the
ability of Acquisition Sub to carry out the transactions contemplated
hereby without significant unanticipated delay;
(c) with or without giving of notice or the passage of time, or
both, violate, or conflict with, or constitute a default under, or result
in the termination or in a right of termination of, violate or be in
conflict with, result in a breach of any term or provision of, or
constitute a default under, or accelerate or permit the acceleration of
the performance required by, or give any other Person a basis for
accelerated or increased rights or termination or nonperformance under,
or require any consent, authorization or approval under, any term or
provision of any Lien, lease, license or other agreement or instrument to
which Acquisition Sub or any of its Subsidiaries is a party or by which
it or they are bound, unless such circumstance would not have a material
adverse effect on the ability of Acquisition Sub to carry out the
transactions contemplated hereby without significant unanticipated delay;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of Acquisition Sub, violate any provision
of, or require any consent, authorization or approval under, any
Applicable Laws of any Governmental Authority, or any Judgment applicable
to Acquisition Sub or
<PAGE>
37
any of its Subsidiaries, except to the extent that such circumstance would
not have a material adverse effect on the ability of Acquisition Sub to
carry out the transactions contemplated hereby without significant
unanticipated delay; or
(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority, to
be made or obtained by or on behalf of Acquisition Sub except (i) as
required by the Exchange Act, (ii) the filing of the Articles of Merger
and other appropriate merger documents, if any, as required by the laws
of the Commonwealth of Massachusetts or, in connection with the
maintenance of qualification to do business in other jurisdictions, such
other jurisdictions and (iii) filings with the FTC and with the Antitrust
Division under the HSR Act.
SECTION 4.04. Litigation. Neither Acquisition Sub nor any of
-----------
its Subsidiaries is engaged in, and there is not, to the knowledge of
Acquisition Sub, pending, nor has Acquisition Sub received any written notice
of, any Legal Action which would prevent Acquisition Sub from consummating the
transactions contemplated hereby.
SECTION 4.05. Capitalization. The authorized capital stock of
---------------
Acquisition Sub consists of 200,000 shares of Common Stock, $1 par value, of
which 100 shares are issued and outstanding. All issued and outstanding shares
of Acquisition Sub Common Stock have been validly issued and are fully paid,
nonassessable and free of preemptive rights and all of such shares are owned,
beneficially and of record, by Parent. There are no outstanding securities
convertible into or exchangeable or exercisable for shares of capital stock of
Acquisition Sub.
SECTION 4.06. Brokers and Finders. Acquisition Sub has not
--------------------
employed any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE V
Covenants
---------
SECTION 5.01. Access and Information. (a) From the date
-----------------------
hereof until the Effective Date or, if earlier, the date of termination of this
Agreement pursuant to Section 9.01, the Company shall, and shall cause its
Subsidiaries to, afford to Parent and to Parent's officers, employees,
accountants, counsel and other authorized representatives full access, upon
reasonable notice to the Company, to their
<PAGE>
38
plants, properties, books and records during normal business hours for the
purpose of making such investigations as Parent shall reasonably desire in
connection with the transactions contemplated hereby, at its expense (except as
otherwise contemplated by Section 10.01), and the Company shall use its
reasonable efforts to cause its and its Subsidiaries' representatives to furnish
promptly to Parent such additional financial and operating data and other
information regarding the business and properties of the Company and its
Subsidiaries as Parent may from time to time reasonably request for such
purpose. In addition, the Company shall afford to Parent and to Parent's
officers, employees, accountants, counsel and other authorized representatives
the right to speak directly with the lenders of the Company and its Subsidiaries
in the presence of representatives of the Company selected by the Chief
Executive Officer of the Company, including without limitation, Fleet Capital
Corporation.
(b) The provisions of the confidentiality agreement dated April 13,
1994 (the "Confidentiality Agreement"), between the Company and Saint-Gobain
Corporation in connection with the transactions contemplated hereby shall be
incorporated herein and made a part hereof except that the termination of such
Agreement shall be extended to December 31, 1996.
SECTION 5.02. Proxy Statement. (a) The Company shall prepare
----------------
and file with the SEC, as soon as reasonably practicable, the proxy statement
to be distributed to the Company's stockholders in connection with the Special
Meeting referred to in Section 5.03 (the "Proxy Statement"), and the Company
shall use all reasonable efforts to have such Proxy Statement cleared by the
SEC. The Proxy Statement shall comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied or
required to be supplied by Parent or Acquisition Sub for inclusion or
incorporation by reference in the Proxy Statement.
(b) Parent shall cooperate with the Company in preparing the Proxy
Statement and making any filings required to be made pursuant to this Section
5.02, and the Company shall consult with Parent in that regard and keep Parent
fully informed of its progress with respect thereto and provide to Parent
copies of the Proxy Statement and all such filings for review and approval
prior to the finalization thereof.
(c) Parent and the Company shall furnish to each other, and each
other's counsel, all such information as may be required and requested in
connection with the preparation of the Proxy Statement and the filing of the
Proxy Statement with the SEC, and each represents and warrants to the other
that no written information furnished as provided for in this Section 5.02(c)
which has been prepared by the responsible party will contain any untrue
statement of a material fact or omit to state a material fact
<PAGE>
39
required to be stated in order to make any information so furnished, in light
of the circumstances under which it is so furnished, not misleading.
(d) Parent and the Company shall each promptly notify the other if
at any time before the Effective Date it becomes aware that the Proxy Statement
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading. In such event, the Company shall prepare a supplement or
amendment to the Proxy Statement which corrects such misstatements or omissions
and shall cause the same to be filed with the SEC and distributed to the
stockholders of the Company in accordance with the Exchange Act.
(e) Upon the acceptance of any shares of Company Common Stock and
Preference Stock (if any) by Acquisition Sub pursuant to the Offer (the
"Consummation of the Offer"), Parent shall cause Acquisition Sub to vote all
its shares of Company Common Stock and Preference Stock in favor of the Merger.
SECTION 5.03. Stockholders' Meeting. (a) The Company shall
----------------------
call a special meeting of its stockholders ("Special Meeting") to consider and
vote upon the matters necessary for the consummation of the transactions
contemplated by this Agreement and shall recommend to its stockholders a vote
"FOR" the Merger; provided, however, that nothing contained in this
-------- -------
Section 5.03(a) or any other provision of this Agreement shall prohibit the
Company or its Board of Directors, or the representatives of either of them,
from recommending to the stockholders of the Company against, or withdrawing,
modifying or changing its recommendation to the stockholders with respect to,
the Merger, if permitted by Section 5.12 hereof.
(b) The date of the Special Meeting shall be determined jointly by
Parent and the Company, but shall occur as soon as practicable following the
SEC's approval of the Proxy Statement and related proxy materials.
SECTION 5.04. Supplemental Information. From time to time
-------------------------
prior to the Effective Date, the Company shall promptly advise Parent of any
inaccuracy of which it has knowledge in any Schedules which it has delivered
pursuant to this Agreement if any matter arises hereafter which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in any such Schedule. Such updating shall not cure any
breach or misrepresentation or failure of any closing condition that may exist
based on the Schedules originally delivered with this Agreement.
<PAGE>
40
SECTION 5.05. Further Assurances. Consistent with the terms
-------------------
and conditions hereof, each party hereto shall execute and deliver such
instruments and take such other action as the other parties hereto may
reasonably require in order to carry out this Agreement and the transactions
contemplated hereby.
