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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
CASCADE CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate box):
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/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
Common Stock, par value $0.50 per share, of Cascade
Corporation Special Voting Stock, without par value, of
Cascade Corporation
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(2) Aggregate number of securities to which transaction applies:
11,439,890 shares of Common Stock based on the number
outstanding as of October 31, 2000.
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
The filing fee was calculated pursuant to Exchange Act
Rule 0-11 (c)(1), and is the product of multiplying 1/50 of
1% by an amount equal to the sum of (x) the product of
11,439,890 shares of Common Stock, par value $0.50 per
share, of Cascade Corporation multiplied by $17.25 per
share, and approximately (y) $2,075,000 payable to holders
of outstanding options to purchase shares of Common Stock in
exchange for the cancellation of such options.
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(4) Proposed maximum aggregate value of transaction:
$199,413,103
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(5) Total fee paid:
$39,883
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Preliminary Copy
[LOGO]
CASCADE CORPORATION
2201 N.E. 201ST AVE.
FAIRVIEW, OREGON 97024-9718
------------------------
To our Shareholders:
You are cordially invited to attend the Special Meeting of shareholders of
Cascade Corporation to be held on , 2001, at .m., local time, at
, [Portland, Oregon] . At the Special Meeting, you will be
asked to consider and vote upon an Agreement and Plan of Merger, dated as of
October 18, 2000, among Cascade Acquisition Corp., Cascade-II Acquisition Corp.,
CAS Acquisition Corp. and Cascade, providing for the merger of CAS Acquisition
Corp. with and into Cascade, with Cascade being the surviving corporation.
Pursuant to the merger, each share of Cascade's outstanding common stock
will be converted into the right to receive cash in the amount of $17.25 per
share. Following the merger, Cascade will be a privately-held corporation and
its common stock will no longer be publicly traded.
On March 29, 2000, members of Cascade's management advised Cascade's board
of directors that they were considering a proposal to take Cascade private in a
management-led leveraged buyout. The board of directors then proceeded to
appoint a committee of independent directors (the "special committee") to
evaluate any management proposal and other alternatives to enhance value for the
shareholders of Cascade. In April 2000, the special committee hired Gleacher &
Co. LLC as its financial advisor. Over the ensuing months, Gleacher approached
on behalf of the special committee many parties potentially interested in a
business combination transaction involving Cascade. After careful consideration
of several alternatives, the special committee concluded that a merger proposal
involving acquisition companies formed by Lift Technologies, Inc., a
manufacturer of lift truck masts, TD Capital Group Limited, the private equity
arm of the Toronto Dominion Bank Group, and the Ontario Municipal Employees
Retirement System (collectively referred to as the "Lift Group"), in which each
Cascade common shareholder would receive $17.25 per share in cash, was the best
available alternative for Cascade shareholders.
The board of directors, acting on the recommendation of the special
committee, has determined that the terms and conditions of the merger are fair
to, and in the best interests of, the Cascade shareholders. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE "IN FAVOR" OF THE MERGER.
The proposed merger is an important decision for Cascade and its
shareholders. The merger cannot occur unless, among other things, the merger
agreement is approved by a majority of the outstanding shares of Cascade common
stock and the votes attributable to the outstanding share of Cascade special
voting stock, voting together as a single voting group. Holders of shares with
approximately 6.6% of Cascade's outstanding voting power have entered into
voting agreements with Cascade under which they have agreed to vote their shares
in favor of the merger agreement. The accompanying proxy statement explains the
proposed merger and provides specific information concerning the Special
Meeting. We encourage you to read this entire document carefully.
Whether or not you plan to attend the Special Meeting, please take the time
to vote on the proposal submitted by completing the enclosed proxy card and
mailing it to us in the enclosed postage-paid envelope. Please sign, date and
mail your proxy card indicating how you wish to vote. If you fail to return your
proxy card, the effect will be a vote against the merger.
This proxy statement is dated , 2000, and is first being mailed
to Cascade shareholders on or about , 2000.
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[LOGO]
CASCADE CORPORATION
2201 N.E. 201ST AVE.
FAIRVIEW, OREGON 97024-9718
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 2001
------------------------
To our Shareholders:
A Special Meeting of Shareholders of Cascade Corporation will be held on
, 2001 at .m., local time, at , [Portland,
Oregon] , for the following purposes:
1. To consider and vote upon the Agreement and Plan of Merger, dated as of
October 18, 2000, among Cascade Acquisition Corp., Cascade-II Acquisition
Corp. (together referred to as the "Parent"), CAS Acquisition Corp., an
indirect wholly-owned subsidiary of the Parent, and Cascade, pursuant to
which (i) CAS Acquisition Corp. will be merged with and into Cascade,
with Cascade being the surviving corporation, and (ii) each outstanding
share of Cascade common stock (other than shares of Cascade common stock
held by Parent or its subsidiaries, or Cascade or its subsidiaries) will
be canceled and converted automatically into the right to receive $17.25
in cash, payable to the holder of such share, without interest; and
2. To transact such other business as may properly come before the Special
Meeting or any adjournment or postponement of the Special Meeting.
The Cascade board of directors, acting on the recommendation of a special
committee, has determined that the terms and conditions of the merger are fair
to, and in the best interests of, Cascade's shareholders and recommends that you
vote "IN FAVOR" of the merger.
Only Cascade shareholders of record at the close of business on ,
2000 are entitled to notice of and to vote at the Special Meeting or any
adjournment or postponement of the Special Meeting. A complete list of the
shareholders entitled to vote at the Special Meeting or any adjournments or
postponements of the Special Meeting will be available at and during the Special
Meeting.
YOUR VOTE IS IMPORTANT. TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE
SPECIAL MEETING, YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT
YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON. YOU MAY REVOKE YOUR PROXY IN
THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT ANYTIME BEFORE IT HAS
BEEN VOTED AT THE SPECIAL MEETING. IF YOU RETURN A PROXY WITHOUT SPECIFYING A
CHOICE ON THE PROXY, THE PROXY WILL BE VOTED "IN FAVOR" OF THE MERGER. IT WILL
BE POSSIBLE FOR YOU TO VOTE IN PERSON AT THE SPECIAL MEETING EVEN IF YOU HAVE
RETURNED A PROXY. PLEASE REVIEW THE PROXY STATEMENT FOR MORE INFORMATION.
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Portland, Oregon By order of the Board of Directors,
, 2000
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TABLE OF CONTENTS
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QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 1
WHO CAN HELP ANSWER YOUR QUESTIONS.......................... 2
SUMMARY TERM SHEET.......................................... 3
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING
STATEMENTS................................................ 8
THE SPECIAL MEETING......................................... 9
DATE, PLACE AND TIME...................................... 9
PURPOSE OF THE MEETING.................................... 9
RECORD DATE AND VOTING AT THE SPECIAL MEETING............. 9
VOTES REQUIRED............................................ 9
VOTING AGREEMENTS......................................... 10
SOLICITATION AND PROXY SOLICITOR.......................... 10
REVOCATION AND USE OF PROXIES............................. 10
ADJOURNMENTS OR POSTPONEMENTS............................. 10
SPECIAL FACTORS............................................. 11
BACKGROUND OF THE MERGER.................................. 11
REASONS FOR THE MERGER.................................... 15
RECOMMENDATION OF THE BOARD OF DIRECTORS AND THE SPECIAL
COMMITTEE............................................... 17
OPINION OF FINANCIAL ADVISOR.............................. 17
CONDUCT OF BUSINESS OF CASCADE IF MERGER NOT
CONSUMMATED............................................. 23
CERTAIN EFFECTS OF THE MERGER............................. 23
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES..... 24
THE MERGER.................................................. 26
EFFECTIVE TIME............................................ 26
THE MERGER AND MERGER CONSIDERATION....................... 26
TREATMENT OF CASCADE STOCK OPTIONS........................ 26
FINANCING; SOURCES OF FUNDS............................... 27
REGULATORY REQUIREMENTS................................... 27
ACCOUNTING TREATMENT OF THE MERGER........................ 27
RIGHTS OF DISSENTING SHAREHOLDERS......................... 27
DELISTING OF CASCADE COMMON STOCK......................... 27
FEES AND EXPENSES......................................... 28
LITIGATION RELATED TO THE MERGER.......................... 28
THE MERGER AGREEMENT........................................ 29
REPRESENTATIONS AND WARRANTIES............................ 29
PAYMENT FOR SHARES AND OPTIONS............................ 29
CONDUCT OF BUSINESS PRIOR TO THE MERGER................... 30
ADDITIONAL AGREEMENTS OF CASCADE.......................... 31
ADDITIONAL AGREEMENT OF PARENT............................ 32
DIRECTOR AND OFFICER INDEMNIFICATION...................... 32
COOPERATION AND REASONABLE EFFORTS........................ 32
CONDITIONS TO THE MERGER.................................. 32
NO SOLICITATION OF TAKEOVER PROPOSALS; RIGHT TO ENTER INTO
SUPERIOR PROPOSAL....................................... 33
TERMINATION OF THE MERGER AGREEMENT....................... 34
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TERMINATION FEE AND EXPENSES.............................. 35
EXTENSION, WAIVER AND AMENDMENT........................... 35
THE PARTIES................................................. 36
INTERESTS OF CERTAIN PERSONS IN THE MERGER.................. 36
PRINCIPAL SHAREHOLDERS...................................... 39
PRICE RANGE OF COMMON STOCK................................. 41
INDEPENDENT ACCOUNTANTS..................................... 41
SHAREHOLDER PROPOSALS....................................... 40
OTHER MATTERS............................................... 41
WHERE YOU CAN FIND MORE INFORMATION......................... 42
APPENDICES
Appendix A
Agreement and Plan of Merger................................ A-1
Appendix B
Voting Agreement dated October 18, 2000 by and between
Cascade and William J. Harrison............................. B-1
Appendix C
Voting Agreement dated October 18, 2000 by and between
Cascade and W.J. Harrison Holdings Ltd...................... C-1
Appendix D
Fairness Opinion dated October 18, 2000 of Gleacher & Co.
LLC......................................................... D-1
Appendix E
Dissenters' Rights Under Oregon Law......................... E-1
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QUESTIONS AND ANSWERS ABOUT THE MERGER
WHY SHOULD CASCADE MERGE WITH CAS ACQUISITION CORP.?
On March 29, 2000, members of Cascade's management advised Cascade's board
of directors that they were considering a proposal to take Cascade private in a
management-led leveraged buyout. The board of directors then proceeded to
appoint a committee of independent directors (the "special committee") to
evaluate the management proposal and other alternatives to enhance value for the
shareholders of Cascade. In April 2000, the special committee hired Gleacher &
Co. LLC as its financial advisor. Over the ensuing months, Gleacher approached
on behalf of the special committee many parties potentially interested in a
business combination transaction involving Cascade. After careful consideration
of several alternatives, the special committee concluded that a merger proposal
involving acquisition companies formed by Lift Technologies, Inc., a
manufacturer of lift truck masts, TD Capital Group Limited, the private equity
arm of the Toronto Dominion Bank Group, and the Ontario Municipal Employees
Retirement System (collectively referred to as the "Lift Group"), in which each
Cascade shareholder (other than Parent or its subsidiaries, or Cascade or its
subsidiaries) will receive $17.25 per share in cash, was the best available
alternative for Cascade's shareholders. On the day before the initial public
announcement that Cascade's management was considering a leveraged buyout of
Cascade, the closing market price of Cascade's common stock was $8.50 per share.
WHAT WILL HAPPEN TO CASCADE AFTER THE MERGER?
If the merger is approved by Cascade shareholders and completed, Cascade
will become a wholly-owned subsidiary of Cascade-II Acquisition Corp., Cascade
common stock will no longer be quoted on the New York Stock Exchange or publicly
traded and members of the general public will no longer own Cascade common
stock. See "The Merger-Delisting of Cascade Common Stock."
WILL MY CASH PAYMENT BE AFFECTED BY CHANGES IN CASCADE'S STOCK PRICE BETWEEN NOW
AND THE SPECIAL MEETING?
No. The cash payment of $17.25 for each share of Cascade common stock will
not change even if the market price of Cascade common stock changes before the
merger is completed.
ARE THERE RISKS TO BE CONSIDERED?
The merger is contingent upon, among other things, shareholder approval,
Parent's receipt of $238 million in debt financing and governmental approvals.
If any of these or other conditions are not satisfied, or for some other reason
the transaction does not close, Cascade's stock would continue to be publicly
traded and remain subject to market risks. See "Special Factors--Conduct of
Business of Cascade if Merger Not Consummated."
IF MY SHARES OF CASCADE COMMON STOCK ARE HELD IN "STREET NAME" BY MY BROKER,
WILL MY BROKER VOTE MY SHARES FOR ME?
No. The law does not allow your broker to vote your shares of Cascade common
stock on the merger at the Special Meeting without your direction. You should
follow the instructions from your broker on how to vote your shares. Shares that
are not voted because you do not instruct your broker will have the effect of a
vote against the merger.
IF I SEND IN MY PROXY CARD BUT DO NOT INDICATE MY VOTE, HOW WILL MY SHARES BE
VOTED?
If you sign and return your proxy card but do not indicate how to vote your
shares at the Special Meeting, the shares represented by your proxy will be
voted "IN FAVOR" of the merger.
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WHAT IF I DON'T RETURN MY PROXY CARD?
Since it takes a majority of the votes entitled to be cast to approve the
merger, not returning your proxy card is the same as voting against the merger.
WHAT SHOULD I DO NOW TO VOTE AT THE SPECIAL MEETING?
Sign, mark and mail your proxy card indicating your vote on the merger in
the enclosed postage-paid return envelope as soon as possible, so that your
shares of Cascade stock can be voted at the Special Meeting.
MAY I CHANGE MY VOTE AFTER I MAIL MY PROXY CARD?
Yes. You may change your vote at any time before your proxy is voted at the
Special Meeting. You can do this in three ways:
- You can send Cascade a written statement that you revoke your proxy, which
to be effective must be received prior to the vote at the Special Meeting;
- You can send Cascade a new proxy card prior to the vote at the Special
Meeting, which to be effective must be received prior to the vote at the
Special Meeting; or
- You can attend the Special Meeting and vote in person. Your attendance
alone will not revoke your proxy. You must attend the Special Meeting and
cast your vote at the Special Meeting.
Send any revocation of a proxy or new proxy card to Cascade in care of Beacon
Hill Partners, Inc., 90 Broad Street, New York, New York, 10004, Attention:
. If your shares are held in street name, you must follow the
directions provided by your broker to vote your shares or to change your
instructions.
DO I SEND IN MY STOCK CERTIFICATES NOW?
No. If the merger is completed, you will receive written instructions for
delivering your certificates representing shares of Cascade common stock in
order to receive the $17.25 per share cash payment from the paying agent,
(" ").
WHO CAN HELP ANSWER YOUR QUESTIONS
If you have more questions about the merger or would like additional copies
of the proxy statement, you should contact:
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Beacon Hill Partners, Inc.
90 Broad Street
New York, New York 10004
Attention:
Telephone Number: (212) 843-8500
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SUMMARY TERM SHEET
Throughout this proxy statement the term "merger" means the merger between
CAS Acquisition Corp., an Oregon corporation, and Cascade Corporation, an Oregon
corporation, with Cascade being the surviving corporation. The term "merger
agreement" means the Agreement and Plan of Merger, dated as of October 18, 2000,
among Cascade Acquisition Corp., Cascade-II Acquisition Corp. (together referred
to as the "Parent"), CAS Acquisition Corp. and Cascade. A copy of the merger
agreement is attached as Appendix A to this proxy statement. Cascade Acquisition
Corp., Cascade-II Acquisition Corp. and CAS Acquisition Corp. are acquisition
companies formed by the Lift Group.
This summary highlights selected information included in this proxy
statement. This summary may not contain all of the information that is important
to you. For a more complete understanding of the merger and the other
information contained in this proxy statement, you should read this entire proxy
statement carefully, as well as the additional documents to which it refers. For
instructions on obtaining more information, see "Where You Can Find More
Information."
THE PARTIES
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Cascade.............................. Cascade is a leading international manufacturer of lift
truck attachments, forks and accessories.
Cascade's corporate headquarters are located at 2201 N.E.
201st Ave., Fairview, Oregon 97204-9718 and its telephone
number is (503) 669-6300.
Cascade Acquisition Corp............. Cascade Acquisition Corp. is a newly formed Delaware
corporation and a wholly-owned subsidiary of 1437414 Ontario
Limited, a corporation organized under the laws of the
province of Ontario, Canada.
Cascade-II Acquisition Corp.......... Cascade-II Acquisition Corp. is a Delaware corporation and a
wholly-owned subsidiary of Cascade Acquisition Corp.
CAS Acquisition Corp................. CAS Acquisition Corp. is an Oregon corporation and a wholly-
owned subsidiary of Cascade-II Acquisition Corp. that was
formed for the sole purpose of effecting the merger. CAS
Acquisition Corp. will be merged out of existence at the
effective time of the merger, with Cascade as the surviving
corporation becoming a wholly-owned subsidiary of Cascade-II
Acquisition Corp. CAS Acquisition Corp. is not expected to
have significant assets or liabilities (other than those
arising in connection with the merger) or to engage in any
activities (other than those incident to its formation and
the merger).
The Lift Group....................... The Lift Group is comprised of Lift Technologies Inc., which
is a corporation organized under the laws of the province of
Ontario, Canada, and is a leading manufacturer of lift truck
masts, TD Capital Group Limited, the private equity arm of
the Toronto Dominion Bank Group, the Ontario Municipal
Employees Retirement System, a multi-employer pension plan
for employees of local governments in the province of
Ontario, and William J. Harrison, founder and President of
Lift Technologies Inc. and a former director of Cascade who
controls approximately 6.6% of the voting power of Cascade's
outstanding capital stock.
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The principal executive offices for Cascade Acquisition
Corp., Cascade-II Acquisition Corp., CAS Acquisition Corp.
and the Lift Group are c/o Lift Technologies Inc., 251
Woodlawn Road West, Unit 217, Guelph, Ontario, Canada,
N1H8J1, and their telephone number is (519) 823-4545.
THE SPECIAL MEETING
The Special Committee................ The board of directors established a special committee to
evaluate a management buy-out proposal and other
alternatives to enhance value for the shareholders of
Cascade. See "Special Factors--Background of the Merger" and
"--Reasons for the Merger."
Recommendation of the Board of
Directors.......................... The board of directors and the special committee believe
that the merger is fair to, and in the best interests of,
the Cascade shareholders. The board of directors, based on a
recommendation of the special committee, recommends that the
Cascade shareholders vote "in favor" of approval of the
merger agreement and the transactions contemplated by the
merger agreement. Six directors voted to approve the
recommendation of the special committee, one director voted
against it, and two directors abstained from voting. See
"Special Factors--Background of the Merger," "--Reasons for
the Merger" and "--Recommendation of the Board of Directors
and the Special Committee."
Date, Place and Time of the Special
Meeting............................ This proxy statement is being furnished to Cascade
shareholders for use at the Special Meeting in connection
with the approval of the merger agreement and at any
adjournments or postponements of the Special Meeting. The
Special Meeting will be held on , 2001, at
, [Portland, Oregon] . See "The Special
Meeting--Date, Place and Time." If the Special Meeting is
adjourned or postponed for any reason, we will give you
notice of the rescheduled date and time.
Record Date; Voting.................. , 2000 has been established as the record date for
determining those shareholders who are entitled to notice of
and to vote at the Special Meeting. Each share of Cascade
common stock is entitled to one vote. In addition, the
outstanding share of Cascade special voting stock
beneficially owned by William J. Harrison is entitled to
800,000 votes. See "The Special Meeting--Record Date and
Voting at the Special Meeting."
Required Vote........................ The merger must be approved by a majority of the shares of
Cascade common stock and the votes attributable to the share
of Cascade special voting stock, voting together as a single
voting group, outstanding on the record date. On the record
date, there were shares of Cascade common stock and
one share of Cascade special voting stock entitled to
800,000 votes outstanding. See "The Special Meeting--Votes
Required."
Voting Agreements.................... William J. Harrison and his affiliate, holding an aggregate
of approximately 6.6% of the voting power of Cascade's
outstanding
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capital stock, have entered into voting agreements with
Cascade under which they have agreed to vote their shares in
favor of the merger. See "The Special Meeting--Voting
Agreements."
Total Value to Cascade............... The total value to Cascade shareholders of the merger is
expected to be approximately $199.5 million, consisting of
approximately $197.3 million in cash to be paid in the
aggregate for shares of Cascade common stock based on the
number of shares of Cascade common stock outstanding on the
record date, and approximately $2.1 million in cash to be
paid to holders of stock options.
THE MERGER
Merger Consideration................. Pursuant to the merger agreement, each share of Cascade
common stock (other than shares of Cascade common stock held
by Parent or its subsidiaries, or Cascade or its
subsidiaries) will be converted automatically into the right
to receive the cash amount of $17.25, without interest. See
"The Merger--The Merger and Merger Consideration."
Cascade Stock Options................ Each option to purchase Cascade common stock which is
outstanding immediately prior to the closing of the merger
will be canceled, whether or not such option is vested or
exercisable. Each holder of an option priced below $17.25
who elects to exercise the option prior to the closing of
the merger under Section 12(a) of the 1999 Amendment and
Restatement of the Cascade Corporation 1995 Senior Managers'
Incentive Stock Option Plan will receive a cash payment
equal to the product of (a) the difference between $17.25
and the option exercise price multiplied by (b) the number
of shares subject to the option, less applicable withholding
taxes. See "The Merger--Treatment of Cascade Stock Options"
and "Interests of Certain Persons in the Merger--Treatment
of Stock Options."
Conditions to the Merger............. The merger will be completed only if a number of conditions
are met or waived by Parent, CAS Acquisition Corp., and
Cascade, as applicable. These conditions include, among
other things:
- Cascade shareholders approving the merger;
- Receipt of $238 million in debt financing by Parent;
- All necessary governmental approvals being obtained;
and
- The absence of any judgment, injunction or order
prohibiting the merger.
Financing the Merger................. Parent has received and delivered to the special committee
commitment letters for debt and equity financing sufficient
to pay the merger consideration. See "The Merger--Financing;
Sources of Funds."
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Interests of Certain Persons in the
Merger............................. In considering the recommendation of the board of directors
and the special committee with respect to the merger,
shareholders should be aware that certain members of
management, some of whom are members of the board of
directors, have certain interests which present them with
potential conflicts of interest in connection with the
merger. The board of directors and special committee were
aware of these potential conflicts and considered them in
connection with their consideration and approval of the
merger. These interests include:
- Unvested stock options held by Cascade's directors and
executive officers become fully exercisable in
connection with the consummation of the merger (the
aggregate value of all such options (based upon a
share price of $17.25 less the applicable exercise
price per share) being approximately $915,000);
- Robert C. Warren, Jr., Kurt G. Wollenberg, Richard S.
Anderson and Terry H. Cathey, officers of Cascade,
have entered into severance and non-compete agreements
that will provide each such person a severance benefit
if he is involuntarily terminated within 12 months
following the merger; and
- Parent will provide continuing indemnification to and
maintain directors' and officers' insurance for
Cascade's current directors and officers for a period
of six years following the merger.
See "Interests of Certain Persons in the Merger" for further
information.
Target Takeover Proposals and
Termination Fee.................... Cascade may accept another acquisition proposal under
certain circumstances. However, Cascade must immediately pay
Parent a termination fee of $7.5 million and Parent's
expenses of up to $2.5 million if the merger agreement is
terminated by Cascade because Cascade's board of directors
has withdrawn or modified its approval or recommendation of
the merger agreement or merger. See "The Merger
Agreement--No Solicitation of Takeover Proposals; Right to
Enter Into Superior Proposal."
Amendment or Waiver of Terms of the
Merger Agreement................... The merger agreement may be amended or its conditions
precedent to closing waived at any time before or after the
Special Meeting. See "The Merger Agreement--Extension,
Waiver and Amendment."
Regulatory and Third-Party
Approvals.......................... Other than compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, no material regulatory approvals
are required. Failure to obtain non-material governmental
consents will
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not prevent completion of the merger. See "The Merger--
Regulatory Requirements."
Opinion of Financial Advisor......... Gleacher & Co. LLC, financial advisor to the special
committee, has provided an opinion to the board of directors
that, as of October 18, 2000, the date of the opinion, the
cash consideration of $17.25 per share provided in the
merger agreement was fair, from a financial point of view,
to Cascade's shareholders, other than the Lift Group and its
affiliates. The full text of Gleacher's written opinion,
which sets forth the assumptions made, the matters
considered, the scope and limitations of the review
undertaken and the procedures followed by Gleacher in
rendering such opinion, is attached to this proxy statement
as Appendix D.
Gleacher's opinion was provided solely for the information
and assistance of the board of directors and is not a
recommendation as to how Cascade shareholders should vote at
the Special Meeting. Cascade shareholders are urged to, and
should, read Gleacher's opinion carefully and in its
entirety. Gleacher has received a fee for rendering its
fairness opinion and will receive a fee if the merger is
consummated. See "Special Factors--Opinion of Financial
Advisor."
Certain U.S. Federal Income Tax
Consequences....................... For U. S. federal income tax purposes, the receipt of cash
by Cascade shareholders will be a taxable transaction. In
general, shareholders that are not tax-exempt will be taxed
on the difference between their basis in their Cascade
shares and the cash received. All shareholders are urged to
consult their tax advisors to determine the effect of the
merger under federal tax law, or foreign tax law where
applicable, and under their own state and local tax laws.
See "Special Factors--Certain United States Federal Income
Tax Consequences."
Rights of Dissenting Shareholders.... Under Oregon law, because Cascade's common stock is publicly
traded on the New York Stock Exchange, the holders of
Cascade common stock have no dissenters' rights of
appraisal. The holder of the outstanding share of Cascade
special voting stock has dissenters' rights of appraisal,
but such share is obligated to be voted in favor of approval
of the merger agreement pursuant to a Voting Agreement. See
"The Merger--Rights of Dissenting Shareholders."
</TABLE>
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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS
This proxy statement and the documents to which Cascade refers its
shareholders in this proxy statement contain forward-looking statements. In
addition, from time to time, Cascade or its representatives may make
forward-looking statements orally or in writing. Cascade bases these forward-
looking statements on its expectations and projections about future events,
which it derives from the information currently available to Cascade. Such
forward-looking statements relate to future events or Cascade's future
performance, including:
- Cascade's financial performance and projections;
- Cascade's growth in revenue and earnings; and
- Cascade's business prospects and opportunities.
Cascade shareholders can identify forward-looking statements as those that
are not historical in nature, particularly those that use terminology such as
"may," "will," "should," "expects," "anticipates," "contemplates," "estimates,"
"believes," "plans," "projected," "predicts," "potential" or "continue" or the
negative of these or similar terms. Factors which could cause Cascade's actual
results to differ materially from these forward-looking statements include, but
are not limited to:
- competitive factors in, and the cyclical nature of, the materials handling
industry;
- fluctuations in lift truck orders or deliveries;
- availability and cost of raw materials;
- general business and economic conditions in North America, Europe and
Asia;
- foreign currency fluctuations; and
- the effectiveness of Cascade's cost reduction initiatives.
Forward-looking statements are only predictions. The forward-looking events
discussed in this proxy statement, the documents to which we refer Cascade
shareholders and other statements made from time to time by Cascade or its
representatives, may not occur, and actual events and results may differ
materially and are subject to risks, uncertainties and assumptions about
Cascade. Cascade is not obligated to publicly update or revise any
forward-looking statement, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this proxy statement, the documents to which
Cascade refers shareholders and other statements made from time to time by
Cascade or its representatives, might not occur.
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THE SPECIAL MEETING
DATE, PLACE AND TIME
Cascade is furnishing this proxy statement to Cascade shareholders in
connection with the solicitation of proxies by the Cascade board of directors
for use at the Special Meeting of shareholders of Cascade to be held on
, 2001, at , local time, at , [Portland, Oregon]
, or any adjournment or postponement thereof, pursuant to the enclosed
Notice of Special Meeting of Shareholders.
PURPOSE OF THE MEETING
At the Special Meeting, Cascade shareholders of record as of the close of
business on , 2000 will be eligible to vote upon the recommendation of
Cascade's board of directors and the special committee to approve and adopt the
merger agreement, pursuant to which (i) CAS Acquisition Corp. will be merged
with and into Cascade, with Cascade being the surviving corporation, and
(ii) each outstanding share of Cascade common stock (other than shares of
Cascade common stock held by Parent or its subsidiaries, or Cascade or its
subsidiaries) will be canceled and converted automatically into the right to
receive $17.25 in cash, payable to the holder of such share, without interest.
RECORD DATE AND VOTING AT THE SPECIAL MEETING
, 2000, has been established as the record date for the
determination of the shareholders entitled to notice of, and to vote at, the
Special Meeting and any adjournments and postponements of the Special Meeting.
On that day, there were shares of Cascade common stock outstanding, which
shares were held by approximately shareholders of record and one share of
Cascade special voting stock outstanding held by one shareholder of record.
Holders of Cascade common stock are entitled to one vote per share. The holder
of the share of Cascade special voting stock is entitled to 800,000 votes.
A majority of the issued and outstanding shares of Cascade common stock and
votes attributable to the Cascade special voting stock on the record date,
represented in person or by proxy, will constitute a quorum for the transaction
of business at the Special Meeting. If a quorum is not present, the Special
Meeting may be adjourned from time to time until a quorum is present.
Abstentions and broker non-votes are counted as present for purposes of
determining the presence of a quorum at the Special Meeting for the transaction
of business.
Any shareholder of Cascade has the right to vote against approval of the
merger and the merger agreement. However, under Oregon law, because Cascade is a
publicly traded corporation, Cascade shareholders (other than the holder of the
share of Cascade special voting stock) have no statutory dissenters' rights of
appraisal. See "The Merger--Rights of Dissenting Shareholders."
VOTES REQUIRED
Approval of the merger agreement requires the affirmative vote of a majority
of the outstanding Cascade common stock and the votes attributable to the share
of Cascade special voting stock, voting together as a single voting group,
entitled to vote at the Special Meeting. A failure to vote, abstention from
voting, or a broker non-vote will have the same legal effect as a vote cast
against approval of the merger and the merger agreement.
Brokers, and in many cases nominees, will not have discretionary power to
vote on the proposals to be presented at the Special Meeting. Accordingly,
beneficial owners of shares must instruct their brokers or nominees how to vote
their shares at the Special Meeting.
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VOTING AGREEMENTS
In connection with the execution of the merger agreement, William J.
Harrison, founder and President of Lift Technologies Inc. and a former Cascade
director, and W.J. Harrison Holdings Ltd., a company of which Mr. Harrison is
the sole shareholder, have entered into voting agreements with Cascade, dated as
of October 18, 2000, which provide that Mr. Harrison and W.J. Harrison
Holdings Ltd. will vote, in the aggregate, approximately 6.6% of the voting
power of Cascade's outstanding capital stock in favor of the approval and
adoption of the merger agreement and the approval of the merger.
SOLICITATION AND PROXY SOLICITOR
Cascade will bear all expenses of the solicitation of proxies in connection
with this proxy statement, including the cost of preparing and mailing this
proxy statement. Cascade will reimburse brokers, fiduciaries, custodians and
their nominees for reasonable out-of-pocket expenses incurred in sending this
proxy statement and other proxy materials to, and obtaining instructions
relating to such materials from, beneficial owners of Cascade shares. Cascade
shareholder proxies may be solicited by directors, officers and employees of
Cascade in person or by telephone, facsimile or by other means of communication.
However, they will not be paid for soliciting proxies.
Cascade has hired Beacon Hill Partners, Inc. to assist in soliciting proxies
in connection with the Special Meeting. Cascade has agreed to pay Beacon Hill a
fee of approximately $7,500 plus reimbursement of expenses in connection with
its engagement to solicit proxies for the Special Meeting.
