<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
STATEMENT ON SCHEDULE 13d
under the Securities Exchange Act of 1934
GRADALL INDUSTRIES, INC.
(Name of Subject Company [Issuer])
JLG ACQUISITION CORP.
(Bidder)
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
(Title of Class of Securities)
------------------------
38411P107
(CUSIP Number of Class Securities)
THOMAS D. SINGER
VICE PRESIDENT -- GENERAL COUNSEL
JLG INDUSTRIES, INC.
1 JLG DRIVE
MCCONNELSBURG, PA 17233
(717) 485-5161
(Name, Address and Telephone Number of Persons Authorized to Receive
Notices and Communications on Behalf of Bidder)
Copy to:
W. ANDREW JACK, ESQ.
COVINGTON & BURLING
1201 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20044-7566
(202) 662-6000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- ---------------------- --------------------
<S> <C>
$206,600,340 $41,320
</TABLE>
- ---------------
* Based upon the offer to purchase all of the outstanding shares of common
stock, par value $0.001 per share, of Gradall Industries, Inc. at $20.00 cash
per share, 9,515,460 shares outstanding and 814,557 options outstanding as of
April 30, 1999.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable
(i)
<PAGE> 2
1) Name of Reporting Person: JLG Industries, Inc.
S.S. or I.R.S. Identification No. of Above Person: 25-1199382
------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
[ ] (a)
[ ] (b)
------------------------------------------------------------------------
3) SEC Use Only
------------------------------------------------------------------------
4) Source of Funds: WC (working capital), BK (bank)
------------------------------------------------------------------------
5) [ ] Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f)
------------------------------------------------------------------------
6) Citizenship or Place of Organization: Pennsylvania
------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH
<C> <S>
7) Sole Voting Power: 3,273,036*
--------------------------------------------------------------------------------------------
8) Shared Voting Power: 0
--------------------------------------------------------------------------------------------
9) Sole Dispositive Power: 0
--------------------------------------------------------------------------------------------
10) Shared Dispositive Power: 0
--------------------------------------------------------------------------------------------
</TABLE>
11) Aggregate Amount Beneficially Owned by Each Reporting
Person: 3,273,036*
------------------------------------------------------------------------
12) [ ] Check if Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions).
------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 7: 34.4% (based on
9,515,460 outstanding)
------------------------------------------------------------------------
14) Type of Reporting Person: CO
- --------------------------------------------------------------------------------
- ---------------
* Beneficial ownership is based solely on the provisions of the Stockholders
Agreements, pursuant to which among other things, certain stockholders of
Gradall Industries, Inc. have agreed with the reporting person to grant an
irrevocable proxy to JLG Acquisition Corp. to vote the shares shown as
beneficially owned by such reporting persons in favor of the Merger and
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, all as more fully
described herein. Capitalized terms have the meanings assigned thereto herein.
Amount does not include options to purchase 489,125 shares which, if
exercised, would be beneficially owned by the reporting person pursuant to the
Stockholders Agreements.
(ii)
<PAGE> 3
1) Name of Reporting Person: JLG Acquisition Corp.
S.S. or I.R.S. Identification No. of Above Person: 25-1835546
------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
[ ] (a)
[ ] (b)
------------------------------------------------------------------------
3) SEC Use Only
------------------------------------------------------------------------
4) Source of Funds: WC (working capital), BK (bank)
------------------------------------------------------------------------
5) [ ] Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f)
------------------------------------------------------------------------
6) Citizenship or Place of Organization: Pennsylvania
------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH
<C> <S>
7) Sole Voting Power: 3,273,036*
--------------------------------------------------------------------------------------------
8) Shared Voting Power: 0
--------------------------------------------------------------------------------------------
9) Sole Dispositive Power: 0
--------------------------------------------------------------------------------------------
10) Shared Dispositive Power: 0
--------------------------------------------------------------------------------------------
</TABLE>
11) Aggregate Amount Beneficially Owned by Each Reporting
Person: 3,273,036*
------------------------------------------------------------------------
12) [ ] Check if Aggregate Amount in Row 7 Excludes Certain Shares (See
Instructions).
------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 7: 34.4% (based on
9,515,460 outstanding)
------------------------------------------------------------------------
14) Type of Reporting Person: CO
- --------------------------------------------------------------------------------
- ---------------
* Beneficial ownership is based solely on the provisions of the Stockholders
Agreements, pursuant to which among other things, certain stockholders of
Gradall Industries, Inc. have agreed to grant the reporting person an
irrevocable proxy to vote the shares shown as beneficially owned by such
reporting persons in favor of the Merger and against any action or agreement
(other than the Merger Agreement or the transactions contemplated thereby)
that would impede, interfere with, delay, postpone or attempt to discourage
the Merger or the Offer, all as more fully described herein. Capitalized terms
have the meanings assigned thereto herein. Amount does not include options to
purchase 489,125 shares which, if exercised, would be beneficially owned by
the reporting person pursuant to the Stockholders Agreements.
(iii)
<PAGE> 4
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Gradall Industries, Inc., a Delaware
corporation (the "Company"), and the address of its principal executive offices
is set forth in Section 7 "Certain Information Concerning the Company" of the
Offer to Purchase, a copy of which is attached hereto as Exhibit (a)(1) and is
incorporated herein by reference.
(b) This Statement relates to the offer by JLG Acquisition Corp., a
Delaware corporation ("Merger Subsidiary") and a wholly-owned subsidiary of JLG
Industries, Inc., a Pennsylvania corporation ("Parent"), to purchase all
outstanding shares of common stock, par value $0.001 per share (together with
associated rights to purchase Series B Participating Cumulative Preferred Stock)
(collectively, the "Shares"), of the Company at $20.00 per share, net to the
seller in cash, upon the terms and conditions set forth in the Offer to Purchase
and in the related Letter of Transmittal, a copy of which is attached hereto as
Exhibit (a)(2) (which are herein collectively referred to as the "Offer"). The
information set forth in the introduction to the Offer to Purchase (the
"Introduction") is incorporated herein by reference.
(c) The information set forth in Section 6 "Price Range of Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d), (g) This Tender Offer Statement is filed by the Merger Subsidiary
and the Parent. The information set forth in the Introduction, Section 8
"Certain Information Concerning Merger Subsidiary and Parent" and Schedule 1 of
the Offer to Purchase is incorporated herein by reference.
(e) and (f) Neither Parent, Merger Subsidiary, nor, to the best knowledge
of Merger Subsidiary, any of the persons listed in Schedule 1 of the Offer to
Purchase, has during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) and (b) The information set forth in the Introduction, Section 8
"Certain Information Concerning the Merger Subsidiary and the Parent", Section
10 "Background of the Offer; Contacts with the Company" and Section 11 "The
Merger Agreement; The Stockholders Agreement" of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) and (b) The information set forth in Section 9 "Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(e) The information set forth in the Introduction and Section 12
"Purpose of the Offer; The Merger; Plans for the Company" of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 14 "Effect of the Offer on the
Market for the Shares; Nasdaq Listing and Exchange Act Registration" of the
Offer to Purchase is incorporated herein by reference.
<PAGE> 5
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) and (b) The information set forth in the Introduction, Section 8
"Certain Information Concerning the Merger Subsidiary and the Parent" and
Schedule 1 of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction, Section 8 "Certain
Information Concerning the Merger Subsidiary and the Parent", Section 10
"Background of the Offer; Contacts with the Company" and Schedule 1 of the Offer
to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Introduction and Section 17 "Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 8 "Certain Information Concerning the
Merger Subsidiary and the Parent" of the Offer to Purchase is incorporated
hereby by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in Section 10 "Background of the Offer;
Contacts with the Company" and Section 11 "The Merger Agreement; The
Stockholders Agreement" of the Offer to Purchase is incorporated herein by
reference.
(b) and (c) The information set forth in Section 16 "Certain Legal Matters
and Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 14 "Effect of the Offer on the
Market for the Shares; Nasdaq Listing and Exchange Act Registration" of the
Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
-2-
<PAGE> 6
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase, dated May 17, 1999
(a)(2) Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9)
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Text of Joint Press Release issued by Parent and the
Company, dated May 11, 1999
(a)(7) Form of summary advertisement, dated May 17, 1999
(b)(1) Commitment Letter dated May 5, 1999, to Parent from First
Union National Bank
(c)(1) Agreement and Plan of Merger dated as of May 10, 1999, among
Gradall Industries, Inc., JLG Industries, Inc., and JLG
Acquisition Corp.
(c)(2) Stockholders Agreement dated as of May 10, 1999, among JLG
Acquisition Corp.; JLG Industries, Inc.; Gradall Industries,
Inc. and MLGA Fund II, L.P.
(c)(3) Stockholders Agreement dated as of May 10, 1999, among JLG
Acquisition Corp.; JLG Industries, Inc.; Gradall Industries,
Inc.; Sangwoo Ahn; Perry J. Lewis; Barry L. Phillips; Jack
D. Rutherford; David S. Williams; Joseph H. Keller, Jr.;
James C. Cahill; and Bruce A. Jonker
(c)(4) Confidentiality Agreement dated November 3, 1997, as amended
on February 23, 1999 between Gradall Industries, Inc. and
JLG Industries, Inc.
(d) None
(e) None
(f) None
</TABLE>
-3-
<PAGE> 7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
JLG ACQUISITION CORP.
By: /s/ THOMAS D. SINGER
--------------------------------------------------------
Name: Thomas D. Singer
Title: Vice President, Secretary
JLG INDUSTRIES, INC.
By: /s/ THOMAS D. SINGER
--------------------------------------------------------
Name: Thomas D. Singer
Title: Vice President -- General Counsel, Assistant Secretary
Dated: May 17, 1999
-4-
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(a)(1) Offer to Purchase, dated May 17, 1999
(a)(2) Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification number on
Substitute Form W-9)
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Text of Joint Press Release issued by Parent and the
Company, dated May 11, 1999
(a)(7) Form of summary advertisement, dated May 17, 1999
(b)(1) Commitment Letter dated May 5, 1999, to Parent from First
Union National Bank
(c)(1) Agreement and Plan of Merger dated as of May 10, 1999, among
Gradall Industries, Inc., JLG Industries, Inc., and JLG
Acquisition Corp.
(c)(2) Stockholders Agreement dated as of May 10, 1999, among JLG
Acquisition Corp.; JLG Industries, Inc.; Gradall Industries,
Inc. and MLGA Fund II, L.P.
(c)(3) Stockholders Agreement dated as of May 10, 1999, among JLG
Acquisition Corp.; JLG Industries, Inc.; Gradall Industries,
Inc.; Sangwoo Ahn; Perry J. Lewis; Barry L. Phillips; Jack
D. Rutherford; David S. Williams; Joseph H. Keller, Jr.;
James C. Cahill; and Bruce A. Jonker
(c)(4) Confidentiality Agreement dated November 3, 1997, as amended
on February 23, 1999 between Gradall Industries, Inc. and
JLG Industries, Inc.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
PAR VALUE $.001 PER SHARE
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
OF
GRADALL INDUSTRIES, INC.
AT
$20.00 NET PER SHARE
BY
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 15, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES OF COMMON STOCK WHICH CONSTITUTES MORE THAN 50% OF THE VOTING
POWER (DETERMINED ON A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE OF ALL OF
THE SECURITIES OF GRADALL INDUSTRIES, INC. ENTITLED TO VOTE GENERALLY IN THE
ELECTION OF DIRECTORS OR ON A MERGER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS
AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1 AND 15.
THE BOARD OF DIRECTORS OF GRADALL INDUSTRIES, INC. HAS BY UNANIMOUS VOTE
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF GRADALL INDUSTRIES, INC. AND RECOMMENDS THAT
HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES TO JLG ACQUISITION
CORP.
CERTAIN STOCKHOLDERS REPRESENTING APPROXIMATELY 34.4% OF THE ISSUED AND
OUTSTANDING SHARES HAVE CONTRACTUALLY AGREED TO TENDER THEIR SHARES IN THE
OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) of Gradall Industries, Inc. should either (1)
complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal, mail or deliver
the Letter of Transmittal (or such facsimile) and any other required documents
to the Depositary (as defined herein), and either deliver the certificates
representing the tendered Shares and any other required documents to the
Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (2) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
they desire to tender Shares so registered.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Gleacher & Co. LLC
(the "Dealer Manager") or to D.F. King & Co., Inc. (the "Information Agent") at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks or trust
companies.
------------------------
The Dealer Manager for the Offer is:
GLEACHER & CO. LLC
660 Madison Avenue
New York, NY 10021-8405
Telephone: (212) 418-4200
Facsimile: (212) 752-2711
May 17, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
INTRODUCTION....................................................... 1
THE TENDER OFFER................................................... 2
1. Terms of the Offer; Expiration Date......................... 2
2. Acceptance for Payment and Payment for Shares............... 4
3. Procedure for Tendering Shares, Valid Tenders............... 5
4. Withdrawal Rights........................................... 7
5. Certain Federal Income Tax Consequences..................... 8
6. Price Range of Shares; Dividends............................ 9
7. Certain Information Concerning the Company.................. 9
8. Certain Information Concerning the Merger Subsidiary and the
Parent...................................................... 12
9. Source and Amount of Funds.................................. 14
10. Background of the Offer; Contacts with the Company.......... 14
11. The Merger Agreement; The Stockholders Agreement............ 16
12. Purpose of the Offer; the Merger; Plans for the Company..... 25
13. Dividends and Distributions................................. 27
14. Effect of the Offer on the Market for the Shares, Nasdaq
Listing and Exchange Act Registration....................... 27
15. Certain Conditions of the Offer............................. 28
16. Certain Legal Matters and Regulatory Approvals.............. 29
17. Fees and Expenses........................................... 31
18. Miscellaneous............................................... 32
SCHEDULE 1
CERTAIN INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE MERGER SUBSIDIARY AND PARENT..................... I-1
</TABLE>
<PAGE> 3
To: The Stockholders of
Gradall Industries, Inc.
INTRODUCTION
JLG Acquisition Corp., a Delaware corporation (the "Merger Subsidiary") and
a wholly-owned subsidiary of JLG Industries, Inc., a Pennsylvania corporation
(the "Parent"), hereby offers to purchase for cash all of the outstanding shares
of common stock $0.001 par value per share (together with the associated rights
to purchase Series B Participating Cumulative Preferred Stock) (collectively,
the "Shares"), of Gradall Industries, Inc., a Delaware corporation (the
"Company"), at a purchase price of $20.00 per Share, net to the seller in cash
without interest thereon (such price, or such higher price per Share as may be
paid in the Offer being referred to as the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as amended from time to time, together constitute
the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares pursuant to the Offer. The
Merger Subsidiary will pay all fees and expenses of Gleacher & Co. LLC, which is
acting as Dealer Manager for the Offer (in such capacity, the "Dealer Manager"),
ChaseMellon Shareholder Services, L.L.C., which is acting as the Depositary (in
such capacity, the "Depositary") and D.F. King & Co., Inc., which is acting as
the Information Agent (in such capacity, the "Information Agent") incurred in
connection with the Offer. See Section 17.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS") HAS BY
UNANIMOUS VOTE DETERMINED THAT THE MERGER AGREEMENT (AS DEFINED BELOW) AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER
(AS DEFINED BELOW), ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF
THE COMPANY AND RECOMMENDS THAT THE HOLDERS OF THE SHARES ACCEPT THE OFFER AND
TENDER THEIR SHARES TO THE MERGER SUBSIDIARY.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the Company's financial
advisor ("Merrill Lynch") has delivered to the Company's Board of Directors its
written fairness opinion (the "Fairness Opinion"), dated May 10, 1999, to the
effect that, as of such date, the consideration to be received by the holders of
Shares pursuant to the Offer and the Merger (as defined below), taken together,
was fair from a financial point of view to such holders. Such opinion is set
forth in full as an exhibit to the Company's Solicitation/ Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") that is being mailed to
stockholders of the Company.
The Offer is conditioned upon among other things, there being validly
tendered and not properly withdrawn prior to the Expiration Date (as defined in
Section 1) a number of Shares which constitutes more than 50% of the voting
power (determined on a fully-diluted basis), on the date of purchase, of all the
securities of the Company entitled to vote generally in the election of
directors or in a merger (the "Minimum Tender Condition"). See Sections 1 and
15. If the Merger Subsidiary purchases not less than that number of Shares
needed to satisfy the Minimum Tender Condition, it will be able to effect the
Merger without the affirmative vote of any other stockholder of the Company. See
Section 12.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 10, 1999 (the "Merger Agreement"), among the Parent, the Merger
Subsidiary and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Merger Subsidiary, and also provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement and the Delaware General Corporation Law (the
"DGCL"), the Merger Subsidiary will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and become a wholly-owned subsidiary
of the Parent, and the separate corporate existence of the Merger Subsidiary
will cease.
<PAGE> 4
Certain stockholders of the Company, including certain directors and
executive officers of the Company and certain partners, principals, officers,
directors, employees and affiliates of MLGA II, L.P. ("MLGA"), representing
approximately 34.4% of the issued and outstanding Shares of the Company (the
"Principal Holders") have contractually agreed, among other things, to tender
their Shares in the Offer, provide the Merger Subsidiary with an irrevocable
proxy and otherwise support the transaction with the Merger Subsidiary. See
Section 11 for a discussion of the arrangements with the Principal Holders.
Pursuant to the Merger Agreement, the Company agrees, if and to the extent
permitted by law, at the request of the Merger Subsidiary and subject to the
terms of the Merger Agreement, to take all necessary and appropriate actions to
cause the Merger to become effective as soon as reasonably practicable after the
purchase of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with the DGCL. See Section 11.
At the effective time of the Merger (the "Effective Time"), each Share
issued and outstanding immediately prior to the Effective Time (other than any
Shares held by the Parent, the Merger Subsidiary, any subsidiary of the Parent
or in the treasury of the Company, which Shares, by virtue of the Merger, shall
be canceled and shall cease to exist with no payment being made with respect
thereto, and other than Dissenting Shares (as defined herein)) shall be
converted into the right to receive in cash the Offer Price, payable to the
holder thereof without interest, upon surrender of the certificate formerly
representing such Share.
The Company has represented to the Parent that as of April 30, 1999, there
were outstanding (i) 9,515,460 Shares and (ii) options to purchase an aggregate
of 811,557 Shares (of which options to purchase an aggregate of 260,774 Shares
were exercisable). Based upon the foregoing, the Merger Subsidiary believes that
approximately 5,163,509 Shares constitute a majority of the outstanding Shares
on a fully diluted basis.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of the Shares pursuant to the Offer and the
exchange of Shares for the Offer Price pursuant to the Merger are described in
Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), the Merger Subsidiary will accept for payment and pay for all Shares
validly tendered on or prior to the Expiration Date and not properly withdrawn
as permitted by Section 4. The term "Expiration Date" means 12:00 Midnight, New
York City time, on June 15, 1999, unless and until the Merger Subsidiary, in its
discretion (but subject to the terms and conditions of the Merger Agreement),
shall have extended the period during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Merger Subsidiary, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Tender Condition and the expiration or termination of all waiting
periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1996, as
amended, and the regulations thereunder (the "HSR Act"). The Offer is not
conditioned on the receipt of financing. See Section 15, which sets forth in
full the conditions to the Offer. Subject to the provisions of the Merger
Agreement, including the provisions of the Merger Agreement set forth in the
next paragraph, and the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Merger Subsidiary reserves the
right, in its sole discretion, to waive any or all conditions to the Offer and
to make any other changes in the terms and conditions of the Offer. Subject to
the provisions of the Merger Agreement, and the applicable rules and regulations
of the Commission, if by
2
<PAGE> 5
the Expiration Date any or all of such conditions to the Offer have not been
satisfied, the Merger Subsidiary reserves the right (but shall not be obligated)
to (i) terminate the Offer and return all tendered Shares to tendering
stockholders, (ii) waive such unsatisfied conditions and purchase all shares
validly tendered or (iii) extend the Offer, and, subject to the terms of the
Offer (including the rights of stockholders to withdraw their Shares), retain
the Shares which have been tendered, until the Offer, as so extended by the
Merger Subsidiary, shall expire.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, the Merger Subsidiary expressly reserves the
right, in its sole discretion, at any time and from time to time, and regardless
of whether or not any of the events set forth in Section 15 shall have occurred
or shall have been determined by the Merger Subsidiary to have occurred, to (i)
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares, by giving oral or
written notice of such extension to the Depositary and (ii) amend the Offer in
any respect by giving oral or written notice of such amendment to the
Depositary. Under the terms of the Merger Agreement, however, without the prior
written consent of the Company, the Merger Subsidiary will not decrease the
price per Share payable in the Offer, change the form of consideration payable
in the Offer, decrease the number of Shares sought to be purchased in the Offer,
change the Offer conditions in a manner adverse to the Company or the holders of
Shares, waive the Minimum Tender Condition, impose additional conditions to the
Offer, or amend any other terms of the Offer in any manner adverse to the
holders of any Shares. The Merger Subsidiary shall have no obligation to pay
interest on the purchase price of tendered Shares, including in the event the
Merger Subsidiary exercises its right to extend the period of time during which
the Offer is open. The rights reserved by the Merger Subsidiary in this
paragraph are in addition to the Merger Subsidiary's rights to terminate the
Offer pursuant to Section 15. The Merger Agreement provides that, subject to the
terms and conditions of the Offer and the Merger Agreement and the satisfaction
or waiver (to the extent permitted) of all the conditions to the Offer as of the
Expiration Date, the Merger Subsidiary will accept for payment and pay for all
Shares validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the Expiration Date. If the conditions to the Offer are not
satisfied or waived by the Merger Subsidiary as of the Expiration Date, the
Merger Subsidiary may extend the Offer from time to time until such time as such
conditions are satisfied or waived.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, and such announcement in
the case of an extension will be made in accordance with Rule 14e-l(d) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Merger
Subsidiary may choose to make any public announcement, except as provided by
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to holders of
Shares), the Merger Subsidiary shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
If the Merger Subsidiary makes a material change in the terms of the Offer
or if it waives a material condition of the Offer, the Merger Subsidiary will
disseminate additional tender offer material and extend the Offer to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The
minimum period during which an Offer must remain open following material changes
in the terms of the Offer, other than a change in price or a change in the
percentage of securities sought, will depend upon the facts and circumstances,
including the materiality, of the changes. With respect to a change in price or,
subject to certain limitations, a change in the percentage of securities sought,
a minimum ten business day period from the day of such change is generally
required to allow for adequate dissemination to stockholders. For purposes of
the Offer, a "business day" means any day other than a Saturday, Sunday, or a
federal holiday and consists of the time period from 12:01 A.M. through 12:00
Midnight, New York City time.
The Company has provided the Merger Subsidiary with the Company's
stockholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed by the Merger Subsidiary
to record holders of Shares and furnished to brokers, dealers, commercial banks,
trust companies and similar persons
3
<PAGE> 6
whose names, or the names of whose nominees, appear on the stockholder list or,
if applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Merger Subsidiary will accept for payment and will pay for
all Shares validly tendered and not properly withdrawn on or prior to the
Expiration Date as soon as practicable after the later to occur of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions of the
Offer set forth in Section 15. In addition, subject to applicable rules of the
Commission, the Merger Subsidiary expressly reserves the right to delay
acceptance for payment of or payment for Shares pending receipt of any
regulatory approvals specified in Section 16. Any such delays will be effected
in compliance with Rule 14e-l(c) under the Exchange Act.
For information with respect to approvals and filings required to be
obtained or made prior to the consummation of the Offer, including under the HSR
Act, see Section 16.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates representing such Shares ("Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's Message
(as defined below) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the Merger
Subsidiary may enforce such agreement against such participant.
For purposes of the Offer, the Merger Subsidiary will be deemed to have
accepted for payment (and thereby purchased) Shares validly tendered and not
properly withdrawn as, if and when the Merger Subsidiary gives oral or written
notice to the Depositary of the Merger Subsidiary's acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Shares accepted for payment pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payments from the Merger Subsidiary and transmitting such payments to
stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If for any reason
whatsoever acceptance for payment of or payment for any Shares tendered pursuant
to the Offer is delayed or the Merger Subsidiary is unable to accept for payment
or pay for Shares tendered pursuant to the Offer, then without prejudice to the
Merger Subsidiary's rights set forth herein, the Depositary may nevertheless, on
behalf of the Merger Subsidiary and subject to Rule 14e-l(c) under the Exchange
Act, retain tendered Shares and such Shares may not be withdrawn except to the
extent that the tendering stockholder is entitled to and duly exercises
withdrawal rights as described in Section 4.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned
without expense to the tendering stockholder (or, in the case of Shares tendered
by Book-Entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to an account maintained at the Book Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
4
<PAGE> 7
The Parent and the Merger Subsidiary reserve the right to transfer or
assign any of their rights or obligations to any direct or indirect wholly-owned
subsidiary of the Parent, but any such transfer or assignment will not relieve
the Parent or the Merger Subsidiary of their obligations under the Offer.