SECTION 5.06. Conduct of Company Business Prior to the Effective
---------------------------------------------------
Date. (a) Except as set forth on Schedule 5.06 or any other Schedule hereto
- -----
with reference to this Section 5.06 or otherwise consented to or approved by an
authorized officer of Parent or as expressly contemplated or permitted by this
Agreement, the Company agrees that prior to the Effective Date (or, if earlier,
when a majority of the members of the Board of Directors of the Company are
designees of Acquisition Sub in accordance with Section 5.21) the business of
the Company and its Subsidiaries shall be conducted in the ordinary course
consistent with past practice and:
(i) no change shall be made in the respective articles or
certificate of organization or incorporation or By-Laws of the Company or
any of its Subsidiaries;
(ii) no change shall be made in the number of shares of the
Company's authorized, issued or outstanding capital stock; nor shall any
Conversion Rights be granted, made, redeemed or amended; nor shall the
Company or any Subsidiary issue, deliver, pledge or sell any such shares,
securities or obligations (except deliveries or pledges in favor of the
Company's senior lenders); provided, however, that the Company
-------- -------
shall be permitted to issue shares or other securities as contemplated by
the Savings Plan as in effect on the date hereof and shall be permitted
to issue shares of Common Stock in connection with the due exercise of
Options under the 1982 Stock Option Plan, the 1992 Stock Option Plan, the
Director Option Plan or any other right or convertible security
outstanding as of the date of this Agreement in accordance with the
existing terms thereof;
(iii) except as required with respect to the 5% Stock (including
the obligations set forth in Section 5.19) or with respect to the
Preference Stock as permitted in Section 5.19, (x) no dividend shall be
declared or paid or other distribution (whether in cash, stock, property
or any combination thereof) or payment declared or made in respect of the
Company Common Stock or any other outstanding capital stock of the
Company, nor shall the Company or any Subsidiary (y) purchase, acquire or
redeem any shares of Company Common Stock, 5% Stock or Preference Stock
or (z) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock;
<PAGE>
41
(iv) neither the Company nor any Subsidiary shall enter into any
Material Contract, or except in the ordinary course of business
consistent with past practice any other agreement, commitment or
instrument;
(v) the Company shall use and shall cause each Subsidiary to use
its and their respective reasonable efforts to preserve its and their
business organization intact, to keep available the services of its and
their officers and present key employees and to preserve its and their
properties and the goodwill of its and their suppliers, customers and
others with whom business relationships exist;
(vi) the Company shall not take, agree to take or permit any
Subsidiary to take any action or do or permit to be done anything in the
conduct of its business or that of any Subsidiary which would be contrary
to or in breach of any of the terms or provisions of this Agreement or
which would cause any of the representations of the Company contained
herein to be or become untrue in any material respect;
(vii) neither the Company nor any of its Subsidiaries shall adopt
or amend in any material respect or terminate any Benefit Plan, except as
required by law, or change any actuarial or other assumption used to
calculate funding obligations with respect to any Company Pension Plan
(except to the extent that failure to make such change would result in
noncompliance with GAAP, ERISA or the Code), or change the manner in
which contributions to any Company Pension Plan are made or the basis on
which such contributions are determined, except as required by Applicable
Law;
(viii) the Company shall not acquire or agree to acquire (x) 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 or (y) any assets that are material, individually or in
the aggregate, to the Company and its Subsidiaries taken as a whole,
except purchases of inventory, raw materials, supplies and similar
materials in the ordinary course of business consistent with past
practice and capital expenditures complying with clause (xi);
(ix) the Company shall not sell, lease, license, mortgage or
otherwise encumber or subject to any Lien (except in favor of the
Company's senior lenders or Permitted Liens) or otherwise dispose of any
of its material properties or assets, except bona fide sales of inventory
in the ordinary course of business consistent with past practice;
<PAGE>
42
(x) the Company shall not (x) incur any indebtedness for borrowed
money or guarantee any such indebtedness of another person, issue or sell
any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary
course of business consistent with past practice and routine endorsements
in the process of collection, or (y) make any loans, advances or capital
contributions to, or investments in, any other person, other than to the
Company or any direct or indirect wholly owned Subsidiary of the Company
or routine travel and similar advances to employees;
(xi) the Company shall not make or agree to make any new capital
expenditure or expenditures which, individually, is in excess of $100,000
or, in the aggregate, are in excess of $250,000;
(xii) the Company shall not make any tax election or settle or
compromise any income tax liability; provided that Parent shall not
--------
unreasonably withhold any consent or approval of any such tax election,
settlement or compromise; and provided further that the filing of the
----------------
Company's 1995 Federal income tax return and 1995 state and local income
tax returns shall not constitute the settling or compromising of any
income tax liability for purposes of this paragraph;
(xiii) the Company shall not 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, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities that are
reflected or reserved against in, the Balance Sheet or incurred since the
date of the Balance Sheet in the ordinary course of business consistent
with past practice, or waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party, except as permitted by
Section 5.12; and
(xiv) the Company shall not authorize any of, or commit or agree to
take any of, the foregoing actions.
(b) Parent shall respond within a reasonable period of time to any
request for consent or approval required under Section 5.06.
<PAGE>
43
(c) Advice of Changes. The Company shall promptly advise
------------------
Parent orally and in writing of any change or event of which the Company has
knowledge having, or which, insofar as can reasonably be foreseen, would have,
a Material Adverse Effect.
SECTION 5.07. Consents. Each of the Company, Parent and
---------
Acquisition Sub shall, and shall cause each of their Subsidiaries to, use its
and their reasonable efforts to obtain prior to the Effective Date all
approvals, authorizations and consents of all third Persons identified on
Schedule 2.05 and all Permits which are necessary for (i) the consummation of
the Offer, the Merger and the other transactions contemplated hereby, (ii) the
ownership or leasing and operation by the Surviving Corporation and each of its
Subsidiaries of all the properties and assets of the Company and its
Subsidiaries and (iii) the conduct by the Surviving Corporation and each of its
Subsidiaries of the business of the Company and its Subsidiaries as conducted
by such entities on the date hereof.
SECTION 5.08. Filings. The Company, Parent and Acquisition
--------
Sub shall use their reasonable efforts to respond as promptly as practicable to
all inquiries received from the FTC or the Antitrust Division for additional
information or documentation in connection with all notices, reports or other
documentation filed by Parent and the Company under the HSR Act. The Company,
Parent and Acquisition Sub shall take such reasonable action as may be necessary
under state and Federal securities laws applicable to or necessary for, and will
file all documents and notifications with the SEC and other Governmental
Authorities reasonably necessary for, the consummation of the Offer, the Merger
and the transactions contemplated hereby. Each party shall furnish the other and
the other's counsel with all information reasonably requested by such other
party pertaining to it and its subsidiaries and affiliates as may be required in
order to enable such other party to take all such actions as required by this
Section 5.08. Nothing in this Agreement shall require Parent to dispose of, or
make any change in, any portion of its or the Company's assets or business or to
pay any material amount or incur any other material burden in order to obtain
any consent, approval or authorization or satisfy any condition in connection
with the Closing.
SECTION 5.09. Filing of Articles of Merger. Subject to the
-----------------------------
terms and conditions of this Agreement, as soon as practicable following the
approval of the Merger by the stockholders of the Company contemplated by
Section 5.03 hereof, the Company, Parent and Acquisition Sub will cause the
Articles of Merger to be filed with the Secretary of State of the Commonwealth
of Massachusetts.
SECTION 5.10. Interim Financial Statements. Until the
-----------------------------
Effective Date or, if earlier, the date of termination of this Agreement
pursuant to Section 9.01, as
<PAGE>
44
soon as practicable but in no event later than 30 days after the end of each
month beginning with February 1996, the Company shall deliver to Parent
unaudited consolidated financial information for such month and the
corresponding month of the preceding year as prepared by the Company's
management for its own internal purposes, such information to be held in
confidence in accordance with Section 5.01(b) hereof. Until the Effective Date
or, if earlier, the date of termination of this Agreement pursuant to Section
9.01, the Company shall deliver to Parent its Form 10-Q for each quarter within
45 days after the end of such quarter after the date of this Agreement (but not
later than the business day prior to the date of filing of such Form 10-Q with
the SEC). The financial statements contained therein shall present fairly in all
material respects the Company's consolidated financial condition, results of
operations and changes in financial position (on a consolidated basis) as at the
date or for the periods indicated in accordance with GAAP consistently applied,
except as otherwise indicated in such statements and except as to format and
footnote disclosure shall be prepared in conformity with the requirements of
Rule 10-01 of Regulation S-X under the Exchange Act and Item 303 of Regulation
S-K.
SECTION 5.11. Public Announcements. (a) The parties agree
---------------------
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties. Thereafter, unless required by Applicable Law or by the rules of any
applicable self-regulatory organizations, the Company, Parent and Acquisition
Sub shall not, and shall each cause their respective officers, employees and
other authorized representatives not to, prior to the Effective Date, issue any
press release or make any other public disclosure or announcement or otherwise
make any disclosure to any third Person (other than by way of the Offer
Documents, the Schedule 14D-9 and the Proxy Statement referred to in Section
5.02) concerning the transactions contemplated by this Agreement or the terms
and provisions hereof.
(b) Should any press release or other public disclosure be
required to be made, then the party required to make such release or disclosure
shall not make such release or disclosure without first using its reasonable
efforts to obtain the prior written consent of the other parties hereto as to
both the timing and content of such press release or public disclosure, which
consent shall not be unreasonably withheld.