REVOCATION AND USE OF PROXIES
The enclosed proxy card is solicited on behalf of the Cascade board of
directors. A shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) delivering a written notice revoking the proxy to
Cascade before the vote at the Special Meeting, (ii) executing a proxy with a
later date and delivering it to Cascade before the vote at the Special Meeting
or (iii) attending the Special Meeting and voting in person. Any written notice
of revocation should be delivered to Cascade in care of Beacon Hill
Partners, Inc., 90 Broad Street, New York, New York, 10004, Attention:
. Attendance at the Special Meeting without casting a ballot will
not, by itself, constitute revocation of a proxy.
Subject to proper revocation, all shares of Cascade stock represented at the
Special Meeting by properly executed proxies received by Cascade will be voted
in accordance with the instructions contained in such proxies. Executed, but
unmarked, proxies will be voted "IN FAVOR" of approval of the merger agreement
and the transactions contemplated thereby.
ADJOURNMENTS OR POSTPONEMENTS
Although it is not expected, the Special Meeting may be adjourned or
postponed for the purpose of soliciting additional proxies. Any adjournment or
postponement of the Special Meeting may be made without notice, other than by an
announcement made at the Special Meeting, by approval of a majority of the votes
present in person or represented by proxy at the Special Meeting, whether or not
a quorum exists. Any signed proxies received by Cascade will be voted in favor
of an adjournment or postponement of the Special Meeting in these circumstances,
unless either a written note on the proxy delivered by the shareholder directs
otherwise or the shareholder has voted against the merger agreement. Thus,
proxies voting against the merger agreement will not be used to vote for
adjournment of the Special Meeting for the purpose of providing additional time
to solicit votes to approve the merger agreement. Any adjournment or
postponement of the Special Meeting for the purpose of soliciting additional
proxies will allow Cascade shareholders who have already sent in their proxies
to revoke them at any time prior to their use.
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SPECIAL FACTORS
BACKGROUND OF THE MERGER
On March 29, 2000, a special meeting of the board of directors of Cascade
was called for the purpose of receiving a presentation by representatives of an
investment banking firm on various options available to increase shareholder
value. When the meeting convened, C. Calvert Knudsen, Chairman of the Board,
advised the directors that the investment banking firm had terminated its
engagement just prior to the meeting because of conflicts of interest involving
Robert C. Warren, Jr., President and Chief Executive Officer of Cascade and a
member of the board of directors. Mr. Warren advised the board that he and
certain other members of management (the "management group") were considering a
bid to take Cascade private and were discussing the terms of a possible
engagement with the same investment banking firm. Cascade issued a press release
on March 29, 2000 disclosing that Mr. Warren and other managers were exploring
the possibility of a management-led leveraged buyout.
The board of directors then appointed a special committee of independent
directors to review and consider any proposals from the management group and to
consider other options that the special committee in its discretion deemed
appropriate to protect and enhance shareholder interests. The special committee
was also authorized to retain independent financial advisors and legal counsel.
At a subsequent meeting, on May 11, 2000, the Cascade board of directors
amplified the duties and responsibilities of the special committee to include
considering the merits and fairness of any acquisition proposals and other
alternatives that might be available to increase shareholder value, and
recommending to the board of directors what position it should take with respect
to such proposals and alternatives. The directors appointed to the special
committee were James S. Osterman, chair, Nicholas R. Lardy, Ernest C. Mercier,
Henry W. Wessinger II and Nancy A. Wilgenbusch. The special committee retained
legal counsel on March 31, 2000. In addition, following interviews with three
investment banking firms, the special committee selected Gleacher & Co. LLC as
its financial advisor. The special committee subsequently issued a press release
announcing the retention of Gleacher to advise it on strategic alternatives to
maximize shareholder value, including a sale or merger.
At a meeting on April 14, 2000, the special committee determined to conduct
a broad public auction by which all potentially interested parties could be
informed of an opportunity to acquire Cascade. The special committee directed
Gleacher to prepare a confidential offering memorandum for use in this process.
On May 11, 2000, the special committee received a report from Gleacher
regarding its progress in preparing a confidential offering memorandum to
solicit indications of interest from potential buyers. The special committee
reviewed and commented on a list of potential financial and strategic buyers
developed by Gleacher. The special committee also authorized retaining the
George Group Inc. to analyze the operations of Cascade and prepare a report to
give the special committee an independent basis on which to evaluate a wider
range of alternatives, including the possibility of increasing Cascade's value
on a stand-alone basis through improvements to existing operations.
In June 2000, Gleacher began a process at the direction of the special
committee designed to solicit proposals for a business combination transaction
involving Cascade. Approximately 175 potentially interested parties were
contacted, and a confidential offering memorandum was distributed to
approximately 50 parties who expressed a preliminary interest in pursuing a
transaction. The parties contacted included financial and strategic buyers, both
domestic and foreign. Each of the parties was required to sign a confidentiality
agreement before receiving the offering memorandum.
On June 16, 2000, representatives of the George Group Inc. presented a value
opportunity assessment report on Cascade to the special committee, which
included recommendations for improvement in a number of areas, as well as
findings on growth prospects and strategic options. At
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the meeting, the special committee also reviewed the status of the solicitation
of potential buyers with its financial and legal advisors.
On July 7, 10 and 11, 2000, Schedule 13-Ds were filed by the management
group with the SEC disclosing that the management group's financial sponsor was
forming an acquisition corporation with (i) Robert C. Warren, Jr., Richard S.
Anderson, Senior Vice President of Cascade, and Terry H. Cathey, Senior Vice
President of Cascade, and (ii) the Robert C. and Nani S. Warren Revocable Trust,
to acquire 100% of the common stock of Cascade. The Schedule 13-Ds disclosed
that (i) the Warren trust owned approximately 13.3% of Cascade's outstanding
common stock as of April 2, 2000 and (ii) the trustees of the Warren trust were
Robert C. Warren, Jr., Nani S. Warren (Mr. Warren's mother), C. Calvert Knudsen,
a director of Cascade, and Jack B. Schwartz, a director of Cascade and a partner
of Cascade's principal outside legal counsel.
By July 12, 2000, Gleacher had received on behalf of the special committee
12 preliminary, non-binding indications of interest to acquire Cascade. In
addition to the management group, indications of interest were received from
seven financial buyers and four strategic/hybrid buyers.
On July 13, 2000, the special committee held a telephonic meeting to review
with its advisors the detailed information submitted with the indications of
interest from each of the 12 parties, including their indicated price range,
form of consideration, financing considerations, due diligence requirements, and
other matters. After consideration of these factors, the special committee
unanimously agreed to invite seven parties, including the management group, to
submit detailed proposals. Each group and their financing sources were invited
to meet with and receive presentations from Cascade management, review Cascade
corporate and business information in a data room, visit Cascade plants in the
United States and Europe, perform additional due diligence, and interview
Cascade's third-party advisors, including environmental consultants, accountants
and the George Group Inc., and submit a detailed offer to the special
committee's advisors by August 23, 2000, including comments on a proposed merger
agreement provided to each of them by the special committee's legal counsel.
On August 18, 2000, at the urging of the Lift Group and in order to give all
bidders more time to conduct due diligence and complete their proposals, the
special committee authorized an extension of the deadline for bids from
August 23 to September 7, 2000.
On September 11, 2000, the special committee met to review detailed offers
submitted by three parties: the management group, the Lift Group and a third
party. Four parties decided not to make offers and terminated their involvement
in the process. The three detailed offers included information on price,
financing, comments on the proposed merger agreement, due diligence
requirements, time for the exclusivity period, break-up fees and other matters.
Each of the offers contained varying conditions and contingencies, which were
reviewed by the special committee's advisors. The offers from the Lift Group and
the third party proposed the same acquisition price per share. After analyzing
each of the proposals, the special committee instructed Gleacher to request that
each of the three parties revise their offers to (i) remove certain conditions
and contingencies and (ii) revisit their offer price in light of the tie between
the two highest bids. The parties were asked to respond by September 14, 2000.
On September 14, 2000, the special committee held a telephonic meeting with
its advisors to review the results of its request for revised bids. The Lift
Group improved its bid to $17.25 per share with committed financing, and the
management group increased its bid to $16.50 per share. The third bidder did not
revise its $17.00 per share offer. The special committee discussed with its
advisors the material aspects of each proposal, including price, financing,
status of commitment letters, extent of remaining due diligence, time requested
for an exclusivity period, break-up fees, special conditions and comments on the
merger agreement. The special committee unanimously determined that the Lift
Group offer was the most attractive proposal when compared to the other bids
received in terms of price, absence of contingencies and certainty of financing.
However, the special committee objected to the break-up fee requested by the
Lift Group and request for payment of expenses during the
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exclusivity period if a definitive merger agreement was not reached. The special
committee instructed its advisors to contact the Lift Group and attempt to have
those provisions removed before the special committee would decide on whether to
proceed to negotiate an exclusivity agreement with the Lift Group.
On September 15, 2000, the special committee held a telephonic meeting to
receive a report from its advisors on negotiations with the Lift Group and
communications with the other two final bidders. The advisors to the special
committee reported that the Lift Group had agreed to drop its request for a
$10.0 million break-up fee and full expense reimbursement in the exclusivity
agreement in exchange for reaching agreement in advance on the terms of the
termination provisions to be included in a possible definitive merger agreement.
They stated that discussions were held with the managment group after the
September 14 meeting but that the management group did not increase its $16.50
offer. The advisors also reviewed the provisions of the proposed exclusivity
agreement with the special committee and issues involved in negotiating the
termination provisions. The special committee instructed its advisors to attempt
to work out the remaining issues with the Lift Group over the weekend of
September 16-17, 2000.
On September 17, 2000, the special committee agreed to approve the
exclusivity agreement if the Lift Group would agree to a merger agreement
break-up fee of $7.5 million and a limit on reimbursable expenses of
$2.5 million. The special committee's advisors negotiated with the Lift Group's
advisors during the afternoon and the evening of September 17 and obtained the
Lift Group's agreement to the terms requested by the special committee. The
resulting exclusivity agreement provided the Lift Group the exclusive right
until September 29, 2000 to conduct due diligence and negotiate a final
agreement for the acquisition of Cascade. The exclusivity agreement could be
extended until October 16, 2000 under certain conditions, including the need to
complete environmental due diligence. On September 28, 2000, the exclusivity
agreement was extended until October 16, 2000 in order to allow the Lift Group
to complete its environmental review.
From late September until October 16, 2000, the special committee's legal
and financial advisors negotiated terms and issues under the proposed merger
agreement with the Lift Group's advisors. During this period, the Lift Group
continued to engage in due diligence activities regarding Cascade and its
facilities.
On October 16, 2000, the special committee's legal and financial advisors
reviewed the negotiated draft merger agreement and the Lift Group's financing
agreements and requested that a few final issues be resolved before the
definitive merger agreement could be signed. At the Cascade board of directors
meeting later that day, Mr. Osterman and the special committee's advisors
reviewed the merger agreement and other documents with the board of directors,
and explained the remaining open issues with the Lift Group. Gleacher made an
oral presentation to the board of directors that the merger price was fair from
a financial point of view to the shareholders of Cascade, other than the Lift
Group and its affiliates. Gleacher's oral opinion was subsequently confirmed in
writing on October 18, 2000. The board of directors decided to take no action on
the merger agreement until signed copies of the agreement and other documents
were received from the Lift Group in the form recommended by the special
committee. The board of directors also noted the expiration of the exclusivity
period. The advisors continued to work with the Lift Group and its
representatives to obtain completed and signed agreements for the special
committee.
On October 17, 2000, the remaining open issues were resolved and the merger
agreement and other documents were signed by the Lift Group and delivered to the
special committee. At about 4:30 p.m., Pacific Daylight Time, on October 17,
2000, the special committee received a letter from the management group
increasing its price to $17.50 per share, subject to certain requirements. The
management group said that its new offer would expire October 20, and requested
copies of the most recent merger agreement with the Lift Group, schedules to the
agreement, and copies of certain
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environmental due diligence studies. On behalf of the special committee, the
chair advised the management group that its requests could not be met, but that
the special committee welcomed the opportunity to discuss the terms and
conditions of their proposed new offer. On the morning of October 18, Gleacher,
on behalf of the special committee, called the Lift Group and advised them that
an unspecified higher offer had been received. The Lift Group's advisors
responded later in the day that the Lift Group was not prepared to increase its
price and that the proposal represented by the negotiated merger agreement would
expire at 6:00 p.m., Pacific Daylight Time, on October 18, 2000.
At the special committee meeting on October 18, 2000, the advisors reported
that all requested documents from the Lift Group had been received in executed
form, were in proper order and were ready to deliver to Cascade, upon the
special committee's approval of the merger agreement. Gleacher advised the
special committee that it had learned from several telephone calls with the
management group's financial sponsor that the management group did not have
financing commitments in place for its new offer, was not prepared to identify
all of the sources of its financing and was conditioning its offer on the
financing sources satisfying legal, environmental and tax due diligence, and
completing business and accounting due diligence. In the special committee's
view, it would take a minimum of 30 days and perhaps longer for the management
group to be in the same position as the Lift Group, and even then there would be
no assurance that it could obtain financing commitments under existing market
conditions. The special committee also considered that the new proposal from the
management group represented less than a 1% increase over the Lift Group price
on a time value of money basis. They considered the implications of turning down
a transaction with full financing commitments in place at a fair price for a
highly conditional offer from a party that needed to complete substantial due
diligence, lacked financing commitments and faced a difficult financing market.
The special committee also believed that there was no assurance that the Lift
Group would extend its stated deadline past 6:00 p.m. on October 18. In the
special committee's view, pursuing the management group proposal could have
resulted in losing both transactions and seriously harming the financial
interests of Cascade's shareholders.
The special committee then unanimously adopted a report to present to the
Cascade board of directors which summarized the special committee's activities
and the reasons for its recommendation to the board that the merger agreement
with the Lift Group in the form presented to the special committee be approved.
The Cascade board of directors met on the afternoon of October 18, 2000 to
consider the merger agreement and the special committee's recommendation. All of
the directors of Cascade were present, except for Messrs. Mercier and Lardy who
participated by conference telephone. Also present and participating were legal
counsel for Cascade, legal counsel for the special committee and representatives
of Gleacher. Mr. Osterman presented the report and recommendation of the special
committee.
After extensive discussion, the Cascade board of directors approved the
merger agreement with the Lift Group as being in the best interests of Cascade
and its shareholders, and recommended that the shareholders vote in favor of the
merger agreement and the transactions contemplated thereby. Messrs. Osterman,
Wessinger, Lardy, Mercier and Kubicek and Ms. Wilgenbusch voted in favor of such
approval and recommendation, Mr. Warren voted against, and Messrs. Knudsen and
Schwartz abstained from voting.
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REASONS FOR THE MERGER
The special committee determined that the merger is in the best interests of
Cascade and its shareholders. In reaching its determination, the special
committee considered a number of factors, including the factors listed below.
The conclusions of the special committee with respect to each of these factors
supported its determination that the merger and the cash payment of $17.25 for
each share of Cascade common stock (other than shares held by Parent or its
subsidiaries, or Cascade or its subsidiaries) were fair to, and in the best
interests of, Cascade and its shareholders. The most relevant information
reviewed and factors considered by the special committee are set forth below:
- the price of $17.25 per share to be received by Cascade's shareholders
represents a substantial premium (102.9% over the closing price prior to
the initial announcement of the appointment of the special committee; a
10.8% premium over the 52-week high; a 130.0% premium over the 52-week
low; and a 57.8% premium over the 52-week average);
- in addition to the significant price premium, the judgment of the special
committee that $17.25 in cash per share is the highest price reasonably
available to shareholders for the following reasons:
- the broad solicitation process conducted by Gleacher, on behalf of the
special committee, over a four-month period, which reached
approximately 175 potential buyers and resulted in 12 parties
submitting initial indications of interest and three final bidders
submitting offers, constituted an extensive and fair process which
provided ample opportunities to achieve the fairest price and terms for
Cascade's shareholders;
- the course of the extensive and competitive arm's-length negotiations
that occurred between the special committee and the three final bidders
submitting offers resulted in each party increasing its per share offer
price one or more times over its initial indication of interest; and
- the course of the arm's-length negotiations between the special
committee and the Lift Group regarding the merger price: the Lift
Group's initial price was $14-$16 per share; the price was increased to
$17 per share when the three final bidders were asked to submit their
best offers; and when the final bidders were again asked to submit
their best and final purchase price, the Lift Group increased its price
to $17.25 per share.
- Cascade's limitations as a public company, including limited trading
volume, limited recognition in its trading group, lack of institutional
sponsorship, limited public float and lack of research attention by market
analysts, all of which led the special committee to believe that
shareholder value was not likely to be maximized if Cascade remained a
public company;
- the opinion of Gleacher delivered to the board of directors on
October 18, 2000, that as of such date the merger consideration to be
received by the holders of Cascade's common stock was fair, from a
financial point of view, to Cascade's shareholders (other than the Lift
Group and its affiliates);
- consideration of the feasibility of various strategic alternatives,
including sale of separate segments of Cascade, sale to a strategic buyer,
a leveraged recapitalization, and continuing operation as a public
company; in the opinion of the special committee, none of these was either
feasible or as attractive as the merger proposal;
- the existing assets, financial condition, operations, management and
historical earnings of Cascade; the special committee's judgment as to the
nature and future prospect of Cascade's business and the risks involved in
achieving these prospects; and the impact these factors could have on the
future value of Cascade's common stock;
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- the terms and conditions of the merger agreement, including the following
factors, which the special committee deemed favorable in reaching its
decision:
- the right of the board of directors to provide information and engage
in negotiations with third parties who make unsolicited proposals to
acquire Cascade, and the board's right to terminate the merger
agreement in order to pursue a more favorable transaction;
- the view of the special committee that the termination fee and expense
reimbursement obligations of Cascade in the above situation would not
discourage competing third-party offers to acquire Cascade; and
- the consideration to be received by the Cascade shareholders, and the
fact that the per share price is payable in cash, which eliminates
uncertainties in evaluating the consideration to be received.
- the risks and costs of deferring a sale of Cascade at this time in the
hope of achieving a higher price at a later date;
- the Lift Group's advice to the special committee that it expects minimal
disruption in the Cascade workforce following the merger; and
- Lift Group management's extensive experience in the lift truck industry.
The special committee also considered potentially negative factors in its
deliberations concerning the merger, including:
- the risk that the merger might not be completed in a timely manner or at
all;
- the cash consideration to be received by Cascade shareholders in the
merger will result in a taxable transaction to non-exempt shareholders for
federal income tax purposes and possibly for state, local and foreign
income tax purposes as well;
- the fact that if the merger agreement is approved and adopted, the current
shareholders of Cascade (other than the Lift Group and its affiliates)
will not participate in any future growth of Cascade;
- the risk that the Lift Group will not receive the funds contemplated by
its commitment letters or from other sources on terms substantially
similar to those in the commitment letters and will not be required to
close the merger; and
- the risk that, if the Lift Group elected not to proceed with the merger in
breach of the merger agreement, recovery against the Lift Group parties to
the merger agreement would be difficult.
The special committee concluded that the positive factors outweighed the
negative factors.
The above discussion regarding the information and factors considered by the
special committee is not intended to be exhaustive, but includes all of the
material factors considered by the special committee in making its
determination. The members of the special committee evaluated the factors in
light of their knowledge of Cascade's business, their knowledge of the materials
handling and related industries, and their business judgment. In view of the
variety of factors considered in connection with its evaluation of the merger
agreement and the proposed merger, the special committee did not quantify or
otherwise assign relative weights to the specific factors it considered. The
determination was made after consideration of all the factors together. In
addition, individual members of the special committee may have given different
weight to different factors and therefore may have viewed certain factors more
positively or negatively than others.
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The special committee believes the process that it followed in approving the
merger agreement was procedurally fair and unbiased because:
- the special committee consisted solely of independent members of the board
of directors;
- the members of the special committee were experienced and sophisticated in
business and financial matters and were well informed about the business
and operations of Cascade;
- the special committee retained and was advised by independent financial
and legal advisors experienced in advising on transactions similar to the
merger;
- the special committee reviewed and considered the fairness opinion of
Gleacher;
- the special committee held 11 meetings and engaged in extensive
deliberations to evaluate potential alternatives to the merger, the
various acquisition proposals and the merger agreement with the Lift
Group; and
- the members of the special committee will not personally benefit from the
consummation of the merger other than in their capacity as holders of
Cascade common stock or options.
In determining to approve the merger agreement and recommend the merger
proposal to shareholders, the Cascade board of directors consulted with
Cascade's executive officers and legal advisors, as well as with the special
committee and its advisors, and considered the following factors:
- the determination and recommendation of the special committee;
- each of the factors referred to above under "Reasons for the Merger" which
were taken into account by the special committee in its deliberations; and
- the nature of the arm's-length negotiations between the special committee
and its advisors, on the one hand, and the Lift Group and its advisors, on
the other hand.
RECOMMENDATION OF THE BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE
The board of directors, following the unanimous recommendation to it by the
members of the special committee, has approved the merger agreement, the merger
and the transactions contemplated by the merger agreement and recommends that
Cascade shareholders vote "in favor" of approval of the merger and approval and
adoption of the merger agreement. The board of directors believes that the
consideration to be received by Cascade shareholders is fair and in the best
interests of Cascade shareholders.
OPINION OF FINANCIAL ADVISOR
On April 24, 2000, the special committee of Cascade's board of directors
engaged Gleacher & Co. LLC to act as the special committee's exclusive financial
advisor with regard to the possible sale of Cascade and, if requested by the
special committee, to give its opinion as to the fairness, from a financial
point of view, of the consideration to be received by Cascade's shareholders in
such a transaction.
At the direction of the special committee, Gleacher commenced a process to
solicit proposals for a potential business combination transaction involving
Cascade. The solicitation process involved, among other things, (i) contacting
approximately 175 potentially interested parties, (ii) distributing a
confidential information memorandum to approximately 50 parties that expressed
interest, (iii) inviting 12 parties that indicated preliminary interest in a
potential business combination transaction to perform additional due diligence,
(iv) inviting seven parties to submit final offers for a potential business
combination transaction involving Cascade, (v) evaluating final offers from
three parties, and (vi) negotiating definitive documentation on an exclusive
basis with one party with respect to a business
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combination transaction involving Cascade. At the conclusion of the solicitation
process described above, the special committee had received an offer from the
Lift Group to acquire Cascade for consideration of $17.25 per share in cash.
On October 16, 2000, at the request of the special committee, Gleacher
rendered its oral opinion to the board of directors, subsequently confirmed in
writing on October 18, 2000, that, as of such date, based upon and subject to
the various considerations set forth in its opinion, the $17.25 per share
consideration was fair, from a financial point of view, to Cascade's
shareholders, other than the Lift Group and its affiliates. In rendering this
opinion Gleacher also presented to the board of directors the financial analyses
described below.
THE FULL TEXT OF GLEACHER'S OPINION, WHICH SETS FORTH, AMONG OTHER THINGS,
ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS ON THE
REVIEW UNDERTAKEN IN CONNECTION WITH THE DELIVERY OF THIS OPINION, IS ATTACHED
AS APPENDIX D TO THIS PROXY STATEMENT. CASCADE'S SHAREHOLDERS ARE URGED TO READ
THE OPINION CAREFULLY AND IN ITS ENTIRETY. THE SUMMARY OF, AND ALL REFERENCES
TO, THE OPINION OF GLEACHER SET FORTH IN THIS PROXY STATEMENT ARE QUALIFIED IN
THEIR ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION, WHICH IS
INCORPORATED HEREIN BY REFERENCE. GLEACHER'S OPINION IS ADDRESSED TO CASCADE'S
BOARD OF DIRECTORS AND IS DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT
OF VIEW, OF THE CONSIDERATION TO BE RECEIVED BY CASCADE'S SHAREHOLDERS (OTHER
THAN THE LIFT GROUP AND ITS AFFILIATES) AND IS NOT INTENDED TO AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD
VOTE WITH RESPECT TO THE MERGER.
In connection with rendering its opinion, Gleacher, among other things:
- reviewed certain publicly available financial statements and other
information of Cascade;
- reviewed certain internal financial statements (including budgeted
financial statements for the fiscal year ending January 31, 2001) and
other financial and operating data concerning Cascade prepared by the
management of Cascade;
- analyzed certain financial projections prepared with the assistance of the
management of Cascade, which projections Cascade's management has
represented to Gleacher are consistent with its best judgments as to the
future performance of Cascade and constitute the best currently available
projections of Cascade's management with respect to such future financial
performance of Cascade;
- discussed the past and current operations and financial condition and the
prospects of Cascade with senior executives of Cascade;
- reviewed the reported prices and trading activity for Cascade's common
stock;
- compared the financial performance of Cascade and the prices and trading
activity of Cascade's common stock with those of certain other publicly
traded companies that Gleacher deemed relevant;
- reviewed the financial terms, to the extent publicly available, of certain
acquisition transactions that Gleacher deemed relevant;
- participated in discussions and negotiations among representatives of
Cascade and the Lift Group;
- reviewed a draft of the merger agreement and certain related documents;
and
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<PAGE>
- performed such other analyses and considered such other factors as
Gleacher deemed appropriate.
Gleacher assumed and relied upon, without assuming responsibility for
independent verification, the accuracy and completeness of the financial and
other information reviewed by Gleacher for the purposes of its opinion. With
respect to the budgeted financial statements supplied to Gleacher and the
financial projections, with the consent of the board of directors, Gleacher
relied upon the representations and assumed that they have been reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the senior management of Cascade as to the future financial
performance of Cascade. Gleacher assumes no responsibility for and expresses no
view as to such forecasts or the assumptions on which they are based, and
Gleacher relied upon the assurances of the senior management of Cascade that
they are unaware of any facts that would make the information provided to or
reviewed by Gleacher incomplete or misleading. Gleacher did not make any
independent valuation or appraisal of the assets or liabilities of Cascade, nor
was Gleacher furnished with any such valuations or appraisals. Gleacher also
assumed that the merger would be consummated in accordance with the terms set
forth in the draft merger agreement provided to Gleacher and that all of the
representations and warranties of the parties to such merger agreement were
true, that the covenants of each party to such merger agreement would be fully
complied with, and that all conditions to the merger set forth in such merger
agreement will be satisfied and not waived. Gleacher relied as to certain legal
matters on advice of counsel to the special committee.
Gleacher notes that the merger follows a publicly announced process in which
Gleacher on behalf of the special committee broadly solicited proposals for
business combination transactions involving Cascade. Gleacher considered the
results of such process in rendering its opinion. Gleacher's opinion was
necessarily based on economic, market and other conditions as in effect on, and
the information made available to Gleacher as of, October 18, 2000. It should be
understood that, although subsequent developments may affect the conclusion
reached in its opinion, Gleacher does not have any obligation to update, revise
or reaffirm its opinion.
In addition to conducting the solicitation process described above, Gleacher
performed a number of analyses to assess the fairness, from a financial point of
view, of the consideration to be received by Cascade's shareholders, other than
the Lift Group and its affiliates. The following is a brief summary of the
material valuation, financial and comparative analyses considered by Gleacher in
connection with the rendering of its opinion. This summary does not purport to
be a complete description of the analyses underlying the opinion. The following
summary of the analyses contains information in tabular format. In order fully
to understand the financial analyses used by Gleacher the tables must be read in
conjunction with the text of each summary. The tables alone do not constitute a
complete description of the financial analyses summarized therein. Cascade's
shareholders are encouraged to review Gleacher's entire opinion.
PURCHASE PRICE PREMIUMS ANALYSIS. Gleacher reviewed the historical closing
prices of Cascade's common stock on the New York Stock Exchange at various dates
and the implied purchase price premiums determined by dividing the $17.25 per
share consideration by such closing prices. The following table includes this
information at certain dates prior to March 30, 2000, the date of the initial
public announcement that Cascade management was considering a leveraged buyout
of Cascade:
<TABLE>
<CAPTION>
DATE PRIOR TO CLOSING PURCHASE PRICE
INITIAL ANNOUNCEMENT PRICE PREMIUM
-------------------- -------- --------------
<S> <C> <C>
One Day................................................ $8.50 102.9%
One Week............................................... 8.75 97.1
Four Weeks............................................. 8.38 106.0
</TABLE>
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Gleacher also noted that the closing price of Cascade's common stock had not
exceeded the $17.25 per share consideration since July 28, 1998.
COMPARABLE COMPANY ANALYSIS. Using publicly available information, Gleacher
reviewed the relative performance and trading market value of Cascade by
comparing certain market trading and operating statistics for Cascade with
certain other publicly traded companies that Gleacher deemed relevant.
The comparison group included a total of seven companies: Alamo Group Inc.;
Caterpillar Inc.; Gehl Company; JLG Industries, Inc.; The Manitowoc
Company, Inc.; NACCO Industries, Inc.; and Terex Corporation. Gleacher reviewed,
among other information, the comparable companies' total enterprise value, or
TEV (equal to equity market value plus total debt and redeemable preferred stock
less cash and cash equivalents), as multiples of last twelve months (LTM) net
sales and EBITDA (equal to operating income plus depreciation and amortization),
as well as the comparable companies' price to earnings (P/E) multiples for the
projected calendar years 2000 and 2001. Operating results were adjusted to
exclude disclosed non-recurring items. All projected calendarized earnings
figures, other than those for Cascade, were based on Institutional Brokers
Estimate System mean earnings per share estimates. Gleacher's analysis of the
comparable companies included the following multiples (based on closing stock
prices as of October 13, 2000):
<TABLE>
<CAPTION>
TEV MULTIPLES P/E MULTIPLES
----------------------- ----------------------
NET SALES EBITDA 2000 2001
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Mean...................................... 0.57x 4.6x 8.1x 7.1x
Median.................................... 0.56 4.6 8.1 7.1
High...................................... 0.75 6.4 11.0 9.4
Low....................................... 0.39 2.8 4.1 3.7
</TABLE>
As of March 29, 2000, the day prior to the initial announcement date of a
potential change of control transaction involving Cascade, Cascade's implied
unaffected trading multiples, calculated on the same basis as the comparable
companies, were as follows: (i) LTM net sales multiple of 0.65x,
(ii) LTM EBITDA multiple of 4.2x, (iii) calendar year 2000 P/E multiple of 7.0x
and (iv) calendar year 2001 P/E multiple of 6.4x. Projected calendarized
earnings figures for Cascade were based on earnings per share estimates as set
forth in a D.A. Davidson & Co. research report dated December 9, 1999.
No company used in the comparable company analysis is identical to Cascade.
Accordingly, comparable company analysis necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of Cascade and other factors that could affect the public
trading value of the companies to which it is being compared. Mathematical
analysis (such as determining the mean or median) is not in itself a meaningful
method of using comparable company data.
DISCOUNTED CASH FLOW ANALYSIS. Gleacher performed a discounted cash flow
analysis to calculate an estimate of the present fully diluted equity value per
share of Cascade using financial forecasts through the fiscal year ending
January 2006 that were provided by and/or prepared with the assistance of
Cascade management. A discounted cash flow analysis is a traditional valuation
methodology used to derive the value of a corporate entity by calculating the
estimated future unlevered free cash flows of that entity and discounting the
aggregate of such cash flows back to present value.
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<PAGE>
In conducting its analysis, Gleacher utilized discount rates ranging from
10.0% to 14.0% (reflecting a number of factors including a weighted average cost
of capital analysis) and terminal EBITDA multiples ranging from 4.0x to 5.0x
(reflective of the comparable company analysis as well as the approximate
historical range of Cascade's trading multiples). Based on these assumptions,
Gleacher calculated a range of present values per fully diluted share of $12.68
to $19.21. Gleacher noted that, given the assumptions described above,
$1.0 million of annual pre-tax cost savings (beginning in the fiscal year ending
January 2003) would generate incremental present value of approximately $0.30 to
$0.40 per fully diluted share.