In the event that the aggregate consideration to be received by a holder
pursuant to the Offer for such holder's Shares equals an amount that includes
one-half of one cent, such amount will be rounded up to the nearest whole cent;
any amount less than one-half of one cent shall be rounded down to the nearest
whole cent.
3. PROCEDURE FOR TENDERING SHARES, VALID TENDERS.
Except as set forth below, in order for Shares to be validly tendered
pursuant to the Offer, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or an Agent's Message in connection with a Book-Entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date and either (i)
Share Certificates evidencing tendered Shares must be received by the Depositary
at such address or such Shares must be tendered pursuant to the procedure for
Book-Entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case on or prior to the Expiration Date, or
(ii) the guaranteed delivery procedures described below must be complied with.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make Book-Entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through Book-Entry transfer at the Book-Entry Transfer
Facility, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a Book-Entry transfer, and any other
documents required by the Letter of Transmittal, must in any case be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF
BOOK ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a bank, broker, dealer, credit union, savings association or other
entity which is a member in good standing of the Securities Transfer Agents
Medallion Program (each of the foregoing being referred to as an "Eligible
Institution"), except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
5
<PAGE> 8
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered holder, the Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case, signed exactly as
the name of the registered holder appears on such certificates, with the
signatures on such certificates or stock powers guaranteed as aforesaid. See
Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, or such stockholder cannot deliver the Share Certificates and all
other required documents to reach the Depositary on or prior to the Expiration
Date, or such stockholder cannot complete the procedure for delivery by
Book-Entry transfer on a timely basis, such Shares may nevertheless be tendered,
provided that all of the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form made available by the Merger Subsidiary
is received by the Depositary as provided below on or prior to the
Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation),
representing all tendered Shares in proper form for transfer, together with
the Letter of Transmittal (or a facsimile thereof) properly completed and
duly executed, with any required signature guarantees (or, in the case of a
Book-Entry transfer, an Agent's Message) and any other documents required
by the Letter of Transmittal are received by the Depositary within three
Nasdaq National Market trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares tendered within the meaning of, and that the tender
of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act,
each in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a Book-Entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Merger Subsidiary, and each of
them, as such stockholder's attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Merger Subsidiary (and with respect
to any and all other Shares, other securities or rights issued or issuable in
respect of such Shares on or after the date hereof). All such powers of attorney
and proxies shall be considered irrevocable and coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, the Merger Subsidiary accepts such Shares for payment. Upon such
acceptance for payment, all prior powers of attorney and proxies given by such
stockholder with respect to such Shares (and such other Shares and securities)
will be revoked without further action, and no subsequent powers of attorney and
proxies may be given nor any subsequent written consents executed (and, if given
or executed, will not be deemed effective). The designees of the Merger
Subsidiary will, with respect to the Shares (and such other Shares and
securities) for which such appointment is effective, be empowered to
6
<PAGE> 9
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. The Merger Subsidiary reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon the Merger Subsidiary's payment for such Shares, the Merger Subsidiary must
be able to exercise full voting rights with respect to such Shares and other
securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Merger Subsidiary in its sole discretion,
which determination shall be final and binding on all parties. The Merger
Subsidiary reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may in the
opinion of its counsel be unlawful. The Merger Subsidiary also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender of Shares of any particular stockholder whether or
not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Merger
Subsidiary, the Parent, any of their affiliates or assigns, the Dealer Manager,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Merger Subsidiary's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
The Merger Subsidiary's acceptance for payment of Shares tendered pursuant
to any of the procedures described above will constitute a binding agreement
between the tendering stockholder and the Merger Subsidiary upon the terms and
subject to the conditions of the Offer.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash with such stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All stockholders
surrendering Shares pursuant to the Offer should complete and sign the
substitute Form W-9 included in the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Depositary). Certain stockholders (including among others all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment by the
Merger Subsidiary pursuant to the Offer, may also be withdrawn at any time after
July 15, 1999. If the Merger Subsidiary extends the Offer, is delayed in its
acceptance for payment of Shares or is unable to purchase Shares validly
tendered pursuant to the Offer for any reason, then without prejudice to the
Merger Subsidiary's rights under the Offer, the Depositary may nevertheless, on
behalf of the Merger Subsidiary, retain tendered Shares and such Shares may not
be withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as described in this Section 4. Any such delay in acceptance
for payment will be accompanied by an extension of the Offer to the extent
required by law.
7
<PAGE> 10
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If Share Certificates to be withdrawn have been delivered
or otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and the signatures on the notice of withdrawal must
be guaranteed by an Eligible Institution unless such Shares have been tendered
for the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedure for Book-Entry transfer as set forth in Section 3, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Merger Subsidiary, in its
sole discretion, whose determination will be final and binding. The Merger
Subsidiary reserves the absolute right to reject any and all withdrawals
determined by it not to be in proper form. The Merger Subsidiary also reserves
the absolute right to waive any defect or irregularity in any withdrawal of
Shares of any particular stockholder whether or not similar defects or
irregularities are waived in the case of the other stockholders. No withdrawal
of Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of the Merger Subsidiary, the
Parent, any of their affiliates or assigns, the Dealer Manager, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a discussion of the material United States federal income
tax consequences relating to the sale or exchange of Shares pursuant to the
Offer and/or the Merger. This summary deals only with U.S. Stockholders (as
defined below) who hold their Shares as capital assets. This discussion is based
on the Internal Revenue Code of 1986, as amended (the "Code"), the proposed,
temporary and final Treasury regulations promulgated thereunder, and any
relevant administrative rulings or pronouncements or judicial decisions, all as
in effect on the date hereof and all of which are subject to change, possibly
with retroactive effect. This discussion does not address all of the tax
consequences that may be relevant to a particular Stockholder in light of that
Stockholder's specific circumstances, nor does it discuss the U.S. federal
income tax consequences that may be applicable to certain types of Stockholders,
such as Stockholders who have received their Shares pursuant to the exercise of
employee stock options or otherwise as compensation, dealers in securities,
financial institutions, tax-exempt entities, life insurance companies, persons
holding their Shares as a part of a hedging, integrated, conversion or
constructive sale transaction or as part of a straddle, or persons whose
functional currency is not the U.S. dollar, who may be subject to special rules
and/or limitations under the Code which are not discussed below. In addition,
the following discussion does not discuss the alternative minimum tax
consequences, if any, of the sale or exchange of Shares pursuant to the Offer or
the Merger, or the state, local or foreign tax consequence of such sale or
exchange of Shares.
For purposes of this discussion, (i) the term "Stockholder" refers to a
beneficial owner of Shares, and (ii) the term "U.S. Stockholder" means a
Stockholder who is (a) a citizen or resident of the United States, (b) a
corporation or partnership created or organized in the United States or under
the laws of the United States or any political subdivision thereof, (c) an
estate the income of which is subject to United States federal income taxation
regardless of its source or (d) a trust which is subject to the supervision of a
court within the United States and the control of one or more United States
persons (as defined in Section 7701 (a)(30) of the Code). ALL STOCKHOLDERS
SHOULD CONSULT WITH THEIR OWN TAX
8
<PAGE> 11
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE
MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND
CHANGES IN SUCH TAX LAWS.
The sale or exchange of Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes. A tendering U.S.
Stockholder generally will recognize gain or loss on such sale or exchange of
Shares in an amount equal to the difference between the cash received by such
U.S. Stockholder pursuant to the Offer or the Merger and the U.S. Stockholder's
adjusted tax basis in the Shares exchanged therefor. Gain or loss will be
calculated separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) tendered and purchased pursuant to the Offer
or converted in the Merger, as the case may be. For federal income tax purposes,
such gain or loss generally will be capital gain or loss and generally will be
long-term capital gain or loss if the relevant U.S. Stockholder held his, her or
its Shares for more than one year as of the date the Merger Subsidiary accepts
such Shares for payment pursuant to the Offer or as of the effective date of the
Merger, as the case may be. The long-term capital gains of individuals, estates
and certain trusts generally are subject to a maximum tax rate of 20%. Capital
losses generally must be used only to offset capital gains.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company's 1998 Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (the "1998 Annual Report"), the Shares are listed
and traded on the Nasdaq National Market ("Nasdaq") under the symbol "GRDL." The
following table sets forth, for the quarters indicated, the high and low sales
prices per Share on Nasdaq with respect to periods occurring in 1997, 1998 (as
computed in the 1998 Annual Report) and 1999 (as reported by the Dow Jones News
Service). According to the 1998 Annual Report, the Company has not paid any
dividends on the Shares since its initial public offering.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Year Ended December 31, 1997
First Quarter............................................. $16 1/4 $12
Second Quarter............................................ $16 1/4 $12
Third Quarter............................................. $17 3/8 $14 3/4
Fourth Quarter............................................ $16 7/8 $15
Year Ended December 31, 1998
First Quarter............................................. $18 3/8 $15 3/8
Second Quarter............................................ $17 7/8 $13 1/16
Third Quarter............................................. $16 7/8 $12 5/8
Fourth Quarter............................................ $16 $13 3/32
Year Ending December 31, 1999
First Quarter............................................. $15 $12 1/4
</TABLE>
On May 10, 1999, the last full trading day prior to announcement of the
Offer, the closing sale price per Share reported on Nasdaq was $17 1/2. On May
14, 1999, the last full trading day before commencement of the Offer, the
closing sale price per Share reported on Nasdaq was $19 9/16. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise noted in this Offer to Purchase, the information
concerning the Company contained in this Offer to Purchase, including financial
information, has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources. The summary
information concerning the Company in this Section 7 and elsewhere in this Offer
to Purchase is derived from the Company's 1998 Annual Report, the Company's
quarterly reports on Form 10-Q for the quarters ended March 31, 1998, June 30,
1998 and September 30, 1998 (together, the "1998 Quarterly Reports") and other
9
<PAGE> 12
publicly available information. The summary information set forth below is
qualified in its entirety by reference to such reports (which may be obtained
and inspected as described below) and should be considered in conjunction with
the more comprehensive financial and other information in such reports and other
publicly available reports and documents filed by the Company with the
Commission and other publicly available information. Although the Merger
Subsidiary and the Parent do not have any knowledge that would indicate that any
statements contained herein based upon such reports are untrue, neither the
Merger Subsidiary nor the Parent assumes any responsibility for the accuracy or
completeness of the information contained therein, or for any failure by the
Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are unknown to the
Merger Subsidiary and the Parent.
General. The Company was incorporated under the laws of the State of
Delaware in 1985 to acquire all of the outstanding capital stock of The Gradall
Company, an Ohio corporation. The Gradall Company was established in 1946 by the
Warner and Swasey Company. The Company is a manufacturer and marketer of
hydraulic excavators and rough-terrain variable reach material handlers as well
as related service parts. The Company's excavators are typically used by general
contractors and government agencies for ditching, sloping, finish grading,
general maintenance and infrastructure projects. The Company's excavators are
sold through approximately 46 independent distributors at approximately 168
locations throughout North America. The Company's rough-terrain variable reach
material handlers are typically used by residential, non-residential and
institutional building contractors for lifting, transporting and planing a wide
variety of materials at their point of use or storage. The Company's material
handlers are sold through approximately 40 independent distributors at
approximately 169 locations throughout North America. In addition, the Company's
material handlers are available at national rental companies at over 490
locations.
The Company's principal executive offices are located at 406 Mill Avenue,
S.W., New Philadelphia, Ohio 44663. The telephone number of the Company at such
offices is (330) 339-2211.
Financial Information. Set forth below is certain selected consolidated
financial data for the Company which was derived from the 1998 Annual Report and
the 1998 Quarterly Reports. More comprehensive financial information is included
in the reports (including management's discussion and analysis of financial
condition and results of operations) and other documents filed by the Company
with the Commission, and the following financial data is qualified in its
entirety by reference to such reports and other documents including the
financial information and related notes contained therein. Such reports and
other documents may be examined and copies thereof may be obtained from the
offices of the Commission and Nasdaq in the manner set forth below.
GRADALL INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS FOR THE THREE MONTHS
ENDED DECEMBER 31 ENDED MARCH 31
------------------------------ --------------------
1998 1997 1996 1999 1998
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................ $182,607 $158,659 $140,909 $50,532 $ 41,541
Cost of sales............................ 140,456 120,663 108,098 38,617 31,990
Operating income......................... 23,963 20,640 17,915 6,378 5,234
Net income............................... 14,354 11,991 7,313 3,761 3,054
Earnings per share (1)................... $ 1.54 $ 1.33 $ 1.07 $ .39 $ .34
</TABLE>
- ---------------
(1) Earnings per share data is presented on a diluted basis for 1999, 1998 and
1997 and on a pro forma basis for 1996.
10
<PAGE> 13
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED DECEMBER 31
----------------- FOR THE THREE MONTHS
1997 1998 ENDED MARCH 31, 1999
------- ------- --------------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.......................................... $76,735 $98,987 $107,833
Total Liabilities..................................... 55,516 56,612 61,674
Total Stockholders' Equity............................ 21,219 42,375 46,159
</TABLE>
Certain Company Projections. To the knowledge of the Parent and the Merger
Subsidiary, the Company does not as a matter of course, make public forecasts as
to its future financial performance. However, in connection with the discussions
concerning the Offer and the Merger, the Company furnished the Parent with
financial projections prepared by Company management for 1999 and 2000. The
financial projections are based on numerous assumptions concerning revenue
growth in all product and customer areas, and increases in sales and marketing
and general administrative expenses.
On February 25, 1999, the Company's projections for fiscal year ending
December 31, 1999, and 2000 were as follows:
<TABLE>
<CAPTION>
1999E* 2000E*
------ ------
<S> <C> <C>
Sales....................................................... $217.9 $251.5
Gross Profit................................................ $ 48.7 $ 56.5
Operating Profit (1)........................................ $ 27.0 $ 32.4
EBITDA (1).................................................. $ 31.5 $ 37.8
Earnings Per Share (2)...................................... $ 1.72 $ 2.12
</TABLE>
- ---------------
* Dollars in millions except Earnings Per Share.
(1) Net of miscellaneous expenses.
(2) Diluted.
Subsequently, on April 7, 1999, the Company increased its 1999 Earnings Per
Share projection to $1.82, reflecting higher than previously projected first
quarter sales and lower than previously projected fixed manufacturing costs. The
Company did not provide revised projections for sales or other previously
projected data.
The Company's 1999 and 2000 operating budgets and the financial projections
contained therein were prepared for the limited purpose of managing the
operating plan of the Company for fiscal years 1999 and 2000. They do not
reflect recent developments that have occurred since they were prepared, such as
the Offer and the Merger. This reference to the projections is provided solely
because such projections have been provided to the Parent and none of the
Parent, the Merger Subsidiary, the Company or any of their respective affiliates
or representatives believes that such projections should be relied upon.
THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING
PROJECTIONS OR FORECASTS. THESE FORWARD-LOOKING STATEMENTS (AS THAT TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995) ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE PROJECTIONS. THE COMPANY HAS ADVISED THE MERGER SUBSIDIARY
AND THE PARENT THAT ITS INTERNAL FINANCIAL FORECASTS (UPON WHICH THE PROJECTIONS
PROVIDED TO THE PARENT WERE BASED IN PART) ARE, IN GENERAL, PREPARED SOLELY FOR
INTERNAL USE AND CAPITAL BUDGETING AND OTHER MANAGEMENT DECISIONS, AND ARE
SUBJECTIVE IN MANY RESPECTS AND THUS SUSCEPTIBLE TO INTERPRETATIONS AND PERIODIC
REVISION BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENTS. THE PROJECTIONS
ALSO REFLECT NUMEROUS ASSUMPTIONS (NOT ALL OF WHICH WERE PROVIDED TO THE
PARENT), ALL MADE BY
11
<PAGE> 14
THE MANAGEMENT OF THE COMPANY, WITH RESPECT TO INDUSTRY PERFORMANCE, GENERAL
BUSINESS, ECONOMIC, MARKET AND FINANCIAL CONDITIONS AND OTHER MATTERS, ALL OF
WHICH ARE DIFFICULT TO PREDICT, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL
AND NONE OF WHICH WERE SUBJECT TO APPROVAL BY THE PARENT OR THE MERGER
SUBSIDIARY. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE ASSUMPTIONS MADE IN
PREPARING THE PROJECTIONS WILL PROVE ACCURATE, AND ACTUAL RESULTS MAY BE
MATERIALLY GREATER OR LESS THAN THOSE CONTAINED IN THE PROJECTIONS. THE
INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT BE REGARDED AS AN INDICATION THAT
ANY OF THE PARENT, THE MERGER SUBSIDIARY, THE COMPANY OR THEIR RESPECTIVE
AFFILIATES OR REPRESENTATIVES CONSIDERED OR CONSIDER THE PROJECTIONS TO BE A
RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE RELIED
UPON AS SUCH. NONE OF THE PARENT, THE MERGER SUBSIDIARY, THE COMPANY OR ANY OF
THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES HAS MADE, OR MAKES ANY
REPRESENTATION TO ANY PERSON REGARDING THE INFORMATION CONTAINED IN THE
PROJECTIONS AND NONE OF THEM INTENDS TO UPDATE OR OTHERWISE REVISE THE
PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO
REFLECT THE OCCURRENCE OF FUTURE EVENTS EVEN IN THE EVENT THAT ANY OR ALL OF THE
ASSUMPTIONS UNDERLYING THE PROJECTIONS ARE SHOWN TO BE IN ERROR. IT IS EXPECTED
THAT THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL
RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN THOSE PROJECTED.
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and in accordance therewith is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission located in
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should also
be available for inspection and copying at prescribed rates at the regional
offices of the Commission located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300,
New York, New York 10048. Such reports, proxy statements and other information
may also be obtained at the Web site that the Commission maintains at
"http://www.sec.gov". Copies of this material may also be obtained by mail, upon
payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such materials should
also be available for inspection at the library of Nasdaq, 1735 K Street, N.W.,
Washington, D.C. 20006.
8. CERTAIN INFORMATION CONCERNING THE MERGER SUBSIDIARY AND THE PARENT.
General. The Merger Subsidiary, a Delaware corporation and a direct,
wholly owned subsidiary of Parent, was organized in connection with the Offer
and the Merger and has not carried on any activities to date other than those
incident to its formation and the commencement of the Offer. The Parent, a
Pennsylvania corporation, is the world's leading manufacturer, distributor and
international marketer of aerial work platforms used primarily in industrial,
commercial, institutional and construction applications. Sales are made
principally to independent equipment rental companies that rent the Parent's
products and provide service support to equipment users. Equipment purchases by
end-users, either directly from the Parent or through distributors, comprise a
significant, but smaller portion of sales. The Parent also generates revenues
from sales of used equipment and from equipment rentals and services provided by
its JLG Equipment Services operations. The Parent's products are marketed
internationally through independent rental companies and a network of
independent distributors which rent and sell the Parent's products and provide
service support. North American customers are located in all 50 states in the
U.S., as well as in Canada and Mexico.
12
<PAGE> 15
International customers are located in Europe, the Asia/Pacific region,
Australia, Japan and South America, including a joint venture arrangement in
Brazil.
The principal executive offices of the Merger Subsidiary and the Parent are
located at 1 JLG Drive, McConnellsburg, Pennsylvania 17233-9533.
The name, citizenship, business address, present principal occupation or
employment, and five year employment history of each of the directors and
executive officers of the Merger Subsidiary and the Parent are set forth in
Schedule 1 hereto.
Except as described in this Offer to Purchase, neither the Parent, the
Merger Subsidiary, nor, to the best of their knowledge, any of the persons
listed on Schedule 1 hereto or any associate or majority-owned subsidiary of the
Merger Subsidiary, the Parent, or any of the persons so listed, beneficially
owns or has a right to acquire directly or indirectly any Shares, and none of
the Parent, the Merger Subsidiary, or, to the best of their knowledge, any of
the persons or entities referred to above, or any of the respective executive
officers, directors or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the past 60 days.
Except as described in this Offer to Purchase, neither the Parent nor the
Merger Subsidiary nor, to the best of their knowledge, any of the persons listed
in Schedule 1 hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or voting of such securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss, division of profits or loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, neither
the Parent, the Merger Subsidiary nor, to the best of their knowledge, any of
the persons listed in Schedule 1 hereto, has had any business relationship or
transaction with the Company or any of its executive officers, directors, or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, there have been no contacts, negotiations or transactions between the
Parent, the Merger Subsidiary or any of the persons listed in Schedule 1 hereto,
on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
Financial Information. Selected consolidated financial information
relating to the Parent and its subsidiaries is set forth in Part I, Item 1 of
the Parent's quarterly report on form 10-Q for its fiscal quarter ended January
31, 1998 (the "Parent's 10-Q"), which sets forth (i) unaudited consolidated
balance sheets of the Parent for the Parent's fiscal quarter ended January 31,
1999, and fiscal year ended July 31, 1998; and (ii) unaudited condensed
consolidated statements of income of the Parent for three and six month periods
ended January 31, 1998 and January 31, 1999. More comprehensive financial
statements of the Parent are set forth in Part II, Item 8 of the Parent's annual
report on form 10-K for its fiscal year ended July 31, 1999 (the "Parent's
10-K"), which sets forth audited consolidated balance sheets for the fiscal
years ended July 31, 1997 and 1998, along with consolidated statements of
income, consolidated statement of shareholders' equity, and consolidated
statements of cash flow for the fiscal years ended July 31, 1996, 1997 and 1998.
The financial statements and other information of the Parent set forth in Part
I, Item 1 of the Parent's 10-Q and Part II, Item 8 of the Parent's 10-K are
incorporated herein by reference. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission in the
same manner as set forth with respect to the Company in Section 7.
Available Information. Parent is subject to the information filing
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Parent is required to
disclose in such proxy statements certain information, as of particular dates,
concerning its directors and officers, their remuneration, stock options granted
to them, the principal holders of its securities and any material interests of
such persons in transactions with Parent. Such reports, proxy statements and
other information should be made available for inspection and copying at the
offices of the Commission in the same manner as set forth with respect to the
Company in Section 7.
13
<PAGE> 16
9. SOURCE AND AMOUNT OF FUNDS.
The aggregate amount to be paid to effect the Offer and the Merger
(including the payments of fees and expenses related thereto, except for
financing fees) will be approximately $210 million. It is currently contemplated
that the transactions contemplated by the Merger Agreement will be funded by
borrowings by the Parent pursuant to a revolving credit facility (the "New
Credit Facility") with First Union National Bank (the "Bank"), which facility
provides for aggregate commitments of up to $250 million. The New Credit
Facility matures on the fifth anniversary of the closing date and bears interest
at floating rates indexed to the Bank's Base Rate plus an applicable margin. The
Parent also may select LIBOR rate options for 30, 60, 90 or 180 day periods at
the applicable LIBOR rate plus an applicable margin. The New Credit Facility
will be unsecured and will require compliance by the Parent with certain
financial and other covenants.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In September 1997, the Parent engaged Gleacher & Co. LLC ("Gleacher") to
serve as its financial advisor in connection with possible business combination
transactions.
During October 1997, representatives of Merrill Lynch, the Company's
financial advisor, contacted L. David Black, the Parent's Chairman, President
and Chief Executive Officer, concerning a possible transaction between the
Parent and the Company.
On November 3, 1997, the Parent and the Company entered into a
confidentiality and standstill agreement under which the Company agreed to
provide the Parent with certain non-public information in connection with the
Parent's consideration of a possible business combination involving the Parent
and the Company. From November 1997 through December 1997, representatives of
the Parent received and reviewed such non-public information.
In mid November 1997, at a regularly scheduled meeting, the Parent's Board
of Directors was informed of a potential transaction involving the Company.
In December 1997, the Parent informed representatives of Merrill Lynch that
the Parent did not at that time intend to make a proposal to the Company
concerning a transaction between them.
In mid May 1998, at a regularly scheduled meeting, the Company's Board of
Directors determined that the Company would not, at that time, continue to
pursue a business combination transaction with another party.
In early to mid December 1998, the Parent's Board of Directors held a
specially called telephonic meeting to reconsider a possible transaction
involving the Company. Parent's reconsideration reflected, among other things,
Parent's changing views about market conditions and customer expectations. Soon
after this meeting, a representative of Gleacher contacted Sangwoo Ahn, the
Chairman of the Company, to arrange a meeting to discuss the Parent's renewed
interest in a transaction with the Company.
In mid December 1998, Mr. Ahn met with a representative of Gleacher, and
the Gleacher representative expressed to Mr. Ahn Parent's interest in discussing
a potential transaction between the Parent and the Company.
In late December 1998, Mr. Ahn conveyed to a representative of Gleacher the
Company's response to the Parent's expression of interest and noted that the
Company might pursue a transaction with the Parent at a price higher than that
discussed at the earlier meeting. Mr. Ahn and the representative of Gleacher
agreed that the Company and the Parent would reconsider their respective
positions over the holidays.