SECTION 5.12. No Solicitation. (a) The Company shall not,
----------------
nor shall it permit any of its Subsidiaries or affiliates to, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of, the Company or any of
its Subsidiaries to, (i) solicit or initiate, or knowingly encourage the
submission of, any takeover proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to any takeover proposal (except for (1) non-confidential information, or
<PAGE>
45
(2) filings with the SEC); provided, however, that prior to the earlier of
-------- -------
(x) the Consummation of the Offer or (y) the Special Meeting, to the extent
required by the fiduciary obligations of the Board of Directors of the Company,
as determined in good faith by the Board of Directors based on the advice of
counsel, the Company may, (A) in response to an unsolicited request therefor,
furnish information with respect to the Company (pursuant to a confidentiality
agreement at least as restrictive as the Confidentiality Agreement (as
determined by the Company's counsel)) to any person who has indicated to the
Company that it is interested in pursuing a qualified takeover proposal and
discuss such information (but not the terms of any possible takeover proposal)
with such person and (B) upon receipt by the Company of a qualified takeover
proposal, following the delivery to Parent of the notice required pursuant to
Section 5.12(c), participate in discussions or negotiations regarding such
qualified takeover proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding sentence by
any officer of the Company or any of its Subsidiaries or any investment banker,
attorney or other advisor or representative of the Company or any of its
Subsidiaries, shall be deemed to be a breach of this Section 5.12 by the
Company. For purposes of this Agreement, "takeover proposal" means any
proposal for a merger or other business combination (regardless of legal form)
involving the Company or any Subsidiary or any proposal or offer to acquire in
any manner, directly or indirectly, a substantial portion of the assets or
business of the Company or a substantial equity interest in, or any substantial
amount of voting securities of, the Company or any Subsidiary, or any other
transaction outside the ordinary course of business and not otherwise
specifically permitted by the terms of this Agreement the consummation of which
would impede or prevent the consummation of the Merger pursuant to the terms of
this Agreement; and "qualified takeover proposal" means a takeover proposal
having terms which the Board of Directors of the Company determines (based on,
among other things, the advice of a financial advisor of nationally recognized
reputation) in its good faith reasonable judgment to be more favorable to the
holders of Company Common Stock than the Total Merger Consideration and holders
of Preference Stock than the Preference Stock Consideration and likely to be
fully financed and consummated.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or Acquisition Sub, the approval or
recommendation by such Board of Directors or any such committee of this
Agreement, the Offer or the Merger, (ii) approve or recommend, or propose to
approve or recommend, any takeover proposal or (iii) enter into any agreement
with respect to any takeover proposal. Notwithstanding the foregoing, in the
event the Board of Directors of the Company receives a qualified takeover
proposal, the Board of Directors or any committee thereof or the Company may
(subject to the limitations contained in this Section) withdraw or modify its
approval or recommendation of this Agreement, the Offer or the Merger at
<PAGE>
46
any time after 48 hours following Parent's receipt of written notice (a "Notice
of Qualified Takeover Proposal") advising Parent that the Board of Directors has
received a qualified takeover proposal, specifying the material terms and
conditions of such qualified takeover proposal and identifying the person making
such qualified takeover proposal. The Company may take any of the foregoing
actions pursuant to the preceding sentence only until the earlier of (x) the
Consummation of the Offer or (y) the approval of the Merger at the Special
Meeting. Nothing contained herein shall prohibit the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a)
following Parent's receipt of a Notice of Qualified Takeover Proposal provided
that the Company does not withdraw or modify its position with respect to the
Merger or approve or recommend a takeover proposal.
(c) In addition to the obligations of the Company set forth in
paragraph (b) of this Section, the Company shall promptly advise Parent orally
and in writing of any request for information or of any takeover proposal, or
any inquiry with respect to any takeover proposal, the material terms and
conditions of such request, takeover proposal or inquiry, and the identity of
the person making any such takeover proposal or inquiry. The Company shall
keep Parent fully informed of the status and details of any such request,
takeover proposal or inquiry.
SECTION 5.13. Validity of Representations. Parent,
----------------------------
Acquisition Sub and the Company shall each take such action as is reasonably
necessary to render their respective representations and warranties accurate on
and as of the Effective Date. Without limiting the foregoing, the Company
shall take any action required by Parent to ensure the accuracy of Section 2.22
including redemption of the Rights if Parent determines that would be
desirable.
SECTION 5.14. Employees; Benefits. Parent and Acquisition Sub
--------------------
shall honor (i) all employment, severance or similar contractual arrangements
in accordance with their terms in existence on the date of this Agreement and
disclosed prior to the date of this Agreement to Parent and (ii) all legally
imposed obligations relating to employment matters. After the Closing Date,
Parent and Acquisition Sub shall comply with enforceable Applicable Law,
including without limitation the Workers Adjustment Retraining Notification
Act, 29 U.S.C. Section 2101 et seq. It is the current intention of Parent
-- ---
and Acquisition Sub to cause the Surviving Corporation to provide benefits to
employees of the Company and its Subsidiaries that are no less favorable in the
aggregate to such employees than those in effect on the date of this Agreement;
provided, however, that the foregoing shall not limit or restrict the
- -------- -------
right of the Surviving Corporation or its Subsidiaries to terminate the
employment of such employees or subsequently to modify the benefits or other
terms of employment of such employees, to the extent permitted by enforceable
Applicable Law.
<PAGE>
47
SECTION 5.15. Indemnification and Insurance. (a) Parent and
------------------------------
Acquisition Sub hereby agree that all rights to indemnification now existing in
favor of the directors or officers of the Company and its Subsidiaries (the
"Indemnified Parties") as currently provided in their respective certificates
or articles of incorporation or organization and By-Laws or in any agreements,
contracts or arrangements with the Company or any of its Subsidiaries in effect
on the date hereof and previously furnished to Parent and to the extent not in
violation of applicable state law, shall survive the Merger and shall continue
in full force and effect for a period of five years from the Effective Date;
provided that, in the event any claim or claims are asserted or made within
- --------
such five year period, all rights to indemnification in respect of any such
claim or claims shall continue until the disposition of any and all such
claims. Without limiting the foregoing, to the extent currently provided in
the certificates or articles of incorporation or organization and By-Laws of
the Company and its Subsidiaries and Massachusetts law, or agreements,
contracts or arrangements disclosed to Parent with the Company or any of the
Subsidiaries, in the event that any Indemnified Party becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter, including the transaction contemplated by this Agreement, occurring
prior to, and including, the Effective Date, or otherwise relating to or
arising out of such matters, Parent or the Surviving Corporation shall
periodically advance to such Indemnified Party his or her legal and other
expenses (including the costs of any investigation and preparation incurred in
connection therewith). Parent shall use all reasonable efforts to maintain in
effect, or shall cause the Surviving Corporation to use all reasonable efforts
to maintain in effect, for two years after the Effective Date, directors' and
officers' liability insurance ("D&O Insurance") covering those persons covered
by the Company's directors' and officers' liability insurance on the date of
this Agreement or the Effective Date and which is substantially equivalent in
terms of coverage and amount as the Company has in effect on the Effective Date
so long as such insurance is available and the annual premium therefor would
not be in excess of 200% of the last annual premium paid prior to the
date of this Agreement (the "Maximum Premium"). If the existing D&O Insurance
expires, is terminated or cancelled during such two-year period, Parent will
use all reasonable efforts to cause to be obtained as much D&O Insurance as can
be obtained for the remainder of such period for an annualized premium not in
excess of the Maximum Premium, on terms and conditions no less advantageous
than the existing D&O Insurance. The Company represents to Parent that the
Maximum Premium is $179,000.
(b) Any Indemnified Party wishing to claim indemnification
hereunder, upon learning of any such Legal Action, shall promptly notify Parent
and the Surviving Corporation with respect thereto, but the failure to so
notify shall not relieve Parent or the Surviving Corporation of any liability
it may have to such Indemnified Party
<PAGE>
48
hereunder except to the extent that Parent and the Surviving Corporation are
materially prejudiced thereby.
(c) Parent and the Surviving Corporation shall periodically, as
requested, advance to such Indemnified Party his, her or its legal and other
expenses (including the cost of investigation and preparation incurred in
connection therewith) to the extent such Indemnified Party is indemnified
pursuant to the terms of this Section 5.15, unless it is ultimately determined
by a court of competent jurisdiction that such Indemnified Party is not
entitled to indemnification hereunder.
(d) Parent and the Surviving Corporation shall be subrogated to
any rights any Indemnified Party may have with respect to any amounts paid to
or on behalf of such Indemnified Party by Parent and the Surviving Corporation
hereunder.
SECTION 5.16. Redemption of 5% Stock and Preference Stock.
--------------------------------------------
(a) In connection with the Merger, the Company, Parent and Acquisition Sub
hereby agree that the 5% Stock shall be redeemed and retired, as soon as
practicable following the Effective Date for the 5% Stock Consideration in
accordance with the Surviving Corporation's Articles of Organization.
(b) Prior to the date specified in the call notice for the
redemption and retirement of the 5% Stock, the Surviving Corporation shall
cause to be deposited with an appropriate trust company or bank, for the credit
of the holders of the 5% Stock, sufficient funds to be paid to such holders for
redemption and retirement of all of such shares of 5% Stock as provided for
herein and in the Surviving Corporation's Articles of Organization.