LEVERAGED BUYOUT ANALYSIS. Gleacher performed an analysis of the equity
returns which could potentially be generated in a hypothetical leveraged buyout
transaction, or LBO, with a capitalization reflective of the current leveraged
finance market. Gleacher used in its analysis financial forecasts through the
fiscal year ending January 2006 that were provided by and/or prepared with the
assistance of Cascade management. The LBO analysis assumed (i) a $17.25 per
share purchase price, (ii) total debt capacity at closing of 4.0x LTM EBITDA for
Cascade (adjusted to exclude non-recurring items as provided by Cascade
management), (iii) interest rates on tranches of senior debt and mezzanine debt
financing ranging from 9.75% to 14.00%, (iv) terminal EBITDA multiples ranging
from 4.5x to 5.5x (reflective of the multiples implied by the proposed
transaction with the Lift Group) and (v) equity ownership dilution for mezzanine
financing providers and management incentive programs ranging in the aggregate
from 8% to 12%. Based on these assumptions, Gleacher calculated returns to
equity sponsors ranging from 11.4% to 20.9%. Gleacher noted that in order to
calculate a 25% return to equity sponsors given the assumptions described above,
the analysis would require annual cost savings (beginning in the fiscal year
ending January 2003) of $4.9 million to $16.7 million.
PRECEDENT TRANSACTION ANALYSIS. Gleacher reviewed the purchase price
premiums (where applicable) and the implied transaction multiples in certain
acquisition transactions that Gleacher deemed relevant.
The comparison group included a total of twelve transactions (listed in
reverse chronological order):
- The acquisition of the truck-mounted forklift businesses of Terex
Corporation by Partek Corporation;
- The acquisition of BT Industries AB by Toyoda Automatic Loom Works, Ltd.;
- The acquisition of Gleason Corporation by Vestar Capital Partners;
- The acquisition of OmniQuip International, Inc. by Textron Inc.;
- The acquisition of Gradall Industries, Inc. by JLG Industries, Inc.;
- The acquisition of Grove Worldwide LLC by Keystone, Inc.;
- The acquisition of the P&H Material Handling Division of Harnischfeger
Industries, Inc. by Chartwell Investments, Inc.;
- The acquisition of the Mustang Manufacturing subsidiary of Brunel Holdings
Plc by Gehl Company;
- The acquisition of the Snorkel Division of Figgie International Inc. by
OmniQuip International, Inc.;
- The acquisition of The Raymond Corporation by BT Industries AB;
- The acquisition of the Simon Access Division of Simon Engineering Plc by
Terex Corporation; and
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<PAGE>
- The acquisition of Kenhar Corporation by Cascade.
Gleacher reviewed, among other information, the precedent transactions'
multiples of total enterprise value (TEV) to the target companies' last twelve
months (LTM) net sales and EBITDA as well as the precedent transactions'
purchase price premiums based on the target companies' closing prices one day,
one week and four weeks prior to the transactions' announcement dates. Operating
results were adjusted to exclude disclosed non-recurring items. Gleacher's
analysis of the precedent transactions included the following multiples and
purchase price premiums:
<TABLE>
<CAPTION>
PREMIUMS TO
TEV MULTIPLES PRE-ANNOUNCEMENT PRICE
-------------------- --------------------------------
NET SALES EBITDA ONE DAY ONE WEEK FOUR WEEKS
--------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Mean.......................... 0.92x 7.1x 37.9% 49.1% 65.4%
Median........................ 0.93 7.1 35.5 40.3 36.2
High.......................... 1.44 9.6 60.0 95.3 152.6
Low........................... 0.46 4.8 14.3 26.0 31.0
</TABLE>
Based on the $17.25 per share consideration, the proposed acquisition of Cascade
by the Lift Group generated TEV multiples of Cascade's LTM net sales and EBITDA
of 0.93x and 5.1x, respectively, and purchase price premiums of 102.9%, 97.1%
and 106.0% to Cascade's closing stock prices one day, one week and four weeks,
respectively, prior to March 30, 2000, the date of the initial public
announcement that Cascade management was considering a leveraged buyout of
Cascade. Cascade's operating results were adjusted to exclude non-recurring
items as provided by Cascade management.
No transaction used in the precedent transaction analysis is identical to
the proposed transaction involving Cascade. Accordingly, precedent transaction
analysis necessarily involves complex considerations and judgments concerning
differences in financial and operating characteristics of Cascade and other
factors that could affect the value of the companies to which it is being
compared and of the transactions to which the proposed transaction is being
compared. Mathematical analysis (such as determining the mean or median) is not
in itself a meaningful method of using precedent transaction data.
SUMMARY. The preceding summary is not a complete description of the
analyses performed by Gleacher or of its presentation to Cascade's board of
directors. The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. Gleacher
believes that its analyses must be considered as a whole and that selecting
portions of its analyses and the factors considered by it, without considering
all such analyses and factors, would create an incomplete and misleading view of
the process underlying its opinion and the presentation to the board of
directors. Gleacher has not indicated that any of the analyses which it
performed had a greater significance from any other, nor, except as set forth
above, did it derive any value from, or draw any conclusion with respect to the
fairness based on, any particular analysis. In addition, Gleacher may have
deemed various assumptions more or less probable than other assumptions, so that
the ranges of valuations resulting from any particular analysis described above
should not be taken to be Gleacher's view of the actual value of Cascade.
Gleacher made its determination as to fairness on the basis of its experience
and professional judgment after considering the results of all of the analyses.
In performing its analyses, Gleacher made numerous assumptions with respect
to industry performance, general business and economic conditions and other
matters, many of which are beyond the control of Cascade. The analyses performed
by Gleacher are not necessarily indicative of actual values, which may be
significantly more or less favorable than suggested by such analyses. Such
analyses were prepared solely as a part of Gleacher's analysis of the fairness
of the consideration to be received by Cascade's shareholders, other than the
Lift Group and its affiliates, and were provided to the board of directors in
connection with the delivery of Gleacher's opinion. The analyses do not purport
to be
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<PAGE>
appraisals or necessarily reflect the prices at which businesses or securities
might actually be sold, which are inherently subject to uncertainty. In
addition, as described above, Gleacher's opinion and presentation to the board
of directors was one of many factors taken into consideration by the board of
directors in making its determination to approve the merger. Consequently, the
Gleacher analyses described above should not be viewed as determinative of the
opinion of the board of directors or Cascade's management with respect to the
merger.
Gleacher is an internationally recognized investment banking and advisory
firm that regularly engages in the valuation of businesses and their securities
in connection with mergers and acquisitions. The special committee selected
Gleacher as its exclusive financial advisor based on Gleacher's qualifications,
expertise and reputation, and because members of the firm have substantial
experience in transactions such as the merger and in the valuation of
businesses.
Pursuant to the terms of the engagement letter dated April 24, 2000 between
Gleacher and the special committee, Cascade has paid Gleacher an advisory fee of
$150,000 for its time and efforts pursuing a sale transaction and an opinion fee
of $250,000 for rendering the fairness opinion. In addition, Cascade agreed to
pay Gleacher a success fee upon the completion of a sale transaction based on an
incentive-based formula, and against which the advisory fee and the opinion fee
will be credited. Based on the $17.25 per share consideration, the success fee
would equal approximately $4.6 million. In addition, Cascade has agreed, among
other things, to reimburse Gleacher for all reasonable out-of-pocket expenses
incurred in connection with the services provided by Gleacher, and to indemnify
and hold harmless Gleacher and certain related parties from and against certain
liabilities and expenses, including certain liabilities under the federal
securities laws, in connection with its engagement.
CONDUCT OF BUSINESS OF CASCADE IF MERGER NOT CONSUMMATED
Cascade's board of directors has not determined whether to seek or consider
alternative transactions if the merger is not completed. If the merger were not
concluded, Cascade would remain a publicly-held company and its common stock
would continue to be listed on the New York Stock Exchange. Cascade is
conducting its business in the ordinary course pending the merger and believes
it is prepared to operate normally in the event the merger does not take place.
See "The Merger Agreement--Conduct of Business Prior to the Merger."
CERTAIN EFFECTS OF THE MERGER
Pursuant to the merger agreement, following approval of the merger agreement
and subject to the fulfillment or waiver of certain conditions, CAS Acquisition
Corp. will be merged with and into Cascade, and Cascade will continue as the
surviving corporation. As a result of the merger, Cascade shareholders (other
than Parent or its subsidiaries, or Cascade or its subsidiaries) will be
entitled to receive $17.25 in cash for each share of Cascade common stock held
by them at the time of the merger.
Following the merger, Cascade's shareholders will cease to participate in
Cascade's future earnings or growth or benefit from increases, if any, in the
value of Cascade stock. Upon completion of the merger, Cascade will no longer be
quoted on the New York Stock Exchange, trading information will no longer be
available, the registration of Cascade common stock under the Securities
Exchange Act of 1934, will be terminated, and Cascade will be relieved of the
obligation to comply with the public reporting requirements of the Exchange Act.
Each holder of an option with an exercise price less than $17.25 who elects
to exercise the option prior to the closing of the merger under the Option Plan
will receive a cash payment equal to the product of (a) the difference between
$17.25 and the option exercise price multiplied by (b) the
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<PAGE>
number of shares subject to the option, less applicable withholding taxes. See
"The Merger--Treatment of Cascade Stock Options."
Cascade's restated articles of incorporation in effect immediately before
the merger will be the articles of incorporation of the surviving corporation.
Cascade's bylaws in effect immediately before the merger will, at the effective
time of the merger, be amended and restated in the form of CAS Acquisition
Corp.'s bylaws. CAS Acquisition Corp.'s directors immediately before the merger
will become the surviving corporation's directors immediately after the merger.
William J. Harrison will become the President and Chief Executive Officer of the
surviving corporation immediately after the merger.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of material United States federal income tax
consequences of the merger to shareholders of Cascade whose shares of Cascade
common stock are converted into the right to receive cash in the merger. The
discussion does not purport to consider all aspects of United States federal
income taxation that might be relevant to such shareholders. The discussion is
based on current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), existing, proposed and temporary regulations promulgated
thereunder, and administrative and judicial interpretations thereof, all of
which are subject to change, possibly with a retroactive effect. The discussion
applies only to shareholders who hold Cascade common stock as capital assets
within the meaning of Section 1221 of the Code. This discussion does not apply
to shares of Cascade common stock received pursuant to the exercise of employee
stock options or otherwise as compensation, or to certain types of shareholders
(such as insurance companies, tax-exempt organizations, financial institutions,
regulated investment companies, broker-dealers and taxpayers who hold Cascade
common stock as part of a "straddle," "hedge" or "conversion transaction" or who
have a "functional currency" other than the United States dollar) who may be
subject to special rules. The discussion does not discuss the United States
federal income tax consequences to any shareholder who, for United States
federal income tax purposes, is a non-resident alien individual, a foreign
corporation, a foreign partnership or a foreign estate or trust, nor does it
consider the effect of any foreign, state or local laws.
Furthermore, the discussion does not discuss the United States federal
income tax consequences of the exchange of the outstanding share of Cascade
special voting stock for one share of special voting stock of the surviving
corporation pursuant to the merger, or any tax consequences of the merger
relating to the Exchangeable Shares issued by Cascade (Canada) Ltd., a
wholly-owned subsidiary of Cascade.
Because individual circumstances may differ, each shareholder should consult
the shareholder's own tax advisor to determine the applicability of the rules
discussed below and the particular tax effects of the merger, including the
application and effect of the alternative minimum tax, and any state, local and
foreign tax laws and of changes in such laws.
The exchange of shares of Cascade common stock for cash pursuant to the
merger will be a taxable transaction for United States federal income tax
purposes and possibly for state, local and foreign income tax purposes as well.
In general, a shareholder who receives cash in exchange for shares of Cascade
common stock pursuant to the merger will recognize gain or loss for United
States federal income tax purposes equal to the difference, if any, between the
amount of cash received and the shareholder's adjusted tax basis in the shares
of Cascade common stock exchanged for cash pursuant to the merger. Gain or loss
will be determined separately for each block of shares (i.e., shares acquired at
the same cost in a single transaction) exchanged for cash pursuant to the
merger. Such gain or loss will be long-term capital gain or loss provided that
the shareholder's holding period for such shares of Cascade common stock is more
than one year at the time of consummation of the merger. Capital gain recognized
by an individual upon a disposition of a share of Cascade common stock that has
been held
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<PAGE>
for more than one year generally will be subject to a maximum United States
federal income tax rate of 20% or, in the case of a share that has been held for
one year or less, will be subject to tax at ordinary income tax rates. For
corporations, capital gains and ordinary income are taxed at the same rate, with
a maximum rate of 35%. Certain limitations apply to the use of a shareholder's
capital losses.
A shareholder may be subject to backup withholding at the rate of 31% on
payments received in connection with the merger, unless the shareholder provides
a correct taxpayer identification number and otherwise complies with applicable
requirements of the backup withholding rules, or unless an exemption applies. In
order to avoid backup federal income tax withholding, each shareholder must
(unless an exemption applies and is proved in a manner satisfactory to the
paying agent) provide the paying agent with a Form W-9 or Substitute Form W-9
that provides such shareholder's correct taxpayer identification number and
certifies under penalty of perjury that (i) such taxpayer identification number
is correct (or that such shareholder is awaiting a taxpayer identification
number) and (ii) such shareholder is not subject to backup withholding (such
Form W-9 or Substitute Form W-9 will be included as part of the letter of
transmittal to be provided by paying agent). A shareholder who does not provide
the shareholder's correct taxpayer identification number or fails to provide the
certifications described above may be subject to penalties imposed by the
Internal Revenue Service, as well as backup withholding. Any amount withheld
under these rules will be creditable against the shareholder's federal income
tax liability. Certain shareholders (including, among others, corporations) are
not subject to backup withholding.
Each shareholder is urged to consult the shareholder's tax advisor with
respect to the specific tax consequences of the merger, including the
applicability to the shareholder's particular situation of the tax
considerations contained in this summary and the applicability and effect of
state, local, foreign or other tax laws.
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THE MERGER
THE FOLLOWING IS A BRIEF SUMMARY OF THE MERGER AGREEMENT, A COPY OF WHICH IS
ATTACHED AS APPENDIX A TO THIS PROXY STATEMENT AND INCORPORATED BY REFERENCE IN
THIS PROXY STATEMENT. YOU SHOULD READ THE MERGER AGREEMENT IN ITS ENTIRETY FOR A
MORE COMPLETE DESCRIPTION OF THE MERGER. IN THE EVENT OF ANY DISCREPANCY BETWEEN
THE TERMS OF THE MERGER AGREEMENT AND THE FOLLOWING SUMMARY, THE MERGER
AGREEMENT WILL CONTROL.
EFFECTIVE TIME
The merger agreement provides that the merger will become effective upon the
filing of the Articles of Merger with the Secretary of State of the State of
Oregon. If the merger is approved at the Special Meeting by a majority of the
outstanding shares of common stock and the votes attributable to the share of
Cascade special voting stock, voting together as a single voting group, and the
other conditions to the merger are satisfied or waived, it is currently
anticipated that the merger will become effective as soon as practicable after
the Special Meeting. However, there can be no assurance as to the timing of the
consummation of the merger or that the merger will be consummated.
THE MERGER AND MERGER CONSIDERATION
At the effective time, CAS Acquisition Corp., a newly formed indirect
wholly-owned subsidiary of Parent, will merge with and into Cascade, and the
separate corporate existence of CAS Acquisition Corp. will cease. Cascade will
be the surviving corporation and will become a wholly-owned subsidiary of
Cascade-II Acquisition Corp. following the merger. Pursuant to the merger
agreement and at the effective time:
- each share of Cascade common stock outstanding immediately prior to the
effective time (other than shares held by Parent or its subsidiaries, or
Cascade or its subsidiaries) will, by virtue of the merger and without any
action on the part of the holder thereof, be converted into the right to
receive cash in the amount of $17.25 per share;
- the share of Cascade special voting stock outstanding immediately prior to
the effective time will, by virtue of the merger and without any action on
the part of the holder thereof, be converted into one share of special
voting stock of the surviving corporation;
- each outstanding share of CAS Acquisition Corp. will, by virtue of the
merger and without any action on the part of the holder thereof, be
converted into one share of common stock of the surviving corporation;
- each share of Cascade common stock issued and outstanding immediately
prior to the effective time that is owned by Parent or its subsidiaries,
or Cascade or its subsidiaries, will automatically be canceled, retired
and cease to exist and no payment will be made with respect thereto; and
- each certificate representing shares of Cascade common stock that has been
converted to cash under the terms of the merger agreement will, after the
effective time, evidence only the right to receive, upon the surrender of
such certificate, cash in the amount of $17.25 per share.
TREATMENT OF CASCADE STOCK OPTIONS
Except as provided below, upon consummation of the merger, each holder of a
Cascade stock option who elects to exercise the option under the Option Plan
prior to the consummation of the merger will be entitled to receive, subject to
any applicable withholding taxes, an amount equal to the product of (i) the
total number of shares of Cascade common stock into which the option was
exercisable immediately prior to the effective time and (ii) the difference
between $17.25 and the
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option exercise price for such option, payable in cash immediately following the
merger (the "option consideration"). If the exercise price for an option is
equal to or greater than $17.25, the option will be canceled without being
converted into the right to receive any payment.
FINANCING; SOURCES OF FUNDS
Parent's obligations under the merger agreement are subject to the receipt
by Parent or CAS Acquisition Corp. of at least $238 million of debt financing
proceeds. Parent has received and delivered to the special committee debt
commitment letters (the "debt commitment letters") from Fleet National Bank,
N.A. and TD Capital-Mezzanine Partners in the aggregate amount of $238 million
and an equity commitment letter (the "equity commitment letter") from William J.
Harrison, TD Capital Group Limited and the Ontario Municipal Employees
Retirement System in the aggregate amount of up to $100 million in cash, plus
stock and assets, for total proceeds in an aggregate amount sufficient to pay
the merger consideration. The debt commitment letters are subject to customary
and other conditions including (i) the absence of material regulatory changes or
changes in the financial or capital markets that could reasonably be expected to
impair the syndication of the financing, (ii) completion of environmental due
diligence and (iii) the absence of material adverse changes in the business,
assets or affairs of Cascade.
REGULATORY REQUIREMENTS
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
certain acquisition transactions may not be consummated unless notice has been
given and certain information furnished to the Antitrust Division of the United
States Department of Justice and the Federal Trade Commission and specified
waiting period requirements have been satisfied, unless earlier termination has
been granted.
Parent and Cascade will each make their respective filings with the
Department of Justice and the Federal Trade Commission. The applicable waiting
period will expire on , 2000. The Department of Justice and the
Federal Trade Commission, as well as a state or private person, may challenge
the merger at any time before or after its completion. Neither Parent nor
Cascade is aware of any other material governmental or regulatory approval
required for completion of the merger, other than compliance with the corporate
law of Oregon.
ACCOUNTING TREATMENT OF THE MERGER
The merger will be accounted for under the "purchase" method of accounting.
Accordingly, a determination of the fair value of Cascade's assets and
liabilities will be made for accounting purposes only in order to allocate the
purchase price to the assets acquired and the liabilities assumed.
RIGHTS OF DISSENTING SHAREHOLDERS
Under Oregon law, because Cascade is a publicly traded corporation on the
New York Stock Exchange, the holders of Cascade common stock have no dissenters'
rights of appraisal. The holder of the outstanding share of Cascade special
voting stock has dissenters' rights of appraisal, but William J. Harrison, the
beneficial owner of such share, has entered into a voting agreement with Cascade
which provides that Mr. Harrison will cause the Cascade special voting stock to
be voted in favor of the approval and adoption of the merger agreement and the
approval of the merger.
DELISTING OF CASCADE COMMON STOCK
As a result of the merger, the common stock of Cascade will be delisted from
the New York Stock Exchange.
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FEES AND EXPENSES
We estimate that merger-related fees and expenses, consisting primarily of
financial advisory fees, SEC filing fees, fees and expenses of investment
bankers, attorneys and accountants and other related charges, will total
approximately $6.2 million, assuming the merger is completed. This amount
consists of the following estimated fees:
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
----------- ----------
<S> <C>
Advisory fees and expenses.................................. $5,000,000
Legal fees and expenses..................................... 700,000
Accounting fees and expenses................................ 35,000
SEC filing fee.............................................. 40,000
Printing, solicitation and mailing costs.................... 75,000
Miscellaneous expenses...................................... 300,000
----------
Total....................................................... $6,150,000
</TABLE>
Cascade will be responsible for paying all of its expenses incurred in
connection with the merger. These expenses will not reduce the merger
consideration to be received by Cascade's shareholders.
LITIGATION RELATED TO THE MERGER
In July 2000, the group, including members of Cascade's management that in
March 2000 announced its intention to present to Cascade's board of directors a
proposal to take Cascade private in a management-led leveraged buyout, filed a
Schedule 13D with the Securities and Exchange Commission. The Schedule 13D
stated that the management group and the Robert C. and Nani S. Warren Revocable
Trust, owner of 1,631,192 shares of Cascade common stock, had entered into a
Letter of Understanding with an affiliate of Code, Hennessy & Simmons LLC, a
private equity investment firm, in connection with its exploration of a buyout
proposal.
Subsequently in July 2000, two actions were filed against Cascade, its
directors and Code, Hennessy & Simmons LLC in the Circuit Court of the State of
Oregon for the County of Multnomah, ROSENBERG V. CASCADE CORPORATION, Case
No. 00-07-06991 and TYBERG V. CASCADE CORPORATION, Case No. 00-07-07268. Each
action seeks class action status, alleges breach of fiduciary duty in connection
with the management group's buyout proposal, and asks for injunctive relief and
damages. Plaintiffs' lawyers have indicated their intention to seek dismissal of
the actions as moot.
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THE MERGER AGREEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN MATERIAL PROVISIONS OF THE
MERGER AGREEMENT THAT HAVE NOT BEEN PREVIOUSLY DISCUSSED. THIS SUMMARY DOES NOT
PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MERGER AGREEMENT, WHICH IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX A AND IS
INCORPORATED HEREIN BY REFERENCE.
REPRESENTATIONS AND WARRANTIES
In the merger agreement, Cascade made customary representations and
warranties to the other parties with respect to its business, organization,
operations and financial condition and other matters. The merger agreement also
contains customary representations and warranties of Parent and CAS Acquisition
Corp. relating to their business and the financing for the merger. The
representations and warranties in the merger agreement do not survive after the
effective time, except certain covenants and agreements which by their terms
contemplate performance following the effective time.
PAYMENT FOR SHARES AND OPTIONS
has been appointed as the paying agent in connection with the
merger. will receive a fee which Cascade expects will be
approximately $ as compensation for its services, plus reimbursement of its
out-of-pocket expenses in connection with such services.
As of the effective time, CAS Acquisition Corp. will make available to the
paying agent cash in an amount equal to the aggregate merger consideration
payable to holders of shares of Cascade common stock and options. As soon as
practicable after the effective time, the paying agent will mail to each record
holder of shares of common stock or options (other than options with an exercise
price equal to or greater than $17.25) a letter of transmittal and instructions
for use in surrendering certificates or options in exchange for cash payment.
The letter of transmittal will specify that the delivery will be effected, and
risk of loss and title will pass, only upon delivery of the shares of common
stock or options, as applicable, to the paying agent.
Each holder of a share of Cascade common stock that has been converted into
the right to receive the cash payment of $17.25 per share, and each holder of an
option that has been converted into the right to receive the option
consideration shall, upon surrender to the paying agent of a stock certificate
or certificates representing such shares, or option agreement or agreements
representing such options, together with a properly completed letter of
transmittal covering such shares or options, receive a check representing the
amount of such cash payment. Until so surrendered, each such stock certificate
or option agreement will, after the effective time, represent for all purposes
only the right to receive such cash payment. No interest will be paid or will
accrue on the cash payment.
If payment of the merger consideration is to be made to a person other than
the person in whose name the certificate or option surrendered is registered, it
will be a condition of payment that (i) the certificate or option so surrendered
be properly endorsed, or otherwise be in proper form for transfer and (ii) the
person requesting such payment pay to the paying agent any transfer or other
taxes required by reason of the payment of the merger consideration to a person
other than the registered holder of the certificate or option, or establish to
the satisfaction of the paying agent that such tax has been paid or is not
applicable.
Six months after the effective time, the paying agent will deliver to the
surviving corporation any portion of the payment fund that remains undistributed
to or unclaimed by the holders of certificates or options. From then on, any
holders of certificates or options who have not previously complied with the
above-described procedures to receive payment of the merger consideration may
look only to the surviving corporation for payment of the merger consideration
to which they are entitled.
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After the effective time, there will be no further transfers on the stock
transfer books of the surviving corporation of the Cascade common stock. From
and after the effective time, the holders of Cascade common stock will cease to
have any rights with respect to such shares except as provided in the merger
agreement or under applicable law.
SHAREHOLDERS AND OPTION HOLDERS SHOULD NOT SEND THEIR CERTIFICATES OR
OPTIONS NOW AND SHOULD SEND THEM ONLY PURSUANT TO INSTRUCTIONS SET FORTH IN THE
LETTER OF TRANSMITTAL TO BE MAILED TO SHAREHOLDERS AND OPTION HOLDERS PROMPTLY
AFTER THE EFFECTIVE TIME. IN ALL CASES, THE MERGER CONSIDERATION WILL BE
PROVIDED ONLY IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THIS PROXY
STATEMENT AND SUCH LETTER OF TRANSMITTAL.
CONDUCT OF BUSINESS PRIOR TO THE MERGER
Cascade has agreed that, until the completion or termination of the merger,
Cascade and its subsidiaries will conduct their businesses in the ordinary
course of business in substantially the manner conducted prior to the date of
the merger agreement. Cascade has also agreed to, and cause its subsidiaries to
(i) use reasonable commercial efforts consistent with past practice and policies
to preserve intact its and its subsidiaries present business organizations, (ii)
keep available the services of their respective officers and key employees and
(iii) preserve their relationships with customers and suppliers and others
having business dealings with them, to the end that their goodwill and ongoing
business will be maintained following the completion of the merger.
Except as expressly contemplated by the merger agreement or with the prior
written consent of Parent, Cascade has further agreed, until the completion or
termination of the merger, that it will not, and will not permit any of its
subsidiaries to, do any of the following:
- amend their respective articles of incorporation or bylaws or other
organizational documents;
- rescind, modify, amend or otherwise change or affect any of the
resolutions of the board of directors recommending adoption of the merger
agreement and authorization of the merger;
- issue, sell, transfer, assign, pledge, convey or dispose of any capital
stock or other equity interest, including, without limitation, any
subscriptions, options, warrants, calls, conversions or other rights,
agreements, commitments, arrangements or understandings of any kind
obligating Cascade or any of its subsidiaries, contingently or otherwise,
to issue or sell, or cause to be issued or sold, any capital stock or
other equity interest of Cascade or any of its subsidiaries;
- split, combine or reclassify any shares of any class of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of any
class of its capital stock, or redeem or otherwise acquire any shares of
such capital stock;
- write off any receivables, except in the ordinary course of business
consistent with past practice;
- sell, assign, lease or otherwise transfer or dispose of any material
assets, or acquire or agree to acquire any material business or assets,
except in the ordinary course of business consistent with past practice;
- (i) except in the ordinary course of business consistent with past
practice under existing lines of credit, create, incur or assume any
long-term debt, including obligations in respect of capital leases, or
create, incur, assume, maintain or permit to exist any short-term
borrowing in an aggregate amount for Cascade and Cascade's subsidiaries in
excess of $5 million, or make or commit to make capital expenditures in
excess of $250,000 each or $5,000,000 in the aggregate, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly,
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contingently or otherwise) for the obligations of any other person, except
for assumptions, guarantees or endorsements by Cascade of the obligations
of its subsidiaries in the ordinary course of business consistent with
past practice, (iii) make any loans, advances or capital contributions to,
or investments in, any other person (other than customary loans or
advances in the ordinary course of business consistent with past practice)
to employees not to exceed $100,000 in the aggregate and extensions of
credit made to customers on a trade receivable basis in the ordinary
course of business consistent with past practice, (iv) create, assume or
permit to exist any lien upon their assets, except for those in existence
on the date of the merger agreement and except for those additional liens
created in the ordinary course of business consistent with past practice
or (v) amend in any material respect or terminate any material contract;
- (i) increase or modify or agree to increase or modify the compensation,
bonuses or other benefits or perquisites of any employee of Cascade or any
of its subsidiaries, except for salary increases granted in the ordinary
course of business consistent with past practice or (ii) pay or commit to
pay any compensation, bonus, pension or other retirement benefit or
allowance, fringe benefit or other benefit not required by the terms of an
existing employee benefit plan or collective bargaining agreement as in
effect on the date hereof or otherwise in the ordinary course of business
consistent with past practice;
- make any new elections, or make any changes to current elections, with
respect to taxes;
- fail to maintain their books and records in accordance with generally
accepted accounting principles;
- take or fail to take any action that would cause any of its
representations and warranties not to be true and correct on the date the
merger is completed in the manner required by Section 7.3(b) of the merger
agreement; and
- enter into any agreement, contract, commitment or arrangement to do any of
the foregoing.
ADDITIONAL AGREEMENTS OF CASCADE
Cascade has further agreed, among other things specifically identified in
the merger agreement:
- to convene the Special Meeting;
- to prepare and file this proxy statement with the SEC as soon as is
reasonably practicable, promptly respond to any SEC comments and, subject
to compliance with the rules and regulations of the SEC, mail a definitive
proxy statement to the shareholders of Cascade;
- to cooperate with Parent to (i) determine whether any governmental filings
are necessary in connection with the merger agreement and the merger,
(ii) make all necessary governmental filings and obtain any consents and
approvals as may be required in connection with the merger agreement and
the merger and (iii) pursue all reasonable commercial efforts to obtain
promptly the satisfaction of the conditions to the completion of the
merger;
- to confer with Parent on a regular basis to report Cascade's operational
matters of materiality and the general status of Cascade's ongoing
operations and promptly provide Parent a copy of any governmental filing
made by Cascade in connection with the merger agreement and the merger;
- to consult with Parent before issuing any press release or making any
other public statement regarding the merger agreement or the transactions
contemplated thereby except based on the advice of counsel as required by
law; and
- to provide Parent reasonable access to its facilities, records and all
other information as Parent may reasonably request.
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ADDITIONAL AGREEMENT OF PARENT
Parent has further agreed, among other things specifically identified in the
merger agreement, to use commercially reasonable efforts to obtain the
financings described in the debt commitment letters and the equity commitment
letter, including using commercially reasonable efforts to negotiate definitive
agreements with respect thereto and to satisfy all conditions applicable to
Parent in such letters. See "The Merger -- Financing; Sources of Funds."
DIRECTOR AND OFFICER INDEMNIFICATION
Pursuant to the merger agreement, and subject to any limitation imposed from
time to time under applicable law, all rights of indemnification available to
the directors, officers, employees or agents of Cascade in respect of acts or
omissions occurring prior to the date the merger is completed, shall remain
available for six years following the date the merger is completed, to the
maximum extent provided under Cascade's restated articles of incorporation and
bylaws, as in effect on the date of the execution of the merger agreement.
In addition, for six years after the completion of the merger, Parent will
(i) maintain in effect Cascade's officers' and directors' liability insurance in
effect on the date of the execution of the merger agreement for those persons
covered by such insurance policy on such date or (ii) purchase an extended
coverage or "tail" insurance policy having a policy limit equal to or greater
than the aggregate policy limit of such insurance and covering such persons
against claims made within six years following the completion of the merger;
provided, that the surviving corporation will not be obligated to pay in order
to maintain or procure such insurance coverage any amount per year in excess of
250% of the aggregate premiums paid by Cascade for its base amount of directors'
and officers' liability insurance for the policy period ending November 20,
2000. See "Interests of Certain Persons in the Merger--Indemnification and
Insurance."