In early February, at the direction of the Parent, Gleacher sent a letter
to Mr. Ahn expressing the Parent's continued interest in discussing a
transaction with the Company and indicating that the Parent would be willing to
consider paying a higher per share purchase price than had been discussed at the
earlier meeting between representatives of Gleacher and Mr. Ahn.
14
<PAGE> 17
Later in early February 1999, Mr. Ahn contacted representatives of Gleacher
and offered the Parent an opportunity to conduct a due diligence investigation
of the Company. Through representatives of Gleacher, the Company accepted this
offer and delivered to the Company a written description of the scope of the
investigation it proposed to conduct. Thereafter representatives of Merrill
Lynch contacted representatives of Gleacher to coordinate a due diligence
meeting.
In mid February 1999, the Board of Directors of the Parent met in a
regularly scheduled meeting and discussed the potential transaction with the
Company.
In late February 1999, representatives of the Company's management and
Merrill Lynch met with representatives of the Parent's management and Gleacher
and made presentations to them concerning the Company's business. At the same
meeting, the various participants discussed the terms of a potential transaction
between the Parent and the Company.
In mid March 1999, representatives of Merrill Lynch and the Company's legal
counsel delivered to the Parent a draft merger agreement. Representatives of
Merrill Lynch requested that the Parent submit to the Company a written proposal
concerning a transaction with the Company together with any proposed changes to
the draft of the merger agreement.
During March and April 1999, the Parent, together with its legal counsel
and independent public accountants, conducted a due diligence investigation of
the Company, (including reviews of the Company's business, operations and
financial condition), had discussions with members of the Company's management,
and visited certain facilities of the Company.
In late March and early April 1999, the Parent's Board of Directors held
telephonic meetings to review the status of the Parent's due diligence
investigation of the Company and to further consider a transaction involving the
Company. At these meetings, representatives of Gleacher presented financial
analyses of the proposed transaction, and representatives of the Company's legal
counsel presented a summary of the draft merger agreement and draft stockholders
agreement and commented on various legal issues related to these draft
agreements.
In early to mid April 1999, Mr. Black on behalf of the Parent submitted to
Merrill Lynch a written proposal for a transaction between the Parent and the
Company, including comments on the Company's draft merger agreement and draft
stockholders agreement.
In mid April 1999, a representative of Merrill Lynch contacted a
representative of Gleacher to discuss certain issues related to the Parent's
proposal, including the proposed per share purchase price and certain issues
related to the draft stockholders agreement, and the Company's legal advisors
contacted the Parent's legal advisors to discuss certain issues related to the
draft merger agreement.
Later in mid April 1999, Mr. Black on behalf of the Parent submitted to
Merrill Lynch a revised written proposal for a transaction between the Parent
and the Company, which revised proposal included an increased per share purchase
price and included certain changes to the draft stockholders agreement.
From mid April through early May 1999, representatives of the Parent
conducted additional due diligence and representatives of the Parent and
Company, along with their respective legal and financial advisors, conducted
further negotiations concerning the terms of the draft merger agreement and
draft stockholders agreement.
In early May 1999, the Parent's Board of Directors met by telephone to
discuss the proposed transaction with the Company. At this meeting,
representatives of Gleacher delivered orally to the Parent's Board of Directors
Gleacher's opinion (later confirmed in writing) that the consideration proposed
to be paid by the Parent in the proposed transaction with the Company was fair,
from a financial point of view, to the Parent. Also at this meeting,
representatives of the Parent's legal counsel commented on various legal issues
related to the draft merger agreement and draft stockholders agreement and
explained the principal changes that had been made to such documents in the
negotiations with the Company and its advisors. After discussing the proposed
transaction, the Parent's Board of Directors unanimously approved the
transaction.
15
<PAGE> 18
Later in early May 1999, the Company's Board of Directors held a special
meeting to consider the proposed transaction. At this meeting, representatives
of Merrill Lynch made a presentation concerning certain financial analyses that
it had performed in connection with its review of the proposed transaction and
rendered orally to the Company's Board of Directors Merrill Lynch's opinion
(later confirmed in writing) that the consideration to be received by the
Company's shareholders pursuant to the Offer and the Merger, taken together, was
fair, from a financial point of view, to such shareholders. The representatives
of Merrill Lynch also reviewed with the Company's Board of Directors Merrill
Lynch's discussions with certain third parties who were also potentially
interested in concluding transactions with the Company. The Company's legal
counsel presented a summary of the draft merger agreement and draft stockholders
agreement and commented on various legal issues related thereto.
On May 10, 1999, representatives of the Parent, the Merger Subsidiary and
the Company executed the Merger Agreement and the Stockholders Agreements. On
May 11, 1999, Parent and the Company issued a joint press release announcing the
transaction.
On May 17, 1999, the Merger Subsidiary commenced the Offer.
11. THE MERGER AGREEMENT; THE STOCKHOLDERS AGREEMENT.
The following is a summary of the Merger Agreement and the Stockholders
Agreements, which summaries are qualified in their entirety by reference to the
Merger Agreement, the Stockholders Agreements and such other agreements which
are filed as exhibits to the Tender Offer Statement on Schedule 14D-1.
The Offer. The Merger Agreement provides for the commencement of the Offer
as soon as practicable after the execution of the Merger Agreement, but in no
event later than the fifth business day after the public announcement of the
execution of the Merger Agreement. The obligation of the Merger Subsidiary to
accept for payment or pay for any Shares tendered pursuant to the Offer is
subject to the satisfaction or waiver (to the extent permitted by the Merger
Agreement) of the conditions set forth in Section 15 (the "Offer Conditions").
The Parent or the Merger Subsidiary may waive any such condition in whole or in
part and make any other changes in the terms and conditions of the Offer,
subject to the terms of the Merger Agreement.
Under the terms of the Merger Agreement, each of the Parent and Merger
Subsidiary expressly reserves the right to modify the terms of the Offer, except
that neither Parent nor Merger Subsidiary shall, without the prior written
consent of the Company, decrease the consideration payable in the Offer, change
the form of consideration payable in the Offer, decrease the number of Shares
sought pursuant to the Offer, change or modify the conditions to the Offer in a
manner adverse to the Company or holders of Shares, impose additional conditions
to the Offer, waive the Minimum Tender Condition, or amend any term of the Offer
in any manner adverse to the Company or holders of Shares. The Merger Subsidiary
shall have no obligation to pay interest on the purchase price of tendered
Shares, including in the event the Merger Subsidiary exercises its right to
extend the period of time during which the Offer is open. The rights reserved by
the Merger Subsidiary in this paragraph are in addition to the Merger
Subsidiary's rights to terminate the Offer pursuant to Section 15. The Merger
Agreement provides that, subject to the terms and conditions of the Offer and
the Merger Agreement and the satisfaction or waiver (to the extent permitted) of
all the Offer Conditions as of the Expiration Date, the Merger Subsidiary will
accept for payment and pay for all Shares validly tendered and not withdrawn
pursuant to the Offer as soon as practicable after the Expiration Date.
Notwithstanding the foregoing, the Merger Subsidiary, without the consent of the
Company, (i) must extend the Offer for an aggregate of 10 additional business
days after the then scheduled expiration date of the Offer to the extent
necessary to permit such conditions to be satisfied (the "First Extension
Period"); (ii) may extend the Offer, if at the end of the First Extension Period
any of the conditions to the Merger Subsidiary's obligation to accept for
payment and pay for Shares shall not have been satisfied, until such time as
such condition is satisfied or waived; and (iii) may extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Commission or the staff thereof applicable to the Offer.
Composition of the Board of Directors After the Offer. The Merger
Agreement provides that, promptly upon the acceptance for payment of and payment
for any Shares by the Merger Subsidiary, the Merger
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<PAGE> 19
Subsidiary shall be entitled to designate such number of directors, rounded up
to the next whole number, on the Board of Directors of the Company as will give
the Merger Subsidiary, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors equal to the product of (i) the
number of directors on the Board of Directors and (ii) the percentage that such
number of votes represented by Shares so purchased bears to the number of votes
represented by Shares outstanding. The Company shall at such time, subject to
applicable law, including applicable fiduciary duties, cause the Merger
Subsidiary's designees to be so elected by its existing Board of Directors. In
connection with the foregoing, the Company will, subject to applicable law,
including applicable fiduciary duties, promptly, at the option of the Parent,
either increase the size of the Board of Directors and/or use its best efforts
to obtain the resignation of such number of its current directors as is
necessary to enable the Merger Subsidiary's designees to be elected or appointed
by the Board of Directors as provided above.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the satisfaction or waiver of the conditions thereof (and including those
described in Section 15) and in accordance with the DGCL, at the Effective Time,
the Merger Subsidiary shall be merged with and into the Company. Following the
Merger, the separate corporate existence of the Merger Subsidiary shall cease
and the Company shall continue as the surviving corporation.
Certificate of Incorporation, By-laws, Directors and Officers After the
Merger. The Merger Agreement provides that the certificate of incorporation of
the Company, as in effect immediately prior to the Effective Time, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended in accordance with its terms and applicable law. The by-laws of the
Merger Subsidiary as in effect immediately prior to the Effective Time shall be
the by-laws of the Surviving Corporation from and after the Effective Time until
thereafter amended in accordance with their terms and applicable law. The Merger
Agreement also provides that the directors of the Merger Subsidiary immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, in
each case until their respective successors are duly elected and qualified.
Conversion of Shares. Pursuant to the Merger Agreement, at the Effective
Time, each Share issued and outstanding immediately prior to the Effective Time
(other than any Shares held by Parent, the Merger Subsidiary, any subsidiary of
the Parent, or in the treasury of the Company, which Shares, by virtue of the
Merger, shall be canceled and shall cease to exist with no payment being made
with respect thereto, and other than Dissenting Shares) shall be converted into
the right to receive in cash the Offer Price payable to the holder thereof,
without interest (the "Merger Consideration"), upon surrender of the certificate
formerly representing such Share. Each share of common stock of the Merger
Subsidiary issued and outstanding immediately prior to the Effective Time shall
be converted into one share of common stock of the Surviving Corporation.
Conversion of Options. The Merger Agreement provides that, immediately
prior to the Effective Time, all of the outstanding stock options granted under
any stock option, performance unit or similar plan of the Company, whether or
not then exercisable or vested, shall be canceled by the Company, and the holder
thereof shall be entitled to receive at the Effective Time from the Company in
consideration for such cancellation an amount in cash equal to the product of
(a) the excess of the Merger Consideration over the exercise price per Share
thereof and (b) the number of Shares subject to such stock option, whether or
not then vested or exercisable (net of taxes required by law to be withheld with
respect thereto).
The Merger Agreement also provides that the Company shall take all actions
as are reasonably necessary to cause the "Share Purchase Date" applicable to the
then current "Offering Period" (both, within the meaning of the Gradall
Industries, Inc. Employee Stock Purchase Plan (the "Stock Purchase Plan")) to be
the last trading day on which the Company Common Stock is traded on the NASDAQ,
immediately prior to the date which is fifteen (15) business days following the
acceptance for payment for Shares under the Offer (or, if earlier, the Effective
Time) (the "New Purchase Date"); provided that, such change in the "Share
Purchase Date" shall be conditioned upon the acceptance for payment of Shares
under the Offer. On the New
17
<PAGE> 20
Purchase Date, the Company shall apply the funds credited as of such date under
the Stock Purchase Plan within each participant's payroll withholdings account
to the purchase of whole shares of Common Stock in accordance with the terms of
the Stock Purchase Plan; provided, however that the cost to each participant in
the Stock Purchase Plan for the shares shall be the lower of 85% of the closing
sale price of Company Common Stock, as reported on the NASDAQ on (i) the first
trading day of the then current Offering Period or (ii) the last trading day
prior to the New Purchase Date.
Dissenting Shares. The Merger Agreement provides that, notwithstanding
anything to the contrary, any issued and outstanding Shares held by a person (a
"Dissenting Stockholder") who objects to the Merger and complies with all the
provisions of Delaware law concerning the right of holders of Shares to require
appraisal of their Shares ("Dissenting Shares") shall not be converted into the
right to receive the Merger Consideration, but shall be entitled to receive such
consideration as may be determined to be due to such Dissenting Stockholder
pursuant to the laws of the State of Delaware. If, after the Effective Time,
such Dissenting Stockholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case pursuant to the
DGCL, his Shares shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give the Parent
prompt notice of any demands for appraisals of Shares received by the Company
and the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not, except as
required by any competent court, without the prior written consent of the
Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate any such demands.
Stockholders Meeting. The Merger Agreement provides that after
consummation of the Offer, to the extent required by applicable law, the Company
shall promptly take all action necessary in accordance with the DGCL and its
certificate of incorporation and bylaws to convene a Company stockholders
meeting to consider and vote on the Merger and the Merger Agreement. At the
Company stockholders meeting, all of the Shares then owned by the Parent, the
Merger Subsidiary or any other subsidiary of the Parent will be voted to approve
the Merger and the Merger Agreement. Subject to its fiduciary duties and its
duties as set forth in the subsection titled "No Solicitation of Transactions,"
below, the Board of Directors shall recommend that the Company's stockholders
vote to approve the Merger and the Merger Agreement if such vote is sought and
shall use its best efforts to solicit from the stockholders of the Company
proxies in favor the of the Merger.
The Merger Agreement also provides that, if required under applicable law,
the Company and the Parent will prepare a letter to the stockholders, notice of
meeting, proxy statement and form of proxy, or the information statement, as the
case may be, to be distributed to the stockholders in connection with the Merger
(the "Proxy Statement"). The Company and the Parent will file the Proxy
Statement with the Commission under the Exchange Act as promptly as practicable
after the Merger Subsidiary purchases Shares pursuant to the Offer, and use all
reasonable efforts to have the Proxy Statement cleared by the Commission. As
promptly as practicable after the Proxy Statement has been cleared by the
Commission, the Company shall mail the Proxy Statement to the stockholders of
the Company as of the record date for the Company stockholders meeting. If, at
any time prior to the Effective Time, any event occurs relating to the Parent or
any of its subsidiaries, affiliates, officers or directors that is required
pursuant to applicable law to be set forth in a supplement to the Proxy
Statement, the Parent shall promptly inform the Company of such event.
The Merger Agreement also provides that, notwithstanding the foregoing, in
the event that the Merger Subsidiary acquires Shares representing at least 90%
of the votes represented by all of the outstanding common stock of the Company,
the parties thereto agree, at the request of the Merger Subsidiary, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of the DGCL, as soon as reasonably practicable after
such acquisition, without a meeting of the stockholders of the Company.
The Merger Agreement also provides in the event that, pursuant to the Offer
or otherwise, the Parent or the Merger Subsidiary acquire in the aggregate a
number of the outstanding shares of each class of capital stock of the Company
sufficient to enable the Merger Subsidiary or the Company to cause the Merger to
become effective without a meeting of stockholders of the Company, the parties
thereto shall, at the request of
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the Parent, take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition without a meeting
of stockholders of the Company.
Conduct of Business Pending the Merger. The Company has agreed that,
during the period from the date of the Merger Agreement to the Effective Time,
except pursuant to the terms of the Merger Agreement or unless the Parent
otherwise agrees in writing, the Company will, and will cause each of its
subsidiaries to conduct its operations according to its ordinary and usual
course of business in accordance with past practices, including substantial
compliance with all applicable laws and the preservation, in accordance with
commercially reasonable practices, of the Company's material business and assets
(including relationships with its significant customers and suppliers).
Without limiting the generality of the foregoing and except as otherwise
expressly contemplated by the Merger Agreement, the Company has agreed that the
Company and its subsidiaries shall refrain from taking various actions without
the Parent's prior written consent until the Effective Time. These prohibitions
cover, among other things, limitations on (i) issuing, selling, or pledging, or
authorizing or proposing the issuance, sale or pledge of (A) additional shares
of capital stock of any class (including the Shares), or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or granting or accelerating any right to
convert or exchange any securities of the Company for Shares, or (B) any other
securities in respect of, in lieu of or in substitution for Shares outstanding
on the date thereof or split, combine or reclassify any of the Company's capital
stock; (ii) purchasing, redeeming or otherwise acquiring, or proposing to
purchase or otherwise acquire, any of its outstanding securities (including the
Shares); (iii) declaring, setting aside or paying any dividend or other
distribution on any shares of capital stock of the Company; (iv) making any
acquisition of any corporation or similar entity or a material amount of the
assets of any corporation or similar entity, or selling a material amount of its
assets, except in all instances for actions in the ordinary course of business;
(v) except in the ordinary course of business, (A) incurring any indebtedness
for borrowed money or guaranteeing any such indebtedness of another person or
(B) making any loans, advances of capital contributions to, or investments in,
any other person, other than to the Company or any direct or indirect
wholly-owned subsidiary of the Company; (vi) proposing or adopting any
amendments to the certificate of incorporation or bylaws of the Company; (vii)
except in the ordinary course of business and for any labor or collective
bargaining agreement, entering into any new employment, severance or termination
agreements with, or granting any increase in severance or termination pay to,
any officers, directors or key employees or granting any material increases in
the compensation or benefits to officers, directors and key employees; (viii)
changing any accounting methods, principles or practices materially affecting
their assets, liabilities or business except insofar as may be required by a
change in generally accepted accounting principles; (ix) making any material tax
election or settling or compromising any material income tax liability; (x)
except for any labor or collective bargaining agreement, permitting any material
amendment or waiving any material rights with respect to any Material Contract
(as defined in the Merger Agreement), or permitting any discretionary release of
escrowed assets held pursuant to any escrow agreement included within the
definition of Material Contract; (xi) without first consulting with Parent
regarding any material Company proposal, engaging in any negotiations with
officials or representatives of any labor union with respect to such material
proposal regarding any possible modification, extension or replacement of any
union contract or collective bargaining agreement; provided that the Company
shall not be obligated to alter any such proposal after consultation with the
Parent; (xii) taking or permitting any action (over which it has control) that
would make any representation or warranty of the Company under the Merger
Agreement inaccurate in any material respect or omit to take any action (which
action is commercially reasonable) necessary to prevent such representation or
warranty from being inaccurate; or (xiii) agreeing in writing or otherwise to
take any of the foregoing actions.
Access to Information. Pursuant to the Merger Agreement from the date
thereof to the Effective Time, the Company shall upon reasonable notice (i) give
the Parent and its authorized representatives reasonable access during regular
business hours to the Company's and each of its subsidiary's plants, offices,
warehouses and other facilities and to its books and records, (ii) permit the
Parent to make such inspections as it may require, and (iii) cause its officers,
employees and agents and those of its subsidiaries to furnish the Parent with
such financial and operating data and other information with respect to the
business and properties of the
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<PAGE> 22
Company and the subsidiaries as the Parent may from time to time reasonably
request. Any information obtained by the Parent shall be subject to the
provisions of a confidentiality agreement previously entered into between the
Company and the Parent.
Best Efforts. The Merger Agreement provides that, subject to the terms and
conditions thereof, each of the parties thereto shall use its best efforts to
ensure that the conditions set forth in the Merger Agreement are satisfied and
to consummate and make effective the transactions contemplated by the Offer, the
Merger and the Merger Agreement as promptly as practicable. The Company shall
also provide all reasonable cooperation in connection with any financing of the
Offer and the Merger.
Public Announcements. So long as the Merger Agreement is in effect, the
Parent, the Merger Subsidiary and the Company agree to consult with each other
before issuing any press release or otherwise making any public statement with
respect to the transactions contemplated by the Merger Agreement and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with any
national securities exchange or the NASDAQ Stock Market.
Employment Benefits Matters. The Merger Agreement provides that from and
after the Effective Time, the Parent will cause the Surviving Corporation to
honor, in accordance with their existing terms, existing employment, severance,
consulting or other compensation agreements, plans or contracts between the
Company or any Commonly Controlled Entity (as defined in the Merger Agreement)
of the Company and any officer, director or employee of the Company or any
Commonly Controlled Entity of the Company which are specifically disclosed by
the Company pursuant to the Merger Agreement; provided, however, that prior to
the Effective Time, the Company will implement the change of the Share Purchase
Date under the Stock Purchase Plan prior to the acceptance for payment of the
Shares under the Offer Agreement.
For the one-year period immediately following the Effective Time, the
Parent has agreed to cause the Surviving Corporation to provide the employees of
the Surviving Corporation with benefits and coverage under such benefit plans,
programs and arrangements that are no less favorable to the employees in the
aggregate than the Benefit Plans (as defined in the Merger Agreement), provided,
however, to the extent that any such benefit plans, programs and arrangements
that are pension plans (whether qualified or nonqualified, including, but not
limited to, the Gradall Industries, Inc. Restoration Plan and the Gradall
Industries, Inc. Amended and Restated Supplemental Executive Retirement Plan)
are terminated or suspended at any time after the one-year period immediately
following the Effective Time, the Parent has agreed to cause the Surviving
Corporation to fully vest any participant in any such pension plans and pay the
full accrued benefit on an unreduced and nondiscounted basis under the
nonqualified plans (and with respect to the Gradall Industries, Inc. Benefit
Restoration Plan, as if the participant retired at the age 62 with 30 years of
service under such Plan) to the participant at the time of the termination or
suspension.
Indemnification. The Merger Agreement provides that from and after the
Effective Time, the Parent and the Surviving Corporation will indemnify, defend
and hold harmless each person who was, is now, or who becomes prior to the
Effective Time, an officer, director or employee of the Company against all
losses, expenses, claims, damage, liabilities, costs, expenses, judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval will not be unreasonably withheld) arising out of the
transactions contemplated by the Merger Agreement to the fullest extent provided
for under the Company's certificate of incorporation and by-laws as in effect as
of the date of the execution of the Merger Agreement, including without
limitation the advancement of expenses. All rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current or former directors or
officers of the Company and its subsidiaries as provided in their respective
certificates of incorporation or by-laws (or comparable organizational
documents) and any indemnification agreements of the Company will be assumed by
the Surviving Corporation in the Merger, without further action, as of the
Effective Time, will survive the Merger and will continue in full force and
effect (to the extent consistent with applicable law) in accordance with their
terms.
The Merger Agreement also provides that from and after the Effective Time,
the Parent has agreed to cause the Surviving Corporation to honor its
indemnification commitments and obligations and that the Parent
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will guarantee the due and prompt performance in full of the Surviving
Corporation's indemnification commitments and obligations. In the event that the
Parent or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers of conveys all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision will be made so
that the successors and assigns of Parent or the Surviving Corporation, as the
case may be, assume the indemnification obligations.
The Merger Agreement also provides that for at least six years after the
Effective Time, the Surviving Corporation shall provide officers' and directors'
liability insurance in respect of acts or omissions occurring prior to or at the
Effective Time, including but not limited to the transactions contemplated by
the Merger Agreement, covering each person covered by the Company's officers'
and directors' liability insurance policy in effect prior to the Effective Time
on terms with respect to coverage and amount no less favorable as a whole than
those of such policy in effect on the date of the execution of the Merger
Agreement; provided that in satisfying its indemnification obligations, the
Surviving Corporation shall not be obligated to pay total premiums in excess of
$400,000.
No Solicitation of Transactions. The Merger Agreement provides that the
Company will not, nor shall it permit any of its subsidiaries to, nor will it
authorize or permit any officer, director, employee, agent or representative of
the Company or any of its subsidiaries ("Company Representatives") to, directly
or indirectly, (i) solicit, initiate, or knowingly facilitate the submission of
any Acquisition Proposal (as defined below) or any inquiries regarding any
Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any person (including any parties with which the
Company or any representative of the Company has previously engaged in
discussions or negotiations with respect to any Acquisition Proposal) any
information with respect to its business, properties or assets for the purpose
of facilitating the consummation of any Acquisition Proposal, or (iii) enter
into any agreement with respect to any Acquisition Proposal; provided, however,
that the foregoing shall not prohibit the Company or any of its subsidiaries or
Company Representatives from, prior to the acceptance for payment of Shares
pursuant to the Offer, (A) furnishing information pursuant to a confidentiality
letter (which will be provided for informational purposes to the Parent, subject
to the Company's duty to disclose to Parent any request for nonpublic
information, if not in contravention of the Company's fiduciary duties), with
terms no less favorable than the confidentiality agreement entered into by the
Parent and the Company concerning the Company and its businesses, properties or
assets to a person who has made an unsolicited written Acquisition Proposal, or
(B) engaging in discussions or negotiations with such person who has made an
unsolicited written Acquisition Proposal, but in each case referred to in the
foregoing clauses (A) and (B) only to the extent that the Board of Directors of
the Company shall have concluded in good faith, after consultation with its
outside legal counsel, that such action is necessary in order for the Board of
Directors to comply with its fiduciary duties to the stockholders of the Company
under applicable law. "Acquisition Proposal" means any proposal or offer for, or
any expression of interest (by public announcement or otherwise) by any person,
other than the Parent or its affiliates, in a merger or other business
combination involving the Company or any inquiry, proposal or offer to acquire
in any manner (including through a joint venture with the Company), directly or
indirectly, all or any significant portion of the assets or capital stock of the
Company or any subsidiary of the Company.