(c) If requested by Parent or Acquisition Sub, the Company shall
as soon as practicable thereafter and prior to the Effective Time deliver a
notice of redemption fixing a date of redemption at the earliest permitted date
and cause to be deposited with an appropriate trust company or bank, for the
credit of the holders of the Preference Stock, sufficient funds to be paid to
such holders for redemption and retirement of all outstanding shares of
Preference Stock as provided for herein, in the Certificate of Vote of Directors
that established the Preference Stock and in the Company's Articles of
Organization. In such case Parent shall transfer to the Company immediately
prior to such deposit the amount thereof in exchange for the issuance to it by
the Company of that number of shares of Company Common Stock equal to the amount
of such deposit divided by the Total Merger Consideration. Parent may decide
whether to deliver any request under this Section 5.16(c) in its sole
discretion, and, notwithstanding any other provision of this Agreement
(including Section 5.20) shall not be obligated to do so even if redemption of
the Preference Stock would cause satisfaction of a condition set forth in
Article VI or Article VII that otherwise would not be satisfied.
<PAGE>
49
SECTION 5.17. Material Contracts. The Company shall not enter
-------------------
into any material modification or amendment concerning any Material Contract
listed on Schedule 2.11(a) or 2.11(b) without the consent of Parent, which
consent shall not be unreasonably withheld. Immediately after the Closing,
Parent shall cause the Surviving Corporation to pay the outstanding principal
amount (and accrued interest thereon) owed by the Company under each Material
Contract set forth on Schedule 2.11(b).
SECTION 5.18. Tax Matters. Promptly after the request of
------------
Parent and in any event no later than three months from the date of such
request, the Company shall provide to Parent true, complete and correct (in all
material respects) copies of (a) a schedule setting forth the deferred
intercompany gain account, and the excess loss account of each of its
Subsidiaries, and (b) a schedule setting forth the Federal income tax basis for
the stock of each of the Subsidiaries except those Subsidiaries for which such
information cannot be obtained after due inquiry.
SECTION 5.19. Dividend Payments. The Company shall declare
------------------
and pay or set apart for payment accumulated dividends on the 5% Stock to the
extent required such that the holders of 5% Stock shall not at any time be
entitled to vote pursuant to paragraph (d) of Article IV of the Company's
Articles of Organization. The Company shall not declare or pay or set apart
for payment any accumulated dividends on the Preference Stock, except that
after the Consummation of the Offer the Company may declare and make such
payment to the extent required to prevent holders of Preference Stock from at
any time being entitled to vote pursuant to subparagraph (8) of the Company's
Certificate of Vote of Directors Establishing a Series of a Class of Stock with
respect to the Preference Stock.
SECTION 5.20. Satisfaction of Conditions. The Company, Parent
---------------------------
and Acquisition Sub shall each take all reasonable actions that may be required
to satisfy the conditions set forth in Article VI and Article VII hereof,
respectively.
SECTION 5.21. Directors. Subject to compliance with
----------
applicable law (including Section 14(f) of the Exchange Act), upon the
acquisition by Acquisition Sub of at least a majority of the outstanding Common
Stock pursuant to the Offer, Acquisition Sub shall be entitled to designate at
least a majority of the members of the Board of Directors of the Company, and
the Company and its Board of Directors shall, at such time, take any and all
such action (including to increase the size of the Board of Directors or to use
its best efforts to cause directors to resign) needed to cause a sufficient
number of Acquisition Sub's designees to be appointed to the Company's Board of
Directors that such designees shall constitute such majority (any director so
designated by Acquisition Sub, a "Designated Director"). It is understood that
immediately after the acquisition by Acquisition Sub of at least a majority of
the outstanding Common Stock pursuant to the Offer (x) the Company's Board of
Directors
<PAGE>
50
shall consist of seven members, (y) the initial designees of Acquisition Sub to
the Company's Board of Directors are expected to be Michel L. Besson, Peter R.
Dachowski, Thomas A. Decker and James E. Hilyard and (z) the remaining members
of the Company's Board of Directors are expected to be Robert P. Bass, Jr.,
Richard C. Maloof and Joseph D. Vecchiolla. In the event that, after the
acquisition by Acquisition Sub of at least a majority of the outstanding Common
Stock pursuant to the Offer and prior to the Effective Time, the number of
members of the Board of Directors increases (including pursuant to the
provisions of the Preference Stock and the 5% Stock), the Company and its Board
of Directors shall, at such time, take any and all such additional action
(including to increase the size of the Board of Directors, to use its best
efforts to cause additional directors to resign and to appoint additional
designees of Acquisition Sub) needed to cause a sufficient number of Acquisition
Sub's designees to be appointed to the Board of Directors that such designees
shall then constitute at least a majority of the members of the Board of
Directors. The parties hereto shall use their respective best efforts to cause
at least three members of the Company's Board of Directors at all times prior to
the Effective Time to be Continuing Directors. "Continuing Director" means (a)
any member of the Company's Board of Directors on the date of this Agreement,
(b) any member of the Company's Board of Directors who is not an employee or
director or affiliate of, and not a Designated Director or other nominee of,
Acquisition Sub or Parent or their respective Subsidiaries, and (c) any
successor of a Continuing Director who is (i) not an employee or director or
affiliate of, and not a Designated Director of other nominee of, Acquisition Sub
or Parent or their respective Subsidiaries and (ii) recommended to succeed such
Continuing Director by at least a majority of the then Continuing Directors.
ARTICLE VI
Conditions to the Obligations of Parent
---------------------------------------
and Acquisition Sub
-------------------
Each and every obligation of Parent and Acquisition Sub under this
Agreement shall be subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, each of which may be waived by
Parent and Acquisition Sub except as otherwise provided by law, provided that,
--------
upon the Consummation of the Offer, each of the following conditions (other
than the conditions set forth in Section 6.03(b) and (d) and 6.04(b)) shall
be deemed waived by Parent and Acquisition Sub:
SECTION 6.01. Representations and Warranties True. The
------------------------------------
representations and warranties of the Company contained in this Agreement
(without
<PAGE>
51
regard to any information provided under Section 5.04) that are
qualified as to materiality shall be true and correct, and the representations
that are not so qualified shall be true and correct in all material respects,
in each case on and as of the date hereof and on and as of the Effective Date,
and between the date hereof and the Effective Date there shall not have been
any event or change in circumstance causing or reasonably anticipated to cause
in the future any Material Adverse Effect.
SECTION 6.02. Company's Performance. Each of the obligations
----------------------
of the Company to be performed by it on or before the Closing Date pursuant to
the terms of this Agreement shall have been duly performed or complied with in
all material respects by the Closing.
SECTION 6.03. Authorization of Merger. (a) All corporate
------------------------
action necessary by the Company to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby (including the Offer and the Merger) shall have been duly
and validly taken, and the Company and Acquisition Sub shall have full right
and power to merge on the terms provided herein.
(b) The holders of the Company Common Stock and of the Preference
Stock shall have duly approved the Merger at the Special Meeting called for
that purpose (other than if such approval shall not have occurred solely due to
the breach by Parent or Acquisition Sub of Section 5.02(e)).
(c) All consents, approvals and authorizations from third Persons
and Governmental Authorities identified on Schedule 2.05 and Schedule 2.11(b)
required to consummate the transactions contemplated by this Agreement shall
have been obtained.
(d) All applicable waiting periods under the HSR Act shall have
expired or been terminated.
SECTION 6.04. Absence of Litigation. (a) There shall not be
----------------------
pending or threatened any suit, action or proceeding by any Governmental
Authority (i) challenging the acquisition by Parent or Acquisition Sub of any
shares of Company Common Stock or Preference Stock, seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from the Company, Parent or
Acquisition Sub any damages related to the Merger or the other transactions
contemplated hereby that are material in relation to the Company and its
Subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership
or operation by the Company, Parent or any of their respective Subsidiaries of
any material portion of the business or assets of the Company, Parent or any of
their respective Subsidiaries, or to compel the Company, Parent or any of their
respective
<PAGE>
52
Subsidiaries to dispose of or hold separate any material portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, as a
result of the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Parent or
Acquisition Sub to acquire or hold, or exercise full rights of ownership of, any
shares of Surviving Corporation Common Stock, (iv) seeking to prohibit Parent or
any of its Subsidiaries from effectively controlling in any material respect the
business or operations of the Company or its Subsidiaries or of Parent and its
Subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect.
(b) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or other order
or legal restraint or prohibition enacted, entered, promulgated, enforced,
issued or deemed applicable to the Merger or the transactions contemplated
thereby, or any other action shall be taken by any Governmental Authority or
court, in each case preventing the consummation of the Merger or the
transactions contemplated thereby, shall be in effect.