COOPERATION AND REASONABLE EFFORTS
Pursuant to the merger agreement, and subject to certain conditions and
limitations described therein, the parties have agreed to use their respective
commercially reasonable best efforts to take, or cause to be taken, all actions
and to do, and cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by the merger agreement.
CONDITIONS TO THE MERGER
Cascade's and Parent's respective obligations to complete the merger are
subject to the satisfaction or waiver of each of the following conditions before
completion of the merger:
- the merger agreement and the merger have been approved by the affirmative
vote of a majority of the shares of Cascade common stock and the votes
attributable to the share of Cascade special voting stock, voting together
as a single voting group;
- any waiting period applicable to the consummation of the merger under the
HSR Act shall have expired or been terminated;
- no preliminary or permanent injunction or other order, decree or ruling
issued by a relevant court or governmental body shall be in effect which
would make the consummation of the merger illegal or otherwise prevent the
consummation of the merger;
- each party has performed in all material respects each of its respective
covenants and obligations under the merger agreement at or prior to the
completion of the merger;
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- the representations and warranties of each party must be true and correct
in all material respects when made and, unless such representation or
warranty is made as of a specific date, as of the closing of the merger;
- each party has received a certificate dated as of the closing of the
merger of an executive officer of the other party to the effect that the
conditions set forth in the two immediately preceding points have been
satisfied; and
- each party shall have received the legal opinion of counsel to the other
party in such form as the receiving party shall reasonably request.
In addition, (i) Cascade's obligations to complete the merger are subject to
the receipt by Parent or CAS Acquisition Corp. of sufficient funds to pay the
merger consideration for the Cascade common stock and the options before
completion of the merger and (ii) Parent and CAS Acquisition Corp.'s obligations
to complete the merger are subject to their receipt of at least $238 million of
proceeds under the debt commitment letters on terms substantially similar to
those set forth in such commitment letters, provided they have used commercially
reasonable efforts to obtain such financing or alternate financing on
substantially similar terms.
NO SOLICITATION OF TAKEOVER PROPOSALS; RIGHT TO ENTER INTO SUPERIOR PROPOSAL
Except as otherwise permitted by the merger agreement as discussed below,
the merger agreement provides that Cascade will not (whether directly or
indirectly through any officer, director, employee, representative or agent)
solicit or initiate any "acquisition proposal," engage in negotiations or
discussions or provide any non-public information to a third party relating to
an acquisition proposal, or agree to, approve or recommend to Cascade
shareholders any acquisition proposal. An acquisition proposal is any inquiry,
proposal or offer relating to any merger, consolidation, share exchange,
business combination, sale of substantial assets, sale of shares of capital
stock (including by means of a tender offer) or similar transaction or series of
transactions involving Cascade, other than the transactions contemplated by the
merger agreement.
The merger agreement also provides that Cascade will immediately notify
Parent of the existence of any acquisition proposal, the terms of such
acquisition proposal and the identity of the person making such acquisition
proposal. Cascade will promptly provide to Parent any non-public information
concerning Cascade provided to such person that was not previously provided to
Parent.
The non-solicitation provision contained in the merger agreement permits
Cascade, its board of directors or any committee of the board of directors, to
furnish non-public information to, or enter into discussions or negotiations
with any person making an unsolicited bona fide written acquisition proposal or
to recommend such an acquisition proposal to Cascade's shareholders if and only
to the extent that (i) the acquisition proposal is not subject to any financing
or material due diligence conditions and the board of directors or any committee
of the board of directors believes in good faith (after consultation with and
based upon the advice of its financial advisor) that such person has the
financial capacity to consummate the acquisition proposal, and that the
acquisition proposal would, if consummated, result in a transaction more
favorable to Cascade's shareholders from a financial point of view than the
transaction contemplated by the merger agreement (a "superior proposal"), and
the board of directors or committee determines in good faith (after consultation
with and based upon the advice of outside legal counsel) that such action is
necessary for the board of directors to comply with its fiduciary duties to
Cascade's shareholders and (ii) prior to furnishing such non-public information
to, or entering into discussions or negotiations with such person, Cascade
receives from such person an acceptable confidentiality agreement.
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In the event the Cascade board of directors or any committee of the board of
directors receives a superior proposal, and the board of directors or the
committee proposes to endorse or accept the proposal, the board of directors or
the committee will promptly advise Parent of the terms of the proposal, and will
not enter into any commitments with respect to the proposal unless, within two
business days of providing Parent with the terms of the proposal, Parent does
not deliver to the board of directors or the committee a written offer to amend
the terms of the merger agreement to provide for terms and conditions (including
the amount and value of consideration hereunder) which are reasonably determined
by the board of directors or the committee to be, when taken in their entirety,
as favorable to Cascade as the superior proposal. If Cascade were to terminate
the merger agreement in order to permit Cascade to enter into a definitive
agreement with respect to a Superior Proposal, it would be required to pay
Parent a $7.5 million termination fee and Parent's expenses incurred in
connection with the merger agreement up to $2.5 million. See "--Termination Fee
and Expenses."
TERMINATION OF THE MERGER AGREEMENT
The merger agreement may be terminated at any time before the completion of
the merger, whether before or after approval of the matters presented in
connection with the merger by the shareholders of Cascade:
- by mutual written consent of Parent, CAS Acquisition Corp. and Cascade;
- by either Parent, CAS Acquisition Corp. or Cascade if the merger is not
completed, without the fault of the terminating party, by March 31, 2001;
- by Parent or CAS Acquisition Corp. if (i) Cascade shall have materially
breached any of its covenants in the merger agreement or made a material
misrepresentation and not cured the same within 15 days of notice of the
breach or misrepresentation by the non-breaching party and (ii) the breach
or misrepresentation is incurable or Cascade is not exercising all
reasonable efforts to cure it;
- by Cascade if either Parent or CAS Acquisition Corp. (i) shall have
materially breached any of its covenants in the merger agreement or made a
material misrepresentation and not cured the same within 15 days of notice
of the breach or misrepresentation by the non-breaching party and
(ii) the breach or misrepresentation is incurable or Parent or CAS
Acquisition Corp. is not exercising all reasonable efforts to cure it;
- by either Parent, CAS Acquisition Corp. or Cascade if (i) a court or
governmental order prohibiting the merger is issued and is final and not
appealable or (ii) the merger fails to receive the requisite approval of
Cascade's shareholders;
- by Parent or CAS Acquisition Corp. if (i) the Cascade board of directors
has withdrawn or modified in a manner materially adverse to Parent or CAS
Acquisition Corp. its approval or recommendation of the merger agreement
or merger, or recommended an acquisition proposal with a third party not
affiliated with Parent or CAS Acquisition Corp. or (ii) Cascade has
executed a definitive agreement relating to an acquisition proposal or
similar business combination with a third party not affiliated with Parent
or CAS Acquisition Corp.; or
- by Cascade upon written notice to Parent in order to permit Cascade to
enter into a definitive agreement with respect to a superior proposal
which is then pending provided that Cascade has previously provided Parent
proper notice of the superior proposal.
The party desiring to terminate the merger agreement will give written
notice of such termination to the other party in accordance with the terms
thereof. In the event of the termination of the merger agreement, no party shall
have any liability or further obligation to any other party except that
(i) Cascade shall pay to Parent a $7.5 million termination fee and Parent's
expenses incurred in
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connection with the merger agreement up to $2.5 million under certain
circumstances and (ii) the termination will not prejudice the rights of any
party arising out of any breach by any other party of any covenant, agreement or
representation contained in the merger agreement.
TERMINATION FEE AND EXPENSES
In accordance with the terms of the merger agreement, Cascade must promptly
pay Parent a $7.5 million termination fee if the merger agreement is terminated:
- by Parent or CAS Acquisition Corp. because (i) the Cascade board of
directors has withdrawn or modified in a manner materially adverse to
Parent or CAS Acquisition Corp. its approval or recommendation of the
merger agreement or merger, or recommended an acquisition proposal with a
third party not affiliated with Parent or CAS Acquisition Corp. or
(ii) Cascade has executed a definitive agreement relating to an
acquisition proposal or similar business combination with a third party
not affiliated with Parent or CAS Acquisition Corp.;
- by Cascade in order to permit Cascade to enter into a definitive agreement
with respect to a superior proposal which is then pending; or
- by Parent, CAS Acquisition Corp. or Cascade because the merger fails to
receive the requisite approval of Cascade's shareholders if an acquisition
proposal is communicated to the Cascade shareholders after the date of the
merger agreement and prior to the Special Meeting and the acquisition
proposal is consummated within 12 months of the date of termination of the
merger agreement.
In addition, Cascade must pay to Parent within five business days of
Cascade's receipt of an itemized statement of expenses and fees all of Parent's
and CAS Acquisition Corp.'s reasonable out-of-pocket expenses and fees incurred
by Parent or CAS Acquisition Corp.'s in connection with the transactions
contemplated by the merger agreement and the merger up to a maximum of
$2.5 million if the merger agreement is terminated:
- by Parent or CAS Acquisition Corp. because (i) the Cascade board of
directors has withdrawn or modified in a manner materially adverse to
Parent or CAS Acquisition Corp. its approval or recommendation of the
merger agreement or merger, or recommended an acquisition proposal with a
third party not affiliated with Parent or CAS Acquisition Corp. or
(ii) Cascade has executed a definitive agreement relating to an
acquisition proposal or similar business combination with a third party
not affiliated with Parent or CAS Acquisition Corp.;
- by Cascade in order to permit Cascade to entered into a definitive
agreement with respect to a superior proposal which is then pending
provided that Cascade has previously provided Parent proper notice of the
Superior Proposal; or
- by Parent, CAS Acquisition Corp. or Cascade because the merger fails to
receive the requisite approval of Cascade's shareholders, if at the time
of such termination no acquisition proposal is pending.
EXTENSION, WAIVER AND AMENDMENT
The merger agreement may be amended only in a writing signed by all of the
parties. At any time prior to the completion of the merger, to the extent
permitted by applicable law, the parties may (i) extend the time for performance
of any of the acts of the other parties to the merger agreement, (ii) waive any
inaccuracies in the representations or warranties contained in the merger
agreement or any document delivered under the merger agreement and (iii) waive
compliance with any of the agreements or conditions contained in the merger
agreement.
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THE PARTIES
CASCADE
Cascade is an Oregon corporation formed in 1943. Cascade's headquarters are
located at 2201 N.E. 201st Ave., Fairview, Oregon 97024-9718 (telephone number
503-669-6300). Cascade is a leading international manufacturer of attachments,
forks, hose reels, sideshifters, hydraulic cylinders and related replacement
parts, primarily for the lift truck industry.
CASCADE ACQUISITION CORP.
Cascade Acquisition Corp. is a newly formed Delaware corporation organized
by the Lift Group and a wholly-owned subsidiary of 1437414 Ontario Limited, a
corporation organized under the laws of the Province of Ontario.
CASCADE-II ACQUISITION CORP.
Cascade-II Acquisition Corp. is a newly formed Delaware corporation
organized by the Lift Group and a wholly-owned subsidiary of Cascade Acquisition
Corp.
CAS ACQUISITION CORP.
CAS Acquisition Corp. is an Oregon corporation organized by the Lift Group
and a wholly-owned subsidiary of Cascade-II Acquisition Corp. and was formed for
the sole purpose of effecting the merger. CAS Acquisition Corp. will be merged
out of existence at the effective time of the merger with the surviving
corporation becoming a wholly-owned subsidiary of Cascade-II Acquisition Corp.
THE LIFT GROUP
The Lift Group is comprised of Lift Technologies Inc., which is a
corporation organized under the laws of the Province of Ontario, Canada, and is
a leading manufacturer of lift truck masts; TD Capital Group Limited, the
private equity arm of the Toronto Dominion Bank Group; the Ontario Municipal
Employees Retirement System, a multi-employer pension plan for employees of
local governments in the province of Ontario; and William J. Harrison, founder
and President of Lift Technologies Inc. and a former director of Cascade who
controls approximately 6.6% of the voting power of Cascade's outstanding capital
stock. The Lift Group owns all of the capital stock of 1437414 Ontario Limited.
The principal executive offices for the Lift Group are c/o Lift
Technologies Inc., 251 Woodlawn Road West, Unit 217, Guelph, Ontario, N1H 8J1,
and its telephone number is (519) 823-4545.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the special committee and the board of
directors, you should be aware that certain of Cascade's officers and directors
have interests in the merger described below that present actual or potential
conflicts of interest in connection with the merger.
TREATMENT OF STOCK OPTIONS. Certain directors, officers and employees have
received options to acquire shares of Cascade common stock under the option
plan. Upon consummation of the merger, each holder of an option who elects to
exercise the option under Section 12(a) of the option plan prior to the
consummation of the merger will be entitled to receive, subject to any
applicable withholding taxes, an amount equal to the product of (i) the total
number of shares of Cascade common stock into which the option was exercisable
immediately prior to the effective time and (ii) the difference between $17.25
and the option exercise price for such option, payable in cash immediately
following the merger.
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The table below shows the number of options currently held by each of
Cascade's executive officers and directors and the amounts to be paid to these
individuals at the effective time of the merger in exchange for cancellation of
these options.
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER NUMBER OF CASH AMOUNT TO
OR DIRECTOR OPTIONS BE RECEIVED
------------------------- --------- --------------
<S> <C> <C>
Greg H. Kubicek..................................... 5,000 $ 21,250
C. Calvert Knudsen.................................. 5,000 8,125
Robert C. Warren, Jr................................ 124,360 378,648
Nicholas R. Lardy................................... 5,000 8,125
Ernest C. Mercier................................... 5,000 8,125
James S. Osterman................................... 5,000 8,125
Jack B. Schwartz.................................... 5,000 8,125
Henry W. Wessinger II............................... 5,000 21,250
Nancy A. Wilgenbusch................................ 5,000 8,125
Gregory S. Anderson................................. 38,653 142,528
Richard S. Anderson................................. 41,087 144,630
Terry H. Cathey..................................... 44,408 149,637
Robert L. Mott...................................... 41,546 145,031
Kurt G. Wollenberg.................................. 43,307 142,242
Charles S. Mitchelson............................... 22,920 122,823
Art Otsuka.......................................... 0 0
Anthony F. Spinelli................................. 21,041 122,461
</TABLE>
SEVERANCE AGREEMENTS. In May of 2000, Cascade entered into
change-of-control severance letter agreements with Robert C. Warren, Jr.,
Richard S. Anderson, Terry H. Cathey and Kurt G. Wollenberg. Each severance
agreement provides for (i) a lump sum cash payment of 2.99 times the average
annual Form W-2 wages paid to the applicable beneficiary by Cascade for a
preceding period, (ii) acceleration of any unexercisable option held by the
person so that the option becomes fully vested and immediately exercisable in
full and (iii) Cascade's provision to the beneficiary and his eligible
dependents of continued health coverage under Cascade's medical/dental/vision
plans for a period of up to 24 months after the date of the person's
"involuntary termination," in the event of the "involuntary termination" of the
person's employment with Cascade within twelve months following a "change in
control" of Cascade.
"Involuntary termination" means the involuntary termination of the person's
employment with Cascade other than for cause, or the voluntary termination of
such employment following (i) a material reduction in the person's duties or
level of responsibility or level of management to which he reports, (ii) a 20%
or more reduction in the person's level of compensation or (iii) an involuntary
change in the person's place of employment of more than 50 miles. "Change in
control" means (i) a material change in the composition of Cascade's board of
directors over a period of 24 consecutive months, (ii) the sale of all or
substantially all of Cascade's assets in its complete liquidation or
dissolution, (iii) the transfer to new holders of more than 50% of the total
combined voting power of Cascade's securities in a merger or consolidation such
as the merger or (iv) the acquisition by any person (other than Cascade or its
affiliates) of the beneficial ownership of securities possessing more than 35%
of the total combined voting power of Cascade's outstanding securities in a
transaction or series of transactions which Cascade's board of directors at no
time recommends that its shareholders accept or approve.
With certain exceptions, the amount of the severance benefit will be reduced
to an amount which, in combination with all other payments made to the
applicable person in connection with a change of control that qualify as
parachute payments within the meaning of Section 280G of the Code, does not
37
<PAGE>
constitute an "excess parachute payment" under Section 280G of the Code and is
fully deductible by Cascade.
Each of the severance agreements also contains noncompetition provisions
which provide that the applicable person will not, for a period of 24 months
following the termination of his employment with Cascade (i) provide services to
any competitor of Cascade anywhere in the world, (ii) solicit any of Cascade's
employees or (iii) interfere with the business relationship between Cascade and
any of its customers, suppliers, distributors, licensees, or other business
affiliates.
INDEMNIFICATION AND INSURANCE. Pursuant to the merger agreement, and
subject to any limitation imposed from time to time under applicable law, all
rights of indemnification available to the directors, officers, employees or
agents of Cascade in respect of acts or omissions occurring prior to the date
the merger is completed, shall remain available for six years following the date
the merger is completed, to the maximum extent provided under Cascade's restated
articles of incorporation and bylaws, as in effect on the date of the execution
of the merger agreement.
In addition, for six years after the completion of the merger, Parent will
(i) maintain in effect Cascade's officers' and directors' liability insurance in
effect on the date of the execution of the merger agreement for those persons
covered by such insurance policy on such date or (ii) purchase an extended
coverage or "tail" insurance policy having a policy limit equal to or greater
than the aggregate policy limit of such insurance and covering such persons
against claims made within six years following the completion of the merger;
provided, that the surviving corporation will not be obligated to pay in order
to maintain or procure such insurance coverage any amount per year in excess of
250% of the aggregate premiums paid by Cascade for its base amount of directors'
and officers' liability insurance for the policy period ending November 20,
2000. See "The Merger Agreement--Director and Officer Indemnification."
38
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of November 13, 2000, information
concerning ownership of Cascade common stock by (i) each person known to Cascade
to be the beneficial owner of more than 5% of Cascade's outstanding common stock
on the record date for the Special Meeting, (ii) each of Cascade's directors,
(iii) certain of Cascade's executive officers and (iv) all of Cascade's
directors and executive officers as a group. As of November 13, 2000, 11,439,890
shares of Cascade common stock and one share of Cascade special voting stock
were outstanding. The share totals and percentage calculations below assume the
conversion of 800,000 outstanding exchangeable shares issued by Cascade
(Canada) Ltd., a wholly-owned subsidiary of Cascade, into a like number of
shares of Cascade common stock. TD Trust Company holds the share of Cascade
special voting stock as trustee for the holder of the exchangeable shares and is
entitled to cast 800,000 votes on matters presented to Cascade shareholders. TD
Trust Company is required to vote as the owner of the exchangeable shares may
instruct. William J. Harrison is the indirect owner of the exchangeable shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP (1)(2)
---------------------------
NUMBER PERCENT
---------- --------
<S> <C> <C>
THE ROBERT C. AND NANI S. WARREN REVOCABLE TRUST
c/o P.O. Box 20187
Portland, Oregon 97294-0187 ............................ 1,632,392(3) 13.34
WILLIAM J. HARRISON
27 Fox Run Drive, RR#3
Guelph, Ontario, Canada N1H 6N9 ........................ 810,000(4) 6.62
DIMENSIONAL FUND ADVISORS INC.
1211 Ocean Avenue, 11th Floor
Santa Monica, California 90401 ......................... 684,450(5) 5.59
ROBERT J. DAVIS FAMILY GROUP.
17530 Little River Drive
Bend, Oregon 97707 ..................................... 682,100(6) 5.57
WELLINGTON MANAGEMENT COMPANY, LLP
75 State Street
Boston, Massachusetts 02109 ............................ 678,200(7) 5.54
JACK B. SCHWARTZ............................................ 139,181(8) 1.14
ROBERT C. WARREN, JR........................................ 219,225(9)(10) 1.77
C. CALVERT KNUDSEN.......................................... 13,187 *
GREG H. KUBICEK............................................. 8,365 *
JAMES S. OSTERMAN........................................... 10,787 *
NICHOLAS R. LARDY........................................... 9,087 *
HENRY W. WESSINGER II....................................... 8,000 *
ERNEST C. MERCIER........................................... 6,187 *
NANCY A. WILGENBUSCH........................................ 5,187 *
RICHARD S. ANDERSON......................................... 48,402(10) *
GREGORY S. ANDERSON......................................... 43,668(10) *
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP (1)(2)
---------------------------
NUMBER PERCENT
---------- --------
<S> <C> <C>
TERRY H. CATHEY............................................. 50,908 *
KURT G. WOLLENBERG.......................................... 50,984(10) *
Officers and directors as a Group..................... 2,245,560(11) 17.86
</TABLE>
------------------------
* Less than 1% of Cascade's outstanding shares.
(1) Includes shares issuable upon exercise of currently vested stock options or
options that will vest in connection with the merger, as follows: R.C.
Warren, 124,360; T.H. Cathey, 44,408; R.S. Anderson, 41,087; G.S. Anderson,
38,653; K.G. Wollenberg, 43,307; Messrs. Knudsen, Kubicek, Lardy, Mercier,
Osterman, Schwartz and Wessinger and Ms. Wilgenbusch, 5,000 each; and all
executive officers and directors as a group, 331,815.
(2) No officer or director owns more than 1% of Cascade's outstanding shares
except for the following who may be considered to own beneficially the
percentages indicated: R.C. Warren, Jr., 15.1%; C.C. Knudsen, 13.4%; and
J.B. Schwartz, 14.5%. These percentages in each case include shares held as
trustee for the Robert C. and Nani S. Warren Revocable Trust and should not
be combined to determine the total percentage voting power of the persons
listed.
(3) Nani S. Warren, Robert C. Warren, Jr., C. Calvert Knudsen and Jack B.
Schwartz are Trustees of the trust and share investment powers. Mr. Warren
has sole voting power. Messrs. Knudsen and Schwartz disclaim beneficial
ownership of Trust shares.
(4) Includes 10,000 common shares as to which Mr. Harrison holds sole voting
power and 800,000 exchangeable shares owned by W.J. Harrison Holdings, Ltd.,
each of which may be exchanged for one common share. Mr. Harrison owns 100%
of the outstanding shares of W.J. Harrison Holdings, Ltd.
(5) Dimensional Fund Advisors Inc. has sole voting power with respect to such
shares which are owned by certain of its advisory clients. Dimensional Fund
Advisors Inc. disclaims beneficial ownership of all such securities.
(6) Such shares will be voted as directed by Mr. Robert J. Davis.
(7) Includes 453,500 shares owned of record by advisory clients of Wellington
Management Company, LLP over which Wellington Management Company, LLP has
shared voting power.
(8) Includes shared voting and investment powers as to 128,394 shares, or 1.1%
of those outstanding, held by a charitable foundation, as to which
Mr. Schwartz disclaims beneficial interest.
(9) Includes shared voting and investment powers as to 16,000 shares, and sole
voting and investment powers as to 9,600 shares, held as fiduciary for the
benefit of various family members; also includes 1,200 shares owned by
Mr. Warren's spouse. Mr. Warren disclaims beneficial interest in shares
owned by his spouse or held by him as a fiduciary.
(10) Includes shares held for the benefit of these officers by a 401(k) plan as
follows: R.C. Warren, Jr., 29,108; R.S. Anderson, 2,596; G.S. Anderson,
5,015; and K.G. Wollenberg, 5,177.
(11) Includes an aggregate of 1,786,386 shares held by officers and directors in
fiduciary capacities.
40
<PAGE>
PRICE RANGE OF COMMON STOCK
Cascade common stock is listed on the New York Stock Exchange and traded
under the symbol "CAE". The following table sets forth, for the fiscal quarters
indicated, the high and low closing sale prices per share of Cascade common
stock as quoted on the New York Stock Exchange Composite Transactions Tape:
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL YEAR ENDING JANUARY 31, 2001
First Quarter............................................... $11.43 $ 7.50
Second Quarter.............................................. 12.75 9.94
Third Quarter............................................... 16.00 12.75
Fourth Quarter (through , 2000)..........................
FISCAL YEAR ENDING JANUARY 31, 2000
First Quarter............................................... $17.25 $ 9.94
Second Quarter.............................................. 14.88 12.94
Third Quarter............................................... 13.50 8.94
Fourth Quarter.............................................. 11.13 8.00
</TABLE>
On March 29, 2000, one day prior to the initial public announcement that the
group including members of Cascade's management was considering a leveraged
buyout of Cascade, the closing sale price per share of Cascade common stock
quoted on the New York Stock Exchange Composite Transactions Tape was $8.50.
On October 18, 2000, the last trading day before the public announcement by
Cascade of execution of the merger agreement, the closing sale price per share
of Cascade common stock quoted on the New York Stock Exchange Composite
Transactions Tape was $14.63.
On , 2000, a recent trading day prior to the date of this proxy
statement, the closing sale price per share of Cascade common stock quoted on
the New York Stock Exchange Composite Transactions Tape was $ .
You are urged to obtain current information with respect to the price of
Cascade common stock.
INDEPENDENT ACCOUNTANTS
Upon appointment by Cascade's board of directors, PricewaterhouseCoopers
LLP, independent accountants, audited and reported on the consolidated financial
statements of Cascade and its subsidiaries for its fiscal year ended
January 31, 2000. Representatives from PricewaterhouseCoopers LLP are expected
to be present at the Special Meeting and will have the opportunity to make a
statement if they desire to do so. They are also expected to be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
If the merger is consummated, there will be no public shareholders of
Cascade and no public participation in any future meetings of shareholders of
Cascade. However, if the merger is not consummated, Cascade's public
shareholders will continue to be entitled to attend and participate in Cascade
shareholders' meetings. Pursuant to Rule 14a-8 under the Securities Exchange Act
of 1934 promulgated by the SEC, any shareholder of Cascade who wishes to present
a proposal at the next annual meeting of shareholders of Cascade (in the event
the merger is not consummated), and who wishes to have such proposal included in
the Cascade proxy statement for that meeting, must have
41
<PAGE>
delivered a copy of such proposal to Cascade at 2201 N.E. 201st Ave., Fairview,
Oregon 97024-9718, Attention: Secretary, so that it was received no later than
December 14, 2000.
If Cascade's 2001 Annual Meeting is held and Cascade does not receive notice
prior to December 14, 2000 of any matters to be raised by shareholders, the
persons named in Cascade's proxy cards for that Annual Meeting will have the
discretion to vote the proxies on such matters in accordance with their best
judgment.
OTHER MATTERS
As of the date of this proxy statement, the board of directors does not
intend to bring any other business before the Special Meeting of Cascade
shareholders and, so far as is known to the board of directors, no matters are
to be brought before the Special Meeting except as specified in the notice of
Special Meeting. However, as to any other business that may properly come before
the Special Meeting, the proxy holders intend to vote the proxies in respect
thereof in accordance with the recommendation of the board of directors and the
special committee.
WHERE YOU CAN FIND MORE INFORMATION
Cascade files annual, quarterly and current reports, proxy statements and
other information with the SEC. The annual reports include Cascade's audited
financial statements. You may read and copy any reports, statements or other
information that Cascade files at the SEC's public reference rooms which are
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549, and at the SEC's regional offices located at: Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such materials are also
available from the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington D.C. 20549 at prescribed rates. Copies of such materials may
also be accessed through the SEC Internet web site at http://www.sec.gov. Once
the merger is completed, Cascade will no longer be subject to the reporting
requirements of the Exchange Act. You should rely only on the information
contained or incorporated by reference in this proxy statement to vote your
shares of Cascade common stock at the Special Meeting. Cascade has not
authorized anyone to provide you with information that is different from what is
contained in this proxy statement. This proxy statement is dated , 2000.
You should not assume that the information contained in this proxy statement is
accurate as of any date other than such date.
42
<PAGE>
APPENDIX A
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
CASCADE ACQUISITION CORP.
CASCADE--II ACQUISITION CORP.
CAS ACQUISITION CORP.
AND
CASCADE CORPORATION
DATED AS OF OCTOBER 18, 2000
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
ARTICLE 1 DEFINITIONS.................................................. A-1
ARTICLE 2 THE MERGER................................................... A-4
2.1 The Merger.................................................. A-4
2.2 Articles of Incorporation................................... A-4
2.3 Bylaws...................................................... A-4
2.4 Directors and Officers...................................... A-4
2.5 Effective Time.............................................. A-4
ARTICLE 3 CONVERSION OF SHARES......................................... A-4
3.1 Cascade Common Stock........................................ A-4
3.2 Cascade Special Voting Stock................................ A-5
3.3 Options..................................................... A-5
3.4 Acquisition Co. Common Stock................................ A-6
3.5 Payment for Cascade Common Stock and Options................ A-6
3.6 Adjustment to Prevent Dilution.............................. A-7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF CASCADE.................... A-8
4.1 Organization, etc........................................... A-8
4.2 Authorization and Binding Obligation........................ A-8
4.3 Capitalization.............................................. A-9
4.4 Consents and Approvals; No Conflicts........................ A-10
4.5 Financial Statements; SEC Reports........................... A-10
4.6 Undisclosed Liabilities..................................... A-11
4.7 Governmental Approvals and Authorizations................... A-11
4.8 Compliance with Laws........................................ A-11
4.9 Absence of Certain Payments................................. A-11
4.10 Real Property............................................... A-11
4.11 Personal Property........................................... A-12
4.12 Intellectual Property....................................... A-12
4.13 Contracts................................................... A-12
4.14 Employee Benefit Plans...................................... A-13
4.15 Labor Matters............................................... A-14
4.16 Actions Pending............................................. A-14
4.17 Affiliate Transactions...................................... A-14
4.18 Absence of Changes or Events................................ A-14
4.19 Taxes....................................................... A-14
4.20 Insurance................................................... A-15
4.21 Environmental Matters....................................... A-15
4.22 Absence of Conflicts of Interest............................ A-16
4.23 Fairness Opinion; Financial Advisor......................... A-16
4.24 Foreign Person.............................................. A-16
4.25 Vote Required............................................... A-16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND
ACQUISITION CO......................................................... A-16
5.1 Organization and Standing................................... A-16
5.2 Authorization and Binding Obligation........................ A-16
5.3 Consents and Approvals; No Conflicts........................ A-16
5.4 Litigation.................................................. A-17
5.5 Finders and Investment Bankers.............................. A-17
5.6 Financing................................................... A-17
</TABLE>
AGREEMENT AND PLAN OF MERGER
PAGE i
<PAGE>
<TABLE>
<C> <S> <C>
5.7 Voting Agreement............................................ A-17
ARTICLE 6 COVENANTS.................................................... A-18
6.1 Shareholder Approvals and Cascade Proxy Statement........... A-18
6.2 Filings; Cooperation........................................ A-18
6.3 Conduct of Business......................................... A-19
6.4 Additional Agreements....................................... A-20
6.5 Acquisition Proposals....................................... A-21
6.6 Public Announcements........................................ A-22
6.7 Consent of the Parent....................................... A-22
6.8 Transfer Taxes.............................................. A-22
6.9 Indemnification of Officers and Directors; Officers' and
Directors' Insurance........................................ A-22
6.10 Notification of Certain Matters............................. A-23
6.11 Access to Information....................................... A-23
ARTICLE 7 CLOSING CONDITIONS........................................... A-23
7.1 Conditions Precedent to the Obligations of All Parties...... A-23
7.2 Additional Conditions Precedent to the Obligation of
Cascade..................................................... A-24
7.3 Additional Conditions Precedent to the Obligations of the
Parent and Acquisition Co................................... A-24
ARTICLE 8 CLOSING...................................................... A-25
8.1 Time and Place.............................................. A-25
8.2 Filings at the Closing; Other Actions....................... A-25
ARTICLE 9 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.... A-25
ARTICLE 10 TERMINATION RIGHTS.......................................... A-25
10.1 Termination................................................. A-25
10.2 Procedure and Effect of Termination......................... A-26
10.3 Expenses; Termination Fee................................... A-26
ARTICLE 11 OTHER PROVISIONS............................................ A-27
11.1 Amendment and Modification.................................. A-27
11.2 Benefit and Assignment...................................... A-27
11.3 No Third-party Beneficiaries................................ A-27
11.4 Entire Agreement............................................ A-27
11.5 Headings.................................................... A-27
11.6 Choice of Law............................................... A-27
11.7 Notices..................................................... A-27
11.8 Severability................................................ A-28
11.9 Extensions and Waivers...................................... A-29
11.10 Counterparts................................................ A-29
11.11 Schedules................................................... A-29
</TABLE>
AGREEMENT AND PLAN OF MERGER
PAGE ii
<PAGE>
TABLE OF SCHEDULES
<TABLE>
<S> <C>
Schedule 1.39 ............................................. Named Officers
Schedule 2.4 ...................... Officers of the Surviving Corporation
Schedule 4.1(a) ................ Jurisdictions in Which Cascade is Qualified
Schedule 4.1(b) ... Cascade Subsidiaries and Jurisdictions in Which They are
Qualified
Schedule 4.1(c) ....... Liens on Interests in Cascade Subsidiaries; Minority
Owners of Cascade Subsidiaries
Schedule 4.3 ........ Capitalization of Cascade and Cascade Subsidiaries;
Minority Owners of Cascade Subsidiaries; Agreements to
Purchase or Sell Equity of Cascade or Cascade Subsidiaries
Schedule 4.4 ..................... Consents and Approvals for Transaction
Schedule 4.6 .................................... Undisclosed Liabilities
Schedule 4.10 .... Real Property Interests; Liens on Real Property; Damage
to Real Property; Rights to Acquire Real Property
Schedule 4.12 ...................................... Intellectual Property
Schedule 4.13 .................................................. Contracts
Schedule 4.14 ..................................... Employee Benefit Plans
Schedule 4.14(f) ............... Former Employee Health Insurance Obligations
Schedule 4.14(g) ............................. Impact of Transaction on Plans
Schedule 4.15 .............................................. Labor Matters
Schedule 4.16 ............................................ Actions Pending
Schedule 4.17 ..................................... Affiliate Transactions
Schedule 4.19 ............ Taxes; Jurisdictions in Which Tax Returns Filed
Schedule 4.20 ......................................... Insurance Policies
Schedule 4.21 ...................................... Environmental Matters
Schedule 4.22 .................................... Interested Transactions
Schedule 5.5 ............................. Finders and Investment Bankers
Schedule 6.3 ........................................ Conduct of Business
</TABLE>
AGREEMENT AND PLAN OF MERGER
PAGE iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 18, 2000 (the
"Agreement"), among CASCADE ACQUISITION CORP., a Delaware corporation ("CAC-I"),
CASCADE--II ACQUISITION CORP., a Delaware corporation ("CAC-2," and together
with CAC-I, the "Parent"), CAS ACQUISITION CORP., an Oregon corporation and an
indirect wholly-owned subsidiary of the Parent ("Acquisition Co."), and CASCADE
CORPORATION, an Oregon corporation ("Cascade"). Except as otherwise provided,
references to Sections, Schedules and Exhibits are to sections of and schedules
and exhibits to this Agreement.