The Merger Agreement also provides that except as set forth above, neither
the Board of Directors nor any committee thereof will (i) withdraw or modify, or
publicly propose to withdraw or modify, in a manner adverse to the Parent or the
Merger Subsidiary, the approval or recommendation by such Board of Directors or
any committee thereof of the Merger Agreement or the Merger , (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Proposal or (iii)
cause the Company or any subsidiary to enter into any agreement with respect to
any Acquisition Proposal. Notwithstanding the foregoing, in the event the Board
of Directors of the Company receives an unsolicited bona fide Acquisition
Proposal that is a Superior Proposal, the Board of Directors of the Company may,
if it shall have concluded in good faith, after consultation with its outside
legal counsel, that such action is necessary in order for the Board of Directors
to comply with its fiduciary duties to the stockholders of the Company under
applicable law, withdraw or modify its approval or recommendation of the Offer,
the Merger Agreement and the Merger taken together, or
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approve or recommend any such Superior Proposal, or terminate the Merger
Agreement in order to enter into an agreement with respect to such a Superior
Proposal or enter into any agreement with respect to such a Superior Proposal,
in each case after Parent's receipt of written notice (a "Notice of Superior
Proposal") advising Parent that the Board of Directors of the Company has
received a Superior Proposal and specifying the material terms and conditions of
such Superior Proposal. A "Superior Proposal" means any bona fide written
Acquisition Proposal on terms which the Board of Directors of the Company
determines in its good faith judgment, after consultation with Merrill Lynch or
another financial advisor of nationally recognized reputation, to be more
favorable to the Company's stockholders than the Offer and the Merger.
The Merger Agreement also provides that, in addition to the obligations of
the Company set forth in the paragraph above, the Company shall promptly, and in
any event prior to taking any of the actions in clauses (A) and (B) above,
advise the Parent of any request for nonpublic information or of any Acquisition
Proposal, and the material terms and conditions of such request or Acquisition
Proposal; provided, however, that the Company is not required to provide to the
Parent any information if and to the extent that the Board of Directors of the
Company determined in good faith and after consultation with outside counsel
that in the exercise of its fiduciary obligations it is necessary to refrain
from furnishing such information.
Nothing contained in the "No Solicitation" section of the Merger Agreement
will prohibit the Company from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to the Company's stockholders if, in the good faith
judgment of the Board of Directors of the Company, after consultation with
outside counsel, the failure to so disclose would violate applicable law.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including, but
not limited to, representations and warranties by the Company concerning the
Company's existence, authority, capitalization, subsidiaries, required filings
and consents, approval of the Merger Agreement and the transactions contemplated
thereby, Commission filings and financial statements, absence of certain changes
or events, business, compliance with law, absence of litigation, employee
benefit plans, environmental matters, tax matters, intellectual property
matters, insurance matters, labor matters, the rights agreement, Year 2000
compliance, Material Contracts and brokers. Some of the representations are
qualified by a Company Material Adverse Effect clause and/or qualified by
reference to the knowledge of certain officers at the Company. "Company Material
Adverse Effect" means (i) a material adverse effect on the financial condition,
assets, liabilities, business, or results of operations of the Company and its
subsidiaries taken as a whole; or (ii) a material adverse effect on the ability
of the Company to perform its obligations under the Merger Agreement or to
consummate the transactions contemplated thereby, provided that a material
adverse effect on the liabilities of the Company shall be deemed to be a loss,
casualty, damage, judgment, fine or other liability (net of any corresponding
asset), in each case whether contingent or realized, required in accordance with
generally accepted accounting principles to be reflected on the Company's
consolidated financial statements and that if so reflected would reduce the
Company's consolidated stockholders equity by more than $2 million.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of the Parent, the Merger Subsidiary and the Company to consummate
the Merger are subject to the satisfaction, or waiver, where permissible, at or
before the Effective Time, of each of the following conditions:
(a) if required by applicable law, the Merger shall have been approved
by the affirmative vote of the stockholders of the Company by the requisite
vote in accordance with applicable law;
(b) any applicable waiting period under the HSR Act (and any extension
thereof) relating to the Merger shall have expired or been earlier
terminated;
(c) the Merger Subsidiary shall have, pursuant to the Offer, accepted
for payment and paid for at least that number of Shares which would
represent at least a majority of the voting power represented by the Shares
and other securities entitled generally to vote in the election of the
directors of the Company outstanding on a fully diluted basis after giving
effect to the exercise or conversion of all options, rights and securities
exercisable or convertible into or exchangeable for Shares or such voting
securities;
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provided, however, that the Parent may not invoke this condition if the
Merger Subsidiary shall have failed to purchase Shares so tendered in
violation of the terms of the Merger Agreement;
(d) no preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body
or authority which enjoins, restrains or prohibits the transactions
contemplated by the Merger Agreement or has the effect of making the Merger
illegal and which is in effect at the Effective Time; (each party agrees to
use its best efforts to have any such injunction or order lifted);
(e) no statute, rule, regulation, executive order, decree or order of
any kind shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which prohibits the consummation of the
Merger or has the effect of making the Merger illegal.
Termination Events. The Merger Agreement can be terminated and the Offer
and the Merger contemplated thereby may be abandoned at any time prior to the
Effective Time (except with respect to paragraph (h) and (i) below, which shall
be prior to acceptance of payment for Shares under the Offer) and
notwithstanding approval thereof by the stockholders of the Company:
(a) by mutual written consent of the Parent and the Company;
(b) by the Company, if the Offer has not been commenced within five
business days following the date of execution of the Merger Agreement, or
if the Parent or the Merger Subsidiary shall have breached any covenant in
Section 1.01 of the Merger Agreement (commencement of the Offer) or its
representation and warranty with respect to financing;
(c) by either the Company or the Parent, if there shall be any law or
regulation of any competent authority that makes consummation of the Offer
or the Merger illegal or otherwise prohibited or if any judgment,
injunction, order or decree of any competent authority enjoining the Parent
or the Company from consummating the Offer or the Merger is entered and
such judgment, injunction, order or decree shall become final and
unappealable;
(d) by either the Company or the Parent, if the Board of Directors of
the Company; shall have (i) withdrawn or modified in a manner adverse to
Parent and Merger Subsidiary its approval or recommendation of the Offer or
the Merger or (ii) approved or recommended any Acquisition Proposal in
respect of the Company or (iii) resolved to take any of the foregoing
actions, in each case in compliance with the provisions contained in the
subsection "No Solicitation of Transactions";
(e) by either the Parent or the Company if the Merger has not been
consummated by September 30, 1999; provided, however, that the right to
terminate the Merger Agreement pursuant to this sentence will not be
available to any party whose failure to perform any of its obligations
under the Merger Agreement results in the failure of the Merger to be
consummated by such time;
(f) by either the Company or the Parent, if the required approval of
the Company's stockholders shall not have been obtained at a Company
stockholders meeting duly convened therefor or at any adjournment or
postponement thereof, subject to the terms set forth in the subsection
"Stockholders Meetings";
(g) by either the Company or the Parent if, without any material
breach by such terminating party of its obligations under the Merger
Agreement, the purchase of Shares pursuant to the Offer shall not have
occurred on or before September 30, 1999;
(h) by Parent or the Company prior to acceptance for payment of Shares
under the Offer, if the non-terminating party shall have breached in any
material respect or failed to perform in any material respect any of its
representations, warranties, covenants or other obligations under the
Merger Agreement which breach of failure to perform cannot be or has not
been cured within 10 days after the giving of written notice to the
non-terminating party of such breach or failure to perform (provided that
the terminating party is not then in breach in any material respect or
failing to perform in any material respect any of its representations,
warranties, covenants or other obligations under the Merger Agreement
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that cannot be or has not been cured within 10 days after giving written
notice to the terminating party of such breach or failure to perform); or
(i) by Parent prior to acceptance for payment of Shares under the
Offer, if MLGA Fund II, L.P. shall have breached in any material respect or
failed to perform in any material respect any of its representations,
warranties, covenants or other obligations under the MLGA Stockholders
Agreement (as defined below in the subsection "Stockholders Agreements")
which breach or failure to perform cannot be or has not been cured within
10 days after the giving of written notice to the breaching stockholder of
such breach or failure to perform (provided that Parent is not then in
breach in any material respect or failing to perform in any material
respect any of its representations, warranties, covenants or other
obligations under the MLGA Stockholders Agreement that cannot be or has not
been cured within 10 days after giving written notice to the Parent of such
breach or failure to perform).
Termination Fees and Expenses. The Merger Agreement provides that if the
Merger Agreement is terminated by the Parent as described in paragraph (d) under
the subsection "Termination Events", above, or as described in paragraphs (h) or
(i) under the subsection "Termination Events", above, and within six months
thereafter, the Company enters into an agreement with respect to an Acquisition
Proposal or completes a transaction pursuant to an Acquisition Proposal, the
Company shall pay to the Parent by wire transfer of immediately available funds
to an account designated by the Parent, an amount equal to $6,000,000 (the
"Termination Fee").
If the Company fails to promptly pay such Termination Fee, and, in order to
obtain such payment, the Parent commences a suit which results in a judgment
against the Company for the Termination Fee, the Company shall also pay to the
Parent its costs and expenses incurred in connection with such litigation
together with interest or such unpaid amounts commencing on the date the
Termination Fee became due at a rate equal to the rate of interest announced by
Citibank N.A. from time to time, in the City of New York at such bank's prime or
base rate.
Stockholders Agreements. Concurrently with the execution and delivery of
the Merger Agreement, the Parent, the Merger Subsidiary and the Company entered
into (i) a Stockholders Agreement with MLGA (the "MLGA Stockholders Agreement")
and (ii) a Stockholders Agreement with certain directors and executive officers
of the Company (the "Management Stockholders Agreement"). The MLGA Stockholders
Agreement and the Management Stockholders Agreement are referred to herein
collectively as the "Stockholders Agreements".
Pursuant to the Stockholders Agreements, each Principal Holder agrees to
validly tender (or cause the record owner of such shares to validly tender),
pursuant to and in accordance with the terms of the Offer, as soon as
practicable after commencement of the Offer but in no event later than fifteen
business days after the date of commencement of the Offer, all of such Principal
Holder's Shares, whether owned by the Principal Holder as of the execution date
of the Stockholders Agreements or acquired thereafter, and to not withdraw such
Shares.
The Stockholders Agreements also provide that each of the Principal Holders
agree to vote or cause to be voted at any stockholders meeting all of such
Principal Holder's Shares in favor of adopting the Merger Agreement, in favor of
any other matter necessary or appropriate for the consummation of the
transactions contemplated by the Merger Agreement and against the adoption of
any Adverse Proposal. "Adverse Proposal" means any (1) proposal or action that
would reasonably be expected to result in a breach of any covenant,
representation or warranty of the Company set forth in the Merger Agreement, or
(2) the following actions (other than the Offer, the Merger and the other
transactions contemplated by the Merger Agreement): (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or its subsidiaries; (ii) a sale, lease or
transfer of a material amount of assets of the Company or one of its
subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or any of its subsidiaries; or (iii) (A) any change in a majority
of the persons who constitute the Board of Directors of the Company; (B) any
change in the capitalization of the Company or any amendment of the Company's
certificate of incorporation or bylaws, as amended; (C) any other material
change in the Company's or any of its subsidiaries' corporate structure or
business; or (D) any other action
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that is intended, or could reasonably be expected, to impede, interfere with,
delay, postpone, or adversely affect the Merger and the other transactions
contemplated by the Stockholders Agreements and the Merger Agreement.
The Stockholders Agreements also provide that each of the Principal Holders
will grant an irrevocable proxy to the Merger Subsidiary to vote their Shares
during the term of the Stockholders Agreement (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and of the terms
thereof and each of the other actions contemplated by the Merger Agreement, the
Stockholders Agreement and any actions required in furtherance thereof and (ii)
against the adoption of any Adverse Proposal.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Offer is being made pursuant to the Merger
Agreement. As promptly as practicable following consummation of the Offer and
after satisfaction or waiver of all conditions to the Merger set forth in the
Merger Agreement, the Merger Subsidiary intends to acquire the remaining equity
interest in the Company not acquired in the Offer by consummating the Merger.
Vote Required to Approve the Merger; Stockholder Approval. The Board of
Directors of the Company has approved and adopted the Merger and the Merger
Agreement in accordance with the DGCL. The Board will be required to submit the
Merger Agreement to the Company's stockholders for approval at a stockholders
meeting convened for that purpose in accordance with the DGCL, except as
otherwise required as described in the next paragraph. If stockholder approval
is required, the Merger Agreement must be approved by the vote of the holders of
a majority of the outstanding Shares. As a result, if the Minimum Tender
Condition is satisfied, the Merger Subsidiary will have the power, which it
intends to exercise, to approve the Merger Agreement without the affirmative
vote of any other stockholder
The Merger Agreement provides that, notwithstanding the foregoing, in the
event that the Parent, the Merger Subsidiary or any other subsidiary of the
Parent shall acquire at least 90% of the outstanding Shares pursuant to the
Offer, the parties thereto agree to take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after the
consummation of the Offer, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION WHICH THE MERGER SUBSIDIARY MAY MAKE WILL BE MADE ONLY
PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF
SECTION 14(A) OF THE EXCHANGE ACT
THE OFFER IS CONDITIONED UPON THE MINIMUM TENDER CONDITION BEING SATISFIED.
Appraisal Rights. Stockholders do not have appraisal rights as a result of
the Offer. However, if the Merger is consummated, stockholders of the Company at
the time of the Merger who do not vote in favor of the Merger will have the
right under the DGCL to dissent and demand appraisal of, and receive payment in
cash of the fair value of, their Shares outstanding immediately prior to the
Effective Date of the Merger in accordance with Section 262 of the DGCL.
Under the DGCL, dissenting stockholders who comply with the applicable
statutory procedures will be entitled to receive a judicial determination of the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of such merger or similar business combination)
and to receive payment of such fair value in cash. Any such judicial
determination of the fair value of such Shares could be based upon
considerations other than or in addition to the price paid in the Offer and the
Merger and the market value of the Shares. In Weinberger v. UOP, Inc., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding.
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Stockholders should recognize that the value so determined could be higher or
lower than the price per Share paid pursuant to the Offer or the consideration
per Share to be paid in the Merger or other similar business combination.
In addition, several decisions by Delaware courts have held that in certain
circumstances a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires that the merger be fair
to other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or injunctive relief may
be available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DELAWARE LAW.
The foregoing description of the DGCL is not necessarily complete and is
qualified in its entirely by reference to the DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Merger Subsidiary seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Merger Subsidiary is
deemed to have acquired control of the Company pursuant to the Offer and if the
Merger is consummated more than one year after completion of the Offer or an
alternative acquisition transaction is effected whereby stockholders of the
Company receive consideration less than that paid pursuant to the Offer, in
either case at a time when the Shares are still registered under the Exchange
Act, the Merger Subsidiary may be required to comply with Rule 13e-3 under the
Exchange Act. If applicable, Rule 13e-3 would require, among other things, that
certain financial information concerning the Company and certain information
relating to the fairness of the Merger or such alternative transaction and the
consideration offered to minority stockholders in the Merger or such alternative
transaction, be filed with the Commission and disclosed to stockholders prior to
consummation of the Merger or such alternative transaction. The purchase of a
substantial number of Shares pursuant to the Offer may result in the Company
being able to terminate its Exchange Act registration. See Section 14. If such
registration were terminated, Rule 13e-3 would be inapplicable to any such
future Merger or such alternative transaction.
Plans for the Company. The Parent does not have any current plans to
dispose of any businesses or other assets of the Company or to effect any
changes in its operations.
Except as described in this Offer to Purchase, none of the Merger
Subsidiary or the Parent or, to the best knowledge of the Merger Subsidiary, the
Parent or any of the persons listed on Schedule 1 have any present plans or
proposals that would relate to or result in an extraordinary corporate
transaction such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries or a sale or other transfer of a material
amount of assets of the Company or any of its subsidiaries, any material change
in the capitalization or dividend policy of the Company or any other material
change in the Company's corporate structure or business or the composition of
its Board of Directors or management.
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13. DIVIDENDS AND DISTRIBUTIONS.
If the Company should, on or after the date of the Merger Agreement, split,
combine or otherwise change the Shares or its capitalization, or disclose that
it has taken any such action, then without prejudice to the Merger Subsidiary's
rights under Section 15, the Merger Subsidiary may make such adjustments to the
purchase price and other terms of the Offer as it deems appropriate to reflect
such split, combination or other change.
If on or after the date of the Merger Agreement, the Company should declare
or pay any cash or stock dividend or other distribution on, or issue any rights
with respect to, the Shares that is payable or distributable to stockholders of
record on a date prior to the transfer to the name of the Merger Subsidiary or
the nominee or transferee of the Merger Subsidiary on the Company's stock
transfer records of such Shares that are purchased pursuant to the Offer, then
without prejudice to the Merger Subsidiary's rights under Section 15, (i) the
purchase price payable per Share by the Merger Subsidiary pursuant to the Offer
will be reduced to the extent any such dividend or distribution is payable in
cash and (ii) any non-cash dividend, distribution (including additional Shares)
or right received and held by a tendering stockholder shall be required to be
promptly remitted and transferred by the tendering stockholder to the Depositary
for the account of the Merger Subsidiary, accompanied by appropriate
documentation of transfer. Pending such remittance or appropriate assurance
thereof, the Merger Subsidiary will, subject to applicable law, be entitled to
all rights and privileges as owner of any such non-cash dividend, distribution
or right and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by the Merger Subsidiary in its
sole discretion.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ LISTING AND
EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of the remaining Shares. Following completion of the Offer, at least a majority
of the outstanding Shares will be owned by the Merger Subsidiary.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion in Nasdaq, which
require that an issuer have at least 200,000 publicly held shares, held by at
least 400 stockholders or 300 stockholders of round lots, with a market value of
at least $1,000,000 and have net tangible assets of at least $1,000,000,
$2,000,000 or $4,000,000, depending on profitability levels during the issuer's
four most recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in the NASD's Nasdaq Stock Market (the
"Nasdaq Stock Market") with quotations published in Nasdaq "additional list" or
in one of the "local lists," but if the number of holders of the Shares were to
fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for Nasdaq Stock Market reporting and Nasdaq Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. As of May 14, 1999, there
were approximately 143 holders of record and there were 9,515,460 Shares
outstanding. If as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in Nasdaq or in any other tier of Nasdaq Stock Market and the Shares
are no longer included in Nasdaq or in any other tier of Nasdaq Stock Market, as
the case may be, the market for the Shares could be adversely affected.
If Nasdaq were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchanges or
through other sources. The extent of the public market therefor and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act as described below
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and other factors. The Merger Subsidiary cannot predict whether the reduction in
the number of Shares that might otherwise trade publicly would have an adverse
or beneficial effect on the market price for or marketability of the Shares or
whether it would cause future market prices to be greater or less than the Offer
Price.
The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders. The termination of the registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
stockholders' meetings and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of the
securities pursuant to Rule 144 under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for Nasdaq reporting. If the Shares are
eligible for deregistration under the Exchange Act following the Offer, the
Parent expects to seek to deregister the Shares under the Exchange Act.
The Shares are currently "margin securities" under the rules of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"), which
has the effect, among other things, of allowing brokers to extend credit on the
collateral of such Shares for the purpose of buying, carrying, or trading in
securities ("purpose loans"). Depending upon factors similar to those described
above with respect to listing and market quotations, it is possible that,
following the Offer, the Shares might no longer constitute "margin securities"
for the purposes of the Federal Reserve Board's margin regulations and therefore
could no longer be used as collateral for purpose loans made by brokers.
15. CERTAIN CONDITIONS OF THE OFFER.
The Merger Agreement provides that, notwithstanding any other provision of
the Offer, the Merger Subsidiary shall not be obligated to accept for payment or
pay for, subject to Rule 14e-1(c) of the Exchange Act, any Shares not
theretofore accepted for payment, and, subject to the terms of the Merger
Agreement, may terminate or amend the Offer if (i) that number of Shares which
would represent at least a majority of the voting power represented by the
Shares and other securities entitled generally to vote in the election of
directors of the Company outstanding on a fully diluted basis after giving
effect to the exercise or conversion of all options, rights and securities
exercisable or convertible into or exchangeable for Shares or such voting
securities shall not have been validly tendered and not withdrawn immediately
prior to the expiration of the Offer (the "Minimum Tender Condition"), (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or after
the date of commencement of the Offer and before the acceptance of such Shares
for payment or the payment therefor, any of the following conditions exist or
shall occur and be continuing:
(a) there shall be pending by any governmental entity any suit, action
or proceeding, (i) challenging the acquisition by the Parent or the Merger
Subsidiary of any Shares, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Merger Agreement, (ii) seeking to
prohibit or limit the ownership or operation by the Company, the Parent or
any of their respective subsidiaries of a material portion of the business
or assets of the Company or its subsidiaries, or the Parent or its
subsidiaries, or to compel the Company or the Parent to dispose of or hold
separate any material portion of the business or assets of the Company or
its subsidiaries, or the Parent or its subsidiaries, as a result of the
Offer or any of the other transactions contemplated by the Merger
Agreement, (iii) seeking to impose limitations on the ability of the Parent
or the Merger Subsidiary to acquire or hold, or exercise full fights of
ownership of, any Shares accepted for payment pursuant to the Offer
including, without limitation, the right to vote the Shares accepted for
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payment by it on all matters properly presented to the stockholders of the
Company, or (iv) seeking to prohibit the Parent or any of its subsidiaries
from effectively controlling in any material respect the business or
operations of the Company or its subsidiaries;
(b) the Company shall have entered into an agreement concerning any
Superior Proposal, or the Board of Directors of the Company or any
committee thereof shall have resolved to enter into such an agreement;
(c) any person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than the Parent, the Merger Subsidiary or any
affiliate thereof or the Stockholders described in the Stockholders
Agreements) shall have become the beneficial owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of Shares representing 20% of the
total votes represented by all outstanding Shares;
(d) the Merger Agreement shall have been terminated in accordance with
its terms;
(e) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) a commencement and continuation of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States which would have a Company Material
Adverse Effect (other than the events in Yugoslavia and neighboring
countries), (iii) a change in general conditions in the market for
syndicated bank credit facilities which, based on the written advice of
Gleacher & Co. LLC addressed to Parent (with a copy to be provided to the
Company), materially and adversely affects the ability of financial
institutions in the United States to extend credit or syndicate loans, or
(iv) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening thereof;
and
(f) there shall have occurred any material adverse change in the
financial condition, assets, liabilities, business or results of operations
of the Company and its subsidiaries taken as a whole, except for general
economic changes, changes that affect the industry of the Company or any
subsidiary generally and changes in the Company's business attributable
solely to actions by the Parent or the Merger Subsidiary;
which, in the reasonable judgment of Parent and regardless of the circumstances
giving rise to any such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment, purchase of, or payment for Shares.
The foregoing conditions are for the sole benefit of the Parent and the
Merger Subsidiary and may be asserted by the Parent or the Merger Subsidiary
regardless of the circumstances giving rise to any such conditions and may be
waived by the Parent or the Merger Subsidiary in whole or in part at any time
and from time to time in their reasonable discretion, in each case, subject to
the terms of the Merger Agreement. The failure by the Parent or the Merger
Subsidiary at any time to exercise any of the foregoing rights shall not be
deemed a waiver of such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
Except as set forth below, based upon its examination of publicly available
filings by the Company with the Commission and other publicly available
information concerning the Company, neither the Merger Subsidiary nor the Parent
is aware of any licenses or other regulatory permits that appear to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the Merger Subsidiary's acquisition of Shares
(and the indirect acquisition of the stock of the Company's subsidiaries) as
contemplated herein, or of any filings, approvals or other actions by or with
any domestic (federal or state), foreign or supranational governmental authority
or administrative or regulatory agency that would be required prior to the
acquisition of Shares (or the indirect acquisition of the stock of the Company's
subsidiaries) by the Merger Subsidiary pursuant to the Offer as contemplated
herein. Should any such approval or other action be required, it is the Merger
Subsidiary's present intention to seek such approval or action. However, the
Merger Subsidiary does not presently intend to delay the purchase of Shares
tendered pursuant to the Offer
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pending the receipt of any such approval or the taking of any such action
(subject to the Merger Subsidiary's right to delay or decline to purchase Shares
if any of the conditions in Section 15 shall have occurred). There can be no
assurance that any such approval or other action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the business of the Company, the Parent or the Merger Subsidiary or that certain
parts of the businesses of the Company, the Parent or the Merger Subsidiary
might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or other action or in
the event that such approval was not obtained or such other action was not
taken, any of which could cause the Merger Subsidiary to elect to terminate the
Offer without the purchase of the Shares thereunder. The Merger Subsidiary's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions, including conditions relating to the legal matters
discussed in this Section 15.