SECTION 6.05. Directors. All directors of the Company whose
----------
resignation is requested by Parent at least five days before the Closing Date
will have submitted their resignations as directors effective as of the Closing
Date.
SECTION 6.06. Dissenting Shares. No more than ten percent of
------------------
the issued and outstanding shares of any class of equity securities of the
Company entitled to dissenters rights as of the Closing Date shall be
Dissenting Shares entitled to receive the Dissenting Consideration as provided
in Section 1.12 hereof.
SECTION 6.07. Options. Each outstanding Option issued under
--------
the 1982 Stock Option Plan, the 1992 Stock Option Plan and the Director Option
Plan shall have been amended as contemplated by Section 1.14.
SECTION 6.08. Certificates. The Company shall have furnished
-------------
Parent with such certificates of its officers and others to evidence compliance
with the conditions set forth in this Article VI as may be reasonably requested
by Parent. The form and substance of all opinions, certificates and other
documents hereunder shall be satisfactory in all reasonable respects to Parent
and its counsel.
<PAGE>
53
ARTICLE VII
Conditions to the Obligations of the Company
--------------------------------------------
Each and every obligation of Company under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, each of which may be waived by the Company except as
otherwise provided by law, provided that, upon the Consummation of the
--------
Offer, each of the following conditions (other than the conditions set forth in
Sections 7.03 and 7.04) shall be deemed waived by the Company:
SECTION 7.01. Representations and Warranties True. The
------------------------------------
representations and warranties of Parent and Acquisition Sub contained in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations that are not so qualified shall be true and correct in all
material respects, in each case on and as of the date hereof and on and as of
the Effective Date.
SECTION 7.02. Parent's and Acquisition Sub's Performance.
-------------------------------------------
Each of the obligations of Parent and Acquisition Sub to be performed by them
on or before the Closing Date pursuant to the terms hereof shall have been duly
performed and complied with in all material respects by the Closing.
SECTION 7.03. Authorization of Merger. (a) All corporate
------------------------
action necessary by Acquisition Sub and Parent to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken, and
Acquisition Sub shall have full right and power to merge on the terms provided
herein. The Company's stockholders shall have approved the Merger at the
Special Meeting called for that purpose.
(b) All consents, approvals and authorizations from third Persons
and Governmental Authorities identified on Schedule 2.05 required to consummate
the transactions contemplated by this Agreement shall have been obtained.
(c) All applicable waiting periods under the HSR Act shall have
expired or been terminated.
SECTION 7.04. Absence of Litigation. No Judgment shall have
----------------------
been entered by a Governmental Authority with proper jurisdiction and not
revised prohibiting the Merger, and no Legal Action shall have been instituted
by any Governmental Authority challenging the Merger which if successful would
prohibit the consummation of the Merger.
<PAGE>
54
SECTION 7.05. Certificates. Parent and Acquisition Sub shall
-------------
have furnished Company with such certificates of their respective officers and
others to evidence compliance with the conditions set forth in this Article VII
as may be reasonably requested by Company. The form and substance of all
certificates and other documents hereunder shall be satisfactory in all
reasonable respects to Company and its counsel.
ARTICLE VIII
Closing
-------
SECTION 8.01. Time and Place. Subject to the provisions of
---------------
Articles VI, VII and IX hereof, the closing (the "Closing") of the Merger shall
take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New
York, New York 10019 at 9:30 a.m., local time, on a date (the "Closing Date")
which is to be:
(a) as soon as practicable after the latest to occur of the date by
which the stockholders of the Company shall have approved the Merger
pursuant to Section 5.03, the date of expiration or termination of any
waiting period, including any extensions thereof, which may be applicable
to the Merger under the provisions of the HSR Act, or the date of
satisfaction of all other conditions to the Closing set forth herein the
satisfaction of which is not waived other than conditions that, by their
terms, are to be satisfied on the Closing Date; or
(b) such other place, at such other time, or on such other date as
Parent, Acquisition Sub and the Company may mutually agree upon for the
Closing to take place.
The Closing Date shall be the Effective Date.
SECTION 8.02. Deliveries at the Closing. Subject to the
--------------------------
provisions of Articles VI, VII and IX hereof, at the Closing:
(a) If the Consummation of the Offer shall not have occurred, there
shall be delivered to Parent, Acquisition Sub and the Company the
certificates and other documents and instruments required to be delivered
under Articles VI and VII hereof.
(b) Parent, Acquisition Sub and Company shall cause the Articles
of Merger to be filed in accordance with the provisions of the MBCL and
shall
<PAGE>
55
take any and all other lawful actions and do any and all other lawful
things necessary to effect the Merger and to cause the Merger to become
effective.
ARTICLE IX
Termination and Abandonment of the Merger
-----------------------------------------
SECTION 9.01. Termination. (a) Unless the Consummation of
------------
the Offer shall have occurred and Designated Directors shall constitute at
least a majority of the members of the Board of Directors of the Company, this
Agreement shall be terminated, and the Merger abandoned, if the stockholders of
the Company fail to approve the Merger as contemplated by Section 5.03 hereof.
(b) Notwithstanding approval of this Agreement and the
transactions contemplated hereby by the stockholders of the Company or by the
sole stockholder of Acquisition Sub, this Agreement may be terminated, and the
Offer and the Merger abandoned, at any time prior to the Effective Date:
(i) by the mutual consent of Parent, Acquisition Sub and the
Company; or
(ii) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members
of the Board of Directors of the Company, by Parent, Acquisition Sub or
the Company at any time after September 30, 1996; or
(iii) by Parent or Acquisition Sub, (A) if the Offer terminates
without any shares being accepted for payment due to (x) failure of the
Minimum Condition or (y) any of the other conditions set forth in Exhibit
A hereto (other than solely paragraph (c) thereto) shall have become
impossible to fulfill and shall not have been waived, (B) if any of the
conditions set forth in Article VI hereof shall become impossible to
fulfill and shall not have been waived or deemed waived in accordance
with the terms of this Agreement (it being understood that with respect
to Section 6.04(b) any condition therein relating to an order, injunction
or judicial decree shall be deemed not to have become impossible to
fulfill until such order, injunction or decree shall have become final
and non-appealable) or (C) if the Board of Directors pursuant to Section
5.12(b) withdraws or modifies its approval or recommendation of this
Agreement, the Offer or the Merger; or
<PAGE>
56
(iv) by the Company, if any of the conditions set forth in Article
VII hereof shall become impossible to fulfill, and shall not have been
waived in accordance with the terms of this Agreement; or
(v) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members
of the Board of Directors of the Company, by Parent or Acquisition Sub if
the Company fails to perform in any material respect any of its
obligations hereunder or breaches in any material respect any provision
hereof, and the Company has failed to perform such obligation or cure
such breach, within 10 days of its receipt of written notice thereof from
Parent or Acquisition Sub, and such failure to perform shall not have
been waived in accordance with the terms of this Agreement;
(vi) by the Company if Parent or Acquisition Sub fails to perform
in any material respect any of its obligations hereunder or breaches in
any material respect any provision hereof, and Parent and Acquisition Sub
have failed to perform such obligation or cure such breach, within 10
days of its receipt of written notice thereof from the Company, and such
failure to perform shall not have been waived in accordance with the
terms of this Agreement;
(vii) by the Company if (A) the Board of Directors pursuant to
Section 5.12(b) withdraws or modifies its approval or recommendation of
this Agreement, the Offer or the Merger and (B) the Company pays Parent
all Expenses and the Alternate Transaction Fee in cash, in each case as
provided in Section 10.01(b); or
(viii) by the Company if Acquisition Sub (A) shall have failed to
commence the Offer within the time required under the Exchange Act or (B)
shall have failed to pay for any Company Common Stock or Preference Stock
accepted for payment pursuant to the Offer and, in the case of clause
(B), Acquisition Sub shall have failed to make such payment within three
business days of receipt of written notice thereof from the Company.
SECTION 9.02. Effect of Termination. (a) In the event of the
----------------------
termination and abandonment of this Agreement and the Merger:
(i) this Agreement shall become void and have no effect, without
any liability on the part of any party or its directors, officers or
stockholders, except Section 5.01(b) shall survive and except as provided
in Article X hereof; provided that, except as provided in
-------- ----
Sections 9.02(b) and 9.02(c), each party
<PAGE>
57
shall have the right to bring suit against any other party for any breach
of this Agreement; and except that if the Company has called the
Preference Stock for redemption pursuant to a request by the Purchaser
pursuant to Section 5.16, Parent's obligation to purchase, and the
Company's obligation to sell, shares of Common Stock pursuant to such
Section on the terms set forth therein shall survive; and
(ii) each party will redeliver all documents, work papers and other
material and all copies thereof of any other party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same and, at the request of
any other party, will destroy any analyses, compilations, studies or other
documents prepared using such furnished information.