ARTICLE 1
DEFINITIONS
1.1 "Acquisition Co." has the meaning set forth in the preamble to this
Agreement.
1.2 "Acquisition Co. Common Stock" has the meaning set forth in
Section 3.4.
1.3 "Acquisition Proposal" has the meaning set forth in Section 6.5(a).
1.4 "Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
1.5 "Applicable Law" means all applicable provisions of all
(i) constitutions, treaties, statutes, laws (including, but not limited to, the
common law), rules, regulations, ordinances, codes or orders of any Governmental
Authority and (ii) orders, decisions, rulings, injunctions, judgments, awards
and decrees or consents of or agreements with any Governmental Authority.
1.6 "Articles of Merger" has the meaning set forth in Section 2.5.
1.7 "Board" has the meaning set forth in Section 4.2(b).
1.8 "Business Day" means every day of the week excluding Saturdays, Sundays
and federal holidays.
1.9 "CAC-I" has the meaning set forth in the preamble to this Agreement.
1.10 "CAC-II" has the meaning set forth in the preamble to this Agreement.
1.11 "Cascade" has the meaning set forth in the preamble to this Agreement.
1.12 "Cascade Common Stock" means the common stock, par value $0.50 per
share, of Cascade.
1.13 "Cascade Shareholders Meeting" has the meaning set forth in
Section 6.1(a).
1.14 "Cascade Special Voting Stock" means the share of Cascade Special
Voting Stock issued pursuant to the Share Purchase Agreement.
1.15 "Cascade Subsidiary" means any corporation, partnership, limited
liability company, joint venture or other entity of which Cascade owns, directly
or indirectly, at least a majority of the securities or other ownership interest
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions of such
corporation, partnership, limited liability company, joint venture or other
entity.
1.16 "Certificates" has the meaning set forth in Section 3.5(a).
1.17 "Closing" means the closing of the Merger.
1.18 "Closing Date" means the date on which the Closing occurs.
1.19 "Code" means the Internal Revenue Code of 1986, as amended, together
with all regulations and rulings issued thereunder by any Governmental
Authority.
A-1
<PAGE>
1.20 "Commitment Letters" has the meaning set forth in Section 5.6.
1.21 "Contract" has the meaning set forth in Section 4.13.
1.22 "Effective Time" has the meaning set forth in Section 2.5.
1.23 "Environmental Laws" means all Applicable Laws relating to the
protection of human health or the environment.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, together with the regulations and rulings issued thereunder by any
Governmental Authority.
1.25 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.26 "Exchangeable Shares" means the exchangeable shares of Cascade
(Canada) Ltd. (formerly Cascade (Canada) Holdings Inc.) issued pursuant to the
Share Purchase Agreement.
1.27 "Exercise Price" means, with respect to any Option, the price at which
the holder of such Option is entitled to purchase one share of Cascade Common
Stock upon exercise of such Option.
1.28 "Expenses" has the meaning set forth in Section 10.3(b).
1.29 "Filings" has the meaning set forth in Section 6.2(a).
1.30 "Financial Statements" has the meaning set forth in Section 4.5.
1.31 "Financings" shall have the meaning set forth in Section 5.6.
1.32 "GAAP" means United States generally accepted accounting principles
consistently applied.
1.33 "Governmental Approvals" has the meaning set forth in Section 4.7.
1.34 "Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case to the extent the same has jurisdiction over the
Person or property in question.
1.35 "Hazardous Materials" means, without limitation, asbestos, materials
containing asbestos, polychlorinated biphenyls, petroleum products and
byproducts, or other hazardous or toxic substances, wastes, pollutants or
contaminants defined under or regulated by Environmental Laws.
1.36 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the regulations adopted thereunder.
1.37 "Immaterial Cascade Subsidiary" means all Cascade Subsidiaries except
the Material Cascade Subsidiaries.
1.38 "IRS" means the Internal Revenue Service of the United States.
1.39 "Knowledge" means, with respect to Cascade or any Cascade Subsidiary,
the actual knowledge of any of the officers set forth on Schedule 1.39 or such
knowledge as such officer would obtain upon reasonable inquiry in the area of
such officer's responsibility.
1.40 "Leased Property" has the meaning set forth in Section 4.10.
1.41 "Liens" means all debts, liens, security interests, mortgages, pledges,
judgments, trusts, adverse claims, liabilities, encumbrances and other
impairments of title of any kind other than Permitted Liens.
1.42 "Material Adverse Effect" means a material adverse effect on the
business, assets, properties, liabilities, results of operations or financial
condition of Cascade and the Cascade Subsidiaries, taken as a whole.
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1.43 "Material Cascade Subsidiary" means Cascade (Australia) Pty. Ltd.,
Cascade (Canada) Ltd., Cascade Hydraulic Cylinders, Inc., Sandy Blvd.
Development Associates, Inc., Cascade IFSC Ltd., Cascade (Japan) Ltd., Cascade
Kenhar Ltd. (KPL), Cascade NV, Cascade (Ontario), Inc., Cascade Products Ltd.,
Cascade (UK) Limited, CNS (Halifax) Limited and CNS (Nova Scotia) Co.
1.44 "Merger" has the meaning set forth in Section 2.1.
1.45 "OBCA" means the Oregon Business Corporation Act.
1.46 "Option" means an outstanding option to purchase Cascade Common Stock
issued prior to the date hereof pursuant to the 1999 Amendment and Restatement
of the Cascade Corporation 1995 Senior Managers' Incentive Stock Option Plan.
1.47 "Option Consideration" has the meaning set forth in Section 3.3(a).
1.48 "Option Plan" means the 1999 Amendment and Restatement of the Cascade
Corporation 1995 Senior Managers' Incentive Stock Option Plan.
1.49 "Optionee" means a holder of an option under the Option Plan.
1.50 "Outstanding Cascade Shares" means the aggregate number of shares of
Cascade Common Stock and Exchangeable Shares issued and outstanding immediately
prior to the Effective Time.
1.51 "Owned Property" has the meaning set forth in Section 4.10.
1.52 "Parent" has the meaning set forth in the preamble to this Agreement.
1.53 "Parent Commitment Letter" has the meaning set forth in Section 5.6.
1.54 "Permitted Liens" has the meaning set forth in Section 4.10.
1.55 "Per Share Price" means (U.S.) $17.25.
1.56 "Person" means an individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
1.57 "Plans" has the meaning set forth in Section 4.14.
1.58 "Proxy Statement" has the meaning set forth in Section 6.1(b).
1.59 "Real Estate Laws" means any applicable building, zoning, subdivision,
set back and other land use and other laws, codes, ordinances, rules,
regulations and orders of Governmental Authorities relating to the ownership,
use, operation or condition of the Real Property.
1.60 "Real Property" has the meaning set forth in Section 4.10.
1.61 "Returns" has the meaning set forth in Section 4.19.
1.62 "SEC" means the United States Securities and Exchange Commission.
1.63 "SEC Reports" has the meaning set forth in Section 4.5(b).
1.64 "Share Purchase Agreement" means the Share Purchase Agreement dated
March 11, 1997 among Couphar Ltd., Balyrobe Ltd., 879185 Ontario Inc., 568745
Ontario, Inc., James E. Britton (in trust), Penfund Partners and Company, Bantor
Company, W.J. Harrison and Cascade (Canada) Holdings Inc. and Cascade.
1.65 "Special Committee" means the Special Committee of the Board.
1.66 "Superior Proposal" has the meaning set forth in Section 6.5(a).
1.67 "Surviving Corporation" has the meaning set forth in Section 2.1.
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1.68 "Surviving Corporation Common Stock" has the meaning set forth in
Section 3.4.
1.69 "Tax" has the meaning set forth in Section 4.19.
1.70 "Taxing Authority" has the meaning set forth in Section 4.19.
1.71 "Transfer Taxes" means all sales (including, without limitation, bulk
sales), use, value added, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license and other similar Taxes and
fees imposed by any Governmental Authority.
ARTICLE 2
THE MERGER
2.1 THE MERGER. In accordance with the provisions of this Agreement and
the OBCA, at the Effective Time (a) Acquisition Co. shall be merged with and
into Cascade (the "Merger"), and Cascade shall be the surviving corporation of
the Merger (hereinafter sometimes called the "Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Oregon; (b) the
name, identity, existence, rights, privileges, powers, franchises, properties
and assets of Cascade shall continue unaffected and unimpaired; and (c) the
separate existence of Acquisition Co. shall cease, and all of the rights,
privileges, powers, franchises, properties and assets of Acquisition Co. shall
be vested in the Surviving Corporation. The name of the Surviving Corporation
shall be "Cascade Corporation."
2.2 ARTICLES OF INCORPORATION. The Restated Articles of Incorporation of
Cascade in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until thereafter amended as
provided therein or by law.
2.3 BYLAWS. The Bylaws of Acquisition Co. in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until
thereafter amended, altered or repealed as provided therein.
2.4 DIRECTORS AND OFFICERS. The directors of Acquisition Co. immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
each to hold office in accordance with the Articles of Incorporation and Bylaws
of the Surviving Corporation until his or her successor is appointed and
qualified or until his or her earlier death, resignation or removal. The
individuals set forth on Schedule 2.4 shall be the officers of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation until his or her successor
is appointed and qualified or until his or her earlier death, resignation or
removal.
2.5 EFFECTIVE TIME. The Merger shall become effective with the filing of
the Articles of Merger (and the associated plan of merger) with the Secretary of
State of the State of Oregon in accordance with Sections 60.011 and 60.494 of
the OBCA (the "Articles of Merger"). The Articles of Merger shall be filed
simultaneously with the Closing. The date and time when the Merger shall become
effective is hereinafter referred to as the "Effective Time."
ARTICLE 3
CONVERSION OF SHARES
3.1 CASCADE COMMON STOCK.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of Cascade Common Stock
(except for (i) any shares of Cascade Common Stock then owned beneficially or of
record by the Parent or Acquisition Co. or any other subsidiary of the Parent,
and (ii) shares of Cascade Common Stock then held in the treasury of Cascade or
by any
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Cascade Subsidiary issued and outstanding immediately prior to the Effective
Time), shall be converted into the right to receive cash in an amount equal to
the Per Share Price.
(b) At the Effective Time, each share of Cascade Common Stock which is
then owned beneficially or of record by the Parent or Acquisition Co. or any
other direct or indirect subsidiary of the Parent shall, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled and
retired and cease to exist, without any conversion thereof.
(c) At the Effective Time, each share of Cascade Common Stock held in
Cascade's treasury or by any Cascade Subsidiary immediately prior to the
Effective Time shall, by virtue of the Merger, be canceled and retired and cease
to exist, without any conversion thereof.
(d) The holders of certificates representing shares of Cascade Common
Stock shall, as of the Effective Time, cease to have any rights as shareholders
of Cascade, except such rights, if any, as they may have pursuant to the OBCA
and, except as aforesaid, their sole right shall be the right to receive the Per
Share Price for each share of Cascade Common Stock owned of record by them,
without interest, as determined and paid in the manner set forth in
Section 3.5.
3.2 CASCADE SPECIAL VOTING STOCK.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, the outstanding share of Cascade
Special Voting Stock shall be converted into one share of special voting stock
of the Surviving Corporation.
(b) DISSENTERS' RIGHTS.
(i) Notwithstanding any provision of this Agreement to the contrary,
if the holder of the share of Cascade Special Voting Stock has demanded
and perfected appraisal or dissenters' rights for such share in
accordance with the OBCA and, as of the Effective Time, has not
effectively withdrawn or lost such appraisal or dissenters' rights, the
share of Cascade Special Voting Stock shall not be converted pursuant to
Section 3.2, and the holder of the share of Cascade Special Voting Stock
shall only be entitled to such rights as are granted by Applicable Law.
(ii) Notwithstanding the provisions of subsection (i) above, if the
holder of the share of Cascade Special Voting Stock demands appraisal of
such share under the OBCA and subsequently effectively withdraws or loses
(through failure to perfect or otherwise) the right to appraisal then, as
of the later of the Effective Time and the occurrence of such event, such
holder's share shall represent one share of special voting stock of the
Surviving Corporation.
(iii) Cascade shall give the Parent (A) prompt notice of a written
demand for appraisal of the share of Cascade Special Voting Stock,
withdrawal of such demand, and any other instruments served pursuant to
the OBCA and received by Cascade and (B) the opportunity to participate
in all negotiations and proceedings with respect to demands for appraisal
under the OBCA.
3.3 OPTIONS.
(a) At the Effective Time each Optionee who elects to exercise an
Option pursuant to Section 12(a) of the Option Plan, which had an Exercise Price
less than the Per Share Price, shall be entitled to receive for each Option
outstanding immediately prior to the Effective Time, by virtue of the Merger and
without any other action on the part of the Optionee, cash in an amount equal to
(i) the number of shares of Cascade Common Stock for which such Option was
exercisable immediately
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prior to the Effective Time, multiplied by (ii) the excess of the Per Share
Price over the Exercise Price (the "Option Consideration").
(b) At the Effective Time, each Option which then has an Exercise Price
in excess of the Per Share Price, by virtue of the Merger and without any action
on the part of the Optionee, shall be canceled, without any conversion thereof.
(c) All Optionees shall, as of the Effective Time, cease to have any
rights as Option holders of Cascade and their sole right, if any, shall be the
right to receive the Option Consideration, without interest, as determined and
paid in the manner set forth in Section 3.5.
3.4 ACQUISITION CO. COMMON STOCK. Each share of common stock, par value
$0.01 per share, of Acquisition Co. (the "Acquisition Co. Common Stock"), issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and exchangeable for one fully paid and non-assessable share of common
stock, par value $0.50 per share, of the Surviving Corporation (the "Surviving
Corporation Common Stock"). From and after the Effective Time, each outstanding
certificate theretofore representing shares of Acquisition Co. 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 Co. Common Stock shall have been converted. Promptly after the
Effective Time, the Surviving Corporation shall issue to the Parent a stock
certificate or certificates representing one share of Surviving Corporation
Common Stock for each share of Acquisition Co. Common Stock issued and
outstanding immediately prior to the Effective Time, in exchange for the
certificate or certificates which formerly represented shares of Acquisition Co.
Common Stock, which shall be canceled.
3.5 PAYMENT FOR CASCADE COMMON STOCK AND OPTIONS.
(a) Prior to the Effective Time, the Parent shall designate a business
entity regularly engaged in such work and which is reasonably satisfactory to
Cascade to act as Paying Agent with respect to the Merger (the "Paying Agent").
Each record holder (other than Parent, Acquisition Co. or any other subsidiary
of Parent) of Cascade Common Stock immediately prior to the Effective Time will
be entitled to receive upon (i) surrender to the Paying Agent of the
certificates representing such shares of Cascade Common Stock (the
"Certificates") for cancellation and (ii) delivery to the Paying Agent of the
letter of transmittal referred to in the last sentence of this Section 3.5(a),
duly completed and executed, and any other items specified in such letter of
transmittal, cash in an amount equal to the product of the number of shares of
Cascade Common Stock previously represented by the Certificates multiplied by
the Per Share Price, subject to any required withholding of taxes. Each holder
of Options that have an Exercise Price which is less than the Per Share Price
immediately prior to the Effective Time will be entitled to receive upon
(i) surrender to the Paying Agent of all such Option agreements held by such
Person evidencing the number of shares of Cascade Common Stock into which such
Options were exercisable immediately prior to the Effective Time and
(ii) delivery to the Paying Agent of the letter of transmittal referred to in
the last sentence of this Section 3.5(a), duly completed and executed, and any
other items specified in such letter of transmittal, cash in an amount equal to
the aggregate Option Consideration for all such Options, subject to any required
withholding of taxes. At or prior to the Effective Time, Acquisition Co. shall
make available to the Paying Agent sufficient funds to make all payments in
amounts determined pursuant to the preceding sentences. No interest shall accrue
or be paid on the cash payable upon the surrender of the Certificates or the
Options. Any funds delivered or made available to the Paying Agent pursuant to
this Section 3.5(a) and not exchanged for Certificates or Options within six
months after the Effective Time will be returned by the Paying Agent to the
Surviving Corporation, which thereafter will act as Paying Agent, subject to the
rights of holders of unsurrendered Certificates or Options under this
Section 3.5(a), and any former holders who have not previously exchanged their
Certificates or Options will thereafter be entitled to
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look only to the Surviving Corporation for payment of their claim for the
consideration set forth in Sections 3.1 and 3.3, respectively, without any
interest, but will have no greater rights against the Surviving Corporation than
may be accorded to general creditors thereof under Applicable Law.
Notwithstanding the foregoing, neither the Paying Agent nor any party hereto
shall be liable to a holder of shares of Cascade Common Stock or Options for any
cash or interest delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. As soon as practicable after the Effective
Time, the Surviving Corporation will cause the Paying Agent to mail to each
record holder of shares of Cascade Common Stock and each holder of Options that
have an Exercise Price which is less than the Per Share Price immediately prior
to the Effective Time (i) a form of letter of transmittal (which will specify
that delivery will be effected, and risk of loss and title to the Certificates
or Options will pass, only upon proper delivery of the Certificates or Options
to the Paying Agent), which letter shall be in customary form, and
(ii) instructions for use in effecting the surrender of the Certificates or
Options for payment.
(b) With respect to any Certificate or Option alleged to have been
lost, stolen or destroyed, the owner or owners of such Certificate or Option
shall be entitled to the consideration set forth above upon delivery to the
Surviving Corporation of the other items set forth in Section 3.5(a) and an
affidavit of such owner or owners setting forth such allegation and an indemnity
agreement to indemnify the Parent, the Surviving Corporation and the Paying
Agent against any claim that may be made against any, some or all of them on
account of the alleged loss, theft or destruction of any such Certificate or
Option or the delivery of the payment set forth above.
(c) If consideration is to be delivered to a Person other than the
Person in whose name the Certificate or Option surrendered in exchange therefor
is registered, it shall be a condition to delivery of the consideration that the
Certificate or Option so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the Person requesting such consideration shall
pay any transfer or other Taxes required by reason of the payment to a Person
other than the registered holder of the Certificate or Option surrendered or
establish to the satisfaction of the Surviving Corporation that such Tax has
been paid or is not applicable.
(d) Until surrendered in accordance with the provisions of this
Section 3.5, from and after the Effective Time, (i) each Certificate (other than
(A) Certificates representing shares of Cascade Common Stock owned beneficially
or of record by the Parent, Acquisition Co. or any other subsidiary of the
Parent, and (B) Certificates representing shares of Cascade Common Stock held in
Cascade's treasury or by any Cascade Subsidiary) shall represent for all
purposes only the right to receive the Per Share Price for each share
represented by such Certificate, as determined and paid in the manner set forth
in this Agreement and (ii) each Option that has an Exercise Price which is less
than the Per Share Price immediately prior to the Effective Time shall represent
for all purposes only the right to receive the Option Consideration, as
determined and paid in the manner set forth in this Agreement.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of the Cascade Common Stock that was
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates or Options are presented to the Surviving Corporation, they
shall be cancelled and presented to the Paying Agent for payment (subject to
Section 3.5(a)) of the applicable consideration referred to in this
Section 3.5.
3.6 ADJUSTMENT TO PREVENT DILUTION. In the event that Cascade changes the
number of shares of Cascade Common Stock, Options or other securities
convertible or exchangeable into or exercisable for shares of Cascade Common
Stock issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization,
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merger, subdivision, issuer tender or exchange offer, or other similar
transaction, the Per Share Price shall be equitably adjusted.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CASCADE
Cascade hereby represents and warrants to the Parent and Acquisition Co. as
follows:
4.1 ORGANIZATION, ETC.
(a) Cascade is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oregon and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Cascade is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure to be so
qualified or licensed would not have a Material Adverse Effect. Each
jurisdiction where Cascade is so qualified is listed on Schedule 4.1(a). Except
as set forth on Schedule 4.1(b), there are no Cascade Subsidiaries and, except
as set forth on Schedule 4.1(b) and except with respect to the Exchangeable
Shares, Cascade does not own, directly or indirectly, any capital stock of or
equity interest in any corporation, partnership, joint venture or other entity,
nor is Cascade bound by any agreement to acquire any such capital stock or
equity interest. Cascade has heretofore delivered or made available to the
Parent accurate and complete copies of the Restated Articles of Incorporation
and Bylaws of Cascade, each as amended and in effect on the date hereof. The
stock certificate books and ledgers of Cascade, which have been made available
to the Parent, accurately reflect, at the date hereof, the ownership of the
issued and outstanding capital stock of Cascade.
(b) Each Cascade Subsidiary is listed on Schedule 4.1(b). Each Material
Cascade Subsidiary and, to Cascade's Knowledge, each Immaterial Cascade
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry out its business as now being conducted. Each Material Cascade
Subsidiary and, to Cascade's Knowledge, each Immaterial Cascade Subsidiary is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to be so qualified or licensed would not have a Material Adverse
Effect. Each jurisdiction where each Material Cascade Subsidiary is so qualified
is listed on Schedule 4.1(b). Cascade has delivered to the Parent accurate and
complete copies of the Articles of Incorporation and Bylaws of each Material
Cascade Subsidiary, as amended and in effect on the date hereof.
(c) Except as set forth on Schedule 4.1(c), Cascade owns of record and
beneficially 100% of the issued and outstanding capital stock and all other
equity interest in each Cascade Subsidiary, free and clear of any Liens.
4.2 AUTHORIZATION AND BINDING OBLIGATION.
(a) Cascade has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. Subject to the approvals referred to in Section 6.1, Cascade's
execution, delivery and performance of this Agreement has been duly and validly
authorized by all necessary corporate action on the part of Cascade and this
Agreement has been duly executed and delivered by Cascade. Except for the
actions referred to in Section 4.2(b), which actions are in full force and
effect, and the giving of notice in accordance with Sections 60.214,
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60.561 and 60.567 of the OBCA, no other corporate action or proceedings on the
part of Cascade are necessary to authorize this Agreement or the consummation of
the transactions contemplated hereby. This Agreement constitutes the valid and
binding obligation of Cascade, enforceable against Cascade in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar rights of creditors generally and by
general principles of equity.
(b) The Cascade Board of Directors (the "Board") has authorized the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and has voted to recommend adoption of this
Agreement and authorization of the Merger by the shareholders of Cascade, and
has not withdrawn such authorization. A true and complete copy of such approvals
by the Board has been delivered to the Parent.
(c) The Board has taken all appropriate action so that the entry into
this Agreement and the consummation of the transactions contemplated by this
Agreement shall be exempted from the provisions of OBCA 60.801-60.816 and
60.825-60.845. No other "fair price," "moratorium," "control share acquisition"
or similar anti-takeover statute or regulation, including, without limitation,
OBCA 60.801-60.816 and 60.825-60.845 (each, a "Takeover Statute"), or any
applicable anti-takeover provision in the Restated Articles of Incorporation and
Bylaws of Cascade is, or at the Effective Time will be, applicable to Cascade,
the shares of Cascade Common Stock, the Merger or the other transactions
contemplated by this Agreement.
4.3 CAPITALIZATION.
(a) The authorized Cascade Common Stock and other authorized capital
stock of Cascade and each of the Cascade Subsidiaries is as set forth on
Schedule 4.3. All issued and outstanding shares of Cascade Common Stock and
other equity interest of Cascade and each of the Cascade Subsidiaries are duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. Schedule 4.3 sets forth the name of each Person who owns beneficially or
of record any shares of capital stock and other equity interest of any Cascade
Subsidiary and, in the case of each Cascade Subsidiary, the number of shares
owned by each such Person. Other than the Exchangeable Shares and the share of
Cascade Special Voting Stock, there are no bonds, debentures, notes or other
indebtedness or securities of Cascade or of any Cascade Subsidiary issued and
outstanding which have the right to vote (or are convertible into, or
exchangeable for, securities having the right to vote) on any matter on which
shareholders of Cascade or any Cascade Subsidiary may vote.
(b) Except as set forth on Schedule 4.3, there are not now, and at the
Effective Time there will not be, any options, warrants, calls, subscriptions,
or other rights, agreements or commitments of any nature whatsoever obligating
Cascade or any of the Cascade Subsidiaries to issue, transfer, deliver or sell,
or cause to be issued, transferred, delivered or sold, any additional shares of
Cascade Common Stock or other equity interest of Cascade or any of the Cascade
Subsidiaries, or any securities or obligations convertible into or exchangeable
for any such Cascade Common Stock or other equity interest, or obligating
Cascade or any of the Cascade Subsidiaries to grant, extend or enter into such
agreement or commitment, and no authorization therefor has been given or made by
Cascade or any Cascade Subsidiary. Except for the arrangements described in
Schedule 4.3, there are no contractual arrangements that obligate Cascade or any
Cascade Subsidiary to (i) repurchase, redeem or otherwise acquire any of its
capital stock or other equity interest or (ii) pay any Person any consideration
that is calculated with reference to the consideration to be paid to the Cascade
shareholders under this Agreement.
(c) Except as set forth in Section 5.7, there are not now, and at the
Effective Time there will not be, any shareholder agreements, voting trusts or
other agreements or understandings to which
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Cascade is a party or by which it is bound relating to the voting of any shares
of the capital stock of Cascade which will limit the granting of proxies by or
on behalf of or from, or the casting of votes by, Cascade stockholders with
respect to the Merger. There are no restrictions on the ability of Cascade to
vote the stock of any of the Cascade Subsidiaries.
4.4 CONSENTS AND APPROVALS; NO CONFLICTS. Except as set forth on
Schedule 4.4 and for (a) the applicable requirements of the HSR Act and the
Exchange Act, (b) the approvals referred to in Section 4.2(b), (c) the giving of
notice in accordance with Section 60.214 of the OBCA and (d) the filing and
recordation of the Articles of Merger as required by the OBCA, no filing with,
and no permit, authorization, consent or approval of, any Governmental Authority
or other third party is necessary for the consummation by Cascade of the
transactions contemplated by this Agreement, except where the failure to make
such filing or obtain such authorization, consent or approval would not have a
Material Adverse Effect. Subject to obtaining such approvals and making such
filings, neither the execution and delivery of this Agreement by Cascade nor the
consummation by Cascade of the transactions contemplated hereby, nor compliance
by Cascade with any of the provisions hereof, will (a) result in any violation
of any provision of the Restated Articles of Incorporation or Bylaws of Cascade
or any Cascade Subsidiary, (b) violate any Applicable Law to which Cascade or
any of the Cascade Subsidiaries is subject or by which any of their respective
properties is bound or (c) except as set forth on Schedule 4.4, result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default or give rise to a right of any Person to terminate,
cancel or accelerate the payment or performance of any liability, obligation or
commitment under any contract (including any Contract listed in Schedule 4.13)
to which Cascade or any of the Cascade Subsidiaries is a party, or by which any
of their respective properties are bound, except, in the case of clauses
(b) and (c) above, where such violation, breach, default or right of
termination, cancellation or acceleration would not have a Material Adverse
Effect.
4.5 FINANCIAL STATEMENTS; SEC REPORTS.
(a) Cascade has furnished the Parent with (i) a consolidated balance
sheet of Cascade as of January 31, 2000 and statements of income, changes in
shareholders' equity and cash flows of Cascade for the year then ended, together
with the related audit report of PricewaterhouseCoopers LLP, and (ii) an
unaudited consolidated balance sheet of Cascade as of July 31, 2000 and
statements of income, changes in shareholders' equity and cash flows of Cascade
for the six-month period ended July 31, 2000. All such financial statements are
referred to herein collectively as the "Financial Statements." The Financial
Statements (including any related schedules or notes) have been prepared in
accordance with GAAP throughout the periods involved, except that the unaudited
financial statements are subject to year-end adjustments and do not contain
detailed footnotes. The balance sheets included in the Financial Statements
fairly present, in all material respects, the financial position of Cascade and
the Cascade Subsidiaries as at the dates thereof, and the consolidated
statements of income, changes in shareholders' equity and cash flows included in
the Financial Statements fairly present, in all material respects, the results
of the operations, changes in shareholders' equity and cash flows, respectively,
of Cascade and the Cascade Subsidiaries for the periods indicated.
(b) Cascade has filed all forms, reports, amendments to reports,
statements and schedules with the SEC required to be filed pursuant to the
Exchange Act, and the regulations of the SEC thereunder, since January 1, 1998.
As of their respective dates and, if amended or superseded by a filing prior to
the date of this Agreement or the Closing Date, then as of the date of such
filing, all reports (including the financial statements included or incorporated
therein) filed by Cascade with the SEC (collectively, the "SEC Reports")
complied in all material respects with all applicable requirements of the
Exchange Act and the regulations of the SEC thereunder applicable to such SEC
Reports, and did not contain any untrue statement of a material fact or omit to
state a material fact
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required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
4.6 UNDISCLOSED LIABILITIES. Except (a) to the extent reflected or
reserved against in the January 31, 2000 balance sheet of Cascade included in
the Financial Statements, (b) to the extent disclosed in the SEC Reports,
(c) to the extent incurred in the ordinary course of business consistent with
past practice since January 31, 2000, (d) to the extent set forth on
Schedule 4.6, or (e) for obligations of Cascade arising in the ordinary course
of the performance of its responsibilities under any Contracts listed on
Schedule 4.13 or any agreement which is not required to be listed on
Schedule 4.13 because of the limitations set forth in Section 4.13, neither
Cascade nor any Cascade Subsidiary has any liabilities or obligations of any
nature, whether liquidated, unliquidated, accrued, absolute, contingent or
otherwise which would have a Material Adverse Effect.