State Takeover Laws. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have or whose business operations have substantial economic effects in
such states, or which have substantial assets, security holders, principal
executive offices or principal places of business therein. To the extent that
certain provisions of certain of these state takeover statutes purport to apply
to the Offer, the Merger Subsidiary believes that such laws conflict with
federal law and constitute an unconstitutional burden on interstate commerce. In
1982, the Supreme Court of the United States, in Edgar v. Mite Corp.,
invalidated on constitutional grounds the Illinois Business Takeovers Act, which
as a matter of state securities law made takeovers of corporations meeting
certain requirements more difficult, and the reasoning in such decision is
likely to apply to certain other state takeover statutes. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana could, as a matter of corporate law and in
particular those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court
in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as
they applied to corporations incorporated outside Oklahoma in that they would
subject such corporations to inconsistent regulations. Similarly, in Tyson
Foods, Inc. v. McReynolds, a federal district court in Tennessee ruled that four
Tennessee takeover statutes were unconstitutional as applied to corporations
incorporated outside Tennessee. This decision was affirmed by the United States
Court of Appeals for the Sixth Circuit. In December 1988, a federal district
court in Florida held in Grand Metropolitan PLC v. Butterworth that the
provisions of the Florida Affiliated Transactions Act and the Florida Control
Share Acquisition Act were unconstitutional as applied to corporations
incorporated outside of Florida.
Except as described herein, the Merger Subsidiary has not attempted to
comply with any state takeover statutes in connection with the Offer. The Merger
Subsidiary reserves the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
that right. In the event that any state takeover statute is found applicable to
the Offer, the Merger Subsidiary might be unable to accept for payment or
purchase Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Merger Subsidiary may not be obligated
to accept for purchase or pay for, any Shares tendered. See Section 15.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares pursuant to the Offer is subject to such requirements. See Section 2.
The Parent intends to file by May 17, 1999, with the FTC and the Antitrust
Division a Premerger Notification and Report Form in connection with the
purchase of Shares pursuant to the Offer. Under the provisions of the HSR Act
applicable to the Offer, the purchase of Shares pursuant to the Offer may not be
consummated until the expiration of a 15-calendar day waiting period following
the filing by the Parent. The waiting period under the HSR Act applicable to
such purchases of Shares pursuant to the Offer will expire at
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11:59 p.m., New York City time, on such fifteenth day, unless such waiting
period is extended by a request from the FTC or the Antitrust Division for
additional information or documentary material prior to the expiration of the
waiting period. If either the FTC or the Antitrust Division were to request
additional information or documentary material from the Parent, the waiting
period would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by the Parent with such request.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and in any event the
purchase of and payment for Shares will be deferred until ten days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order or agreement of the parties. Any such extension of the
waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See Section 4.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Merger Subsidiary pursuant to the Offer. At any time before or after the
purchase by the Merger Subsidiary of Shares pursuant to the Offer, either of the
FTC and the Antitrust Division could take such action under the antitrust laws
as it deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Offer or seeking the divestiture
of Shares purchased by the Merger Subsidiary or the divestiture of substantial
assets of the Parent, its subsidiaries or the Company. Private parties and state
attorneys general may also bring legal action under federal or state antitrust
laws under certain circumstances.
Although the Merger Subsidiary believes that the acquisition of Shares
pursuant to the Offer would not violate the antitrust laws, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such challenge is made, what the outcome will be. See Section 15 for
certain conditions to the Offer, including conditions with respect to litigation
and certain government actions.
Margin Credit Regulations. Federal Reserve Board Regulations T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
17. FEES AND EXPENSES.
Gleacher is acting as Dealer Manager in connection with the Offer and is
acting as financial advisor to the Parent in connection with its efforts to
acquire the Company. In connection with the Offer, the Parent has agreed to pay
Gleacher for its services a transaction fee paid by the Parent upon completion
of the Offer in the amount of approximately $2 million, less a credit of
$200,000 previously paid by the Parent. The Parent has also agreed, whether or
not the Offer is consummated, to pay Gleacher (in its capacity as Dealer Manager
and financial advisor) for its reasonable out-of-pocket expenses, including the
reasonable fees and expenses of its legal counsel, incurred in connection with
its engagement. Gleacher renders various investment banking and other advisory
services to the Parent and its affiliates and is expected to continue to render
such services, for which it has received and will continue to receive customary
compensation from the Parent and its affiliates. The Parent has also agreed to
indemnify Gleacher against certain liabilities and expenses in connection with
the Offer, including certain liabilities under the federal securities laws.
The Parent has retained D.F. King & Co., Inc. to act as the Information
Agent and ChaseMellon Shareholder Services L.L.C. to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
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brokers, dealers and other nominee stockholders to forward the Offer materials
to beneficial owners. The Information Agent and the Depositary will receive
reasonable and customary compensation for services relating to the Offer and
will be reimbursed for certain out-of-pocket expenses. The Parent has also
agreed to indemnify the Information Agent and the Depositary against certain
liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
The Parent and the Merger Subsidiary will not pay any fees or commissions
to any broker or dealer or any other person for soliciting tenders of Shares
pursuant to the Offer (other than to the Dealer Manager, the Information Agent
and the Depositary). Brokers dealers commercial banks and trust companies will
upon request, be reimbursed by the Parent and/or the Merger Subsidiary for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
18. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Merger
Subsidiary is not aware of any state where the making of the Offer is prohibited
by administrative or judicial action pursuant to any valid state statute. If the
Merger Subsidiary becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, the Merger
Subsidiary will make a good faith effort to comply with any such state statute.
If after such good faith effort, the Merger Subsidiary cannot comply with such
state statute, the Offer will not be made to nor will tenders be accepted from
or on behalf of the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Merger Subsidiary by the Dealer Manager, or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
The Merger Subsidiary and the Parent have filed with the Commission a
Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 under the Exchange
Act, furnishing certain additional information with respect to the Offer. Such
statement and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the offices of the Commission (except that they will
not be available at the regional offices of the Commission) in the manner set
forth in Section 7 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE MERGER SUBSIDIARY OR THE PARENT NOT CONTAINED
HEREIN OR IN THE LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
JLG ACQUISITION CORP.
32
<PAGE> 35
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS
OF THE MERGER SUBSIDIARY AND THE PARENT
The name, present principal occupation or employment and five-year
employment history of each director and executive officer of the Parent and the
Merger Subsidiary are set forth below. All persons listed below are citizens of
the United States. The business address of each of the Parent and the Merger
Subsidiary is 1 JLG Drive, McConnellsburg, Pennsylvania 17233.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL OCCUPATIONS, POSITIONS,
NAME OFFICES, OR EMPLOYMENT HELD DURING THE PAST FIVE YEARS
---- -------------------------------------------------------------------------------
<S> <C>
L. David Black (1)(2)(3) Chairman of the Board, President and Chief Executive Officer
Charles H. Diller, Jr. (1)(2)(3) Executive Vice President and Chief Financial Officer and Secretary
George R. Kempton (1) Retired Chairman of the Board and Chief Executive Officer, Kysor Industrial
Corporation; Director, Simpson Industries, Inc.
James A. Mezera (1) President, Mezera and Associates, Inc., a management consulting firm, prior to
1996, Vice President, Komatsu Dresser Company
Gerald Palmer (1)(4) Vice President, Wheel Loaders and Excavators Division, Caterpillar, Inc.; prior
to 1998, Vice President, Technical Services Division, Caterpillar, Inc.
Stephen Rabinowitz (1) Chairman of the Board, President and Chief Executive Officer, General Cable
Corporation; prior to 1994, President AlliedSignal Braking Systems,
AlliedSignal, Inc.
Thomas C. Wajnert (1) Chairman of the Board, President and Chief Executive Officer, Payroll
Transfers, Inc.; prior to 1998, Chairman of the Board, AT&T Capital
Corporation; prior to 1997 Chairman of the Board and Chief Executive Officer,
AT&T Capital Corporation.
Charles O. Wood, III (1) President, Wood Holdings, Inc., a private investment firm; Chairman of the
Board, Boston Private Financial Holdings, Inc.
Thomas D. Singer (3) Vice President - General Counsel
Raymond F. Treml (2) Senior Vice President - Operations
Rao G. Bollimpalli (2) Senior Vice President - Engineering
Peter L. Bonafede, Jr. (2) Senior Vice President - Manufacturing since March 1999; prior to March 1999,
Vice President and General Manager, Blaw Knox Paving Equipment; prior to 1997
Plant Manager, Federal Mogul Corporation
</TABLE>
- ---------------
(1) Director of the Parent.
(2) Executive Officer of the Parent.
(3) Director of the Merger Subsidiary.
(4) Caterpillar, Inc. is a direct competitor of the Company. Accordingly, Mr.
Palmer has been recused from deliberating regarding the Offer and is
expected to resign as a director of Parent before the Effective Time.
I-1
<PAGE> 36
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
P. O. Box 3301 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop-Reorg
Attn: Reorganization Department Attn: Reorganization Department Ridgefield Park, NJ 07660
Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
Any questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective telephone numbers
and addresses listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained
from the Information Agent. You may also contact your broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokers Call (212) 425-1685
All Others Call Toll Free (800) 769-6414
The Dealer Manager for the Offer is:
GLEACHER & CO. LLC
660 Madison Avenue
New York, NY 10021-8405
Telephone: (212) 418-4200
Facsimile: (212) 752-2711.
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
OF
GRADALL INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE, DATED MAY 17, 1999
BY
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, JUNE 15, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
P.O. Box 3301 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop-Reorg
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Attn: Reorganization
Department Department
For Facsimile Transmission:
(for Eligible Institutions
Only):
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN AS
SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER
OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED AND COMPLETE THE SUBSTITUTE
FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) (as defined
below) is utilized, if tenders of Shares are to be made by book-entry transfer
into the account of ChaseMellon Shareholder Services, L.L.C. as Depositary (the
"Depositary"), at The Depository Trust Company ("DTC" or the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Stockholders who tender Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
- 2 -
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
DESCRIPTION OF COMMON SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY
AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) AND SHARES TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES EVIDENCED
BY
SHARE CERTIFICATE SHARE NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
TOTAL SHARES:
- ---------------------------------------------------------------------------------------------------------
* Need NOT be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate
delivered to the Depositary are being tendered hereby. See Instruction 4.
</TABLE>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY
BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
DTC Account Number:
Transaction Code Number:
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
DTC Account Number (if delivered by Book-Entry Transfer):
Transaction Code Number:
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
[ ] CHECK HERE IF YOU CANNOT LOCATE YOUR CERTIFICATE(S) AND REQUIRE
ASSISTANCE IN REPLACING THEM, UPON RECEIPT OF NOTIFICATION BY THIS
LETTER OF TRANSMITTAL, THE COMPANY'S STOCK TRANSFER AGENT WILL CONTACT
YOU DIRECTLY WITH REPLACEMENT INSTRUCTIONS.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
- --------------------------------------------------------------------------------
- 3 -
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to JLG Acquisition Corp., a Delaware
corporation (the "Merger Subsidiary"), a wholly owned subsidiary of JLG
Industries, Inc., a Pennsylvania corporation ("Parent"), the above-described
shares of common stock, $0.001 par value per share (together with associated
rights to purchase Series B Participating Cumulative Preferred Stock)
(collectively, the "Shares"), of Gradall Industries, Inc., a Delaware
corporation (the "Company"), at a purchase price of $20.00 per Share, net to the
seller in cash without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 17, 1999 (the "Offer to
Purchase") and in this Letter of Transmittal (which, as amended from time to
time, together constitute the "Offer"). The undersigned understands that the
Merger Subsidiary reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
all or any portion of the Shares tendered pursuant to the Offer, receipt of
which is hereby acknowledged.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Merger
Subsidiary all right, title and interest in and to all of the Shares that are
being tendered hereby and any and all non-cash dividends, distributions
(including additional Shares) or rights declared, paid or issued with respect to
the tendered Shares on or after May 10, 1999, and payable or distributable to
the undersigned on a date prior to the transfer to the name of the Merger
Subsidiary or nominee or transferee of the Merger Subsidiary on the Company's
stock transfer records of the Shares tendered herewith (collectively, a
"Distribution"), and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any
Distribution) with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver such
Share Certificates (as defined herein) (and any Distribution) or transfer
ownership of such Shares (and any Distribution) on the account books maintained
by the Book-Entry Transfer Facility, together in either case with appropriate
evidences of transfer, to the Depositary for the account of the Merger
Subsidiary, (b) present such Shares (and any Distribution) for transfer on the
books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any Distribution), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Merger Subsidiary as
such stockholder's proxy, with full power of substitution to the full extent of
such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Merger Subsidiary and with respect
to any and all other Shares or other securities issued or issuable in respect of
such Shares on or after May 10, 1999. Such appointment will be effective when,
and only to the extent that, the Merger Subsidiary accepts such Shares for
payment. Upon such acceptance for payment, all prior proxies given by such
stockholder with respect to such Shares (and such other Shares and securities)
will be revoked without further action, and no subsequent proxies may be given
nor any subsequent written consents executed (and, if given or executed, will
not be deemed effective). The designees of the Merger Subsidiary will be
empowered to exercise all voting and other rights of such stockholder as they in
their sole discretion may deem proper at any annual or special meeting of the
Company's stockholders or any adjournment or postponement thereof, by written
consent in lieu of any such meeting or otherwise. The Merger Subsidiary reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Merger Subsidiary's payment for such Shares the Merger
Subsidiary must be able to exercise full voting rights with respect to such
Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distribution) tendered hereby and (b) when the Shares are accepted for
payment by the Merger Subsidiary, the Merger Subsidiary will acquire good,
marketable and unencumbered title to the Shares (and any Distribution), free and
clear of all liens, restrictions, charges and encumbrances, and the same will
not be subject to any adverse claim. The undersigned, upon request, will execute
and deliver any additional documents deemed by the Depositary or the Merger
Subsidiary to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby (and any Distribution). In addition, the
undersigned shall promptly remit and transfer to the Depositary, for the account
of the Merger Subsidiary, any and all Distributions in respect of the Shares
tendered hereby, accompanied by
- 4 -
<PAGE> 5
appropriate documentation of transfer; and pending such remittance or
appropriate assurance thereof, the Merger Subsidiary will be, subject to
applicable law, entitled to all rights and privileges as owner of any such
Distribution and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof as determined by the Merger
Subsidiary in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Merger Subsidiary pursuant to the Offer, may also be
withdrawn at any time after July 15, 1999. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Merger Subsidiary upon the terms and subject to the conditions set forth
in the Offer, including the undersigned's representation that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered". Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered". In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or any
certificate(s) for Shares not tendered or accepted for payment in the name of,
and deliver such check and/or such certificates to, the person or persons so
indicated. The undersigned recognizes that the Merger Subsidiary has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name(s) of the registered holder(s) thereof if the Merger Subsidiary
does not accept for payment any of the Shares so tendered.
- 5 -
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of Shares accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue [ ] check [ ] Certificates to:
Name
- -----------------------------------------------------------------------
Address
- ---------------------------------------------------------------------
------------------------------------------------------------------------------
- 6 -
<PAGE> 7
IMPORTANT
STOCKHOLDER(S): SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Dated: ________________________________________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian, attorney-
in-fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information. See
Instruction 5.)
Name(s):
(Please Print)
Capacity:
(Please Provide Full Title)
Address:
(Include Zip Code)
Telephone No.:
(Include Area Code)
Tax Identification or Social Security Number:
COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
Name:
Name of Firm:
(Please Print)
Address:
(Zip Code)
Area Code and Telephone Number:
Dated: ________________________________________, 1999
- 7 -
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" above, or (b) if such Shares are
tendered for the account of a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. Requirements of Tender. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility, as well as this Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase). Stockholders whose Share Certificates are not immediately
available or who cannot deliver their Share Certificates and all other required
documents to the Depositary prior to the Expiration Date or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis may tender
their Shares by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by the Merger Subsidiary, must be received by the Depositary prior to the
Expiration Date; and (iii) the Share Certificates (or a Book-Entry Confirmation)
representing all tendered Shares, in proper form for transfer, in each case
together with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry delivery, an Agent's Message) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three Nasdaq National Market trading days after the date of execution of
such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering stockholders, by execution of this Letter of Transmittal (or a
facsimile hereof), waive any right to receive any notice of the acceptance of
their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. Partial Tenders. (Not Applicable to Book-Entry Stockholders). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." In such cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
- 8 -
<PAGE> 9
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Merger Subsidiary of their authority so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than, the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Merger Subsidiary will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if certificate(s)
for Shares not tendered or accepted for payment are to be registered in the name
of, any person other than the registered holder(s), or if tendered
certificate(s) are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on account
of the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or an exemption therefrom,
is submitted.
Except as otherwise provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be returned
to a person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8. Waiver of Conditions. Subject to the terms and conditions of the Merger
Agreement, the conditions of the Offer (other than the Minimum Condition (as
defined in the Offer to Purchase)) may be waived by the Merger Subsidiary in
whole or in part at any time and from time to time in its sole discretion.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as
- 9 -
<PAGE> 10
an exempt recipient, the stockholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Payer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service by filing a United States federal income return with the
Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has applied for a TIN but has not yet been issued a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed. "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. Requests for Assistance or Additional Copies. Questions or requests
for assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
11. Lost, Destroyed or Stolen Certificates. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE
NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED
DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE.
- 10 -
<PAGE> 11
PAYOR'S NAME:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
AS DEPOSITARY
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PART I -- TAXPAYER IDENTIFICATION NUMBER -- FOR ALL ----------------------------
SUBSTITUTE ACCOUNTS, ENTER YOUR TIN IN THE BOX AT RIGHT. (FOR MOST SOCIAL SECURITY NUMBER
FORM W-9 INDIVIDUALS, THIS IS YOUR SOCIAL SECURITY NUMBER. IF YOU
DEPARTMENT OF THE TREASURY DO NOT HAVE A TIN, SEE OBTAINING A NUMBER IN THE ENCLOSED OR
INTERNAL REVENUE SERVICE GUIDELINES.) CERTIFY BY SIGNING AND DATING BELOW. NOTE: ----------------------------
IF THE ACCOUNT IS IN MORE THAN ONE NAME, SEE THE CHART IN EMPLOYER IDENTIFICATION NUMBER
THE ENCLOSED GUIDELINES TO DETERMINE WHICH NUMBER TO GIVE (IF AWAITING TIN WRITE
THE PAYER. "APPLIED FOR")
--------------------------------------------------------------------------------------------
PART II -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE ENCLOSED GUIDELINES AND
COMPLETE AS INSTRUCTED THEREIN.
--------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR I AM
WAITING FOR A NUMBER TO BE ISSUED TO ME), AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE (a) I AM EXEMPT FROM BACKUP
WITHHOLDING, (b) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT
I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL INTEREST OR
DIVIDENDS, OR (c) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING.
--------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) ABOVE IF YOU HAVE BEEN
NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING
INTEREST OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER BEING NOTIFIED BY THE IRS THAT
PAYER'S REQUEST FOR YOU WERE SUBJECT TO BACKUP WITHHOLDING YOU RECEIVED ANOTHER NOTIFICATION FROM THE IRS THAT
TAXPAYER IDENTIFICATION YOU ARE NOT LONGER SUBJECT TO BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM (2). (ALSO SEE
NUMBER ("TIN") INSTRUCTIONS IN THE ENCLOSED GUIDELINES.)
SIGNATURE _____ DATE __________ , 1999
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART I
OF SUBSTITUTE FORM W-9.
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER
(a) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (b) I INTEND TO MAIL OR DELIVER AN
APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME
OF PAYMENT, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE A NUMBER.
</TABLE>
<TABLE>
<S> <C> <C> <C>
----------------------------------------------------- ---------------------------
Signature Date
- --------------------------------------------------------------------------------------------------------
</TABLE>
- 11 -
<PAGE> 12
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Dealer Manager or the Information Agent at the locations and telephone
numbers set forth below:
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokers Call (212) 425-1685
ALL OTHERS CALL TOLL FREE (800) 769-6414
The Dealer Manager for the Offer is:
GLEACHER & CO. LLC
660 Madison Avenue
New York, NY 10021-8405
Telephone: (212) 418-4200
Facsimile: (212) 752-2711
Date: May 17, 1999
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU)
TO GIVE TO THE PAYER--Social security numbers have nine digits separated by two
hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer. All "Section" referenced are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
<TABLE>
<CAPTION>
- ----------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under state
law
5. Sole proprietorship The owner(3)
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------
<S> <C>
6. A valid trust, estate, or The legal entity(4)
pension trust
7. Corporate The corporation
8. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
account
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a state or local government,
school district, or prison)
that receives agricultural
program payments
- ----------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that person's
number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or your
employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated in
the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 14
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER--If you do not have a taxpayer identification number or you
do not know your number, obtain Form SS-5, Application for a Social Security
Card, at the local Social Administration office, or Form SS-4, Application for
Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING--Payees specifically exempt from
withholding include:
- An organization exempt from tax under Section 501(a), an individual
retirement account (IRA), or a custodial account under Section 403(b)(7), if
the account satisfies the requirements of Section 401(f)(2).
- The United States or a state thereof, the District of Columbia, a possession
of the United States, or a political subdivision or wholly-owned agency or
instrumentality of any one or more of the foregoing.
- An international organization or any agency or instrumentality thereof.
- A foreign government and any political subdivision, agency or
instrumentality thereof.
Payees that may be exempt from backup withholding include:
- A corporation.
- A financial institution.
- A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
- A futures commission merchant registered with the Commodity Futures Trading
Commission.
- A foreign central bank of issue.
Payments of dividends and patronage dividends generally exempt from backup
withholding include:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
Payments of interest generally exempt from backup withholding include:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
- Payments described in Section 6049(b) (5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see the regulations under sections 6041, 6041A,
6042, 6044, 6045, 6049, 6050A and 6050N.
Exempt payees described above must file form W-9 or a substitute form W-9 to
avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER,
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE
FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
PRIVACY ACT NOTICE.--Section 6109 requires you to provide your correct taxpayer
identification number to payers, who must report the payments to the IRS. The
IRS uses the number for identification purposes and may also provide this
information to various government agencies for tax enforcement or litigation
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to payer. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish
your taxpayer identification number to a payer, you are subject to a penalty of
$50 for each such failure unless your failure is due to reasonable cause and not
to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
THE TENDER OF SHARES OF COMMON STOCK
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
OF
GRADALL INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE, DATED MAY 17, 1999
TO
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing shares of common stock, $0.001 par value (together with associated
rights to purchase Series B Participating Cumulative Preferred Stock)
(collectively, the "Shares") of Gradall Industries, Inc., a Delaware corporation
(the "Company"), are not immediately available or time will not permit all
required documents to reach ChaseMellon Shareholder Services, L.L.C., as
Depositary (the "Depositary"), prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase (as defined below)) or the procedure for
delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary. See Section 3 of the
Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
P.O. Box 3301 120 Broadway, 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop-Reorg
Attn: Reorganization Attn: Reorganization
Department Department Ridgefield Park, NJ 07660
Attn: Reorganization
Department
by Facsimile Transmission:
(for Eligible Institutions
Only):
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, AND TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
Shares may not be tendered pursuant to the Guaranteed Delivery Procedures.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to JLG Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of JLG Industries, Inc., a
Pennsylvania corporation, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated May 17, 1999 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, as amended or supplemented from time to
time, together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase.
PLEASE CHECK RELEVANT BOX BELOW
<TABLE>
<S> <C>
Series and Certificate Nos. of Shares (if Address(es):
available):
Common Stock, $0.001 par value
Certificate Nos. (Zip Code)
Number of Shares Tendered Area Code and Telephone No.:
Name(s) of Record Holder(s) Signature(s):
Dated:
DTC Account No.:
Please Type or Print
</TABLE>
- 2 -
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR THE SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as defined in the Offer to
Purchase), hereby guarantees delivery to the Depositary, at one of its addresses
set forth above, certificates ("Share Certificates") evidencing the Shares
tendered hereby, in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's account at The Depositary Trust
Company, in each case with delivery of a Letter of Transmittal (or facsimile
thereof) properly completed and duly executed, or an Agent's Message (as defined
in the Offer to Purchase) in the case of a book-entry delivery, and any other
required documents, all within three days on which the National Association of
Securities Dealers Automated Quotation System, Inc. is open for business after
the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution.
- ------------------------------------------------------
NAME OF FIRM
------------------------------------------------------
ADDRESS
------------------------------------------------------
ZIP CODE
------------------------------------------------------
AREA CODE AND TELEPHONE NO.