(b) Notwithstanding any provisions to the contrary herein, the
sole remedy of Parent or Acquisition Sub for a breach by the Company of any
representation or warranty set forth in Article II of this Agreement shall be
the termination of this Agreement (if permitted by Section 9.01) unless such
breach was made with the actual knowledge of the President and Chief Executive
Officer of the Company, the Vice President of Finance and Administration of the
Company or the General Counsel of the Company, after due inquiry of other
managerial employees of the Company who would be reasonably expected to have
knowledge as to the matter represented (a "Company Willful Misrepresentation").
(c) Notwithstanding any provisions to the contrary herein, the
sole remedy of the Company for a breach by Parent or Acquisition Sub of any
representation or warranty set forth in Article III or IV, respectively, of
this Agreement shall be the termination of this Agreement (if permitted by
Section 9.01) unless such breach was made with the actual knowledge of the
President, Executive Vice President or Senior Vice President of Parent, after
due inquiry of other managerial employees of Parent who would be reasonably
expected to have knowledge as to the matter represented (a "Parent Willful
Misrepresentation").
SECTION 9.03. Procedure for Termination and Amendment. A
----------------------------------------
termination of this Agreement pursuant to Section 9.01 or an amendment of this
Agreement in accordance with Section 10.07 shall, in order to be effective,
require in the case of the Company action by its Board of Directors or the duly
authorized designee of its Board of Directors. In the event that Acquisition
Sub's designees are appointed or elected to the Board of Directors of the
Company as provided in Section 5.21, after the Consummation of the Offer and
prior to the Effective Time, the affirmative vote of at least a majority of the
Continuing Directors shall be required for the Company to agree to amend, waive
compliance with or terminate this Agreement.
<PAGE>
58
ARTICLE X
Miscellaneous
-------------
SECTION 10.01. Expenses; Alternate Transaction Fee. (a)
------------------------------------
Except as provided by Section 10.01(b), (c) or (d) each of the parties hereto
shall bear its own costs, fees and expenses in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the Prior
Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, fees, commissions and expenses (including,
without limitation, all filing, printing, copying, mailing, telephone,
transportation and delivery charges) payable to brokers, finders, investment
bankers, consultants, exchange or transfer agents, attorneys, accountants and
other professionals, whether or not the Consummation of the Offer occurs or the
Merger is consummated.
(b) If the Board of Directors of the Company pursuant to Section
5.12(b) wishes to withdraw or adversely modify its approval or recommendation
of this Agreement, the Offer or the Merger, prior to exercising its rights
under Section 5.12(b), the Company shall pay in same day funds to Parent: (i)
its Expenses incurred to date and thereafter shall pay in same day funds to
Parent within one business day after demand therefor all subsequently incurred
Expenses, provided, that the Company shall not be obligated hereunder to
--------
pay any such Expenses to the extent they exceed an aggregate of $1 million and
(ii) an alternative transaction fee of $1.5 million (the "Alternate Transaction
Fee"). For purposes of Sections 10.01(b) and (c), "Expenses" shall mean all
out-of-pocket fees and expenses (including without limitation all travel
expenses and all fees and expenses of counsel, investment banking firms,
accountants, experts and consultants to Parent or Acquisition Sub) incurred or
paid by or on behalf of Parent or Acquisition Sub during or after 1994 in
connection with or leading to this Agreement, the transactions contemplated
hereby, and performing or securing the performance of the obligations of the
parties hereunder, including, without limitation, such fees and expenses
related to preparation and negotiation of documentation and conducting due
diligence. Parent shall within 36 hours after request therefor advise the
Company of an estimate of its Expenses if the Company wishes to exercise its
rights under Section 5.12(b).
(c) In the event a takeover proposal from a party other than
Parent or one of its affiliates is received by the Company or publicly
disclosed prior to the expiration of the Offer (or in the case of clauses (B)
and (C), prior to the Special Meeting) or, if earlier, termination of this
Agreement, and (A) at the scheduled expiration date of the Offer a sufficient
number of shares of Company Common Stock and Preference Stock shall not
<PAGE>
59
have been tendered or redeemed to satisfy the Minimum Condition, (B) at the
Special Meeting the required approval of the Merger by the Company's
stockholders is not obtained, or (C) this Agreement is terminated (other than by
the Company pursuant to Section 9.01(vi)) prior to a vote on the Merger at the
Special Meeting, unless the Consummation of the Offer shall have occurred the
Company shall pay in same day funds to Parent within two business days after the
earlier of such expiration date, Special Meeting or termination of this
Agreement (i) all Expenses incurred to date and thereafter will pay in same day
funds to Parent within one business day after demand therefor all subsequently
incurred Expenses, provided, that the Company shall not be obligated hereunder
--------
to pay any such Expenses to the extent they exceed an aggregate of $1 million,
and (ii) the Alternate Transaction Fee.
(d) In the event this Agreement is terminated, the Offer is
terminated or the Merger does not occur (i) solely due to a breach by Parent or
Acquisition Sub of any of its covenants or obligations hereunder or due to a
Parent Willful Misrepresentation or (ii) solely due to a breach by the Company
of any of its covenants or obligations hereunder or due to a Company Willful
Misrepresentation, then in the case of a termination pursuant to clause (i)
above, Parent and Acquisition Sub shall promptly pay to the Company, and in the
case of termination pursuant to clause (ii) above, the Company shall promptly
pay to Parent and Acquisition Sub, in same day funds all Expenses incurred to
date (after giving credit for any reimbursement already made under Section
10.01(b) or (c)) and thereafter shall pay in same day funds within one business
day after demand therefor all subsequently incurred Expenses. For purposes of
this paragraph 10.01(d) "Expenses" shall mean all out-of-pocket fees and
expenses (including without limitation all travel expenses and all fees and
expenses of counsel, investment banking firms, accountants, experts and
consultants to Parent or the Company, as the case may be) incurred or paid by
or on behalf of Parent, Acquisition Sub or the Company, as the case may be,
during or after 1994 in connection with or leading to this Agreement, the
transactions contemplated hereby, and performing or securing performance of the
obligations of the parties hereunder, including, without limitation, such fees
and expenses related to preparation and negotiation of documentation and
conducting due diligence. This Section shall not limit damages that would
otherwise be recoverable for breaches hereunder.
SECTION 10.02. Non-Survival of Representations and Warranties.
-----------------------------------------------
The respective representations and warranties, obligations, covenants and
agreements of the Company, Parent and Acquisition Sub contained herein or in
any Schedule, certificate or letter delivered pursuant hereto (other than those
contained in Section 10.01 hereof and those which by their terms extend beyond
the Effective Date or termination of this Agreement) shall expire with, and be
terminated and extinguished by the effectiveness of the Merger and shall not
survive the Effective Date or, if earlier, the date of termination of this
Agreement pursuant to Article IX hereof.
<PAGE>
60
SECTION 10.03. Headings. The descriptive headings of the
---------
several Articles and Sections of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement and shall not in any manner
affect the meaning or interpretation of the terms of this Agreement.
SECTION 10.04. Notices. (a) Any notices or other
--------
communications required or permitted hereunder shall be addressed as follows:
If to Parent or Acquisition Sub to:
CertainTeed Corporation
750 E. Swedesford Road
Valley Forge, Pennsylvania 19482
Attn: Thomas A. Decker, Esq.
Executive Vice President and
General Counsel
Tel: (610) 341-7424
Fax: (610) 341-7087
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attn: Philip A. Gelston
Tel: (212) 474-1548
Fax: (212) 474-3700
If to the Company to:
Bird Corporation
1077 Pleasant Street
Norwood, Massachusetts 02062-6714
Attn: President
Tel: (617) 461-1414
Fax: (617) 461-1619
<PAGE>
61
Copy to:
Bart Friedman, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Tel: (212) 701-3000
Fax: (212) 269-5420
or such other address as shall be furnished in writing by either party in
accordance with this Section 10.04, and any such notice or communication shall
be deemed to have been given as of the date so mailed.
(b) Notices or other communications shall be deemed given (i) if
delivered personally, upon delivery, (ii) if delivered by registered or
certified mail (return receipt requested), upon the earlier of actual delivery
or three business days after being mailed, (iii) if delivered by overnight
courier or similar service, upon delivery, or (iv) if given by fax, upon
confirmation of transmission by fax; provided that if such notice or other
communications would be otherwise deemed given on a day which is not a business
day, the delivery shall be deemed given the first business day following such
day.
SECTION 10.05. Assignment. This Agreement and all of the
-----------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any of the parties hereto, either in whole or in part, without the
prior written consent of the other parties hereto.