4.7 GOVERNMENTAL APPROVALS AND AUTHORIZATIONS. All approvals, permits,
qualifications, authorizations, licenses, franchises, consents, orders,
registrations or other approvals (collectively, the "Governmental Approvals") of
all Governmental Authorities which are necessary in order to permit Cascade and
the Cascade Subsidiaries to carry on their respective businesses have been
obtained and are in full force and effect, except where the failure to obtain
such approval, permit, qualification, authorization, license, franchise,
consent, order, registration or other approval, or the failure to be in full
force and effect, would not have a Material Adverse Effect. There has been no
violation, cancellation, suspension or revocation of any such Governmental
Approval, except for any such violation, cancellation, suspension or revocation
which would not have a Material Adverse Effect. This Section 4.7 does not relate
to environmental matters, which are the subject of Section 4.21.
4.8 COMPLIANCE WITH LAWS. Except for any such violations, breaches or
defaults which would not have a Material Adverse Effect, neither Cascade nor any
Cascade Subsidiary is in conflict with or in violation or breach of or default
under (a) any provision of its organizational documents or (b) to the Knowledge
of Cascade, Applicable Law, and, since January 31, 2000, neither Cascade nor any
Cascade Subsidiary has to its Knowledge received any written notice alleging any
such conflict, violation, breach or default. This Section 4.8 does not relate to
environmental matters, which are the subject of Section 4.21.
4.9 ABSENCE OF CERTAIN PAYMENTS. Neither Cascade, any Cascade Subsidiary,
or any director, officer, employee or agent of, or consultant or other
representative of, Cascade or any Cascade Subsidiary, or any other Person
authorized to act on behalf thereof, has unlawfully offered, paid or agreed to
pay, directly or indirectly, any money or anything of value to or for the
benefit of any individual who is or was an official or employee or candidate for
office of any Governmental Authority, or any employee or agent of any customer
or supplier of Cascade or any Cascade Subsidiary, except for any such offer,
payment or agreement to pay which would not individually or in the aggregate
have a Material Adverse Effect and would not reasonably be expected to subject
Cascade or any Cascade Subsidiary to any damage or penalty in any civil,
criminal or governmental litigation or proceeding.
4.10 REAL PROPERTY. Schedule 4.10 sets forth a complete list of (a) all
real property and all interests in real property owned in fee by Cascade or the
Cascade Subsidiaries (individually, an "Owned Property") and (b) all real
property and all interests in real property leased by Cascade or the Material
Cascade Subsidiaries (individually, "Leased Property;" and together with the
Owned Property, the "Real Property"). Cascade and the Cascade Subsidiaries have
(a) good, marketable and insurable fee title to all Owned Property, and
(b) good valid leasehold interests in all Leased Property, and in the case of
the Owned Property and those leasehold estates set forth on Schedule 4.10, such
title is free and clear of any Liens, except (i) those created or permitted
under the credit agreements listed on Schedule 4.13, (ii) as disclosed on
Schedule 4.10, and (iii) other easements, rights of way and immaterial Liens,
charges, assessments or encumbrances that do not interfere with the use of the
Real Property in the normal conduct of the business of Cascade and the Cascade
Subsidiaries and that do
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not materially impair the value of the Real Property (collectively, the
"Permitted Liens"). Complete and correct copies of each deed or lease relating
to the Real Property described on Schedule 4.10 have been furnished or made
available to the Parent. The current use and operation of the Real Property does
not violate in any material respect any instrument of record affecting the Real
Property. Except as disclosed on Schedule 4.10, no damage or destruction has
occurred with respect to any of the Real Property since January 31, 2000 that
would individually or in the aggregate materially impair the continued use or
operation of the Owned Property or the Leased Property. To the Knowledge of
Cascade, the Owned Property is in compliance with all Real Estate Laws and
neither Cascade nor any Cascade Subsidiary has received any written notice of
violation or claimed violation of any Real Estate Law, in either case except
where such violation or lack of compliance would not have a Material Adverse
Effect. Except as disclosed on Schedule 4.10, neither Cascade nor any Cascade
Subsidiary is obligated under or a party to any option, right of first refusal
or other contractual right to purchase, acquire, sell or dispose of any Real
Property. Neither Cascade nor any Cascade Subsidiary is a lessor, sublessor or
grantor under any lease, sublease or other instrument granting to another Person
any right to the possession, lease, occupancy or enjoyment of the Real Property,
other than pursuant to the agreements listed under the captions "Cascade
Subleases" and "Miscellaneous Encumbrances Upon Real Property" on Schedule 4.10
and except where such right to possession, lease, occupancy or enjoyment of the
Real Property would not materially interfere with the use of the Real Property
in the normal conduct of the business of Cascade and the Cascade Subsidiaries.
This Section 4.10 does not relate to environmental matters, which are the
subject of Section 4.21.
4.11 PERSONAL PROPERTY. Cascade and each of the Cascade Subsidiaries has
good and valid title to all tangible personal property and assets which it owns,
including the material tangible personal property reflected in the balance sheet
included in the Financial Statements as being owned by Cascade or such Cascade
Subsidiary, as the case may be, except for such tangible personal property and
assets disposed of in the ordinary course of business, consistent with past
practice, since January 31, 2000.
4.12 INTELLECTUAL PROPERTY. Cascade and each of the Cascade Subsidiaries
possesses all patents, trademarks, service marks, trade names, copyrights and
licenses that are necessary for the use or ownership of its respective
properties and assets, and the maintenance and operation of its respective
businesses as currently conducted. Neither Cascade nor any of the Cascade
Subsidiaries uses any registered trademarks, trade names, copyrights or patents
(or has applications therefor pending) in connection with their respective
businesses, except those set forth on Schedule 4.12 (collectively referred to as
the "Intellectual Property"). Except as set forth on Schedule 4.12, the
Intellectual Property is owned by Cascade or a Cascade Subsidiary, as indicated
on Schedule 4.12, and is not subject to any license, royalty arrangement or
dispute. To the Knowledge of Cascade, no registered trademark or trade name used
by Cascade or any Cascade Subsidiary infringes on any trademark or trade name in
any state or country in which such trademark or trade name is used by Cascade or
such Cascade Subsidiary. To the Knowledge of Cascade and except as set forth on
Schedule 4.12, neither Cascade nor any Cascade Subsidiary has received written
notification of infringement of any patent, copyright, trademark or trade name,
or any application therefor, from any Person.
4.13 CONTRACTS. Schedule 4.13 lists (or describes in the case of oral
contracts) each contract, note, debt instrument, lease, sublease, covenant not
to compete, supply agreement, guarantee, licensing agreement, partnership
agreement, joint venture agreement, employment agreement (other than agreements
set forth on Schedule 4.14), collective bargaining agreement or other agreement
or commitment of any kind, whether written or oral, to which Cascade or any
Cascade Subsidiary is a party (other than agreements set forth on
Schedule 4.14) or by which any of them is bound (each, a "Contract"), provided
that such Schedule need not list any written or oral Contract or related written
Contracts under which the aggregate payments required to be made by or to
Cascade or any Cascade Subsidiary over the life of the Contract or Contracts are
less than $250,000. Complete copies of every written Contract listed on
Schedule 4.13 have been previously made available to the Parent, except as
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otherwise noted on Schedule 4.13. Each Contract is valid and binding on Cascade
(or a Cascade Subsidiary, as applicable) and is in full force and effect. Each
of Cascade and the Cascade Subsidiaries has performed all material obligations
required to be performed by it to date under the Contracts listed on
Schedule 4.13, and neither Cascade nor any Cascade Subsidiary has received
written notice that it is in material default in the performance of any of its
obligations under any Contract listed on Schedule 4.13, and to the Knowledge of
Cascade, no other Person is in material default in the performance of any of its
obligations under any Contract.
4.14 EMPLOYEE BENEFIT PLANS.
(a) Schedule 4.14 contains a true and complete list of each material
"employee benefit plan," as such term is defined in Section 3(3) of ERISA, and
each material bonus, incentive or deferred compensation, severance, retention,
change in control, equity incentive or other material employee benefit plan,
program or policy maintained or contributed to by Cascade or any Cascade
Subsidiary for the benefit of its respective employees or with respect to which
Cascade or a Cascade Subsidiary is obligated to contribute on behalf of its
employees (collectively, the "Plans"). In addition, Schedule 4.14 sets forth a
true and complete list of all employment and noncompetition agreements with past
or present employees of Cascade or any Cascade Subsidiary which are currently in
effect. Cascade has made available to the Parent true and complete copies of all
Plans; all related trust agreements; the most recent actuarial and trust reports
prepared for any such Plan; the most recent Form 5500 filed in respect of each
such Plan and all schedules thereto; the most recent determination letter issued
in respect of each such Plan which is a retirement plan qualified under
Section 401(a) of the Code; and the current summary plan descriptions with
respect to such Plans for which such a description has been distributed.
(b) Each Plan intended to be qualified under Section 401(a) of the Code
has received a determination letter from the IRS as to the qualification thereof
under Section 401(a) of the Code; and, to the Knowledge of Cascade, no amendment
has been made to any such Plan since the date of such determination letter that
has or would result in the disqualification of such Plan under Section 401(a) of
the Code. Each of the Plans has been operated and administered in all respects
in accordance with Applicable Law, including but not limited to ERISA and the
Code, except where any such noncompliance would not have a Material Adverse
Effect. There are no material pending or, to the Knowledge of Cascade,
threatened claims by or on behalf of any of the Plans or by any employee
participating therein (other than routine claims for benefits). All
contributions required to have been made by Cascade and the Cascade Subsidiaries
to any Plan pursuant to applicable law (including, without limitation, ERISA and
the Code) have been made on a timely basis.
(c) Neither Cascade nor any Cascade Subsidiary has, within the
preceding six years, withdrawn in a complete or partial withdrawal from any
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) or multiple
employer plan (within the meaning of Section 4063 or 4064 of ERISA) or incurred
any liability to the Pension Benefit Guaranty Corporation pursuant to Title IV
of ERISA, which would have a Material Adverse Effect.
(d) No Plan is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code. No Plan is a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA or a multiple employer plan within the meaning of
Section 4063 or 4064 of ERISA.
(e) No other trade or business, whether or not incorporated, is
currently or, within the preceding six years, has been required to be treated as
a "single employer" together with Cascade pursuant to clause (b), (c) or (m) of
Section 414 of the Code.
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(f) Neither Cascade nor any Cascade Subsidiary has any obligations to
provide health and life insurance benefits to retirees or other former or
terminated employees under any Plan, except as set forth on Schedule 4.14(f) and
except as required under Section 4980B of the Code or Section 601 of ERISA.
Cascade and the Cascade Subsidiaries have complied in all material respects with
Section 4980B of the Code and Section 601 of ERISA.
(g) Except as set forth in Schedule 4.14(g), the consummation of the
transactions contemplated by this Agreement will not (i) entitle any employee of
Cascade or any Cascade Subsidiary to severance pay, (ii) accelerate the time of
payments or vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any Plan, (iii) result in any breach or violation of, or a default under,
any of the Plans or (iv) result in any "excess parachute payment" within the
meaning of Section 280G of the Code.
4.15 LABOR MATTERS. Except as described on Schedule 4.15, since
December 31, 1998, there have been no work stoppages or labor difficulties
relating to employees of Cascade or the Cascade Subsidiaries that have had or
are likely to have a Material Adverse Effect. There are no labor disputes
currently subject to any unfair labor practice complaint, grievance procedure,
arbitration or litigation, nor is there a default or any event which, with
notice or the passage of time or both, would become a default, under any
agreement with any labor union or association representing employees of Cascade
or any Cascade Subsidiary, except for any such dispute, procedure, arbitration,
litigation or default which would not have a Material Adverse Effect. There are
no strikes, picketing, work stoppages or representation petitions pending or, to
the Knowledge of Cascade, threatened with respect to any employee of Cascade or
any Cascade Subsidiary that are likely to have a Material Adverse Effect.
4.16 ACTIONS PENDING. Except as set forth in Schedule 4.16, there is no
material claim, litigation, proceeding or investigation pending or, to the
Knowledge of Cascade, threatened in writing, against or affecting the business
or any of the assets of Cascade or any Cascade Subsidiary that is likely either
individually or in the aggregate to have a Material Adverse Effect, or which
seeks to enjoin or prohibit, or otherwise questions the validity of, any action
taken or to be taken in connection with this Agreement.
4.17 AFFILIATE TRANSACTIONS. Except as set forth on Schedule 4.17, there
are no existing agreements, understandings or arrangements between Cascade or
any Cascade Subsidiary, on the one hand, and any Affiliate of Cascade or any
Cascade Subsidiary, on the other hand.
4.18 ABSENCE OF CHANGES OR EVENTS. Except for any change or effect
resulting from (a) changes in general economic conditions, (b) the performance
of this Agreement and compliance with the covenants set forth herein, or
(c) general changes or developments in the industries in which Cascade or the
Cascade Subsidiaries operate, since July 31, 2000, each of Cascade and the
Cascade Subsidiaries has conducted its business only in the ordinary and usual
course and there has not been any adverse change in the business, assets,
properties, liabilities, results of operations or financial condition of Cascade
and the Cascade Subsidiaries which would have a Material Adverse Effect.
4.19 TAXES. Except as set forth on Schedule 4.19, or as reflected or
reserved against in the January 31, 2000 balance sheet included in the Financial
Statements, (a) Cascade and the Cascade Subsidiaries have (or by the Closing
Date will have) duly and timely filed or caused to be filed all tax returns that
are required to be filed on or before the Closing Date (collectively, the
"Returns") or the time for filing such returns shall have been validly extended
to a date after the Closing Date, except to the extent that the failure to so
file would not have a Material Adverse Effect; (b) Cascade and the Cascade
Subsidiaries have paid all Taxes shown on such Returns, and have (or by the
Closing Date will have) withheld and remitted to the appropriate Taxing
Authority, all Taxes that are required to be withheld and remitted on or before
the Closing Date, except to the extent that the failure to so pay, withhold or
remit would not have a Material Adverse Effect; (c) to the Knowledge of Cascade,
no
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claim in writing by the IRS or any other Taxing Authority for assessment or
collection of Taxes, that are or may become payable by Cascade or any Cascade
Subsidiary or chargeable as a Lien upon the assets thereof, has been received by
Cascade or any Cascade Subsidiary; (d) the taxable years of Cascade and the
Cascade Subsidiaries through the taxable year ended 1996 have been examined and
closed; (e) neither Cascade nor any Cascade Subsidiary has been granted any
extension or waiver of the limitation period applicable to any Returns, which
period (after giving effect to such extension or waiver) has not yet expired;
(f) to the Knowledge of Cascade, neither Cascade nor any Cascade Subsidiary has
received any notice in writing of any claim, audit, action, suit, proceeding or
investigation now pending against or with respect to Cascade or any Cascade
Subsidiary in respect of any Tax; (g) there are no requests for rulings or
determinations in respect of any Tax pending between Cascade or any Cascade
Subsidiary, on the one hand, and any Taxing Authority on the other; and
(h) neither Cascade nor any Cascade Subsidiary has (i) been a member of an
affiliated group, or (ii) filed or been included in a combined, consolidated or
unitary Return, in each case involving group members other than Cascade and the
Cascade Subsidiaries. Schedule 4.19 contains a list of states, territories and
jurisdictions (whether foreign or domestic) with respect to which any income Tax
Return has been filed by Cascade or any Cascade Subsidiary within the last three
taxable years. No election under Section 341(f) of the Code has been made to
treat Cascade or any Cascade Subsidiary as a "consenting corporation" as defined
in such Section 341(f). Neither Cascade nor any Cascade Subsidiary is or has
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code.
For purposes of this Agreement, "TAX" means any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, license, withholding on amounts paid to or
by Cascade or any Cascade Subsidiary, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall profits tax,
custom duty or other tax, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest or penalty, addition to tax or
additional amount imposed by any Governmental Authority (domestic or foreign) (a
"Taxing Authority").
4.20 INSURANCE. Schedule 4.20 lists all material insurance policies
maintained by, or for the benefit of, Cascade or any Cascade Subsidiary, as an
insured. All such insurance policies are in full force and effect, all premiums
due thereon have been paid and no notice of termination of any such policy has
been received by the insured thereunder.
4.21 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 4.21 and in
the environmental reports listed thereon, Cascade's and each Cascade
Subsidiary's operation and use of its assets and the Real Property are to the
Knowledge of Cascade in compliance in all respects with all Environmental Laws,
except to the extent that any such noncompliance would not individually or in
the aggregate have a Material Adverse Effect. Except as set forth on
Schedule 4.21 or in the environmental reports listed thereon, to the Knowledge
of Cascade, Cascade and the Cascade Subsidiaries have obtained all environmental
or human health permits necessary for the operation of the business of Cascade
and the Cascade Subsidiaries as presently conducted, and all such permits are in
full force and effect and Cascade and each Cascade Subsidiary are in compliance
in all respects with the terms and conditions of each such permit, except, in
each case, to the extent that any such failure to obtain or noncompliance would
not individually or in the aggregate have a Material Adverse Effect. Except as
set forth on Schedule 4.21, Cascade and the Cascade Subsidiaries have not been
notified that they are potentially responsible parties pursuant to any
Environmental Laws and, to the Knowledge of Cascade, there is no investigation
pending or threatened at any location where Cascade or the Cascade Subsidiaries
transported or arranged for the transportation of Hazardous Materials. Except as
set forth on Schedule 4.21 and in the environmental reports listed thereon, to
the Knowledge of Cascade there are no underground storage tanks containing
Hazardous Materials, equipment containing polychlorinated biphenyls, or asbestos
containing materials on, under or within the Real Property.
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4.22 ABSENCE OF CONFLICTS OF INTEREST. Except as set forth on
Schedule 4.22, no officer, director or Affiliate of Cascade or any Cascade
Subsidiary has any material interest in any material contract or material
property (real or personal), tangible or intangible, used in the business of
Cascade or any Cascade Subsidiary.
4.23 FAIRNESS OPINION; FINANCIAL ADVISOR. The Board has received the
written opinion of Gleacher & Co. LLC, financial advisor to the Special
Committee, dated the date of this Agreement, to the effect that the
consideration to be received by the shareholders of Cascade (other than Parent
and its affiliates) in the Merger is fair to such shareholders from a financial
point of view, a copy of which opinion has been delivered to Parent. Except for
Gleacher & Co. LLC, neither Cascade nor any Cascade Subsidiary has employed, or
is subject to the valid claim of, any broker, finder or other financial
intermediary in connection with the transactions contemplated by this Agreement
or the transactions contemplated hereby, which might be entitled to a fee or
commission in connection herewith or therewith.
4.24 FOREIGN PERSON. Cascade is not a foreign person within the meaning of
Section 1445(f)(3) of the Code.
4.25 VOTE REQUIRED. The affirmative vote of the holders of a majority of
the outstanding Cascade Common Stock and the votes attributable to the share of
Cascade Special Voting Stock, voting together as a single voting group, are the
only vote of holders of any class or series of Cascade capital stock necessary
to approve this Agreement and the transactions contemplated hereby.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND ACQUISITION CO.
The Parent and Acquisition Co., jointly and severally, represent and warrant
to Cascade as follows:
5.1 ORGANIZATION AND STANDING. Each of CAC-I and CAC-II is a corporation
duly organized and in good standing under the laws of the State of Delaware that
has the power and authority to carry on its business as presently conducted.
Acquisition Co. is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Oregon and has all requisite corporate
power and authority to carry on its business as presently conducted.
5.2 AUTHORIZATION AND BINDING OBLIGATION. Each of the Parent and
Acquisition Co. has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Parent and Acquisition Co.
and the consummation by the Parent and Acquisition Co. of the transactions
contemplated hereby have been duly and validly authorized and approved by all
necessary corporate action on the part of each of the Parent and Acquisition Co.
and no other corporate action or other proceeding on the part of the Parent or
Acquisition Co. is necessary to authorize this Agreement or the consummation of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of the Parent and Acquisition Co. and constitutes a valid and
binding obligation of the Parent and Acquisition Co., enforceable against the
Parent and Acquisition Co. in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar rights of creditors generally and by general principles of equity.
5.3 CONSENTS AND APPROVALS; NO CONFLICTS. Except for applicable
requirements of the HSR Act and filing and recordation of the Articles of Merger
as required by the OBCA, no filing with, and no permit, authorization, consent
or approval of, any Governmental Authority is necessary for the consummation by
the Parent or Acquisition Co. of the transactions contemplated by this
Agreement. Subject to obtaining such approval and making such filings, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, nor compliance by the
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Parent or Acquisition Co. with any of the provisions hereof will (a) result in
any violation of any provision of the organizational documents of the Parent or
Acquisition Co., (b) violate any Applicable Law to which the Parent or
Acquisition Co. is subject or by which any of their respective properties is
bound, or (c) result in a material violation or breach of, or constitute (with
or without due notice or lapse of time or both) a material default (or give rise
to any right of termination, cancellation or acceleration) under, any material
contract, agreement, note, bond, mortgage, indenture, license, lease, franchise,
permit, employee benefit plan or other instrument or obligation to which the
Parent or Acquisition Co. is a party, or by which either of them or any of their
respective properties is bound, except in the case of clauses (b) and
(c) above, where such violation, breach, default, or right of termination,
cancellation or acceleration would not have a material adverse effect on their
ability to perform their respective obligations hereunder.
5.4 LITIGATION. There is no claim, litigation, proceeding or investigation
pending or, to the best of the Parent's or Acquisition Co.'s knowledge,
threatened in writing, which seeks to enjoin or prohibit, or otherwise questions
the validity of, any action taken or to be taken by the Parent or Acquisition
Co. in connection with this Agreement or which would have a material adverse
effect on their ability to perform their respective obligations hereunder.
5.5 FINDERS AND INVESTMENT BANKERS. Except as provided in Schedule 5.5,
all negotiations relating to this Agreement and the transactions contemplated
hereby have been carried on without the intervention of any Person acting on
behalf of the Parent or Acquisition Co. in such manner as to give rise to any
valid claim against Cascade for any broker's fee or finder's fee or similar
compensation.
5.6 FINANCING. Parent has received and delivered to the Special Committee
a commitment letter from Fleet National Bank, N.A. dated October 16, 2000,
addressed to TD Capital Group Limited, Lift Technologies Inc. and Ontario
Municipal Employees Retirement Board, and a commitment letter from TD
Capital-Mezzanine Partners dated October 16, 2000, addressed to TD Capital Group
Limited (the "Commitment Letters"), whereby Fleet National Bank, N.A. and TD
Capital-Mezzanine Partners have committed, upon the terms and subject to the
conditions set forth therein, which terms and conditions are satisfactory to
Parent, to provide debt financing in the aggregate amount of $238 million (of
which $164 million shall be in the form of senior indebtedness). Parent has
received and delivered to the Special Committee a letter dated October 17, 2000
(the "Parent Commitment Letter") addressed to Parent whereby William J.
Harrison, TD Capital Group Limited and the Ontario Municipal Employees
Retirement Board have committed, upon the terms and subject to the conditions
set forth in the equity commitment letter and term sheet attached thereto, to
provide a contribution in the form of common equity financing to Acquisition Co.
in an amount of up to $100 million in cash, plus stock and assets (which
contribution, together with the amounts to be provided pursuant to the
Commitment Letters, being hereinafter referred to as the "Financings"). Each of
the Commitment Letters and the Parent Commitment Letter is in effect on the date
hereof and has not been amended or modified and there is no breach or default
existing (or which with notice or lapse of time or otherwise may exist)
thereunder. The aggregate proceeds of the Financings are sufficient to pay the
aggregate Per Share Price and the Option Consideration, to repay the existing
indebtedness of the Company and its Subsidiaries (excluding any indebtedness the
parties agree in writing shall not be repaid) and to pay all fees and expenses
related to the transactions contemplated by this Agreement. Parent and
Acquisition Co. acknowledge that, in entering into this Agreement, Cascade is
relying upon the commitments of William J. Harrison, TD Capital Group Limited
and the Ontario Municipal Employees Retirement Board set forth in the Parent
Commitment Letter.
5.7 VOTING AGREEMENT. W. J. Harrison Holdings, Ltd. and William J.
Harrison have executed and delivered to Cascade voting agreements which provide
that such persons will vote the Exchangeable Shares and any other shares of
Cascade Capital Stock owned by them in favor of approval of the Merger.
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ARTICLE 6
COVENANTS
6.1 SHAREHOLDER APPROVALS AND CASCADE PROXY STATEMENT.
(a) As soon as is reasonably practicable after execution of this
Agreement, Cascade shall take all action necessary, in accordance with the OBCA
and its Restated Articles of Incorporation and Bylaws, to convene a meeting of
its shareholders as promptly as practicable to consider and vote upon the Merger
(the "Cascade Shareholders Meeting"). Subject to the fiduciary obligations of
the Board under Applicable Law as advised by independent counsel, (i) the Proxy
Statement shall contain the recommendation of the Board that the shareholders of
Cascade vote to approve the Merger and this Agreement, and (ii) Cascade shall
use its best efforts to solicit from its shareholders proxies in favor of such
adoption and approval and to take all other action necessary or desirable to
secure the vote or consent of its shareholders as required by the OBCA to effect
the Merger. At the Cascade Shareholders Meeting, Parent, its direct and indirect
subsidiaries and Acquisition Co. shall vote, and shall cause William J. Harrison
Holdings Ltd. and its Affiliates to vote, all of the shares of Cascade Common
Stock and the share of Cascade Special Voting Stock then owned by any of them in
favor of the Merger.
(b) As soon as is reasonably practicable after execution of this
Agreement, Cascade shall (with the cooperation of Parent and Acquisition Co.)
(i) prepare and file with the SEC a preliminary proxy statement, together with a
form of proxy, with respect to the Cascade Shareholders Meeting and, after
consultation with the Parent, promptly respond to any SEC comments with respect
to such preliminary proxy statement, and (ii) subject to compliance with the
rules and regulations of the SEC, mail a definitive proxy statement to the
shareholders of Cascade. The term "Proxy Statement" shall mean such proxy
statement at the time it initially is mailed to Cascade's shareholders and all
amendments or supplements thereto, if any, similarly filed and mailed. None of
the information provided and to be provided by Parent, Acquisition Co. and
Cascade, respectively, for use in the Proxy Statement shall, on the date the
Proxy Statement is first mailed to the Cascade shareholders and on the date of
the Cascade Shareholders Meeting, be false or misleading with respect to any
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 in which they were made, not misleading, and Parent, Acquisition
Co. and Cascade each agree to correct any information provided by it for use in
the Proxy Statement which shall have become false or misleading in any material
respect. Cascade represents that the Proxy Statement shall comply as to form in
all material respects with all applicable requirements of United States
securities laws.
6.2 FILINGS; COOPERATION.
(a) Parent, Acquisition Co. and Cascade agree (i) to cooperate with
each other in determining whether any filings are required to be made or
consents required to be obtained in any jurisdiction in connection with the
consummation of the transactions contemplated by this Agreement, (ii) to
cooperate with each other to properly prepare and file any filings required
under any Applicable Law relating to the Merger and the transactions
contemplated herein, including the filings with the SEC and the filings required
under the HSR Act (collectively, the "Filings"), and (iii) to pursue all
reasonable commercial efforts to obtain promptly the satisfaction of the
conditions to the closing of the Merger. The Parent and Acquisition Co., on the
one hand, and Cascade, on the other, shall promptly notify the other of the
receipt of any comments on, or any request for amendments or supplements to, the
Filings by any governmental official, and each of Cascade, the Parent and
Acquisition Co. will supply the other with copies of all correspondence between
it and each of its subsidiaries and representatives, on the one hand, and any
appropriate governmental official, on the other hand, with respect to the
Filings.
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(b) Subject to compliance with Applicable Law, from the date hereof
until the Effective Time, each of Cascade and the Parent shall confer on a
regular and frequent basis with one or more representatives of the other party
to report Cascade's operational matters of materiality and the general status of
Cascade's ongoing operations and shall promptly provide the other party or its
counsel with copies of all Filings made by such party with any Governmental
Authority in connection with the Merger and the transactions contemplated
herein.
(c) Parent hereby agrees to use commercially reasonable efforts to
obtain the Financings, including using commercially reasonable efforts (i) to
negotiate definitive agreements with respect thereto and (ii) to satisfy all
conditions applicable to Parent in such definitive agreements. In the event any
portion of such financing becomes unavailable in the manner or from the sources
originally contemplated, Parent will use commercially reasonable efforts to
obtain any such portion from alternative sources on substantially comparable
terms. Parent will keep the Special Committee informed on a regular ongoing
basis of the status of its efforts to obtain such financing, and will notify
such committee immediately in the event any portion of such financing becomes
unavailable.
6.3 CONDUCT OF BUSINESS. During the period from the date hereof to the
Closing Date, Cascade covenants and agrees that it will and will cause the
Cascade Subsidiaries to carry on their businesses in the ordinary course of
business, in substantially the same manner as heretofore conducted, and will use
its reasonable commercial efforts consistent with past practices and policies to
preserve intact its and the Cascade Subsidiaries' present business organization,
keep available the services of their respective officers and key employees and
preserve their relationships with customers and suppliers and others having
business dealings with them, to the end that their goodwill and ongoing business
shall be maintained following the Closing. Without limiting the generality of
the foregoing, except as expressly permitted by this Agreement or with the prior
written consent of the Parent, such consent not to be unreasonably withheld or
delayed, or as set forth on Schedule 6.3, Cascade covenants and agrees that it
will not, and it will not permit any Cascade Subsidiary to do, or agree to do,
on or after the date hereof, any of the following, on or before the Closing:
(a) amend their respective articles of incorporation or bylaws or other
organizational documents;
(b) rescind, modify, amend or otherwise change or affect any of the
resolutions of the Board recommending adoption of this Agreement and
authorization of the Merger;
(c) issue, sell, transfer, assign, pledge, convey or dispose of any
capital stock or other equity interest, including, without limitation, any
subscriptions, options, warrants, calls, conversions or other rights,
agreements, commitments, arrangements or understandings of any kind obligating
Cascade or any Cascade Subsidiary, contingently or otherwise, to issue or sell,
or cause to be issued or sold, any capital stock or other equity interest of
Cascade or any Cascade Subsidiary;
(d) split, combine or reclassify any shares of any class of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of any class of
its capital stock, or redeem or otherwise acquire any shares of such capital
stock;
(e) write off any receivables, except in the ordinary course of
business consistent with past practice;
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(f) (i) sell, assign, lease or otherwise transfer or dispose of any
material assets or (ii) acquire or agree to acquire any material business or
assets, except in the ordinary course of business consistent with past practice;
(g) (i) except in the ordinary course of business (including reduction
of accruals related to environmental matters) consistent with past practice
under existing lines of credit, create, incur or assume any long-term debt,
including obligations in respect of capital leases, or create, incur, assume,
maintain or permit to exist any short-term borrowing in an aggregate amount for
Cascade and the Cascade Subsidiaries in excess of $5 million, (ii) make or
commit to make capital expenditures in excess of $250,000 each or $5 million in
the aggregate; (iii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person, except for assumptions, guarantees or endorsements by Cascade
of the obligations of any Cascade Subsidiary in the ordinary course of business
consistent with past practice; (iv) make any loans, advances or capital
contributions to, or investments in, any other Person (other than customary
loans or advances in the ordinary course of business consistent with past
practice) to employees not to exceed $100,000 in the aggregate and extensions of
credit made to customers on a trade receivable basis in the ordinary course of
business consistent with past practice; (v) create, assume or permit to exist
any Lien upon their assets, except for those in existence on the date of this
Agreement and except for those additional Liens created in the ordinary course
of business consistent with past practice; or (vi) amend in any material respect
or terminate any Contract;
(h) (i) increase or modify or agree to increase or modify the
compensation, bonuses or other benefits or perquisites of any employee of
Cascade or any Cascade Subsidiary, except for salary increases granted in the
ordinary course of business consistent with past practice, or (ii) pay or commit
to pay any compensation, bonus, pension or other retirement benefit or
allowance, fringe benefit or other benefit not required by the terms of an
existing Plan or collective bargaining agreement as in effect on the date hereof
or otherwise in the ordinary course of business consistent with past practice;
(i) make any new elections, or make any changes to current elections,
with respect to Taxes;
(j) fail to maintain their books and records in accordance with GAAP;
(k) take or fail to take any action that would cause any of its
representations and warranties not to be true and correct on the Closing Date in
the manner required by Section 7.3(b); or
(l) enter into any agreement, contract, commitment or arrangement to do
any of the foregoing.