------------------------------------------------------
AUTHORIZED SIGNATURE
Title:
- -----------------------------------------------
Name:
- -----------------------------------------------
PLEASE TYPE OR PRINT
Dated: , 1999
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- 3 -
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
OF
GRADALL INDUSTRIES, INC.
AT $20.00 NET PER SHARE
BY
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, JUNE 15, 1999, UNLESS THE OFFER IS EXTENDED.
MAY 17, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by JLG Acquisition Corp., a Delaware corporation
(the "Merger Subsidiary") and a wholly-owned subsidiary of JLG Industries, Inc.,
a Pennsylvania corporation (the "Parent") to act as Dealer Manager in connection
with the Merger Subsidiary's offer to purchase for cash all the outstanding
shares of common stock, par value $0.001 per share (together with associated
rights to purchase Series B Participating Cumulative Preferred Stock)
(collectively, the "Shares"), of Gradall Industries, Inc., a Delaware
corporation (the "Company"), at a purchase price of $20.00 per Share, net to the
seller in cash without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 17, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer") enclosed herewith. Holders of Shares whose certificates for such
Shares (the "Share Certificates") are not immediately available or who cannot
deliver their Share Certificates and all other required documents to the
Depositary (as defined below) prior to the Expiration Date (as defined in the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated May 17, 1999.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients, along with Guidelines of the Internal Revenue
Service for Certification of Taxpayer Identification Number on Substitute
Form W-9. Facsimile copies of the Letter of Transmittal may be used to
tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if the Share Certificates are not immediately available or if
such certificates and all other required documents cannot be delivered to
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") by the
Expiration Date or if the procedure for book-entry transfer cannot be
completed by the Expiration Date.
4. The Letter to Stockholders of the Company from the Chairman of the
Board, and the President and Chief Executive Officer of the Company,
accompanied by the Company's Solicitation/Recommendation Statement on
Schedule 14D-9.
5. A printed form letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
<PAGE> 2
6. A return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., Attn: Reorganization Department, P.O. Box 3301, South Hackensack,
NJ 07606, the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JUNE 15, 1999, UNLESS THE OFFER
IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and any other required documents should be sent
to the Depositary and (ii) either Share Certificates representing the tendered
Shares should be delivered to the Depositary or such Shares should be tendered
by book-entry transfer into the Depositary's account maintained at the
Book-Entry Transfer Facility (as described in the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Merger Subsidiary will not pay any commissions or fees to any broker,
dealer or other person (other than the Dealer Manager, the Depositary and D.F.
King & Co., Inc. (the "Information Agent") (as described in the Offer to
Purchase)) for soliciting tenders of Shares pursuant to the Offer. The Merger
Subsidiary will, however, upon request, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Merger Subsidiary will pay or cause to be paid any stock
transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the undersigned, or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the Information
Agent.
Very truly yours,
GLEACHER & CO. LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE MERGER SUBSIDIARY, THE PARENT, THE DEALER
MANAGER, THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE
OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR
USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
- 2 -
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING CUMULATIVE PREFERRED
STOCK)
OF
GRADALL INDUSTRIES, INC.
AT $20.00 NET PER SHARE
BY
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, JUNE 15, 1999, UNLESS THE OFFER IS EXTENDED.
MAY 17, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated May 17, 1999
(the "Offer to Purchase"), and the related Letter of Transmittal relating to an
offer by JLG Acquisition Corp., a Delaware corporation (the "Merger Subsidiary")
and a wholly-owned subsidiary of JLG Industries, Inc., a Pennsylvania
corporation (the "Parent"), to purchase all of the outstanding shares of common
stock, $0.001 par value per share (together with associated rights to purchase
Series B Participating Cumulative Preferred Stock) (collectively, the "Shares"),
of Gradall Industries, Inc., a Delaware corporation (the "Company"), at a
purchase price of $20.00 per Share, net to the seller in cash without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer"). We are the holder of record of Shares
held by us for your account. A tender of such Shares can be made only by us as
the holder of record and pursuant to your instructions. The Letter of
Transmittal is furnished to you for your information only and cannot be used by
you to tender Shares held by us for your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase.
YOUR ATTENTION IS DIRECTED TO THE FOLLOWING:
1. The Offer price is $20.00 per Share, net to the seller in cash
without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Board of Directors of the Company has by unanimous vote
determined that the Merger Agreement (as defined below) and the
transactions contemplated thereby, including each of the Offer and the
Merger (as defined below), are fair to and in the best interests of the
stockholders of the Company and recommends that holders of the Shares
accept the Offer and tender their Shares to the Merger Subsidiary.
4. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of May 10, 1999 (the "Merger Agreement"), which provides
that subsequent to the consummation of the Offer, the Merger Subsidiary
will merge with and into the Company (the "Merger"). At the effective time
of the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held by the
Parent, any subsidiary of the Parent or the Company and Shares, if
<PAGE> 2
any, held by stockholders who have not voted in favor of the Merger
Agreement or consented thereto in writing and have timely delivered to the
Company demand for appraisal of such Shares in accordance with the Delaware
General Corporation Law) shall be cancelled, extinguished and converted
automatically into the right to receive $20.00 in cash, without interest.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, June 15, 1999, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not properly withdrawn prior to the expiration of the
Offer, at least that number of Shares which, when combined with the Shares
owned, directly or indirectly, by the Parent and its direct and indirect
subsidiaries, constitute more than 50% of the voting power (determined on a
fully-diluted basis) of all securities of the Company, and (ii) the
expiration or termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Merger
Subsidiary is not aware of any state where the making of the Offer is prohibited
by administrative or judicial action pursuant to any valid state statute. If the
Merger Subsidiary becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, the Merger
Subsidiary will make a good faith effort to comply with any such state statute.
If, after such good faith effort, the Merger Subsidiary cannot comply with such
state statute, the Offer will not be made to nor will tenders be accepted from
or on behalf of the holders of Shares in such state. In any jurisdiction where
the securities, "blue sky" or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Merger Subsidiary by the Dealer Manager or one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
- 2 -
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
SHARES OF COMMON STOCK (AND ASSOCIATED RIGHTS TO PURCHASE SERIES B PARTICIPATING
CUMULATIVE PREFERRED STOCK)
OF
GRADALL INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated May 17, 1999 (the "Offer to Purchase"), and the related Letter
of Transmittal pursuant to an offer by JLG Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of JLG Industries, Inc., a
Pennsylvania corporation, to purchase all outstanding shares of common stock,
$0.001 par value per share (together with associated rights to purchase Series B
Participating Cumulative Preferred Stock) (collectively, the "Shares"), of
Gradall Industries, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Number of Shares to be Tendered:
________ Shares*
Dated , 1999 SIGN HERE:
Signature(s)
--------------------------------------
--------------------------------------
Please print name(s)
--------------------------------------
Address
--------------------------------------
Area Code and Telephone Number
--------------------------------------
Tax Identification or Social Security
Number
- ---------------
* Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
- 3 -
<PAGE> 1
EXHIBIT (a)(6)
PRESS RELEASE
[JLG LOGO]
[JLG LETTERHEAD]
FOR IMMEDIATE RELEASE
JLG INDUSTRIES CONTACT: JUNA ROWLAND
DIRECTOR, CORPORATE RELATIONS
(717) 485-6605
GRADALL INDUSTRIES CONTACT: ANDREA PHILLIPS
CORPORATE COMMUNICATIONS
(330) 339-2212 EXT 154
JLG INDUSTRIES, INC. ANNOUNCES DEFINITIVE AGREEMENT
TO ACQUIRE GRADALL INDUSTRIES, INC.
PROVIDING A BROADENED PRODUCT LINE AND EXPANDED CUSTOMER BASE
COMBINED ANNUAL REVENUES APPROACHING $800 MILLION
EXPECTED TO BE ACCRETIVE TO EPS IN THE FIRST FULL YEAR OF COMBINED OPERATIONS
MCCONNELLSBURG, PA, AND NEW PHILADELPHIA, OH, MAY 11, 1999 - JLG
Industries, Inc. (NYSE: JLG) and Gradall Industries, Inc. (NASDAQ: GRDL) today
announced the signing of a definitive agreement under which JLG will acquire
Gradall Industries, Inc. in an all-cash transaction for $20.00 per share,
representing a 14 percent premium to yesterday's closing price and resulting in
total cash to Gradall shareholders of approximately $200 million. The
transaction will create a diversified capital equipment manufacturer with
combined revenues approaching $800 million for the most recent four fiscal
quarters and is expected to be accretive to JLG earnings per share in the first
full year of combined operations.
"A well established company with a leading brand name, Gradall brings
to the table strong market share and a reputation for high quality products,"
said L. David Black, JLG's Chairman of the Board, President and Chief Executive
Officer. "This acquisition brings JLG closer to our immediate goal of becoming a
$1 billion company. The increased size and expanded product breadth will further
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<PAGE> 2
JLG Industries, Inc.
Page 2
enhance our ability to compete in a consolidating rental industry marketplace
and position JLG for future growth opportunities, both domestically and
internationally and is an excellent transaction for the stakeholders of both
companies. The transaction not only combines two leading capital equipment
brands with strong market shares, but also fits well with our diversification
strategy. There is a tremendous opportunity within our respective markets to
grow and expand the presence of both entities."
Barry L. Phillips, Gradall's President and Chief Executive Officer,
stated, "Gradall and JLG have similar corporate cultures and a common goal of
being the best in our respective industries. We expect to benefit from JLG's
global market strength. We also anticipate leveraging our product development
and manufacturing expertise. Gradall looks forward to being a part of the JLG
family. From a marketplace perspective, the strengths of our organizations are
complementary and we target many of the same markets and share customers so we
can leverage existing relationships. We are very excited about the prospects for
cross-selling opportunities."
The strategic reasons for this transaction are compelling for both
companies and include the following key elements:
- ADDITION OF GROWTH SEGMENT - Gradall's material handler
product line will allow JLG to access one of the most dynamic
and fastest growing product segments in the construction and
industrial equipment industry.
- MARKET CHANNEL LEVERAGE - Using their respective distribution
strengths, the combined companies will further solidify their
market position as a prime supplier to the North American
rental industry.
- CORE COMPETENCY LEVERAGE - Similarities between Gradall's
products and those of JLG will allow JLG to leverage its core
competencies in manufacturing, engineering, new product
development, distribution and industry-leading sales and
support services.
- RELATED DIVERSIFICATION - The transaction will allow JLG to
diversify its operations in accordance with its strategic
plan. JLG's and Gradall's product lines are complementary, yet
respond, in part, to different domestic and international
economic cycles. The
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<PAGE> 3
JLG Industries, Inc.
Page 3
addition of Gradall's excavator product line can be expected
to add a measure of consistency and counter-cyclicality to the
overall product portfolio since Gradall's over-the-road
highway-speed excavators are used extensively by state, county
and local governments and by private highway contractors for
infrastructure construction, maintenance and repair. Gradall's
excavator business is expected to benefit from the passage of
the Federal Highway Bill (TEA-21) that guarantees a minimum of
$167 billion in spending for the highway program over the next
six years (a 40 percent increase from the 1991 Federal Highway
Bill).
- BRAND STRENGTH - Gradall's products, like those of JLG, are
known for quality, reliability and durability. Its excavators
have set the industry standard for more than half a century
and its material handlers boast unique performance-enhancing
features. The combined companies will offer a broad portfolio
of products, each with brand name recognition and
identification with quality.
- CAPACITY - The acquisition of Gradall adds significantly to
JLG's overall manufacturing capacity. Gradall's existing New
Philadelphia, Ohio operation has more than 430,000 square feet
under one roof and its recently acquired Orrville, Ohio
facility provides more than 300,000 square feet of additional
space.
This transaction, including the refinancing of the pre-acquisition
outstanding debt of both companies, will be financed using a $250 million
five-year revolving credit facility. Commenting on the transaction financing,
Mr. Black added, "As you know, JLG has historically been a debt-averse
organization. This fiscal conservatism is now paying off as we are in a
comfortable position to finance this transaction. Once the acquisition is
complete, our total debt to total capitalization will be less than 50 percent
and we expect comfortable EBITDA to interest expense coverage. Furthermore,
given the current low interest rate environment and the negligible amount of
debt currently on our balance sheet, leveraging our borrowing power is the
expedient approach, particularly in today's environment where we believe that
JLG's value is not being adequately recognized by the equity market."
The transaction is expected to be completed during the fourth quarter
of JLG's 1999 fiscal year (which ends July 31st) and is subject to customary
conditions, including regulatory antitrust clearance
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<PAGE> 4
JLG Industries, Inc.
Page 4
and the tender of a majority of Gradall's shares. Gleacher & Co. LLC is acting
as advisor to JLG in the transaction and Merrill Lynch & Co. is acting on behalf
of Gradall.
JLG Industries, Inc. is the world's leading manufacturer, distributor
and international marketer of mobile aerial work platforms. Sales are made
principally to distributors and rental companies, which rent and sell the
Company's products to a diverse customer base, which includes users in the
industrial, commercial, institutional and construction markets. Headquartered in
McConnellsburg, Pennsylvania, JLG has two additional manufacturing facilities in
Bedford, Pennsylvania and sales and service locations in Europe and Australia.
Founded in 1946 and headquartered in New Philadelphia, Ohio, Gradall
Industries, Inc. is a leading manufacturer of rough-terrain, variable-reach
material handlers and telescoping hydraulic excavators used in infrastructure,
residential, non-residential and institutional construction and is one of the
industry's most widely recognized brand names. Gradall's variable-reach material
handlers accounted for approximately 60 percent of their 1998 total net sales.
The company is one of the market leaders in this segment, with its
variable-reach material handlers presently ranking among the top three in market
share in North America. Gradall's excavator business is an industry leader in
the road maintenance and infrastructure markets in much the same way as JLG has
achieved a leadership position in the aerial work platform market. Excavators
represented nearly 30 percent of Gradall's 1998 total net sales.
The forward-looking statements in this announcement may involve certain
risks and uncertainties, including cyclical demand, a consolidating customer
base, product liability, availability of product components and others, as
detailed in the Company's SEC reports, including the report on Form 10-Q for the
quarter ended January 31, 1999. In addition, there are inherent risks in
consummating the transaction and executing the strategy that it entails. These
risks include the difficulty of integrating two business organizations and
achieving potential business and operational synergies and interest rate market
risks and other risks associated with the transaction financing. Additional
risks that should be considered for the combined entities are described in the
reports of Gradall filed with the SEC.
For a fax copy, please call 800-758-5804, extension 470675.
# # #
<PAGE> 1
EXHIBIT (a)(7)
This announcement is not an offer to purchase or a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated
May 17, 1999, and the related Letter of Transmittal and is not being
made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any jurisdiction in which the making
of the Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(and associated rights to purchase Series B Participating Cumulative
Preferred Stock)
OF
GRADALL INDUSTRIES, INC.
AT $20.00 NET PER SHARE
BY
JLG ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
JLG INDUSTRIES, INC.
JLG Acquisition Corp., a Delaware corporation (the "Merger Subsidiary")
and a wholly-owned subsidiary of JLG Industries, Inc., a Pennsylvania
corporation ("Parent"), hereby offers to purchase all outstanding shares of
common stock, $0.001 par value (together with associated rights to purchase
Series B Participating Cumulative Preferred Stock) (collectively, the "Shares"),
of Gradall Industries, Inc., a Delaware corporation (the "Company"), at $20.00
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 17, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which together constitute
the "Offer").
<PAGE> 2
2
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
TUESDAY, JUNE 15, 1999 UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) A NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY
PARENT, REPRESENTS MORE THAN 50% OF THE VOTING POWER (DETERMINED ON A FULLY
DILUTED BASIS) ON THE DATE OF PURCHASE OF ALL OF THE SECURITIES OF THE COMPANY
ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OR ON A MERGER. CERTAIN
STOCKHOLDERS OF THE COMPANY OWNING APPROXIMATELY 34.4% OF THE OUTSTANDING SHARES
HAVE AGREED TO TENDER THEIR SHARES IN THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger
dated as of May 10, 1999 (the "Merger Agreement"), among the Company, Parent and
the Merger Subsidiary. The Merger Agreement provides, among other things, that
as soon as practicable after the consummation of the Offer and satisfaction or
waiver of all conditions to the Merger, the Merger Subsidiary will be merged
with and into the Company (the "Merger"), with the Company surviving. Pursuant
to the Merger, each outstanding Share (other than Shares owned by Parent, any
subsidiary of Parent or the Company and Shares held by stockholders properly
exercising appraisal rights under Delaware law (as described in the Offer to
Purchase)) will be converted into the right to receive $20.00 in cash, without
interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS BY UNANIMOUS VOTE APPROVED
THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT
THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO
THE OFFER.
The Offer is subject to certain conditions set forth in the Offer to
Purchase. If any such condition is not satisfied, the Merger Subsidiary may,
subject to certain limitations set forth in the Merger Agreement and described
in the Offer to Purchase, (i) terminate the Offer and return all tendered Shares
to tendering stockholders, (ii) extend the Offer and, subject to withdrawal
rights as set forth below, retain all such Shares until the expiration of the
Offer as so extended, (iii) waive such condition and, subject to any requirement
to extend the period of time during which the Offer is open, purchase all Shares
validly tendered prior to the Expiration Date and not withdrawn, or (iv) delay
acceptance for payment or payment for Shares subject to applicable law, until
satisfaction or waiver of the conditions to the Offer.
The Merger Subsidiary reserves the right, at any time or from time to
time, to extend the period of time during which the Offer is open by giving oral
or written notice of such
<PAGE> 3
3
extension to ChaseMellon Shareholder Services, L.L.C. (the "Depositary"). Any
such extension will be followed as promptly as practicable by public
announcement thereof. During any such extension, all Shares previously tendered
and not withdrawn will remain subject to the Offer, subject to applicable
withdrawal rights.
For purposes of the Offer, the Merger Subsidiary shall be deemed to
have accepted for payment tendered Shares when, as and if the Merger Subsidiary
gives oral or written notice to the Depositary of its acceptance of the tenders
of such Shares. Payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares (or a confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof, or in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase)) and any other required
documents.
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after July 15, 1999 unless theretofore
accepted for payment as provided in the Offer to Purchase. To be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the Depositary at one of its addresses set forth in the
Offer to Purchase and must specify the name of the person who tendered the
Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares
to be withdrawn have been delivered to the Depositary, a signed notice of
withdrawal with (except in the case of Shares tendered by an Eligible
Institution (as defined in the Offer to Purchase)) signatures guaranteed by an
Eligible Institution must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company is providing its stockholder list and security position
listings for the purpose of disseminating the Offer to holders of Shares. The
Offer to Purchase and the related Letter of Transmittal will be mailed to record
holders of Shares and will be furnished to brokers, banks and similar persons
whose names, or the names of whose nominees, appear on the stockholder list or,
if applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Manager
<PAGE> 4
4
as set forth below, and copies will be furnished promptly at the Merger
Subsidiary's expense. No fees or commissions will be paid to brokers, dealers or
other persons (other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokers Call (212) 425-1685
ALL OTHERS CALL TOLL FREE (800) 769-6414
The Dealer Manager for the Offer is:
GLEACHER & CO. LLC
660 Madison Avenue
New York, NY 10021-8405
Telephone: (212) 418-4200
Facsimile: (212) 752-2711
May 17, 1999
<PAGE> 1
FIRST UNION CAPITAL MARKETS CORP. Exhibit(b)(1)
Member NYSE, NASD, SIPC
PA 4930
Loan Syndications
1345 Chestnut Street
P.O. Box 7618
Philadelphia, Pennsylvania 19107-7618
215 973-2727
Fax 215 973-1887
[FIRST UNION LOGO]
May 5, 1999
JLG Industries, Inc.
1 JLG Drive
McConnellsburg, PA 17233-9533
Attention: Charles H. Diller, Jr.
Re: Commitment for Arrangement of Facility and Financing
Dear Mr. Diller:
You have advised us that JLG Industries, Inc. (the "Borrower") seeks
financing for an acquisition of 100% of the stock of Gradall Industries, Inc.
(the "Target") (or if less than 100%, such percentage that is satisfactory to
First Union National Bank ("First Union"), to refinance certain existing
indebtedness, for ongoing working capital requirements and other general
corporate purposes. Attached hereto is a Summary of Terms and Conditions (the
"Term Sheet") describing the general terms and conditions for a Revolving
Credit Facility in the aggregate amount of $250 million (the "Facility").
Based upon and subject to the terms and conditions set forth herein, in
the Term Sheet and in the fee letter of even date (the "Fee Letter"), First
Union is pleased to advise you of its commitment to provide the Facility and
act as Administrative Agent in respect thereof. As set forth more fully in the
Term Sheet, the closing of the Facility is subject to certain conditions
precedent. Although First Union is committing to provide the Facility on the
terms set forth in the Term Sheet, First Union expects to act as Administrative
Agent for a syndicate of financial institutions (collectively, the "Lenders")
to provide all or a portion of the Facility. Prior to the closing thereof,
First Union may use the services of its affiliate, First Union Capital Markets
Corp. ("Capital Markets"), to act as Arranger for the Facility.
The commitments of First Union and Capital Markets hereunder are based
upon the financial and other information regarding the Borrower and its
subsidiaries previously provided to First Union and Capital Markets.
Accordingly, the commitments hereunder are subject to the condition, among
others, that (i) there shall not have occurred after the date of such financial
and other information any material adverse change in the business, assets,
liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its subsidiaries taken as a whole, (ii) the
information concerning the Borrower and its subsidiaries shall not differ in any
material respect from the information previously provided to First Union and
Capital Markets by the Borrower, (iii) the determination of First Union and
Capital Markets that, prior to and during the primary syndication of the
Facility, there shall be no
<PAGE> 2
JLG INDUSTRIES, INC.
PAGE 2
competing issuance of debt, securities or commercial bank facilities of the
Borrower or any of its subsidiaries being offered, placed or arranged except
with the prior written consent of First Union and Capital Markets (except The
First National Bank of Maryland revolving facility not to exceed $20,000,000 in
aggregate principal amount) and (iv) First Union and Capital Markets shall have
completed, to their satisfaction, all legal, business and other due diligence
review of the business, assets, liabilities, operations and condition
(financial or otherwise) of the Borrower and its subsidiaries. Further, the
commitments of First Union and Capital Markets are subject to there not having
occurred any material disruption or adverse change in the financial, banking or
capital markets that could, in the reasonable judgment of First Union or
Capital Markets, materially impair the syndication of the Facility.
You agree to actively assist Capital Markets (including after the closing
of the Facility) in achieving a syndication of the Facility that is
satisfactory to Capital Markets and you. Such syndication may be accomplished
by a variety of means, including direct contact during the syndication between
senior management and advisors of the Borrower and its subsidiaries, and the
proposed syndicate members. To assist Capital Markets in the syndication
efforts you hereby agree (i) to provide and cause your advisors to provide
Capital Markets and the other syndicate members upon request with all
information deemed reasonably necessary by Capital Markets to complete the
syndication, including but not limited to information and evaluations prepared
by you and any of your subsidiaries and their advisors, or on their behalf,
relating to the transactions contemplated hereby, (ii) to assist Capital
Markets upon its reasonable request in the preparation of an Information
Memorandum to be used in connection with the syndication of the Facility and
(iii) to otherwise assist Capital Markets in its syndication efforts, including
making officers and advisors of the Borrower and its subsidiaries available
from time to time to attend and make presentations regarding the business and
prospects of the Borrower and its subsidiaries, as appropriate, at a meeting or
meetings of Lenders or prospective Lenders.
It is understood and agreed that Capital Markets, after consultation with
you, will manage and control all aspects of the syndication, including
decisions as to the selection of proposed Lenders and any titles offered to
proposed Lenders, when commitments will be accepted and the final allocations
of the commitments among the Lenders. It is also understood and agreed that the
allocation and distribution of the fees among the Lenders will be at the sole
discretion of First Union and Capital Markets and that any syndication prior to
execution of the definitive documentation for the Facility will reduce the
commitments of First Union.
In the event that such syndication cannot be achieved in a manner
satisfactory to First Union and Capital Markets under the structure outlined in
the Term Sheet, you agree that First Union and Capital Markets shall (with your
consent, which consent shall not be unreasonably withheld) be entitled, in the
reasonable discretion of First Union and Capital Markets, to change the pricing
or other terms or restructure the components of the Facility (provided that the
aggregate amount of the Facility will
<PAGE> 3
JLG INDUSTRIES, INC.
PAGE 3
remain unchanged) if First Union and Capital Markets determine that such changes
are advisable to ensure a successful syndication or an optimal credit structure.
The agreement in this paragraph shall survive closing of the Facility.