SECTION 10.06. Complete Agreement. This Agreement, including
-------------------
the Schedules, exhibits and other writings referred to herein or delivered
pursuant hereto, contains the entire understanding among the parties with
respect to the Offer, the Merger and the related transactions and supersedes
all prior arrangements or understandings with respect thereto, including the
Prior Agreement, except for the Confidentiality Agreement. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein.
SECTION 10.07. Amendments and Waivers. (a) Subject to the
-----------------------
provisions contained in Articles VI and VII hereof and subject to Section 9.03,
at any time prior to the Effective Date if authorized by their respective
Boards of Directors and to the extent permitted by law, the parties hereto may,
by written agreement, modify, amend, or supplement any term or provision of
this Agreement. Any written
<PAGE>
62
instrument or agreement referred to in this paragraph shall be validly and
sufficiently authorized for the purposes of this Agreement if signed on behalf
of the Company, Parent and Acquisition Sub by a person authorized to sign this
Agreement on their behalf.
(b) This Agreement may be amended at any time only by a written
instrument executed by the Company, Parent and Acquisition Sub. No delay on
the part of any party hereto in exercising any right hereunder shall operate as
a waiver of such right, nor shall any waiver, express or implied, by any party
hereto of any right hereunder or of any failure to provide and perform
hereunder or breach hereof by either party hereto constitute or be deemed to
constitute a waiver of any other failure to provide and perform hereunder or
breach hereof by any party hereto whether of a similar or dissimilar nature
thereto.
SECTION 10.08. Counterparts. This Agreement may be executed
-------------
in two or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
SECTION 10.09. Governing Law. EXCEPT AS TO THE PROVISIONS OF
--------------
SECTIONS 1.03 THROUGH 1.14 (WHICH SHALL BE GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS), THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS RULES) AS
TO ALL MATTERS, INCLUDING, BUT NOT LIMITED TO, MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT AND PERFORMANCE.
SECTION 10.10. Accounting Terms. All accounting terms used
-----------------
herein that are not expressly defined in this Agreement shall have the meanings
given to them in accordance with GAAP.
SECTION 10.11. Parties. Nothing in this Agreement is intended
--------
to confer any rights or remedies under or by reason of this Agreement on any
persons or entities other than the parties hereto and their respective
successors and permitted assigns in accordance with Section 10.05 hereof,
except for the provisions of Section 5.15. Without limiting the foregoing, no
third Person shall be a beneficiary of any provision of this Agreement, except
for the provisions of Section 5.15.
<PAGE>
63
IN WITNESS WHEREOF, each of Parent, Acquisition Sub and the Company
has executed this Agreement, or has caused this Agreement to be executed on its
behalf by a representative duly authorized, all as of the day and year first
above written.
BIRD CORPORATION,
by
---------------------------
Name: Joseph D. Vecchiolla
[Seal] Title: Chairman
by
---------------------------
Name: Frank Anthony
Title: Vice President
by
---------------------------
Name: Elizabeth Arcieri
Title: Treasurer
CERTAINTEED CORPORATION,
by
---------------------------
Name: James E. Hilyard
Title: Vice President
<PAGE>
64
BI EXPANSION CORP.,
by
---------------------------
Name: James E. Hilyard
[Seal] Title: Vice President
by
---------------------------
Name: John R. Mesher
Title: Assistant Treasurer
<PAGE>
EXHIBIT A
Conditions to the Offer
-----------------------
Notwithstanding any other term of the Offer or this Agreement,
Acquisition Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, to pay for any shares of Company
Common Stock or Preference Stock tendered pursuant to the Offer unless, (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer such number of shares of Company Common Stock that would constitute
at least 66-2/3% of the outstanding shares (determined on a fully diluted basis)
of Company Common Stock, (ii) either (x) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer such number of shares of
Preference Stock that would constitute at least 66-2/3% of the outstanding
shares of Preference Stock or (y) the Purchaser shall have elected to cause the
Company to call for redemption the Preference Stock pursuant to Section 5.16
(clauses (i) and (ii) together being the "Minimum Condition"), (iii) any waiting
period under the HSR Act applicable to the purchase of shares of Company Common
Stock and Preference Stock pursuant to the Offer shall have expired or been
terminated and (iv) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, any Governmental Authority required
or necessary in connection with the Offer, the Merger and this Agreement and the
transactions contemplated by this Agreement shall have been obtained and shall
be in full force and effect. Furthermore, notwithstanding any other term of the
Offer or this Agreement, Acquisition Sub shall not be required to accept for
payment or, subject as aforesaid, to pay for any shares of Company Common Stock
or Preference Stock not theretofore accepted for payment or paid for, and may
terminate the Offer if, at any time on or after the date of this Agreement and
before the Consummation of the Offer, any of the following conditions exist:
(a) The representations and warranties of the Company contained in
this Agreement (without regard to any information provided under Section 5.04)
that are qualified as to materiality shall not be true and correct, and the
representations that are not so qualified shall not be true and correct in all
material respects, in each case on and as of the date hereof and on and as of
the date of the scheduled expiration of the Offer.
(b) Any of the obligations of the Company to be performed by it on
or before the date of the scheduled expiration of the Offer pursuant to the
terms of this Agreement shall not have been duly performed or complied with in
all material respects by that date.
(c) Since the Balance Sheet Date, there shall have occurred (or it
shall be reasonably expected that there will be) any event, change or
circumstance causing, or reasonably anticipated to cause in the future, any
Material Adverse Effect.
<PAGE>
(d) Any consents, approvals and authorizations from third Persons
and Governmental Authorities identified on Schedule 2.05 and Schedule 2.11(b)
required to consummate the transactions contemplated by this Agreement shall
not have been obtained.
(e) There shall be pending or threatened any suit, action or
proceeding by any Governmental Authority (i) challenging the acquisition by
Parent or Acquisition Sub of any shares of Company Common Stock or Preference
Stock, seeking to restrain or prohibit the consummation of the Offer, the
Merger or any of the other transactions contemplated by this Agreement or
seeking to obtain from the Company, Parent or Acquisition Sub any damages
related to the Offer, the Merger or the other transactions contemplated hereby
that are material in relation to the Company and its Subsidiaries taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective Subsidiaries of any material portion
of the business or assets of the Company, Parent or any of their respective
Subsidiaries, or to compel the Company, Parent or any of their respective
Subsidiaries to dispose of or hold separate any material portion of the
business or assets of the Company, Parent or any of their respective
Subsidiaries, as a result of the Offer, the Merger or any of the other
transactions contemplated by this Agreement, (iii) seeking to impose
limitations on the ability of Parent or Acquisition Sub to acquire or hold, or
exercise full rights of ownership of, any shares of Surviving Corporation
Common Stock, (iv) seeking to prohibit Parent or any of its Subsidiaries from
effectively controlling in any material respect the business or operations of
the Company or its Subsidiaries or of Parent and its Subsidiaries or (v) which
otherwise is reasonably likely to have a Material Adverse Effect.
(f) There shall be any statute, rule, regulation, judgment, order
or injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any Governmental
Authority or court, 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 (v) of paragraph (e) above.
(g) The Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent its approval or
recommendation of the Offer, the Merger or this Agreement or resolved to take
any of such actions.
(h) The Agreement shall have been terminated in accordance with
its terms.
<PAGE>
The foregoing conditions are for the sole benefit of Acquisition
Sub and Parent and may, subject to the terms of the Agreement, be waived by
Acquisition Sub and Parent in whole or in part at any time and from time to time
in their sole discretion. The failure by Parent or Acquisition Sub at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
<PAGE>
EXHIBIT B
FEDERAL IDENTIFICATION FEDERAL IDENTIFICATION
NO. Applied For NO. 04-3082903
------------------ ------------------
BI Expansion Bird Corporation
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF MERGER
(General Laws, Chapter 156B, Section 78)
Merger of BI Expansion Corp. and
---------------------------------------
Bird Corporation
---------------------------------------
---------------------------------------
---------------------------------------
the constituent corporations, into
Bird Corporation
---------------------------------------
one of the constituent corporations.
The undersigned officers of each of the constituent corporations certify under
the penalties of perjury as follows:
1. An agreement of merger has been duly adopted in compliance with the
requirements of General Laws, Chapter 156B, Section 78, and will be kept as
provided by Subsection (d) thereof. The surviving corporation will furnish a
copy of said agreement to any of its stockholders, or to any person who was a
stockholder of any constituent corporation, upon written request and without
charge.
2. The effective date of the merger determined pursuant to the agreement of
merger shall be the date approved and filed by the Secretary of the
Commonwealth. If a later effective date is desired, specify such date which
shall not be more than thirty days after the date of filing:
3. (For a merger)
The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger:
Article II of the Articles of Organization of Bird Corporation has been replaced
in its entirety by the following amendment:
The purpose of the corporation is to engage in the following business
activities:
To acquire, hold for investment, or sell securities of corporations
and any other type of real or personal property and to engage in and
carry on any other business or activity permitted to be conducted by
a corporation organized under Chapter 156B of Massachusetts General
Laws.