6.4 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use (and Cascade shall cause the
Cascade Subsidiaries to use) their commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate
with one another in connection with the foregoing, including using its
commercially reasonable efforts to obtain all necessary consents, approvals and
authorizations as are required to be obtained under Applicable Law, to defend
all lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, to cause to be lifted or
rescinded any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby,
and to effect all necessary registrations and Filings.
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6.5 ACQUISITION PROPOSALS.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement in accordance with its
terms, Cascade shall not, directly or indirectly, through any officer, director,
employee, representative or agent, (i) solicit or initiate any inquiries or
proposals that constitute, or could reasonably be expected to lead to, a
proposal or offer for a merger, consolidation, share exchange, business
combination, sale of substantial assets, sale of shares of capital stock
(including without limitation pursuant to a tender offer) or similar transaction
or series of transactions involving Cascade, other than the transactions
contemplated by this Agreement (any of the foregoing inquiries or proposals
being referred to in this Agreement as an "Acquisition Proposal"), or
(ii) engage in negotiations or discussions concerning, or provide any non-public
information to any person or entity relating to, any Acquisition Proposal, or
(iii) agree to, approve or recommend to its shareholders any Acquisition
Proposal; PROVIDED, HOWEVER, that nothing contained in this Agreement shall
prevent Cascade, the Board or any committee thereof from (A) furnishing
non-public information to, or entering into discussions or negotiations with,
any person or entity in connection with an unsolicited bona fide written
Acquisition Proposal by such person or entity (including a new and unsolicited
Acquisition Proposal received by Cascade after the execution of this Agreement
from a person or entity whose initial contact with Cascade may have been
solicited by Cascade or on its behalf prior to the execution of this Agreement)
or recommending such an unsolicited bona fide written Acquisition Proposal to
the shareholders of Cascade, if and only to the extent that (1) such Acquisition
Proposal is not subject to any financing or material due diligence conditions
and the Board or any committee thereof believes in good faith (after
consultation with and based upon the advice of its financial advisor) that such
person or entity has the financial capacity to consummate such Acquisition
Proposal and such Acquisition Proposal would, if consummated, result in a
transaction more favorable to Cascade shareholders from a financial point of
view than the transaction contemplated by this Agreement (any such more
favorable Acquisition Proposal being referred to in this Agreement as a
"Superior Proposal") and the Board or any committee thereof determines in good
faith after consultation with and based upon the advice of outside legal counsel
that such action is necessary for the Board to comply with its fiduciary duties
to Cascade's shareholders under applicable law, and (2) prior to furnishing such
non-public information to, or entering into discussions or negotiations with,
such person or entity, Cascade receives from such person or entity an executed
confidentiality agreement on terms no less favorable to Cascade than those
contained in the Confidentiality Agreement, dated as of June 18, 2000, between
Cascade and TD Capital Group Limited or (B) complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal.
Cascade will immediately notify the Parent of the existence of any proposal,
discussion, negotiation or inquiry received by Cascade, and Cascade will
immediately communicate to the Parent the terms of any proposal, discussion,
negotiation or inquiry which it may receive (and will immediately provide to the
Parent copies of any written materials received by Cascade in connection with
such proposal, discussion, negotiation or inquiry) and the identity of the party
making such proposal or inquiry or engaging in such discussion or negotiation.
Cascade will promptly provide to the Parent any non-public information
concerning Cascade provided to any other party which was not previously provided
to the Parent.
(b) In the event a Superior Proposal is received by the Board or any
committee thereof, and the Board or such committee proposes to endorse or accept
such Superior Proposal, the Board or such committee shall promptly advise Parent
of the terms of such Superior Proposal, and will not enter into any commitments
with respect to such Superior Proposal unless, within two Business Days of
providing Parent with the terms of such Superior Proposal, Parent does not
deliver to the Board or any committee thereof a written offer to amend the terms
of this Agreement to provide for terms and conditions (including the amount and
value of consideration hereunder) which are reasonably
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determined by the Board or any committee thereof to be, when taken in their
entirety, as favorable to Cascade as the Superior Proposal.
(c) Upon compliance with the foregoing, following receipt of a Superior
Proposal, the Board shall be entitled to withdraw, modify or refrain from making
its recommendation referred to in Section 6.1(a) and approve and recommend to
the shareholders of Cascade a Superior Proposal, and Cascade shall be entitled
to enter into an agreement with such third party concerning a Superior Proposal.
(d) Cascade shall be entitled to provide copies of this Section 6.5 to
third parties who, on an unsolicited basis after the date of this Agreement,
contact Cascade regarding an Acquisition Proposal.
6.6 PUBLIC ANNOUNCEMENTS. The Parent and Cascade will consult with one
another before issuing any press release or otherwise making any public
statement with respect to this Agreement or the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation
without the consent of the Parent and Cascade, except based on the advice of
counsel for Cascade or the Parent, as the case may be, as required by Applicable
Law.
6.7 CONSENT OF THE PARENT. The Parent, as the sole shareholder of
Acquisition Co., by executing this Agreement hereby consents to the execution,
delivery and performance of this Agreement by Acquisition Co. and such consent
shall be treated for all purposes as a vote duly adopted at a meeting of the
shareholders of Acquisition Co. held for such purpose.
6.8 TRANSFER TAXES.
(a) Except as provided in Section 3.5(c), the Parent shall be
responsible for the payment of, and shall indemnify the Cascade shareholders
against, all Transfer Taxes arising out of or in connection with or attributable
to the transactions effected pursuant to this Agreement.
(b) As between the Cascade shareholders, on the one hand, and the
Parent, on the other hand, the party that has the primary responsibility under
Applicable Law for filing any Tax return required to be filed in respect of
Transfer Taxes shall prepare and timely file such Tax return, PROVIDED HOWEVER,
that such party's preparation of such Tax return shall be subject to the other
party's approval, which approval shall not be withheld or delayed unreasonably.
6.9 INDEMNIFICATION OF OFFICERS AND DIRECTORS; OFFICERS' AND DIRECTORS'
INSURANCE. The Parent agrees that for the entire period from the Effective Time
until at least six (6) years after the Effective Time (a) the Articles of
Incorporation and the Bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification (including advancement of expenses)
and exculpation from liability set forth in Cascade's Restated Articles of
Incorporation and Bylaws, as amended as of the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified during such
period in any manner that would adversely affect the rights thereunder of
individuals who on or prior to the Effective Time were directors, officers,
employees or agents of Cascade unless such modification is required by
Applicable Law and (b) the Surviving Corporation shall either (x) maintain in
effect Cascade's current directors' and officers' liability insurance covering
those persons who are currently covered on the date of this Agreement by
Cascade's directors' and officers' liability insurance policy or (y) purchase an
extended coverage or "tail" insurance policy having a policy limit equal to or
greater than the aggregate policy limit of such insurance and covering such
persons against claims made within six (6) years following the Effective Time,
provided that the Surviving Corporation shall not be obligated to pay in order
to maintain or procure insurance coverage pursuant to this paragraph an amount
per year in excess of 250% of the aggregate premiums paid by Cascade for the
policy period ending November 20, 2000 (exclusive of excess coverage obtained in
2000) for directors' and officers'
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liability insurance (and shall timely notify Cascade's former officers and
directors of any lapse in coverage).
6.10 NOTIFICATION OF CERTAIN MATTERS. Parent and Acquisition Co. shall
give prompt notice to Cascade and Cascade shall give prompt notice to Parent, of
the occurrence, or failure to occur, of any event, which occurrence or failure
to occur would be likely to cause (a) any representation or warranty of Cascade
or of Parent and Acquisition Co. contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date of this Agreement
to the Effective Time, or (b) any material failure of Parent and Acquisition Co.
or Cascade, as the case may be, or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement. The delivery of any
notice pursuant to this Section 6.10 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
6.11 ACCESS TO INFORMATION. To the extent permitted by Applicable Law, and
upon reasonable notice, Cascade shall (and shall cause each Cascade Subsidiary
to) afford to the officers, employees, accountants, counsel, financing sources
and other representatives of Parent, access, during normal business hours during
the period prior to the Effective Time, to all of its properties, books,
contracts, commitments and records and, during such period, Cascade shall (and
shall cause each Cascade Subsidiary to) furnish promptly to the Parent (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of the federal
securities laws and (b) all other information concerning its business,
properties and personnel as the Parent may reasonably request. Access shall
include the right to conduct such management information systems, risk
management and environmental studies as Parent shall reasonably deem
appropriate.
ARTICLE 7
CLOSING CONDITIONS
7.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ALL PARTIES. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) The Merger and this Agreement shall have been duly approved and
adopted by the vote of a majority of the shares of Cascade Common Stock and the
votes attributable to the share of Cascade Special Voting Stock, voting together
as a single voting group, as required by the OBCA and Cascade's Restated
Articles of Incorporation and Bylaws.
(b) Any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission nor any statute, rule,
regulation or executive order promulgated or enacted by any Governmental
Authority shall be in effect which would (i) make the consummation of the Merger
by the Parent, Acquisition Co. or Cascade illegal or (ii) otherwise prevent the
consummation of the Merger.
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7.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATION OF CASCADE. The
obligation of Cascade to effect the Merger is also subject to the fulfillment at
or prior to the Effective Time of the following additional conditions:
(a) The Parent and Acquisition Co. shall each have performed in all
material respects each of its respective covenants and obligations under this
Agreement required to be performed by it on or prior to the Effective Time
pursuant to the terms hereof.
(b) The representations and warranties of the Parent and Acquisition
Co. contained in this Agreement shall be true and correct in all material
respects, in each case when made and, unless such representation or warranty is
made as of a specific date, at and as of the Effective Time as if made at and as
of such time.
(c) Cascade shall have received a certificate, dated the Closing Date,
of an executive officer of the Parent, to the effect that the conditions
specified in paragraphs (a) and (b) of this Section 7.2 have been fulfilled.
(d) Cascade shall have received the opinion of Torys, special counsel
to the Parent and Acquisition Co., in such form as it may reasonably request.
(e) Parent or Acquisition Co. shall have received sufficient funds to
pay the aggregate Per Share Price and Option Consideration and consummate the
Merger.
7.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARENT AND
ACQUISITION CO. The obligations of the Parent and Acquisition Co. to effect the
Merger are also subject to the fulfillment at or prior to the Effective Time of
the following additional conditions:
(a) Cascade shall have performed in all material respects each of its
covenants and obligations under this Agreement required to be performed by it on
or prior to the Effective Time pursuant to the terms hereof.
(b) The representations and warranties of Cascade contained in this
Agreement shall be true and correct when made and, unless such representation or
warranty is made as of a specific date, at and as of the Effective Time as if
made at and as of such time, except for (i) changes contemplated by this
Agreement and (ii) any failure to be so true and correct which, individually or
with all such other failures, would not have a Material Adverse Effect.
(c) The Parent shall have received a certificate dated the Closing
Date, of an executive officer of Cascade, to the effect that the conditions
specified in paragraphs (a) and (b) of this Section 7.3 have been fulfilled.
(d) The Parent and Acquisition Co. shall each have received the opinion
of Newcomb, Sabin, Schwartz & Landsverk, LLP, counsel to Cascade, in such form
as it may reasonably request.
(e) Parent or Acquisition Co. shall have received at least
$238 million of proceeds under the credit facilities contemplated by the
Commitment Letters for such facilities on terms substantially similar to those
set forth in such Commitment Letters, provided Parent and Acquisition Co. shall
have complied with the provisions of Section 6.2(c).
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ARTICLE 8
CLOSING
8.1 TIME AND PLACE. The Closing shall take place at the offices of Tonkon
Torp LLP, 888 S.W. Fifth Avenue, Suite 1600, Portland, Oregon 97204, at
10:00 a.m., local time on the same Business Day that the condition set forth in
Section 7.1(a) is satisfied or on such other date and at such other time as
Cascade and the Parent agree.
8.2 FILINGS AT THE CLOSING; OTHER ACTIONS. At the Closing, the Parent and
Cascade shall cause the Articles of Merger (and the associated plan of merger)
to be filed and recorded in accordance with the provisions of Section 60.494 of
the OBCA, and shall take any and all other lawful actions and do any and all
other lawful things necessary to cause the Merger to become effective.
ARTICLE 9
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All of the representations and warranties contained in this Agreement or any
representations and warranties contained in any certificate, document or
instrument delivered pursuant to this Agreement shall terminate as of the
Closing. The covenants set forth in Sections 3.5, 6.8 and 6.9 shall survive for
the respective periods set forth therein.
ARTICLE 10
TERMINATION RIGHTS
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual consent of the Parent, Acquisition Co. and Cascade;
(b) by either the Parent, Acquisition Co. or Cascade if the Merger
shall not have been consummated on or before March 31, 2001; provided, however,
that the right to terminate this Agreement shall not be available to any party
whose failure to fulfill any obligation of this Agreement has been the cause of,
or resulted in, the failure of the Merger to have occurred on or before the
aforesaid date;
(c) by the Parent or Acquisition Co., if Cascade shall have materially
breached any of its covenants herein or if Cascade shall have made a
misrepresentation and not cured the same within 15 days of notice of such breach
or misrepresentation, which misrepresentation causes the condition in
Section 7.3(b) not to be satisfied; provided, however, that if an inaccuracy in
any of Cascade's representations and warranties as of a date subsequent to the
date of this Agreement or a breach of a covenant by Cascade is curable and
Cascade is continuing to exercise all reasonable efforts to cure such inaccuracy
or breach, then Parent or Acquisition Co. may not terminate this Agreement under
this Section 10.1 (c) on account of such inaccuracy or breach;
(d) by Cascade, if either the Parent or Acquisition Co. shall have
materially breached any of its covenants herein or if either the Parent or
Acquisition Co. shall have made a misrepresentation herein and not cured the
same within 15 days of notice of such breach or misrepresentation, which
misrepresentation causes the condition in Section 7.2(b) not to be satisfied;
provided, however, that if an inaccuracy in any of Parent's or Acquisition Co.'s
representations and warranties as of a date subsequent to the date of this
Agreement or a breach of a covenant by Parent or Acquisition Co. is curable by
Parent or Acquisition Co. and Parent or Acquisition Co. is continuing to
exercise all reasonable efforts to cure such inaccuracy or breach, then Cascade
may not terminate this Agreement under this Section 10.1(d) on account of such
inaccuracy or breach;
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(e) by either the Parent, Acquisition Co. or Cascade, if (i) any court
of competent jurisdiction or other governmental agency of competent jurisdiction
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger, and such order,
decree, ruling or other action shall have become final and non-appealable or
(ii) if the required vote set forth in Section 7.1(a) hereof shall not have been
obtained at the Cascade Shareholders Meeting or at any adjournment or
postponement thereof;
(f) by the Parent or Acquisition Co., if (i) the Board shall have
withdrawn or modified in a manner materially adverse to the Parent or
Acquisition Co. its approval or recommendation of this Agreement or the Merger
or shall have recommended an Acquisition Proposal with a person or entity other
than the Parent, Acquisition Co. or their Affiliates, or (ii) Cascade shall have
executed a definitive agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than the Parent, Acquisition
Co. or their Affiliates; or
(g) by Cascade, if the Board shall have withdrawn or modified its
approval or recommendation of this Agreement or the Merger in order to permit
Cascade to enter into a definitive agreement with respect to a Superior
Proposal, which is then pending, provided Cascade has complied with the
provisions of Section 6.5.
10.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination and
abandonment of the Merger by the Parent, Acquisition Co. or Cascade pursuant to
Section 10.1 hereof, notice thereof shall forthwith be given to Cascade or the
Parent, respectively, and this Agreement shall terminate and the Merger shall be
abandoned, without further action by any of the parties hereto, except that the
provisions of Sections 6.6, 10.3, 11.4, and 11.7 hereof shall survive such
termination, and Parent or Acquisition Co. shall return to Cascade all
documents, work papers and other materials obtained from Cascade in connection
with the transactions contemplated hereby. If this Agreement is terminated as
provided herein, no party hereto shall have any liability or further obligation
to any other party to this Agreement except as provided in this Section 10.2 and
in Section 10.3; PROVIDED, HOWEVER, any termination shall be without prejudice
to the rights of any party hereto arising out of a breach by any other party of
any covenant, agreement or representation contained in this Agreement.
10.3 EXPENSES; TERMINATION FEE.
(a) Except as set forth in this Section 10.3, each of the Parent and
Acquisition Co., on the one hand, and Cascade, on the other hand, shall be
responsible for the payment of their respective expenses, including legal and
accounting fees, in connection with the preparation, negotiation and closing of
this Agreement and transactions contemplated hereby, except that (i) if the
Parent or Acquisition Co. terminate this Agreement pursuant to Section 10.1(f)
or Cascade terminates pursuant to Section 10.1(g) hereof, or (ii) if Cascade,
the Parent or Acquisition Co. terminate this Agreement pursuant to
Section 10.1(e)(ii) and an Acquisition Proposal shall have been publicly
announced or otherwise communicated to the shareholders of Cascade after the
date of this Agreement and prior to the Cascade Shareholders Meeting and such
Acquisition Proposal shall be consummated within 12 months of the date of
termination of this Agreement, then Cascade shall pay to the Parent, in addition
to its Expenses (as defined in Section 10.3(b)), by wire transfer of immediately
available funds to an account designated by Parent, a fee equal to $7,500,000.
Such payment shall be due in the case of a termination in the circumstances
specified in clause (i) above, within five business days after written notice of
termination and in the case of a termination in the circumstances specified in
clause (ii) above, on the date of consummation of such Acquisition Proposal.
(b) If (i) the Parent or Acquisition Co. terminate this Agreement
pursuant to Section 10.1(f) or Cascade terminates pursuant to Section 10.1(g)
hereof, or (ii) if Cascade, the Parent or Acquisition Co. terminate this
Agreement pursuant to Section 10.1(e)(ii) and at the time of such termination no
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Acquisition Proposal shall be pending, then Cascade shall pay to the Parent all
of the Parent's and Acquisition Co.'s reasonable out-of-pocket expenses and fees
(including without limitation fees and expenses payable to counsel, accountants,
experts and consultants, banks, investment banking firms and other financial
institutions and their respective agents and counsel) actually incurred by the
Parent or Acquisition Co. in connection with the transactions contemplated by
this Agreement and the Merger up to a maximum of $2,500,000 (the "Expenses").
Such payment shall be due within five business days after the Parent or
Acquisition Co. shall have provided Cascade with an itemized statement in
respect of such Expenses, and shall be paid by wire transfer of immediately
available funds to an account designated by Parent.
ARTICLE 11
OTHER PROVISIONS
11.1 AMENDMENT AND MODIFICATION. Subject to Applicable Law, this Agreement
may be amended, modified or supplemented only by mutual written agreement of the
parties hereto.
11.2 BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective,
successors and assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party to this
Agreement without the prior written consent of the other parties hereto.
11.3 NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement shall confer
any rights upon any Person other than the parties hereto and their respective
successors and permitted assigns.
11.4 ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement,
dated as of June 18, 2000, between Cascade and TD Capital Group Limited and the
exhibits and schedules hereto and thereto embody the entire agreement and
understanding of the parties hereto and supersede any and all prior agreements,
arrangements and understandings relating to the matters provided for herein and
therein. No amendment, waiver of compliance with any provision or condition
hereof or consent pursuant to this Agreement shall be effective unless evidenced
by an instrument in writing signed by the party against which enforcement of any
amendment, waiver or consent is sought. Acquisition Co. hereby agrees that any
consent or waiver of compliance given by the Parent hereunder shall be
conclusively binding upon it, whether given expressly on Acquisition Co.'s
behalf or not. Cascade is not making any representation or warranty whatsoever,
express or implied, except the representations and warranties of Cascade
contained in this Agreement, and each of the Parent and Acquisition Co.
acknowledges and agrees that it has not relied on or been induced to enter into
this Agreement by any representation or warranty of Cascade (or any Cascade
Subsidiary) other than those expressly set forth in this Agreement.
11.5 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
11.6 CHOICE OF LAW. The construction and performance of this Agreement
shall be governed by the substantive laws of the State of Oregon without regard
to its principles of conflict of laws, and the state and federal courts of
Oregon shall have exclusive jurisdiction over any controversy or claim arising
out of or relating to this Agreement.
11.7 NOTICES. All notices, requests, demands, letters, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been
A-27
<PAGE>
duly given if (a) delivered personally, (b) mailed, certified or registered mail
with postage prepaid, (c) sent by next-day or overnight mail or delivery or
(d) sent by facsimile, as follows:
(a) If to the Parent or Acquisition Co., to them at:
with copies to:
Torys
237 Park Avenue
New York, New York 10017-3142
Facsimile: (212) 682-0200
Attention: Andrew J. Beck, Esq.
(b) If to Cascade, to it at:
Cascade Corporation
2201 NE 201st Avenue
Fairview, Oregon 97204-9718
Facsimile: (503) 669-6718
Attention: Chief Executive Officer
with copies to:
Tonkon Torp LLP
888 SW 5th Avenue, Suite 1600
Portland, Oregon 97204
Facsimile: (503) 972-3704
Attention: Brian G. Booth, Esq.
Thomas P. Palmer, Esq.
and
Newcomb, Sabin, Schwartz & Landsverk, LLP
111 SW 5th Avenue, Suite 4040
Portland, Oregon 97204
Attention: Jack B. Schwartz, Esq.
or to such other Person or address as any party shall specify by notice in
writing to the party entitled to notice. All such notices, requests, demands,
letters, waivers and other communications shall be deemed to have been received
(w) if by personal delivery on the day after such delivery, (x) if by certified
or registered mail, on the fifth Business Day after the mailing thereof, (y) if
by next-day or overnight mail or delivery, on the day delivered or (z) if by
facsimile, on the next day following the day on which such facsimile was sent,
provided that a copy is also sent by certified or registered mail.
11.8 SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permitted under
Applicable Law. Accordingly, in the event that any provision of this Agreement
would be held in any jurisdiction to be invalid, prohibited or unenforceable for
any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, so as to such jurisdiction, be so narrowly drawn, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
A-28
<PAGE>
11.9 EXTENSIONS AND WAIVERS. At any time prior to the Effective Time, the
parties, by action taken or authorized by their respective boards of directors
may, to the extent permitted under Applicable Law, (a) extend the time for the
performance of any of the covenants, obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
11.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
11.11 SCHEDULES. The Schedules to this Agreement shall be arranged in
separate parts corresponding to the Sections of this Agreement, and the
information disclosed in any Schedule shall be deemed to relate to and to
qualify only the particular representation, warranty or covenant set forth in
the corresponding Section, and any other representation, warranty or covenant to
which the relevance of the information in the Schedule is reasonably apparent.
Any and all statements or disclosures set forth in the Schedules shall be deemed
to have been made on and as of the date of this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
A-29
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
<TABLE>
<S> <C> <C>
CASCADE ACQUISITION CORP.
By: /s/ STEPHEN J. DENT
-----------------------------------------
Name: Stephen J. Dent
Title: Vice President
CASCADE--II ACQUISITION CORP.
By: /s/ STEPHEN J. DENT
-----------------------------------------
Name: Stephen J. Dent
Title: Vice President
CAS ACQUISITION CORP.
By: /s/ STEPHEN J. DENT
-----------------------------------------
Name: Stephen J. Dent
Title: Vice President
CASCADE CORPORATION
By: /s/ JAMES S. OSTERMAN
-----------------------------------------
Name: James S. Osterman
Title: Chair of the Special Committee
of the Board of Directors
</TABLE>
A-30
<PAGE>
APPENDIX B
VOTING AGREEMENT
THIS VOTING AGREEMENT is entered into as of October 18, 2000, by and between
CASCADE CORPORATION, an Oregon corporation ("Cascade"), and William J. Harrison
("Shareholder").
RECITALS
A. Cascade Acquisition Corp., a Delaware corporation ("CAC-I"), Cascade--II
Acquisition Corp., a Delaware corporation ("CAC-II," and together with CAC-I,
the "Parent"), CAS Acquisition Corp., an Oregon corporation and an indirect
wholly-owned subsidiary of Parent ("Acquisition Co."), and Cascade are entering
into an Agreement and Plan of Merger of even date herewith (the "Merger
Agreement") which provides (subject to the conditions set forth therein) for the
merger of Acquisition Co. with and into Cascade (the "Merger").
B. In order to induce Cascade to enter into the Merger Agreement,
Shareholder is entering into this Voting Agreement.
AGREEMENT
The parties to this Voting Agreement, intending to be legally bound, agree
as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Voting Agreement:
1.1 "Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
1.2 "Exchangeable Shares" means the exchangeable shares of Cascade
(Canada) Ltd. (formerly Cascade (Canada) Holdings Inc.) issued pursuant to the
Share Purchase Agreement dated March 11, 1997 among Couphar Ltd.,
Balyrobe Ltd., 879185 Ontario Inc., 568745 Ontario, Inc. James E. Britton (in
trust), Penfund Partners and Company, Bantor Company, W.J. Harrison and Cascade
(Canada) Holdings Inc. and Cascade.
1.3 "Expiration Date" shall mean the earlier of (i) the date upon which the
Merger Agreement is validly terminated or (ii) the date upon which the Merger
becomes effective.
1.4 Shareholder shall be deemed to "Own" or to have acquired "Ownership" of
a security if Shareholder: (i) is the record owner of such security; or (ii) is
the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of such security.
1.5 "Person" shall mean any (i) individual, (ii) corporation, limited
liability company, partnership or other entity or (iii) governmental authority.
1.6 "Subject Securities" shall mean: (i) the Exchangeable Shares and all
securities of Cascade (including all shares of Cascade capital stock and all
options, warrants, and other rights to acquire shares of Cascade capital stock)
Owned by Shareholder as of the date of this Agreement; and (ii) all additional
securities of Cascade (including all additional shares of Cascade capital stock
and all additional options, warrants, convertible notes and other rights to
acquire shares of Cascade capital stock) of which Shareholder acquires Ownership
during the period from the date of this Agreement through the Expiration Date.
B-1
<PAGE>
1.7 A Person shall be deemed to have a effected a "Transfer" of a security
if such Person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security; or (ii) enters into an agreement or commitment contemplating
the possible sale of, pledge of, encumbrance of, grant of an option with respect
to, transfer of or disposition of such security or any interest therein.
ARTICLE 2
TRANSFER OF SUBJECT SECURITIES
2.1. RESTRICTION ON TRANSFER. Shareholder agrees that, during the period
from the date of this Voting Agreement through the Expiration Date, Shareholder
shall not cause or permit any Transfer of any of the Subject Securities to be
effected, other than to an Affiliate of Shareholder (or to the Parent or
Acquisition Co.) who shall have: (a) executed a counterpart of this Voting
Agreement and a proxy in the form attached hereto as Exhibit A; and (b) agreed
to hold such Subject Securities (or interest in such Subject Securities) subject
to all of the terms and provisions of this Voting Agreement.
2.2 TRANSFER OF VOTING RIGHTS. Shareholder agrees that, during the period
from the date of this Voting Agreement through the Expiration Date, except as
provided in this Voting Agreement, Shareholder shall ensure that: (a) none of
the Subject Securities is deposited into a voting trust; and (b) no proxy is
granted, and no voting agreement or similar agreement is entered into, with
respect to any of the Subject Securities.
ARTICLE 3
VOTING OF SHARES
3.1 VOTING AGREEMENT. Shareholder agrees that, during the period from the
date of this Voting Agreement through the Expiration Date, at any meeting of
shareholders of Cascade, however called, and in any written action by consent of
shareholders of Cascade, Shareholder shall (unless otherwise directed in writing
by Cascade) cause the Exchangeable Shares and all outstanding shares of Cascade
capital stock that are Owned by Shareholder as of the record date fixed for such
meeting or written consent to be voted in favor of the approval and adoption of
the Merger Agreement and the approval of the Merger on the terms and subject to
the conditions set forth therein, and in favor of each of the other actions
contemplated by the Merger Agreement. Shareholder shall not enter into any
agreement or understanding with any Person prior to the earlier to occur of the
valid termination of the Merger Agreement or the effective time of the Merger to
vote or give instructions in any manner inconsistent with the preceding
sentence.
3.2 PROXY, LETTER OF INSTRUCTIONS, ETC. Contemporaneously with the
execution of this Voting Agreement, Shareholder shall deliver to Cascade an
executed proxy, letter of instructions or other voting instrument reasonably
acceptable to Cascade, which shall be irrevocable to the fullest extent
permitted by law, to give effect to this Voting Agreement.
3.3 FURTHER ASSURANCES. Shareholder shall perform such further acts and
execute such further documents and instruments as may reasonably be required to
vest in Cascade the power to carry out and give effect to the provisions of this
Voting Agreement.
ARTICLE 4
WAIVER OF APPRAISAL RIGHTS
Shareholder hereby irrevocably and unconditionally waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal, any
dissenters' rights and any similar rights relating to the Merger or any related
transaction that Shareholder or any other Person may have by virtue of
B-2
<PAGE>
the ownership of the Exchangeable Shares and any outstanding shares of Cascade
capital stock Owned by Shareholder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder hereby represents and warrants to Cascade as follows:
5.1 AUTHORIZATION, ETC. Shareholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Voting
Agreement and the Proxy and to perform his obligations hereunder and thereunder.
This Voting Agreement and the Proxy have been duly executed and delivered by
Shareholder and constitute legal, valid and binding obligations of Shareholder,
enforceable against Shareholder in accordance with their terms, subject to
(a) laws of general application relating to bankruptcy, insolvency and the
relief of debtors and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.
5.2 NO CONFLICTS OR CONSENTS. The execution and delivery of this Voting
Agreement and the Proxy by Shareholder do not, and the performance of this
Voting Agreement and the Proxy by Shareholder will not: (a) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to
Shareholder or by which he or any of his properties is or may be bound or
affected; or (b) result in or constitute (with or without notice or lapse of
time) any breach of or default under, or give to any other Person (with or
without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse of
time) in the creation of any encumbrance or restriction on any of the Subject
Securities pursuant to any contract (other than this Voting Agreement and the
Proxy) to which Shareholder is a party or by which Shareholder or any of his
Affiliates or properties is or may be bound or affected. The execution and
delivery of this Voting Agreement and the Proxy by Shareholder do not, and the
performance of this Voting Agreement and the Proxy by Shareholder will not,
require any consent or approval of any Person.