You hereby represent and covenant that to the best of your knowledge (i)
all information, other than Projections (as defined below), which has been or is
hereafter made available to First Union, Capital Markets or the Lenders by you
or any of your representatives in connection with the transactions contemplated
hereby (excluding the financial information of Target) ("Information") is and
will be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not materially misleading and
(ii) all financial projections concerning the Borrower and its subsidiaries that
have been or are hereafter made available to First Union, Capital Markets or the
Lenders by you (the "Projections") have been or will be prepared in good faith
based upon reasonable assumptions. You agree to supplement the Information and
the Projections from time to time until the closing date so that the
representation and warranty in the preceding sentence is correct on the closing
date. In arranging and syndicating the Facility, First Union and Capital Markets
will be using and relying on the Information and the Projections.
By executing this letter agreement, you agree to reimburse First Union and
Capital Markets from time to time on demand for all reasonable out-of-pocket
fees, syndication expenses and other expenses (including, but not limited to,
the reasonable fees, disbursements and other charges of Pepper Hamilton LLP, as
counsel to First Union and Capital Markets, and professional fees of
consultants, local counsel and other experts) incurred in connection with the
Facility (excluding fees payable pursuant to the Fee Letter among First Union,
Capital Markets and Borrower dated the date hereof), including the preparation
of definitive documentation for the Facility and the other transactions
contemplated hereby.
By executing this letter agreement, you further agree to indemnify and hold
harmless First Union, Capital Markets, each other Lender and each director,
officer, employee, attorney and affiliate of First Union, Capital Markets and
each other Lender (each such person or entity referred to hereafter in this
paragraph as an "Indemnified Person") from any losses, claims, costs, damages,
expenses or liabilities (or actions, suits or proceedings, including any inquiry
or investigation, with respect thereto) to which any Indemnified Person may
become subject, insofar as such losses, claims, costs, damages, expenses or
liabilities (or actions, suits, or proceedings, including any inquiry or
investigation, with respect thereto) arise out of, in any way relate to, or
result from, this letter, the Facility or the other transactions contemplated
hereby and thereby and to reimburse upon demand each Indemnified Person for any
and all legal and other expenses incurred in connection with investigating,
preparing to defend or defending any such loss, claim, cost, damage, expense or
inquiry or investigation, with
<PAGE> 4
JLG INDUSTRIES, INC.
PAGE 4
respect thereto; provided, that you shall have no obligation under this
indemnity provision for liabilities resulting from gross negligence or willful
misconduct of any Indemnified Person. The foregoing provisions of this
paragraph shall be in addition to any right that an Indemnified Person shall
have at common law or otherwise. No Indemnified Person shall be responsible or
liable for consequential damages which may be alleged as a result of this
letter.
The provisions of the immediately preceding two paragraphs shall remain in
full force and effect regardless of whether definitive financing documentation
shall be executed and delivered and notwithstanding the termination of this
letter agreement or the commitment of First Union or Capital Markets hereunder.
You acknowledge and agree that the services of Capital Markets as Arranger
will be on an exclusive basis during the term of this letter and that, during
such term, no other bank or other financial institution will be engaged or
otherwise consulted or contacted by you regarding any other proposed senior
bank facility for the Borrower or its subsidiaries (except for The First
National Bank of Maryland).
Except as required by applicable law, this letter and the contents hereof
shall not be disclosed by you to any third party without the prior consent of
First Union and Capital Markets, other than to your attorneys, financial
advisors and accountants, or the Target and its financial advisors and
accountants, in each case in connection with any evaluation hereof reasonably
required in connection with the proposed transaction. You acknowledge and agree
that First Union and Capital Markets may share with their respective affiliates
any information relating to the Facility, the Borrower and its subsidiaries.
You further acknowledge and agree to the disclosure by First Union and Capital
Markets of information relating to the Facility to Gold Sheets and other
similar bank trade publications, with such information to consist of deal terms
and other information customarily found in such publications.
This letter may be executed in counterparts which, taken together, shall
constitute an original. This letter, together with the Term Sheet and the Fee
Letter of even date herewith, embodies the entire agreement and understanding
between First Union, Capital Markets and the Borrower with respect to the
specific matters set forth above and supersedes all prior agreements and
understandings relating to the subject matter hereof. No party has been
authorized by First Union or Capital Markets to make any oral or written
statements inconsistent with this letter.
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW.
<PAGE> 5
JLG INDUSTRIES, INC.
PAGE 5
This letter may not be assigned by the Borrower without the prior written
consent of First Union and Capital Markets.
If you are in agreement with the foregoing, please execute the enclosed
copy of this letter and the Fee Letter and pay the Acceptance Fee no later than
the close of business on May 14, 1999. This letter will become effective upon
your delivery to us of executed counterparts of this letter and the Fee Letter
and receipt by First Union of the Acceptance Fee. This Commitment Letter shall
terminate if not so accepted by you prior to that time. Following acceptance by
you, this Commitment Letter shall expire at 5:00 p.m. on July 31, 1999 unless
the Facility is closed by such time.
Very truly yours,
FIRST UNION NATIONAL BANK
By: /s/ Mark S. Supple
-----------------------------
Name: Mark S. Supple
-----------------------------
Title Vice President
-----------------------------
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Paul Hogan
-----------------------------
Name: Paul Hogan
-----------------------------
Title Director
-----------------------------
COMMITMENT ACCEPTED AND AGREED
TO THIS 10TH DAY OF MAY, 1999:
JLG INDUSTRIES, INC.
By: /s/ L. David Black
-----------------------------
Name: L. David Black
-----------------------------
Title Chairman, President & CEO
-----------------------------
<PAGE> 6
JLG INDUSTRIES, INC.
SUMMARY OF TERMS AND CONDITIONS
May 5, 1999
BORROWER: JLG Industries, Inc. and subsidiaries on a joint and several
basis
ADMINISTRATIVE
AGENT: First Union National Bank (the "Administrative Agent").
ARRANGER: First Union Capital Markets Corp. (the "Arranger").
LENDERS: First Union and a syndicate of lenders (the "Lenders")
arranged by the Arranger and satisfactory to the Borrower.
FACILITY: Revolving Credit Facility: $250,000,000 (the "Revolving Credit
Facility") with a $25,000,000 sublimit for the issuance of
standby Letters of Credit. Letters of Credit issued under the
Revolving Credit Facility shall have a term of no more than
one year (not to extend beyond the maturity date of the
Revolving Credit Facility).
SWINGLINE LOANS: A portion of the Revolving Credit Facility not in excess of
$20,000,000 shall be available for swingline loans to the
Borrower (the "Swingline Loans") from First Union on same day
notice. Any such Swingline Loans shall reduce the available
commitment under the Revolving Credit Facility. Each of the
Lenders shall acquire, under certain circumstances, an
irrevocable and unconditional pro rata participation in each
such Swingline Loan.
MATURITY: The Revolving Credit Facility shall mature on the date five
years from the Closing Date.
PURPOSE: To fund the purchase of 100% of the stock of Gradall
Industries, Inc. (the "Target"); to refinance certain existing
indebtedness (including, without limitation, the existing
credit facility of the Borrower (the "Existing Facility"));
and to fund working capital and for general corporate purposes
(including the payment of certain fees and expenses incurred
in connection with the transactions contemplated hereby.)
<PAGE> 7
INTEREST RATE
OPTIONS: The Borrower's option of:
(1) Base Rate: The Base Rate plus the Applicable Base
Rate Margin, as set forth in the pricing grid
attached hereto as Exhibit I. Loans bearing
interest at the Base Rate shall be for a minimum
amount of $1,000,000 and $250,000 increments in
excess thereof.
The Base Rate means the greater of (i) the
Administrative Agent's Prime Rate or (ii) the
overnight federal funds rate plus 0.50%. The Prime
Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to
its customers or other banks.
Swingline Loans shall be maintained solely at the
Base Rate and may be borrowed in minimum increments
of $500,000.
(2) LIBOR Rate: LIBOR plus the Applicable LIBOR Margin
as set forth in the pricing grid attached hereto as
Exhibit I. Loans bearing interest at the LIBOR Rate
shall be for a minimum amount of $5,000,000 and
$1,000,000 increments in excess thereof.
LIBOR shall mean reserve adjusted LIBOR as set
forth on Telerate Page 3750 or as determined by the
Administrative Agent if such information is not
available. The LIBOR Rate Option is available for
Interest Periods of 1,2,3, or 6 months. No more
than six (6) Interest Periods may be in effect at
any time. The LIBOR Rate shall be adjusted for FDIC
and regulatory reserve requirements.
LIBOR Rate interest and all fees shall be
calculated on a 360 day basis, while Base Rate
interest shall be calculated on a 365/66 day basis.
-2-
<PAGE> 8
LOANS UNDER THE
CREDIT FACILITY: Borrowings may be requested upon three business days
notice for LIBOR Loans, and same business day notice
for Base Rate Loans and Swingline Loans. Notice must
be given to the Agent by ll:00 a.m., Philadelphia
time, on the day on which such notice is required. The
aggregate of all outstanding LIBOR Loans, Base Rate
Loans, Swingline Loans and Letters of Credit will be
considered usage for purposes of determining
availability under each Credit Facility.
INTEREST PAYMENTS: Interest on Base Rate Loans will be due and payable
quarterly in arrears. Interest on LIBOR Rate Loans
will be due and payable at the end of each applicable
Interest Period or, in the case of a 6 month LIBOR
Rate Loan, every 3 months.
DEFAULT RATE: Upon the occurrence and during the continuance of a
Default or an Event of Default, (i) the Borrower shall
no longer have the option to request LIBOR Rate Loans
or Swingline Loans, (ii) all amounts due and payable
with respect to LIBOR Rate Loans or Swingline Loans
shall bear interest at a rate per annum two percent
(2%) in excess of the rate then applicable to such
Loans until the end of the applicable Interest Period
and thereafter at a rate equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans
and (iii) all amounts due and payable with respect to
Base Rate Loans shall bear interest at a rate per
annum equal to two percent (2%) in excess of the rate
then applicable to Base Rate Loans.
LETTERS OF CREDIT: Letter of Credit Fees: An amount equal to the
applicable LIBOR Margin on a per annum basis
multiplied by the face amount of each Letter of
Credit, payable to the Administrative Agent, for the
account of the Lenders, quarterly in arrears.
Fronting Fees: An amount equal to 0.125% per annum
multiplied by the face amount of each Letter of
Credit, payable to the Administrative Agent (as
Issuing Lender), for its own account, quarterly in
arrears.
-3-
<PAGE> 9
Administrative Cost: All normal costs and expenses
of the Administrative Agent (as Issuing Lender) in
connection with the issuance, transfer or other
administration of the Letters of Credit.
FACILITY AND OTHER FEES: Facility Fee: The Borrower shall pay a Facility
Fee on a per annum basis, at a rate per annum as
reflected on the attached Exhibit I on the full
amount of the Facility, payable quarterly, in
arrears, regardless of usage.
Administrative Agent's Fee and Underwriting Fee:
As set forth in the Fee Letter dated as of April
8, 1999 between the Borrower and the
Administrative Agent.
OPTIONAL PREPAYMENTS/
OPTIONAL COMMITMENT
REDUCTIONS: Base Rate Loans and Swingline Loans may be prepaid
at any time without penalty. LIBOR Rate Loans may
be prepaid at the end of the applicable Interest
Period without penalty. Prepayment of the LIBOR
Rate Loans prior to the end of the applicable
Interest Period is subject to payment of any
funding losses.
Borrower shall have the right to permanently
reduce the aggregate amount of the Commitment
under the Revolving Credit Facility after prior
written notice to Agent.
CONDITIONS PRECEDENT: Customary for facilities of this nature,
including, but not limited to, credit
documentation satisfactory to the Administrative
Agent, which shall include without limitation
credit agreement, promissory notes, resolutions
and legal opinions; all governmental, shareholder,
corporate and third party consents shall have been
obtained; no material adverse change including no
material pending or threatened litigation,
bankruptcy or other proceeding; satisfactory
review of all corporate documentation and other
legal due diligence; payment in full of all
principal, interest and other amounts outstanding
in connection with the Existing Facility; searches
and payment of all fees and expenses due to the
Administrative Agent and the Administrative
Agent's counsel.
-4-
<PAGE> 10
REPRESENTATIONS
AND WARRANTIES: Customary for facilities of this nature,
including, but not limited to, corporate
existence; corporate and governmental
authorization; enforceability; financial
information; no material adverse changes;
compliance with laws and agreements (including
environmental laws); compliance with ERISA; no
material litigation; payment of taxes; financial
condition; compliance with year 2000 matters; and
full disclosure.
AFFIRMATIVE
COVENANTS: Customary for facilities of this nature,
including, but not limited to, receipt of
financial information; notification of litigation,
investigations and other adverse changes; payment
and performance of obligations; conduct of
business; maintenance of existence; maintenance of
property and insurance (including hazard and
business interruption coverage); maintenance of
records and accounts; inspection of property and
books and records; compliance with laws (including
environmental laws); payment of taxes; ERISA; Year
2000 compliance.
FINANCIAL
COVENANTS: Financial covenants shall be the following:
Minimum Interest Coverage Ratio: Maintain, as of
the last day of each fiscal quarter, an Interest
Coverage Ratio of no less than 4.0 to 1.0 for the
preceding four fiscal quarters.
Maximum Total Funded Debt to EBITDA Ratio.
Maintain as of the last day of each fiscal
quarter, a Total Funded Debt to EBITDA Ratio of no
greater than 3.0 to 1.0 for the preceding four
fiscal quarters.
Minimum Net Worth. Maintain, as of the last day of
each fiscal quarter, a New Worth of not less than
85% of Net Worth as of the end of the most recent
fiscal year ended prior to the Closing Date
("Closing Adjusted Net Worth"), and, as of the
last day of each fiscal quarter for each fiscal
year thereafter, the Closing Adjusted Net Worth
plus 50% of Net Income for each fiscal quarter
subsequent to the most recent fiscal year ended
prior to the Closing Date, without deduction for
losses.
-5-
<PAGE> 11
Definitions: [Adjustments to reflect inclusion of historical
financial results of the Target to be determined.]
"Interest Coverage Ratio" means, as of any date of determination,
with respect to Borrower and its consolidated subsidiaries, the
ratio of EBIT, for the most recent Rolling Period, to interest
expense, for the most recent Rolling Period, in each case as
determined in accordance with GAAP.
"EBIT" means, for any period, net income, with respect to
Borrower and its consolidated subsidiaries for such period as
defined in accordance with GAAP, plus interest expense and taxes
for such period, in each case as defined in accordance with GAAP
and to the extent each has been deducted in determining net
income.
"EBITDA" means, for any period, net income, with respect to
Borrower and its consolidated subsidiaries for such period as
defined in accordance with GAAP, plus interest expense, taxes,
depreciation and amortization for such period, in each case as
defined in accordance with GAAP and to the extent each has been
deducted in determining net income.
"Total Funded Debt" means, as of the date of determination, the
aggregate principal amount of all indebtedness of Borrower and
its consolidated subsidiaries for: (i) borrowed money other than
trade indebtedness incurred in the normal and ordinary course of
business for value received, having a final maturity of one year
or more from the date of determination; (ii) installment
purchases of real or personal property; and (iii) Capital Leases.
NEGATIVE
COVENANTS: Customary for facilities of this nature, including, but not
limited to, restrictions and limitations on: indebtedness; liens;
guaranty obligations; changes in business; mergers; sales of
assets; acquisitions; loans and investments; transactions with
affiliates; sale and leaseback transactions; restrictive
agreements; and changes in fiscal year or accounting method.
-6-
<PAGE> 12
EVENTS OF
DEFAULT: Customary for facilities of this nature, including but
not limited to: failure to pay any interest, principal
or fees under the Facility when due; failure to perform
any covenant or agreement; inaccurate or false
representation or warranties; cross defaults (including
cross-defaults to defaults under material contracts);
insolvency or bankruptcy; ERISA; judgment defaults;
change in control; and any other events of default
deemed reasonably necessary by the Administrative Agent
and the Lenders in the context of the proposed
transaction.
ASSIGNMENTS &
PARTICIPATION: Assignments in minimum amounts of $5,000,000 shall be
permitted subject to the consent of the Administrative
Agent and subject (so long as no default or event of
default has occurred and is continuing) to consent of
the Borrower, such consents not to be unreasonably
withheld or delayed. Participants shall be permitted in
minimum amounts of $5,000,000.
INCREASED COSTS/
CHANGE OF
CIRCUMSTANCES: Provisions customary in facilities of this type
protecting the Lenders in the event of unavailability
of funding, illegality, capital adequacy requirements,
increased costs, withholding taxes and funding losses.
REQUIRED LENDERS: On any date of determination, those Lenders who
collectively hold at least 51% of outstandings, or if
no outstandings, those Lenders who collectively hold at
least 51% of the aggregate commitment of the Lenders.
WAIVER OF JURY
TRIAL, GOVERNING
LAW: Waiver of jury trial and submission to jurisdiction in
Philadelphia, Pennsylvania. Pennsylvania law (without
reference to choice of law provisions) to govern.
COUNSEL TO ARRANGER
AND ADMINISTRATIVE
AGENT: Pepper Hamilton LLP
-7-
<PAGE> 13
EXPENSES: The Borrower shall be responsible for all reasonable
legal and other out-of-pocket expenses incurred by the
Administrative Agent related to due diligence
performed by the Administrative Agent in connection
with the transaction, the execution of the loan
documentation, and future administration of the
definitive credit documentation.
MISCELLANEOUS: This summary of terms and conditions does not purport
to summarize all the conditions, covenants,
representations, warranties and other provisions which
would be contained in definitive credit documentation
for the Facility contemplated hereby.
-8-
<PAGE> 14
EXHIBIT I
Pricing Grid
<TABLE>
<CAPTION>
Level Total Debt to Applicable Applicable Base Annual
EBITDA Ratio LIBOR Margin Rate Margin Facility Fee
- ------- ---------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
I Greater than or equal to 2.5 112.5 bps 0 27.5 bps
II Greater than or equal to 2.0
Less than 2.5 100.0 bps 0 25.0 bps
III Greater than or equal to 1.5
Less than 2.0 87.5 bps 0 25.0 bps
IV Greater than or equal to 1.0
Less than 1.5 70.0 bps 0 22.5 bps
V Less than 1.0 55.0 bps 0 20.0 bps
</TABLE>
Pricing will be at Level III for the first two fiscal quarters following
closing.
-9-
<PAGE> 1
EXHIBIT (c)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
among
JLG Industries, Inc.
JLG Acquisition Corp.
and
Gradall Industries, Inc.
dated as of
May 10, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 THE OFFER ............................................................................................... 1
SECTION 1.01. The Offer.................................................................................. 1
SECTION 1.02. Company Actions............................................................................ 2
ARTICLE 2 THE MERGER .............................................................................................. 5
SECTION 2.01. The Merger................................................................................. 5
SECTION 2.02. Effective Time............................................................................. 5
SECTION 2.03. Effects of the Merger...................................................................... 5
SECTION 2.04. Certificate of Incorporation and Bylaws.................................................... 5
SECTION 2.05. Directors and Officers..................................................................... 5
SECTION 2.06. Conversion of Shares....................................................................... 5
SECTION 2.07. Dissenting Shares.......................................................................... 6
SECTION 2.08. Payments for Shares........................................................................ 6
SECTION 2.09. Stock Option and Other Plans............................................................... 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY .......................................... 8
SECTION 3.01. Corporate Existence and Power.............................................................. 8
SECTION 3.02. Corporate Authority........................................................................ 9
SECTION 3.03. Information Supplied....................................................................... 9
SECTION 3.04. Governmental Authorization................................................................. 9
SECTION 3.05. Non-contravention.......................................................................... 10
SECTION 3.06. Financing.................................................................................. 10
SECTION 3.07. Finders' Fees.............................................................................. 10
SECTION 3.08. Delaware Law............................................................................... 11
SECTION 3.09. Ownership of Shares........................................................................ 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................................................... 11
SECTION 4.01. Corporate Existence and Power.............................................................. 11
SECTION 4.02. Corporate Authority........................................................................ 12
SECTION 4.03. Governmental Authorization................................................................. 12
SECTION 4.04. Non-contravention.......................................................................... 12
SECTION 4.05. Capitalization............................................................................. 13
SECTION 4.06. Subsidiaries............................................................................... 13
SECTION 4.07. Company SEC Documents and Other Reports.................................................... 14
SECTION 4.08. Proxy Statement............................................................................ 14
SECTION 4.09. Information Supplied....................................................................... 14
SECTION 4.10. Absence of Certain Changes................................................................. 15
SECTION 4.11. Litigation................................................................................. 15
SECTION 4.12. Benefit Plans; ERISA....................................................................... 15
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.13. Environmental Matters...................................................................... 18
SECTION 4.14. Taxes...................................................................................... 21
SECTION 4.15. Delaware Takeover Statute.................................................................. 22
SECTION 4.16. Fees and Commissions....................................................................... 23
SECTION 4.17. Material Contracts......................................................................... 23
SECTION 4.18. Intellectual Property Rights............................................................... 24
SECTION 4.19. Labor Matters.............................................................................. 25
SECTION 4.20. Year 2000 Compliance....................................................................... 25
SECTION 4.21. Compliance with Laws....................................................................... 26
SECTION 4.22. Insurance.................................................................................. 26
SECTION 4.23. The Rights Agreement....................................................................... 26
ARTICLE 5 COVENANTS ............................................................................................... 26
SECTION 5.01. Conduct of Business of the Company......................................................... 26
SECTION 5.02. No Solicitation............................................................................ 28
SECTION 5.03. Access to Information...................................................................... 30
SECTION 5.04. Best Efforts............................................................................... 30
SECTION 5.05. Indemnification, Exculpation and Insurance................................................. 31
SECTION 5.06. Employee Plans and Benefits and Employment Contracts....................................... 32
SECTION 5.07. Meeting of the Company's Stockholders...................................................... 32
SECTION 5.08. Public Announcements....................................................................... 33
SECTION 5.09. Performance by Merger Subsidiary........................................................... 34
SECTION 5.10. Notification of Certain Matters............................................................ 34
ARTICLE 6 CONDITIONS TO THE MERGER ................................................................................ 34
SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger................................. 34
ARTICLE 7 TERMINATION; AMENDMENT; WAIVER .......................................................................... 35
SECTION 7.01. Termination................................................................................ 35
SECTION 7.02. Effect of Termination...................................................................... 36
SECTION 7.03. Amendment.................................................................................. 36
SECTION 7.04. Extension; Waiver.......................................................................... 37
SECTION 7.05. Procedure for Termination, Extension or Waiver............................................. 37
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 8 MISCELLANEOUS ........................................................................................... 37
SECTION 8.01. Non-Survival of Representations and Warranties............................................. 37
SECTION 8.02. Entire Agreement; Assignment............................................................... 37
SECTION 8.03. Validity................................................................................... 37
SECTION 8.04. Notices.................................................................................... 38
SECTION 8.05. Governing Law.............................................................................. 39
SECTION 8.06. Jurisdiction............................................................................... 39
SECTION 8.07. Descriptive Headings....................................................................... 39
SECTION 8.08. Parties in Interest........................................................................ 39
SECTION 8.09. Counterparts............................................................................... 39
SECTION 8.10. Fees and Expenses.......................................................................... 39
SECTION 8.11. Certain Definitions........................................................................ 40
</TABLE>
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated as of May 10,
1999, among JLG Industries, Inc., a Pennsylvania corporation ("PARENT"), JLG
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("MERGER SUBSIDIARY"), and Gradall Industries, Inc., a Delaware
corporation (the "COMPANY").
The parties hereto agree as follows:
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer. (a) As promptly as practicable after the date
hereof, but in no event later than the fifth business day after the public
announcement of the execution of this Agreement, Parent shall cause Merger
Subsidiary to commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934), and Merger Subsidiary shall commence, an offer (the
"OFFER") to purchase for cash all issued and outstanding shares, together with
the associated rights to purchase Series B Participating Cumulative Preferred
Stock ( collectively, the "SHARES") of common stock, $.00l par value per share,
of the Company (the "COMMON STOCK") at a price of $20 per Share, net to the
seller in cash (such price, or such higher price per Share as may be paid in the
Offer, being referred to as the "OFFER PRICE"). The Offer shall be subject to
only those conditions set forth in Annex A (any of which may be waived by Merger
Subsidiary in its sole discretion; provided that, without the consent of the
Company, Merger Subsidiary shall not waive the Minimum Tender Condition (as
defined in Annex A)).
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Merger Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") with respect to the Offer a Tender Offer Statement on
Schedule 14D-1 (the "SCHEDULE 14D-1"), which will comply in all material
respects with the provisions of applicable federal securities laws and will
contain the offer to purchase relating to the Offer (the "OFFER TO PURCHASE")
and forms of related letters of transmittal and summary advertisement (which
documents, together with any supplements or amendments thereto, are referred to
herein collectively as the "OFFER Documents"). Parent will deliver copies of the
proposed forms of the Schedule 14D-1 and the Offer Documents (as well as any
change thereto) to the Company within a reasonable time prior to the
commencement of the Offer for prompt review and comment by the Company and its
counsel. Parent will provide the Company and its counsel in writing any comments
that Merger Subsidiary, Parent or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after the receipt thereof.