<PAGE>
(For a consolidation)
(a) the purpose of the resulting corporation is to engage in the following
business activities:
Not Applicable.
(b) State the total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized to issue.
Not Applicable.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
- --------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common: Common:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Preferred: Preferred:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences, voting
powers, qualifications, and special or relative rights or privileges of each
class and of each series then established.
Not Applicable.
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
Not Applicable.
**(e) Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
Not Applicable.
**If there are no provisions state "None".
<PAGE>
4. The information contained in Item 4 is not a permanent part of the Articles
of Organization of the *surviving corporation.
(a) The street address of the *surviving corporation in Massachusetts is: (post
office boxes are not acceptable)
c/o CT Corporation System,
2 Oliver Street, Boston, MA 02109
(b) The name, residential address, and post office address of each director and
officer of the *surviving corporation is:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
President: Peter R. Dachowski 321 Woodmont Circle Same
Berwyn, PA 19312
Treasurer: James F. Harkins, Jr. 27 Meadow Creek Lane Same
Glenmoore, PA 19343
Clerk: John R. Mesher 128 Aspen Drive Same
Downington, PA 19335
Directors: Peter R. Dachowski See Above See Above
Thomas A. Decker 319 Chester Road Same
Devon, PA 19333
(c) The fiscal year (i.e. tax year) of the *surviving corporation shall end on
the last day of the month of: December
(d) The name and business address of the resident agent, if any, of the
*surviving corporation is:
CT Corporation System
2 Oliver Street, Boston,
MA 02109
The undersigned officers of the several constituent corporations listed above
further state under the penalties of perjury as to their respective corporations
that the agreement of *merger has been duly executed on behalf of such
corporation and duly approved by the stockholders of such corporation in the
manner required by General Laws, Chapter 156B, Section 78.
Frank S. Anthony
- ---------------------------------------------------, *Vice President
Frank S. Anthony
- ---------------------------------------------------, *Clerk
of Bird Corporation
- --------------------------------------------------------------------------------
(Name of constituent corporation)
John R. Mesher
- ---------------------------------------------------, *Vice President
John R. Mesher
- ---------------------------------------------------, *Clerk
of BI Expansion Corp.
- --------------------------------------------------------------------------------
(Name of constituent corporation)
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF *CONSOLIDATION / *MERGER
(General Laws, Chapter 156B, Section 78)
===========================================
I hereby approve the within Articles of *Consolidation / *Merger and
the filing fee in the amount of $_________________, having been paid
said articles are deemed to have been filed with me this ___________
day of ____________________ , 19___.
Effective date: _____________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Cynthia A. Nastanski, Esq.
----------------------------------
Cravath, Swaine & Moore
825 Eighth Avenue
----------------------------------
New York, NY 10019
----------------------------------
Telephone: (212) 474-1762
-----------------------
<PAGE>
EXHIBIT 99(c)2
FIFTH AMENDMENT
to
RIGHTS AGREEMENT DATED AS OF NOVEMBER 25, 1986
----------------------------------------------
FIFTH AMENDMENT (the "Amendment") dated as of April 5,
----------
1996 to the Rights Agreement dated as of November 25, 1986, as
amended (the "Rights Agreement"), between Bird Corporation (the
----------------
"Company") and American Stock Transfer & Trust Company (the
-------
"Rights Agent").
------------
WITNESSETH:
WHEREAS, the Company intends to enter into an Amended
and Restated Agreement and Plan of Merger dated as of April 8,
1996 (the "Merger Agreement") with CertainTeed Corporation, a
----------------
Delaware corporation ("CertainTeed"), and BI Expansion
-----------
Corporation, a Massachusetts corporation ("Acquisition Sub")
---------------
and a wholly owned subsidiary of CertainTeed, pursuant to which
(i) Acquisition Sub will make an offer to purchase all
outstanding shares of common stock and preference stock of the
Company on the terms set forth therein (the "Offer"), (ii)
-----
Acquisition Sub will merge (the "Merger") with and into the
------
Company, which will thereby become a wholly owned subsidiary of
CertainTeed, and (iii) the Company's shareholders (other than
shareholders who perfect appraisal rights) will be entitled to
receive the consideration provided in the Merger Agreement upon
consummation of the Merger;
WHEREAS, the Company has determined that this
Amendment shall not adversely affect the interests of the
holders of the Rights Certificates;
WHEREAS, the Company and the Rights Agent desire to
amend the Rights Agreement in accordance with Section 26
thereof and this Amendment;
WHEREAS, it is contemplated that this Amendment be
executed by the Company and the Rights Agent before the Company
enters into the Merger Agreement;
NOW, THEREFORE, in consideration of the premises and
mutual agreements set forth in the Rights Agreement and this
Amendment, the parties hereto agree as follows:
1. The Rights Agreement is hereby amended by adding
the following new Section 34 after Section 33 thereof:
<PAGE>
-2-
"Section 34. CertainTeed Offer and Merger.
----------------------------
Notwithstanding anything to the contrary herein, neither
CertainTeed Corporation, a Delaware corporation
("CertainTeed"), nor BI Expansion Corp., a Massachusetts
corporation ("Acquisition Sub"), or any affiliate thereof
shall be considered an Acquiring Person under this
Agreement and no Stock Acquisition Date, Triggering Event
or Distribution Date has occurred or will occur, in any
such case as a result of the approval, execution or
delivery of, or commencement or consummation of the
transactions contemplated by, the Amended and Restated
Agreement and Plan of Merger dated as of April 8, 1996 by
and among the Company, CertainTeed and Acquisition Sub,
including, without limitation the Offer (as defined in
such Merger Agreement); provided, however, that in the
-------- -------
event that CertainTeed or Acquisition Sub or any affiliate
of CertainTeed becomes the Beneficial Owner of any shares
of Common Stock otherwise than pursuant to such Offer or
Merger Agreement the provisions of this sentence (other
than this proviso) shall not be applicable to such shares
of Common Stock which CertainTeed or Acquisition Sub or
any affiliate of CertainTeed so otherwise became the
Beneficial Owner."
; provided, however, that immediately upon (but not prior to)
-------- -------
execution and delivery of the Merger Agreement the above
Section 34 shall be renumbered Section 33 and Section 33 added
pursuant to the Fourth Amendment to the Rights Agreement dated
March 14, 1996 shall be deleted in its entirety.
2. Exhibit B to the Rights Agreement is hereby
amended by adding the following paragraph before the last
paragraph thereof:
"Notwithstanding anything to the contrary in the
Rights Agreement, neither CertainTeed Corporation, a
Delaware corporation ("CertainTeed"), nor BI Expansion
Corp., a Massachusetts corporation ("Acquisition Sub"), or
any affiliate thereof will be considered an Acquiring
Person under the Rights Agreement and no Stock Acquisition
Date, Triggering Event or Distribution Date has occurred
or will occur, in any such case as a result of the
approval, execution or delivery of, or commencement or
consummation of the transactions contemplated by, the
Amended and Restated Agreement and Plan of Merger dated as
of April 8, 1996 by and among the Company, CertainTeed and
Acquisition Sub, including, without limitation the Offer
(as defined in
<PAGE>
-3-
such Merger Agreement); provided, however, that in the
-------- -------
event that CertainTeed or Acquisition Sub or any
affiliate of CertainTeed becomes the Beneficial Owner
of any shares of Common Stock otherwise than pursuant to
such Offer or Merger Agreement the provisions of this
sentence (other than this proviso) shall not be applicable
to such shares of Common Stock which CertainTeed or
Acquisition Sub or any affiliate of CertainTeed so
otherwise became the Beneficial Owner."
; provided, however, that immediately upon (but not prior to)
-------- -------
the execution and delivery of the Merger Agreement the
paragraph added to Exhibit B to the Rights Agreement by the
Fourth Amendment to the Rights Agreement dated March 14, 1996
shall be deleted in its entirety.
3. The term "Agreement" as used in the Rights
Agreement shall be deemed to refer to the Rights Agreement as
amended to the date hereof.
4. This Amendment shall be deemed to be a contract
made under the laws of the Commonwealth of Massachusetts and
for all purposes shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to
contracts to be made and performed entirely with such
Commonwealth.
5. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
<PAGE>
-4-
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their duly authorized officers
as of the date first written above.
BIRD CORPORATION
By: /s/ Frank Anthony
------------------------
Name: Frank Anthony
Title: Vice President
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Robert Shiner
------------------------
Name: Robert Shiner
Title: Vice President