5.3 TITLE TO SECURITIES. As of the date of this Voting Agreement,
Shareholder holds (free and clear of any encumbrances or restrictions): (a) the
number of Exchangeable Shares set forth under the heading "Exchangeable Shares"
on the signature page hereof; (b) the number of outstanding shares of Cascade
capital stock set forth under the heading "Shares Held of Record" on the
signature page hereof; (c) the options, warrants and other rights to acquire
shares of Cascade capital stock set forth under the heading "Options and Other
Rights" on the signature page hereof; and (d) the additional securities of
Cascade set forth under the heading "Additional Securities Beneficially Owned"
on the signature page hereof; and Shareholder does not directly or indirectly
Own any Exchangeable Shares or any shares of capital stock or other securities
of Cascade, or any option, warrant or other right to acquire (by purchase,
conversion or otherwise) any shares of capital stock or other securities of
Cascade, other than the shares and options, warrants and other rights set forth
on the signature page hereof.
ARTICLE 6
COVENANT OF SHAREHOLDER
From time to time and without additional consideration, Shareholder shall
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall take such further actions, as Cascade may reasonably request for the
purpose of carrying out and furthering the intent of this Voting Agreement.
B-3
<PAGE>
ARTICLE 7
MISCELLANEOUS
7.1 NOTICES. Any notice or other communication required or permitted to be
delivered to either party under this Voting Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other party):
if to Shareholder:
at the address set forth below Shareholder's signature on the signature
page hereof
with copies to:
Aird & Berlis
BCE Place
Box 754
1800-181 Bay Street
Toronto, Ontario
M5J 2T9
Facsimile: (416) 863-1515
Attention: Phil Dawson, Esq.
and
Torys
237 Park Avenue
New York, New York 10017-3142
Facsimile: (212) 682-0200
Attention: Andrew J. Beck, Esq.
If to Cascade, to it at:
Cascade Corporation
2201 NE 201st Avenue
Fairview, Oregon 97204-9718
Facsimile: (503) 669-6718
Attention: Chief Executive Officer
with copies to:
Tonkon Torp LLP
888 SW 5th Avenue, Suite 1600
Portland, Oregon 97204
Facsimile: (503) 972-3704
Attention: Brian G. Booth, Esq.
Thomas P. Palmer, Esq.
and
Newcomb, Sabin, Schwartz & Landsverk, LLP
111 SW 5th Avenue, Suite 4040
Portland, Oregon 97204
Attention: Jack B. Schwartz, Esq.
B-4
<PAGE>
7.2 ENTIRE AGREEMENT. This Voting Agreement, the Proxy and any other
documents delivered by the parties in connection herewith constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings between the
parties with respect thereto. No addition to or modification of any provision of
this Voting Agreement shall be binding upon either party unless made in writing
and signed by both parties.
7.3 SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Voting Agreement or the
Proxy was not performed in accordance with its specific terms or was otherwise
breached. Shareholder agrees that, in the event of any breach or threatened
breach by Shareholder of any covenant or obligation contained in this Voting
Agreement or in the Proxy, Cascade shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (a) a decree or order of specific performance to enforce the observance
and performance of such covenant or obligation and (b) an injunction restraining
such breach or threatened breach. Shareholder further agrees that neither
Cascade nor any other Person shall be required to obtain, furnish or post any
bond or similar instrument in connection with or as a condition to obtaining any
remedy referred to in this Section 7.3, and Shareholder irrevocably waives any
right he may have to require the obtaining, furnishing or posting of any such
bond or similar instrument.
7.4 GOVERNING LAW; VENUE.
(a) This Voting Agreement and the Proxy shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Oregon (without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this Voting
Agreement or the Proxy or the enforcement of any provision of this Voting
Agreement or the Proxy may be brought or otherwise commenced in any state or
federal court located in the State of Oregon. Shareholder:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the State of
Oregon (and each appellate court located in the State of Oregon), in
connection with any such legal proceeding;
(ii) agrees that service of any process, summons, notice or document
by U.S. mail addressed to him at the address set forth in Section 7.1
shall constitute effective service of such process, summons, notice or
document for purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in the State
of Oregon shall be deemed to be a convenient forum; and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or
federal court located in the State of Oregon, any claim that Shareholder
is not subject personally to the jurisdiction of such court, that such
legal proceeding has been brought in an inconvenient forum, that the
venue of such proceeding is improper or that this Voting Agreement or the
subject matter of this Voting Agreement may not be enforced in or by such
court.
(c) SHAREHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS VOTING AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.
B-5
<PAGE>
7.5 COUNTERPARTS. This Voting Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
7.6 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Voting Agreement or the enforcement of any provision of this
Voting Agreement is brought against Shareholder, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).
B-6
<PAGE>
IN WITNESS WHEREOF, Cascade and Shareholder have caused this Voting
Agreement to be executed as of the date first written above.
<TABLE>
<S> <C> <C>
CASCADE CORPORATION
By: /s/ ROBERT C. WARREN, JR.
------------------------------------
Name: Robert C. Warren, Jr.
-----------------------------------
Title: Chief Executive Officer
------------------------------------
SHAREHOLDER
By: /s/ WILLIAM J. HARRISON
------------------------------------
William J. Harrison
Address:
-----------------------------
-----------------------------
-----------------------------
Facsimile:
----------------------------
EXCHANGEABLE SHARES: 800,000*
-------------------------
SHARES HELD OF RECORD: 10,000
----------------------
OPTIONS AND OTHER RIGHTS: 0
--------------------
ADDITIONAL SECURITIES BENEFICIALLY OWNED: 0
-----
*SHARES HELD OF RECORD BY W.J. HARRISON HOLDINGS LTD.
</TABLE>
B-7
<PAGE>
APPENDIX C
VOTING AGREEMENT
THIS VOTING AGREEMENT is entered into as of October 18, 2000, by and between
CASCADE CORPORATION, an Oregon corporation ("Cascade"), and W. J. Harrison
Holdings Ltd. ("Shareholder").
RECITALS
A. Cascade Acquisition Corp., a Delaware corporation ("CAC-I"), Cascade--II
Acquisition Corp., a Delaware corporation ("CAC-II," and together with CAC-I,
the "Parent"), CAS Acquisition Corp., an Oregon corporation and an indirect
wholly-owned subsidiary of Parent ("Acquisition Co."), and Cascade are entering
into an Agreement and Plan of Merger of even date herewith (the "Merger
Agreement") which provides (subject to the conditions set forth therein) for the
merger of Acquisition Co. with and into Cascade (the "Merger").
B. In order to induce Cascade to enter into the Merger Agreement,
Shareholder is entering into this Voting Agreement.
AGREEMENT
The parties to this Voting Agreement, intending to be legally bound, agree
as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Voting Agreement:
1.1 "Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
1.2 "Exchangeable Shares" means the exchangeable shares of Cascade
(Canada) Ltd. (formerly Cascade (Canada) Holdings Inc.) issued pursuant to the
Share Purchase Agreement dated March 11, 1997 among Couphar Ltd.,
Balyrobe Ltd., 879185 Ontario Inc., 568745 Ontario, Inc. James E. Britton (in
trust), Penfund Partners and Company, Bantor Company, W.J. Harrison and Cascade
(Canada) Holdings Inc. and Cascade.
1.3 "Expiration Date" shall mean the earlier of (i) the date upon which the
Merger Agreement is validly terminated or (ii) the date upon which the Merger
becomes effective.
1.4 Shareholder shall be deemed to "Own" or to have acquired "Ownership" of
a security if Shareholder: (i) is the record owner of such security; or (ii) is
the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of such security.
1.5 "Person" shall mean any (i) individual, (ii) corporation, limited
liability company, partnership or other entity or (iii) governmental authority.
1.6 "Subject Securities" shall mean: (i) the Exchangeable Shares and all
securities of Cascade (including all shares of Cascade capital stock and all
options, warrants, and other rights to acquire shares of Cascade capital stock)
Owned by Shareholder as of the date of this Agreement; and (ii) all additional
securities of Cascade (including all additional shares of Cascade capital stock
and all additional options, warrants, convertible notes and other rights to
acquire shares of Cascade capital stock) of which Shareholder acquires Ownership
during the period from the date of this Agreement through the Expiration Date.
C-1
<PAGE>
1.7 A Person shall be deemed to have a effected a "Transfer" of a security
if such Person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security; or (ii) enters into an agreement or commitment contemplating
the possible sale of, pledge of, encumbrance of, grant of an option with respect
to, transfer of or disposition of such security or any interest therein.
ARTICLE 2
TRANSFER OF SUBJECT SECURITIES
2.1. RESTRICTION ON TRANSFER. Shareholder agrees that, during the period
from the date of this Voting Agreement through the Expiration Date, Shareholder
shall not cause or permit any Transfer of any of the Subject Securities to be
effected, other than to an Affiliate of Shareholder (or to the Parent or
Acquisition Co.) who shall have: (a) executed a counterpart of this Voting
Agreement and a proxy in the form attached hereto as Exhibit A; and (b) agreed
to hold such Subject Securities (or interest in such Subject Securities) subject
to all of the terms and provisions of this Voting Agreement.
2.2 TRANSFER OF VOTING RIGHTS. Shareholder agrees that, during the period
from the date of this Voting Agreement through the Expiration Date, except as
provided in this Voting Agreement, Shareholder shall ensure that: (a) none of
the Subject Securities is deposited into a voting trust; and (b) no proxy is
granted, and no voting agreement or similar agreement is entered into, with
respect to any of the Subject Securities.
ARTICLE 3
VOTING OF SHARES
3.1 VOTING AGREEMENT. Shareholder agrees that, during the period from the
date of this Voting Agreement through the Expiration Date, at any meeting of
shareholders of Cascade, however called, and in any written action by consent of
shareholders of Cascade, Shareholder shall (unless otherwise directed in writing
by Cascade) cause the Exchangeable Shares and all outstanding shares of Cascade
capital stock that are Owned by Shareholder as of the record date fixed for such
meeting or written consent to be voted in favor of the approval and adoption of
the Merger Agreement and the approval of the Merger on the terms and subject to
the conditions set forth therein, and in favor of each of the other actions
contemplated by the Merger Agreement. Shareholder shall not enter into any
agreement or understanding with any Person prior to the earlier to occur of the
valid termination of the Merger Agreement or the effective time of the Merger to
vote or give instructions in any manner inconsistent with the preceding
sentence.
3.2 PROXY, LETTER OF INSTRUCTIONS, ETC. Contemporaneously with the
execution of this Voting Agreement, Shareholder shall deliver to Cascade an
executed proxy, letter of instructions or other voting instrument reasonably
acceptable to Cascade, which shall be irrevocable to the fullest extent
permitted by law, to give effect to this Voting Agreement.
3.3 FURTHER ASSURANCES. Shareholder shall perform such further acts and
execute such further documents and instruments as may reasonably be required to
vest in Cascade the power to carry out and give effect to the provisions of this
Voting Agreement.
ARTICLE 4
WAIVER OF APPRAISAL RIGHTS
Shareholder hereby irrevocably and unconditionally waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal, any
dissenters' rights and any similar rights relating to the Merger or any related
transaction that Shareholder or any other Person may have by virtue of
C-2
<PAGE>
the ownership of the Exchangeable Shares and any outstanding shares of Cascade
capital stock Owned by Shareholder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder hereby represents and warrants to Cascade as follows:
5.1 AUTHORIZATION, ETC. Shareholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Voting
Agreement and the Proxy and to perform his obligations hereunder and thereunder.
This Voting Agreement and the Proxy have been duly executed and delivered by
Shareholder and constitute legal, valid and binding obligations of Shareholder,
enforceable against Shareholder in accordance with their terms, subject to
(a) laws of general application relating to bankruptcy, insolvency and the
relief of debtors and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.
5.2 NO CONFLICTS OR CONSENTS. The execution and delivery of this Voting
Agreement and the Proxy by Shareholder do not, and the performance of this
Voting Agreement and the Proxy by Shareholder will not: (a) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to
Shareholder or by which he or any of his properties is or may be bound or
affected; or (b) result in or constitute (with or without notice or lapse of
time) any breach of or default under, or give to any other Person (with or
without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse of
time) in the creation of any encumbrance or restriction on any of the Subject
Securities pursuant to any contract (other than this Voting Agreement and the
Proxy) to which Shareholder is a party or by which Shareholder or any of his
Affiliates or properties is or may be bound or affected. The execution and
delivery of this Voting Agreement and the Proxy by Shareholder do not, and the
performance of this Voting Agreement and the Proxy by Shareholder will not,
require any consent or approval of any Person.
5.3 TITLE TO SECURITIES. As of the date of this Voting Agreement,
Shareholder holds (free and clear of any encumbrances or restrictions): (a) the
number of Exchangeable Shares set forth under the heading "Exchangeable Shares"
on the signature page hereof; (b) the number of outstanding shares of Cascade
capital stock set forth under the heading "Shares Held of Record" on the
signature page hereof; (c) the options, warrants and other rights to acquire
shares of Cascade capital stock set forth under the heading "Options and Other
Rights" on the signature page hereof; and (d) the additional securities of
Cascade set forth under the heading "Additional Securities Beneficially Owned"
on the signature page hereof; and Shareholder does not directly or indirectly
Own any Exchangeable Shares or any shares of capital stock or other securities
of Cascade, or any option, warrant or other right to acquire (by purchase,
conversion or otherwise) any shares of capital stock or other securities of
Cascade, other than the shares and options, warrants and other rights set forth
on the signature page hereof.
ARTICLE 6
COVENANT OF SHAREHOLDER
From time to time and without additional consideration, Shareholder shall
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall take such further actions, as Cascade may reasonably request for the
purpose of carrying out and furthering the intent of this Voting Agreement.
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<PAGE>
ARTICLE 7
MISCELLANEOUS
7.1 NOTICES. Any notice or other communication required or permitted to be
delivered to either party under this Voting Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other party):
if to Shareholder:
at the address set forth below Shareholder's signature on the signature
page hereof
with copies to:
Aird & Berlis
BCE Place
Box 754
1800-181 Bay Street
Toronto, Ontario
M5J 2T9
Facsimile: (416) 863-1515
Attention: Phil Dawson, Esq.
and
Torys
237 Park Avenue
New York, New York 10017-3142
Facsimile: (212) 682-0200
Attention: Andrew J. Beck, Esq.
If to Cascade, to it at:
Cascade Corporation
2201 NE 201st Avenue
Fairview, Oregon 97204-9718
Facsimile: (503) 669-6718
Attention: Chief Executive Officer
with copies to:
Tonkon Torp LLP
888 SW 5th Avenue, Suite 1600
Portland, Oregon 97204
Facsimile: (503) 972-3704
Attention: Brian G. Booth, Esq.
Thomas P. Palmer, Esq.
and
Newcomb, Sabin, Schwartz & Landsverk, LLP
111 SW 5th Avenue, Suite 4040
Portland, Oregon 97204
Attention: Jack B. Schwartz, Esq.
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<PAGE>
7.2 ENTIRE AGREEMENT. This Voting Agreement, the Proxy and any other
documents delivered by the parties in connection herewith constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings between the
parties with respect thereto. No addition to or modification of any provision of
this Voting Agreement shall be binding upon either party unless made in writing
and signed by both parties.
7.3 SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Voting Agreement or the
Proxy was not performed in accordance with its specific terms or was otherwise
breached. Shareholder agrees that, in the event of any breach or threatened
breach by Shareholder of any covenant or obligation contained in this Voting
Agreement or in the Proxy, Cascade shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (a) a decree or order of specific performance to enforce the observance
and performance of such covenant or obligation and (b) an injunction restraining
such breach or threatened breach. Shareholder further agrees that neither
Cascade nor any other Person shall be required to obtain, furnish or post any
bond or similar instrument in connection with or as a condition to obtaining any
remedy referred to in this Section 7.3, and Shareholder irrevocably waives any
right he may have to require the obtaining, furnishing or posting of any such
bond or similar instrument.
7.4 GOVERNING LAW; VENUE.
(a) This Voting Agreement and the Proxy shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Oregon (without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this Voting
Agreement or the Proxy or the enforcement of any provision of this Voting
Agreement or the Proxy may be brought or otherwise commenced in any state or
federal court located in the State of Oregon. Shareholder:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the State of
Oregon (and each appellate court located in the State of Oregon), in
connection with any such legal proceeding;
(ii) agrees that service of any process, summons, notice or document
by U.S. mail addressed to him at the address set forth in Section 7.1
shall constitute effective service of such process, summons, notice or
document for purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in the State
of Oregon shall be deemed to be a convenient forum; and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or
federal court located in the State of Oregon, any claim that Shareholder
is not subject personally to the jurisdiction of such court, that such
legal proceeding has been brought in an inconvenient forum, that the
venue of such proceeding is improper or that this Voting Agreement or the
subject matter of this Voting Agreement may not be enforced in or by such
court.
(c) SHAREHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS VOTING AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.
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7.5 COUNTERPARTS. This Voting Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
7.6 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Voting Agreement or the enforcement of any provision of this
Voting Agreement is brought against Shareholder, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).
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<PAGE>
IN WITNESS WHEREOF, Cascade and Shareholder have caused this Voting
Agreement to be executed as of the date first written above.
<TABLE>
<S> <C> <C>
CASCADE CORPORATION
By: /s/ ROBERT C. WARREN, JR.
-----------------------------------------
Name: Robert C. Warren, Jr.
------------------------------------
Title: Chief Executive Officer
-------------------------------------
SHAREHOLDER
W.J. HARRISON HOLDINGS LTD.
By: /s/ WILLIAM J. HARRISON
-----------------------------------------
William J. Harrison
President
Address:
----------------------------------
----------------------------------
----------------------------------
Facsimile:
---------------------------------
Exchangeable shares: 800,000
-----------------------
Shares Held of Record: 0
---------------------
Options and Other Rights: 0
------------------
Additional Securities Beneficially Owned: 0
-----
</TABLE>
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<PAGE>
APPENDIX D
Gleacher & Co.
Gleacher & Co. Inc.
660 Madison Avenue
New York, NY 10021
October 18, 2000
Board of Directors
Cascade Corporation
2201 N.E. 201st Avenue
Fairview, OR 97024
Gentlemen and Madam:
We understand that Cascade Corporation ("Cascade" or the "Company") proposes to
enter into an Agreement and Plan of Merger, dated as of October 18, 2000 (the
"Merger Agreement"), with Cascade Acquisition Corp., Cascade-II Acquisition
Corp. (collectively, "Parent") and CAS Acquisition Corp. ("Acquisition Co.").
The Merger Agreement provides, among other things, for the merger (the "Merger")
of Acquisition Co. with and into Cascade, with Cascade as the surviving
corporation of the Merger. Pursuant to the Merger, each issued and outstanding
share of common stock, par value $.50 per share (the "Common Stock"), of Cascade
(other than shares held in treasury and shares held by Parent and its
affiliates, including shares issuable upon the exchange or conversion of
outstanding exchangeable preferred shares) will be converted into the right to
receive $17.25 per share in cash (the "Consideration"). The terms and conditions
of the Merger and the transactions to be entered into in connection therewith
are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the Consideration is fair, from a
financial point of view, to the Company's shareholders (other than Parent and
its affiliates).
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements (including budgeted
financial statements for the fiscal year ending January 31, 2001) and
other financial and operating data concerning the Company prepared by the
management of the Company;
(iii) analyzed certain financial projections prepared with the assistance of the
management of the Company, which projections the Company's management has
represented to us are consistent with its best judgments as to the future
performance of the Company and constitute the best currently available
projections of the Company's management with respect to such future
financial performance of the Company;
(iv) discussed the past and current operations and financial condition and the
prospects of the Company with senior executives of the Company;
(v) reviewed the reported prices and trading activity for the Common Stock;
(vi) compared the financial performance of the Company and the prices and
trading activity of the Common Stock with those of certain other publicly
traded companies that we deemed relevant;
(vii) reviewed the financial terms, to the extent publicly available, of certain
acquisition transactions that we deemed relevant;
(viii) participated in discussions and negotiations among representatives of the
Company and Parent;
D-1
<PAGE>
Board of Directors
Cascade Corporation
October 18, 2000
Page 2
(ix) reviewed a draft of the Merger Agreement and certain related documents;
and
(x) performed such other analyses and considered such other factors as we have
deemed appropriate.
We have assumed and relied upon, without assuming responsibility for independent
verification, the accuracy and completeness of the financial and other
information reviewed by us for the purposes of this opinion. With respect to the
budgeted financial statements supplied to us and the financial projections, with
your consent, we have relied upon the representations and assumed that they have
been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the senior management of the Company as to the future
financial performance of the Company. We assume no responsibility for and
express no view as to such forecasts or the assumptions on which they are based,
and we have relied upon the assurances of the senior management of the Company
that they are unaware of any facts that would make the information provided to
or reviewed by us incomplete or misleading. We have not made any independent
valuation or appraisal of the assets or liabilities of the Company, nor have we
been furnished with any such valuations or appraisals. We have also assumed that
the Merger will be consummated in accordance with the terms set forth in the
draft Merger Agreement provided to us and that all of the representations and
warranties of the parties to such Merger Agreement are true, that the covenants
of each party to such Merger Agreement will be fully complied with, and that all
conditions to the Merger set forth in such Merger Agreement will be satisfied
and not waived. We have relied as to certain legal matters on advice of counsel
to the Special Committee of the Board of Directors of the Company.
We note that the proposed Merger follows a publicly announced process in which
we broadly solicited proposals for business combination transactions involving
the Company. We have considered the results of such process in rendering our
opinion.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof. It
should be understood that, although subsequent developments may affect the
conclusion reached in this opinion, we do not have any obligation to update,
revise or reaffirm this opinion.
Our opinion addresses only the fairness from a financial point of view of the
Consideration to be received by the shareholders of the Company (other than
Parent and its affiliates), and we do not express any view as to any other term
of the proposed Merger or the transactions contemplated by the Merger Agreement.
Our opinion does not address the Company's underlying business decision to
effect the transactions contemplated by the Merger Agreement.
We have acted as financial advisor to the Special Committee of the Board of
Directors of Cascade in connection with this transaction and will receive a fee
for our services, which will be paid only upon the consummation of the Merger.
In addition, the Company has agreed to indemnify us for certain liabilities
arising out of our engagement. Our advisory services and the opinion expressed
herein are provided for the information and assistance of the Board of Directors
of the Company in connection with its consideration of the Merger and the
transactions contemplated by the Merger Agreement and such opinion does not
constitute a recommendation as to whether the Company should engage in the
Merger and the transactions contemplated by the Merger Agreement or how any
shareholder of the Company should vote with respect to the Merger and the other
transactions contemplated by the Merger Agreement.
D-2
<PAGE>
Board of Directors
Cascade Corporation
October 18, 2000
Page 3
It is understood that this letter and any advice or materials provided by
Gleacher & Co. in connection with its engagement by the Special Committee are
for the information of the Board of Directors of Cascade, and the Company agrees
that no such opinion, advice or material shall be used for any other purpose or
be reproduced, disseminated, quoted or referred to at any time, in any manner or
for any purpose, nor shall any public references to Gleacher & Co. be made by or
on behalf of the Company, in each case without the prior written consent of
Gleacher & Co.
Based upon and subject to the foregoing, and such other matters as we consider
relevant, we are of the opinion that, as of the date hereof, the Consideration
is fair, from a financial point of view, to the Company's shareholders (other
than Parent and its affiliates).
<TABLE>
<S> <C> <C>
Very truly yours,
GLEACHER & CO. LLC
By: /s/ H. CONRAD MEYER III
------------------------------------
H. Conrad Meyer III
MANAGING DIRECTOR
</TABLE>
D-3
<PAGE>
APPENDIX E
OREGON DISSENTERS' RIGHTS STATUTE
(RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES)
60.551 DEFINITIONS FOR 60.551 TO 60.594. As used in ORS 60.551 to 60.594:
(1) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under ORS 60.554 and who exercises that right when and in the
manner required by ORS 60.561 to 60.587.
(4) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder. [1987 c.52 s.124; 1989 c.1040 s.30]
60.554 RIGHT TO DISSENT. (1) Subject to subsection (2) of this section, a
shareholder is entitled to dissent from, and obtain payment of the fair value of
the shareholder's shares in the event of, any of the following corporate acts:
(a) Consummation of a plan of merger to which the corporation is a party if
shareholder approval is required for the merger by ORS 60.487 or the articles of
incorporation and the shareholder is entitled to vote on the merger or if the
corporation is a subsidiary that is merged with its parent under ORS 60.491;
(b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;
(c) Consummation of a sale or exchange of all or substantially all of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
year after the date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preemptive right of the holder of the shares to
acquire shares or other securities; or
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(B) Reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under ORS
60.141;
(e) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares; or
(f) Conversion to a noncorporate business entity pursuant to ORS 60.472.
(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under ORS 60.551 to 60.594 may not challenge the corporate
action creating the shareholder's entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
(3) Dissenters' rights shall not apply to the holders of shares of any class
or series if the shares of the class or series were registered on a national
securities exchange or quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System as a National Market System issue on
the record date for the meeting of shareholders at which the corporate action
described in subsection (1) of this section is to be approved or on the date a
copy or summary of the plan of merger is mailed to shareholders under ORS
60.491, unless the articles of incorporation otherwise provide. [1987 c.52
s.125; 1989 c.1040 s.31; 1993 c.403 s.9; 1999 c.362 s.15]
60.557 DISSENT BY NOMINEES AND BENEFICIAL OWNERS. (1) A record shareholder
may assert dissenters' rights as to fewer than all the shares registered in the
shareholder's name only if the shareholder dissents with respect to all shares
beneficially owned by any one person and notifies the corporation in writing of
the name and address of each person on whose behalf the shareholder asserts
dissenters' rights. The rights of a partial dissenter under this subsection are
determined as if the shares regarding which the shareholder dissents and the
shareholder's other shares were registered in the names of different
shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares held
on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder does so with respect to all shares of which
such shareholder is the beneficial shareholder or over which such shareholder
has power to direct the vote. [1987 c.52 s.126]
(PROCEDURE FOR EXERCISE OF RIGHTS)
60.561 NOTICE OF DISSENTERS' RIGHTS. (1) If proposed corporate action
creating dissenters' rights under ORS 60.554 is submitted to a vote at a
shareholders' meeting, the meeting notice must state that shareholders are or
may be entitled to assert dissenters' rights under ORS 60.551 to 60.594 and be
accompanied by a copy of ORS 60.551 to 60.594.
(2) If corporate action creating dissenters' rights under ORS 60.554 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send the shareholders entitled to assert dissenters' rights the dissenters'
notice described in ORS 60.567. [1987 c.52 s.127]
60.564 NOTICE OF INTENT TO DEMAND PAYMENT. (1) If proposed corporate action
creating dissenters' rights under ORS 60.554 is submitted to a vote at a
shareholders' meeting, a shareholder who wishes to assert dissenters' rights
shall deliver to the corporation before the vote is taken written notice of the
shareholder's intent to demand payment for the shareholder's shares if the
proposed action is effectuated and shall not vote such shares in favor of the
proposed action.
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(2) A shareholder who does not satisfy the requirements of subsection
(1) of this section is not entitled to payment for the shareholder's shares
under this chapter. [1987 c.52 s.128]
60.567 DISSENTERS' NOTICE. (1) If proposed corporate action creating
dissenters' rights under ORS 60.554 is authorized at a shareholders' meeting,
the corporation shall deliver a written dissenters' notice to all shareholders
who satisfied the requirements of ORS 60.564.
(2) The dissenters' notice shall be sent no later than 10 days after the
corporate action was taken, and shall:
(a) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement of the terms of the proposed corporate action to news media or to
shareholders and requires that the person asserting dissenters' rights certify
whether or not the person acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the corporation must receive the payment demand.
This date may not be fewer than 30 nor more than 60 days after the date the
subsection (1) of this section notice is delivered; and
(e) Be accompanied by a copy of ORS 60.551 to 60.594. [1987 c.52 s.129]
60.571 DUTY TO DEMAND PAYMENT. (1) A shareholder sent a dissenters' notice
described in ORS 60.567 must demand payment, certify whether the shareholder
acquired beneficial ownership of the shares before the date required to be set
forth in the dissenters' notice pursuant to ORS 60.567 (2)(c), and deposit the
shareholder's certificates in accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's
shares under subsection (1) of this section retains all other rights of a
shareholder until these rights are canceled or modified by the taking of the
proposed corporate action.
(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter. [1987 c.52 s.130]
60.574 SHARE RESTRICTIONS. (1) The corporation may restrict the transfer of
uncertificated shares from the date the demand for their payment is received
until the proposed corporate action is taken or the restrictions released under
ORS 60.581.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled
or modified by the taking of the proposed corporate action. [1987 c.52 s.131]
60.577 PAYMENT. (1) Except as provided in ORS 60.584, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with ORS 60.571, the amount
the corporation estimates to be the fair value of the shareholder's shares, plus
accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income statement for that
year and the latest available interim financial statements, if any;
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(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under ORS 60.587;
and
(e) A copy of ORS 60.551 to 60.594. [1987 c.52 s.132; 1987 c.579 s.4]
60.581 FAILURE TO TAKE ACTION. (1) If the corporation does not take the
proposed action within 60 days after the date set for demanding payment and
depositing share certificates, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under ORS 60.567 and repeat the payment demand procedure.
[1987 c.52 s.133]
60.584 AFTER-ACQUIRED SHARES. (1) A corporation may elect to withhold
payment required by ORS 60.577 from a dissenter unless the dissenter was the
beneficial owner of the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media or to shareholders of
the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares plus accrued interest and shall pay
this amount to each dissenter who agrees to accept it in full satisfaction of
such demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares an explanation of how the interest was
calculated and a statement of the dissenter's right to demand payment under ORS
60.587. [1987 c.52 s.134]
60.587 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER. (1) A
dissenter may notify the corporation in writing of the dissenter's own estimate
of the fair value of the dissenter's shares and amount of interest due, and
demand payment of the dissenter's estimate, less any payment under ORS 60.577 or
reject the corporation's offer under ORS 60.584 and demand payment of the
dissenter's estimate of the fair value of the dissenter's shares and interest
due, if:
(a) The dissenter believes that the amount paid under ORS 60.577 or offered
under ORS 60.584 is less than the fair value of the dissenter's shares or that
the interest due is incorrectly calculated;
(b) The corporation fails to make payment under ORS 60.577 within 60 days
after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions imposed
on uncertificated shares within 60 days after the date set for demanding
payment.
(2) A dissenter waives the right to demand payment under this section unless
the dissenter notifies the corporation of the dissenter's demand in writing
under subsection (1) of this section within 30 days after the corporation made
or offered payment for the dissenter's shares. [1987 c.52 s.135]
(JUDICIAL APPRAISAL OF SHARES)
60.591 COURT ACTION. (1) If a demand for payment under ORS 60.587 remains
unsettled, the corporation shall commence a proceeding within 60 days after
receiving the payment demand under ORS 60.587 and petition the court under
subsection (2) of this section to determine the fair value of the shares and
accrued interest. If the corporation does not commence the proceeding within the
60-day period, it shall pay each dissenter whose demand remains unsettled the
amount demanded.
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<PAGE>
(2) The corporation shall commence the proceeding in the circuit court of
the county where a corporation's principal office is located, or if the
principal office is not in this state, where the corporation's registered office
is located. If the corporation is a foreign corporation without a registered
office in this state, it shall commence the proceeding in the county in this
state where the registered office of the domestic corporation merged with or
whose shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares. All parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the circuit court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive. The
court may appoint one or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The appraisers have the powers
described in the court order appointing them, or in any amendment to the order.
The dissenters are entitled to the same discovery rights as parties in other
civil proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgment
for:
(a) The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation;
or
(b) The fair value, plus accrued interest, of the dissenter's after-acquired
shares for which the corporation elected to withhold payment under ORS 60.584.
[1987 c.52 s.136]
60.594 COURT COSTS AND COUNSEL FEES. (1) The court in an appraisal
proceeding commenced under ORS 60.591 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under ORS 60.587.
(2) The court may also assess the fees and expenses of counsel and experts
of the respective parties in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of ORS 60.561 to 60.587; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously or not in good faith with respect to the
rights provided by this chapter.
(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to counsel reasonable fees to be paid out of the amount awarded the
dissenters who were benefited. [1987 c.52 s.137]
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