Parent and Merger Subsidiary represent that the Schedule 14D-1 and the Offer
Documents (including any amendments or supplements thereto) (i) shall comply as
to form in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "EXCHANGE ACT") and (ii) shall not, in the
<PAGE> 6
case of the Schedule 14D-1 at the time filed with the SEC and at the time the
Offer is consummated and in the case of the Offer Documents when first
published, sent or given to the stockholders of the Company and at the time the
Offer is consummated, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; provided, however, that Parent and Merger Subsidiary make
no covenant, representation or warranty as to any of the information relating to
and supplied by the Company in writing specifically for inclusion in the
Schedule 14D-1 or the Offer Documents (including any amendments or supplements
thereto). Parent and Merger Subsidiary shall promptly correct any information in
the Schedule 14D-1 or the Offer Documents that shall have become false or
misleading in any material respect and take all steps necessary to cause such
Schedule 14D-1 or Offer Documents as so corrected to be filed with the SEC and
disseminated to the stockholders of the Company, as and to the extent required
by applicable law. Parent and Merger Subsidiary will provide copies of any
amendments or supplements to the Offer Documents or the Schedule 14D-1 to the
Company prior to any filing of such amendments or supplements with the SEC in
order to provide the Company and its counsel with a reasonable opportunity to
review and comment thereon.
(c) Each of Parent and Merger Subsidiary expressly reserves the right
to modify the terms of the Offer, except that neither Parent nor Merger
Subsidiary shall, without the prior written consent of the Company, decrease the
consideration payable in the Offer, change the form of consideration payable in
the Offer, decrease the number of Shares sought pursuant to the Offer, change or
modify the conditions to the Offer in a manner adverse to the Company or holders
of Shares, impose additional conditions to the Offer, waive the Minimum Tender
Condition, or amend any term of the Offer in any manner adverse to the Company
or holders of Shares. Notwithstanding the foregoing, Merger Subsidiary, without
the consent of the Company, (i) must extend the Offer for an aggregate of 10
additional business days after the then scheduled expiration date of the Offer
to the extent necessary to permit such condition to be satisfied (the "FIRST
EXTENSION PERIOD"), (ii) may extend the Offer, if at the end of the First
Extension Period any of the conditions to Merger Subsidiary's obligation to
accept for payment and pay for Shares shall not have been satisfied, until such
time as such condition is satisfied or waived and (iii) may extend the Offer for
any period required by any rule, regulation, interpretation or position of the
SEC or the staff thereof applicable to the Offer.
(d) Parent will provide or cause to be provided to Merger Subsidiary on
a timely basis the funds necessary to accept for payment, and pay for, Shares
that Merger Subsidiary becomes obligated to accept for payment, and pay for,
pursuant to the Offer.
(e) Merger Subsidiary shall accept for payment, and pay for, Shares in
accordance with the Offer, subject to the satisfaction or waiver of the
conditions to the Offer.
SECTION 1.2. Company Actions. (a) The Company hereby consents to the
Offer and represents that its Board of Directors, at a meeting duly called and
held, has by unanimous vote
2
<PAGE> 7
adopted resolutions approving the Offer, the Merger (as defined in Section 2.01)
and this Agreement, determining that the terms of the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders and
recommending acceptance of the Offer and approval of the Merger and this
Agreement by the stockholders of the Company; provided, however, that the Board
of Directors of the Company may modify, withdraw or change such recommendation
to the extent that the Board of Directors of the Company concludes in accordance
with Section 5.02 hereof, that such action is necessary in order for the Board
of Directors to satisfy its fiduciary duties under applicable law. The Company
further represents that Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MERRILL LYNCH") has delivered to the Company's Board of Directors its opinion
that as of the date of this Agreement the cash consideration to be received by
holders of the Shares for such Shares is fair to such holders from a financial
point of view, and that the Company is authorized by Merrill Lynch to include a
summary description of such opinion in the Offer Documents, provided that any
summary description of such opinion shall be subject to prior review and
approval by Merrill Lynch. The Company hereby consents to the inclusion in the
Offer Documents of the recommendations of the Company's Board of Directors
described in this Section.
(b) The Company will file with the SEC on the date of the commencement
of the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (the
"SCHEDULE 14D-9") containing such recommendations of the Board in favor of the
Offer and the Merger; provided, however, that the Board of Directors of the
Company may modify, withdraw or change such recommendation to the extent that
the Board of Directors concludes in accordance with Section 5.02 hereof, that
such action is necessary in order for the Board of Directors to satisfy its
fiduciary duties under applicable law. The Company will deliver the proposed
forms of the Schedule 14D-9 and the exhibits thereto to Parent within a
reasonable time prior to the commencement of the Offer for prompt review and
comment by Parent and its counsel. Parent and its counsel shall be given a
reasonable opportunity to review any amendments and supplements to the Schedule
14D-9 prior to their filing with the SEC or dissemination to stockholders of the
Company. The Company will provide Parent and its counsel in writing any comments
that the Company or its counsel may receive from the SEC or its staff with
respect to the Schedule 14D-9 promptly after receipt thereof, and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act. The Company represents that the Schedule 14D-9, on the date filed
with the SEC and on the date first published, sent or given to the stockholders
of the Company, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, provided, however, that the Company makes no
covenant, representation or warranty as to any of the information relating to
and supplied by Parent or Merger Subsidiary in writing specifically for
inclusion in the Schedule 14D-9 (including any amendments or supplements
thereto). The Company shall promptly correct any information in the Schedule
14D-9 that shall have become false or misleading in any material respect and
take all steps necessary to cause such Schedule 14D-9 as so corrected to be
filed with the SEC and disseminated to the stockholders of the Company, as and
to the extent required by applicable federal securities laws.
3
<PAGE> 8
(c) In connection with the Offer, the Company shall furnish to, or
cause to be furnished to, Parent and its information agent mailing labels,
security position listings and any available listing or computer file containing
the names and addresses of the record holders of the Shares as of a recent date
and shall furnish Parent and its information agent with such information and
assistance as Parent or its agents may reasonably request in communicating the
Offer to the stockholders of the Company. Subject to the requirements of law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, Parent and Merger
Subsidiary shall, and shall cause each of their affiliates to, hold the
information contained in any of such labels and lists in confidence, use such
information only in connection with the Offer and the Merger, and, if this
Agreement is terminated, deliver to the Company all copies of such information
or extracts therefrom then in their possession or under their control.
(d) Promptly upon the acceptance for payment of and payment for any
Shares by Merger Subsidiary, Merger Subsidiary shall be entitled to designate
such number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as will give Merger Subsidiary, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
of the Company equal to the product of (i) the number of directors on the Board
of Directors of the Company and (ii) the percentage that such number of votes
represented by Shares so purchased bears to the number of votes represented by
Shares outstanding, and the Company shall at such time, subject to applicable
law, including applicable fiduciary duties, cause Merger Subsidiary's designees
to be so elected by its existing Board of Directors. Subject to applicable law,
including applicable fiduciary duties, the Company promptly shall take all
action requested by Parent necessary to effect any such election, including
mailing to its stockholders the information statement (the "INFORMATION
STATEMENT") containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and the Company shall make such
mailing with the mailing of the Schedule 14D-9 (provided that Parent and Merger
Subsidiary shall have provided to the Company on a timely basis all information
required to be included in the Information Statement with respect to Merger
Subsidiary's designees). In connection with the foregoing, the Company will,
subject to applicable law, including applicable fiduciary duties, promptly, at
the option of Parent, either increase the size of the Company's Board of
Directors and/or use its best efforts to obtain the resignation of such number
of its current directors as is necessary to enable Merger Subsidiary's designees
to be elected or appointed to the Company's Board of Directors as provided
above.
(e) Notwithstanding any other provision hereof, of the certificate of
incorporation or by-laws of the Company or of applicable law to the contrary,
following the election or appointment of Merger Subsidiary's designees pursuant
to Section 1.02(d) and prior to the Effective Time, any amendment or termination
of this Agreement or waiver of the obligations or other acts of Parent or Merger
Subsidiary hereunder or waiver by the Company of the Company's rights hereunder
will require the concurrence of a majority of directors of the Company then in
office who are directors on the date hereof and who voted to approve this
Agreement.
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ARTICLE 2
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Delaware General
Corporation Law (the "DGCL"), Merger Subsidiary shall be merged with and into
the Company (the "MERGER") as soon as practicable following the satisfaction or
waiver of the conditions set forth in Article 6. Following the Merger, the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and shall continue its existence under the laws of the State of
Delaware, and the separate corporate existence of Merger Subsidiary shall cease.
SECTION 2.2. Effective Time. Upon the terms and subject to the
conditions hereof, as soon as possible after consummation of the Offer and to
the extent required by the DGCL after the vote of the stockholders of the
Company in favor of the approval of the Merger and this Agreement has been
obtained, the Merger shall be consummated by filing with the Secretary of State
of the State of Delaware, as provided in the DGCL, a certificate of merger or
other appropriate documents (in any such case, the "CERTIFICATE OF MERGER") and
the parties hereto shall make all other filings or recordings required under the
DGCL (the later of the time of such filing or the time specified in the
Certificate of Merger being the "EFFECTIVE TIME").
SECTION 2.3. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL. As of the Effective Time, the Company, as
the Surviving Corporation, shall be a wholly-owned subsidiary of Parent.
SECTION 2.4. Certificate of Incorporation and Bylaws. (a) The
certificate of incorporation of the Company in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation from and after the Effective Time until amended in accordance with
applicable law.
(b) The bylaws of Merger Subsidiary in effect at the Effective Time
shall be the bylaws of the Surviving Corporation from and after the Effective
Time until amended in accordance with applicable law.
SECTION 2.5. Directors and Officers. The directors of Merger Subsidiary
and the officers of the Company immediately prior to the Effective Time shall be
the directors and officers of the Surviving Corporation until their respective
successors are duly elected and qualified.
SECTION 2.6. Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Subsidiary, the
Company or the holders of any of the following securities:
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(a) each Share held by the Company as treasury stock and each issued
and outstanding Share owned by Parent, Merger Subsidiary or any other Subsidiary
of Parent shall be canceled and retired and no payment made with respect
thereto;
(b) each issued and outstanding Share, other than those Shares referred
to in Section 2.06(a) or Dissenting Shares (as defined in Section 2.07), shall
be converted into the right to receive from the Surviving Corporation an amount
of cash, equal to the Offer Price payable to the holder thereof, without
interest (the "MERGER CONSIDERATION"); and
(c) each share of common stock of Merger Subsidiary issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of common stock of the Surviving Corporation.
SECTION 2.7. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding Shares held by a Person (a
"DISSENTING STOCKHOLDER") who objects to the Merger and complies with all the
provisions of Delaware law concerning the right of holders of Shares to require
appraisal of their Shares ("DISSENTING SHARES") shall not be converted as
described in Section 2.06(b) but shall become the right to receive such
consideration as may be determined to be due to such Dissenting Stockholder
pursuant to the laws of the State of Delaware. If, after the Effective Time,
such Dissenting Stockholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case pursuant to the
DGCL, his Shares shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give Parent (i)
prompt notice of any demands for appraisal of Shares received by the Company and
(ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not, except as
required by any competent court, without the prior written consent of Parent,
make any payment with respect to, or settle, offer to settle or otherwise
negotiate, any such demands. "PERSON" means an individual, a corporation, a
limited liability company, a partnership, an association, a trust or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof.
SECTION 2.8. Payments for Shares. (a) Prior to the Effective Time,
Parent shall appoint a commercial bank or trust company reasonably acceptable to
the Company to act as disbursing agent for the Merger (the "DISBURSING AGENT").
Parent will enter into a disbursing agent agreement with the Disbursing Agent,
in form and substance reasonably acceptable in all material respects to the
Company, and shall deposit or cause to be deposited with the Disbursing Agent in
trust for the benefit of the Company's stockholders cash at such times as shall
be necessary to make the payments pursuant to Section 2.06 to holders of Shares
(such amounts being hereinafter referred to as the "EXCHANGE FUND"). The
Disbursing Agent shall, pursuant to irrevocable instructions, make the payments
provided for in the preceding sentence out of the Exchange Fund.
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(b) Promptly after the Effective Time, the Surviving Corporation shall
cause the Disbursing Agent to mail to each record holder, as of the Effective
Time, of an outstanding certificate or certificates which immediately prior to
the Effective Time represented Shares (the "CERTIFICATES") a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Disbursing Agent) and instructions for use in effecting the
surrender of the Certificate for payment therefor. Upon surrender to the
Disbursing Agent of a Certificate, together with such letter of transmittal duly
executed, the holder of such Certificate shall be paid in exchange therefor cash
in an amount equal to the product of the number of Shares represented by such
Certificate multiplied by the Merger Consideration, and such Certificate shall
forthwith be canceled. No interest will be paid or accrued on the cash payable
upon the surrender of the Certificates. If payment is to be made to a Person
other than the Person in whose name the Certificate surrendered is registered,
it shall be a condition of payment that the Certificate so surrendered be
properly endorsed or otherwise in proper form for transfer and that the Person
requesting such payment pay any transfer or other taxes required by reason of
the payment to a Person other than the registered holder of the Certificate
surrendered or established to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.08, each Certificate (other than
Certificates representing Shares owned by Parent, Merger Subsidiary or any other
Subsidiary of Parent or Dissenting Shares) shall represent for all purposes only
the right to receive the Merger Consideration in cash multiplied by the number
of Shares evidenced by such Certificate, without any interest thereon.
(c) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be canceled and exchanged for cash as
provided in this Section 2.08.
(d) Any portion of the Exchange Fund (including the proceeds of any
investments thereof not previously delivered to Parent) that remains unclaimed
by the stockholders of the Company for six months after the Effective Time shall
be paid to the Parent. Any stockholders of the Company who have not theretofore
complied with Section 2.08 shall thereafter look only to Parent and the
Surviving Corporation for payment of their claim for the Merger Consideration
per Share, without any interest thereon.
(e) To the fullest extent permitted by applicable law, none of Parent,
Merger Subsidiary, the Company or the Disbursing Agent shall be liable to any
Person in respect of any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
SECTION 2.9. Stock Option and Other Plans. (a) Prior to the Effective
Time, the Board of Directors of the Company (or, if appropriate, any committee
thereof) shall adopt appropriate resolutions and take all other actions
necessary to provide for the cancellation, effective at the Effective Time, of
all the outstanding stock options, stock appreciation rights,
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limited stock appreciation rights and performance units (the "STOCK OPTIONS")
heretofore granted under any stock option, performance unit or similar plan of
the Company (the "STOCK PLANS"). Immediately prior to the Effective Time each
Stock Option, whether or not then vested or exercisable, shall no longer be
exercisable but shall entitle each holder thereof, in cancellation and
settlement therefor, to payments in cash (subject to any applicable withholding
taxes)(the "CASH PAYMENT"), at the Effective Time, equal to the product of (x)
the total number of shares of Common Stock subject or related to such Stock
Option, whether or not then vested or exercisable, and (y) the excess of the
Merger Consideration over the exercise price per share of Common Stock subject
or related to such Stock Option, each such Cash Payment to be paid to each
holder of an outstanding Stock Option at the Effective Time.
(b) The Company shall use its reasonable best efforts to obtain all
necessary consents to ensure that after the Effective Time, the only rights of
the holders of Stock Options will be to receive the Cash Payment in cancellation
and settlement thereof.
(c) The Company shall take all actions as are reasonably necessary to
cause the "SHARE PURCHASE DATE" applicable to the then current "OFFERING PERIOD"
(both, within the meaning of the Gradall Industries, Inc. Employee Stock
Purchase Plan (the "STOCK PURCHASE PLAN")) to be the last trading day on which
the Company Common Stock is traded on the NASDAQ, immediately prior to the date
which is fifteen (15) business days following the acceptance for payment for
Shares under the Offer (or, if earlier, the Effective Time) (the "NEW PURCHASE
DATE"); provided that, such change in the "SHARE PURCHASE DATE" shall be
conditioned upon the acceptance for payment of Shares under the Offer. On the
New Purchase Date, the Company shall apply the funds credited as of such date
under the Stock Purchase Plan within each participant's payroll withholdings
account to the purchase of whole shares of Common Stock in accordance with the
terms of the Stock Purchase Plan; provided, however that the cost to each
participant in the Stock Purchase Plan for the shares shall be the lower of 85%
of the closing sale price of Company Common Stock, as reported on the NASDAQ on
(i) the first trading day of the then current Offering Period or (ii) the last
trading day prior to the New Purchase Date.
(d) All Stock Plans and the Stock Purchase Plan shall terminate as of
the Effective Time and following the Effective Time, no holder of a Stock Option
or any participant in any Stock Plans and the Stock Purchase Plan shall have any
right thereunder to acquire any capital stock of the Company or any Subsidiary
or the Surviving Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary represent and warrant to the Company as
follows:
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SECTION 3.1. Corporate Existence and Power. Each of Parent and Merger
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power to carry on its business as it is now being conducted.
Each of Parent and Merger Subsidiary is duly qualified to do business as a
foreign corporation, and is in good standing in each jurisdiction where the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not have a material adverse effect on the
financial condition, assets, liabilities, business or results of operations of
Parent and its Subsidiaries taken as a whole, or the ability of Parent or Merger
Subsidiary to perform their obligations under this Agreement or to consummate
the transactions contemplated by this Agreement (a "PARENT MATERIAL ADVERSE
EFFECT").
SECTION 3.2. Corporate Authority. Each of Parent and Merger Subsidiary
has the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby have been duly authorized by its respective Board of Directors and the
stockholder of Merger Subsidiary, and no other corporate action on the part of
Parent or Merger Subsidiary is necessary to authorize the execution and delivery
of this Agreement and the consummation by it of the transactions contemplated
hereby (including the Offer). This Agreement has been duly executed and
delivered by each of Parent and Merger Subsidiary and constitutes a valid and
binding agreement of each of Parent and Merger Subsidiary, enforceable against
each of Parent and Merger Subsidiary in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally.
SECTION 3.3. Information Supplied. None of the information supplied by
Parent, Merger Subsidiary and their respective affiliates specifically for
inclusion in the Schedule 14D-9 or the Proxy Statement (as defined below), if
required, shall, with respect to the Schedule 14D-9, at the time such Schedule
is filed with the SEC or first published or sent or given to holders of Shares
or at the time the Offer is consummated or, with respect to the Proxy Statement,
at the time the Proxy Statement is mailed or at the time of the meeting of the
Company's stockholders, or action by written consent of stockholders, as the
case may be ("STOCKHOLDER ACTION DATE"), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The letter to
stockholders, notice of meeting, proxy statement and form of proxy, or the
information statement, as the case may be, to be distributed to stockholders in
connection with the Merger, or any schedule required to be filed with the SEC in
connection therewith, are collectively referred to herein as the "PROXY
STATEMENT."
SECTION 3.4. Governmental Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Federal,
state or local
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government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign (a "GOVERNMENTAL
ENTITY") is required by Parent or Merger Subsidiary in connection with the
execution and delivery of this Agreement by Parent or Merger Subsidiary or the
consummation by Parent and Merger Subsidiary of the transactions contemplated by
this Agreement, except for (i) compliance with any applicable requirements under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), (ii) requirements under the Exchange Act, (iii) the filing of the
Certificate of Merger pursuant to the DGCL and appropriate documents with the
relevant authorities of other states in which Parent or any of its subsidiaries
is qualified to do business; and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 3.5. Non-contravention. The execution, delivery and performance
by Parent and Merger Subsidiary of this Agreement and the consummation by Parent
and Merger Subsidiary of the transactions contemplated hereby do not and will
not (a) contravene or conflict with the certificate of incorporation or bylaws
or other equivalent organizational document, in each case as amended, of Parent
or any of its Subsidiaries, (b) assuming compliance with the matters referred to
in Section 3.04, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Parent or any of its Subsidiaries, (c) constitute a
default under or give rise to a right of termination, cancellation or
acceleration of any obligation of Parent or any of its Subsidiaries or to a loss
of a material benefit to which Parent or any of its Subsidiaries is entitled
under any provision of any agreement, contract or other instrument binding upon
Parent or any of its subsidiaries or any license, franchise, permit or other
similar authorization held by Parent or any of its Subsidiaries, or (d) result
in the creation or imposition of any Lien on any asset of Parent or any of its
Subsidiaries, other than, in the case of clauses (b), (c) and (d), any such
conflict, violation, default, right, loss or Lien that, individually or in the
aggregate, would not reasonably be expected to have a Parent Material Adverse
Effect. For purposes of this Agreement, "LIEN" means, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
SECTION 3.6. Financing. As of the date of the acceptance for payments
of the Shares pursuant to the Offer, Parent or Merger Subsidiary has, and will
at all times thereafter until consummation of the Merger and the transactions
contemplated thereby, continue to have, and will make available to Merger
Subsidiary, the funds necessary to consummate the Offer and the Merger and the
transactions contemplated thereby, and to pay related fees and expenses (the
"Merger Funds"). The Company has received a true and complete copy of a letter
of commitment obtained by Parent from First Union National Bank to provide debt
financing pursuant to a credit facility described therein ("Financing
Commitment") that describes Parent's expected source of the Merger Funds.
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SECTION 3.7. Finders' Fees. Except for Gleacher & Co. LLC, whose fees
will be paid by Parent, there is no investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Parent or Merger Subsidiary.
SECTION 3.8. Delaware Law. As of the time immediately prior to the
execution of this Agreement, neither Parent nor any of its Subsidiaries was an
"INTERESTED STOCKHOLDER", as such term is defined in Section 203 of DGCL.
SECTION 3.9. Ownership of Shares. Except pursuant to the Stockholders
Agreement, neither Parent nor, to its knowledge any of its Subsidiaries or
affiliates, (i) beneficially owns (as such term is defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, or (ii) is party to any agreement,
arrangement or understanding for purpose of acquiring, holding, voting or
disposing of, in each case, shares of capital stock of the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule of the Company hereto
(the "COMPANY DISCLOSURE SCHEDULE"), the Company hereby represents and warrants
to Parent and Merger Subsidiary as follows:
SECTION 4.1. Corporate Existence and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has the requisite corporate power to carry on its
business as it is now being conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not have a Company Material Adverse
Effect. For purposes of this Agreement (except paragraph (f) of Annex A hereto),
"Company Material Adverse Effect" means (i) a material adverse effect on the
financial condition, assets, liabilities, business, or results of operations of
the Company and its Subsidiaries taken as a whole, or (ii) a material adverse
effect on the ability of the Company to perform its obligations under this
Agreement or to consummate the transactions contemplated hereby, provided that a
material adverse effect on the liabilities of the Company shall be deemed to be
a loss, casualty, damage, judgment, fine or other liability (net of any
corresponding asset), in each case whether contingent or realized, required in
accordance with generally accepted accounting principles ("GAAP") to be
reflected on the Company's consolidated financial statements and that if so
reflected would reduce the Company's consolidated stockholders equity by more
than $2 million. The definition of Company Material Adverse Effect is not
intended to define, qualify or provide any basis for interpreting paragraph (f)
of Annex A hereto. The Company has heretofore delivered to
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Parent true and complete copies of the Company's certificate of incorporation
and bylaws as currently in effect.
SECTION 4.2. Corporate Authority. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and, subject
to any required approval of the Merger by the Company's stockholders, to
consummate the transactions contemplated hereby. The execution and delivery by
the Company of this Agreement, and the consummation by the Company of the
transactions contemplated hereby, have been duly authorized by its Board of
Directors, and except for any required approval of the Merger by the Company's
stockholders, no other corporate action on the part of the Company is necessary
to authorize the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally.
SECTION 4.3. Governmental Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by the Company or any Subsidiary in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated by this Agreement, except for (i)
compliance with applicable requirements under the HSR Act, (ii) requirements
under the Exchange Act, (iii) the filing of the Certificate of Merger pursuant
to the DGCL and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business and such filings to
satisfy applicable requirements of state securities or "BLUE SKY" laws; and (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Company Material Adverse Effect.
SECTION 4.4. Non-contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not and will not (a) contravene or conflict
with the certificate of incorporation or bylaws of the Company or the comparable
charter or organizational documents of any Subsidiary, (b) assuming compliance
with the matters referred to in Section 4.03, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the Company or any
Subsidiary, (c) constitute a default under or give rise to a right of
termination, cancellation or acceleration of any obligation of the Company or
any Subsidiary or to a loss of a material benefit to which the Company or any
Subsidiary is entitled under any provision of any agreement, contract or other
instrument binding upon the Company or any Subsidiary or any license, franchise,
permit or other similar authorization held by the Company or any Subsidiary, or
(d) result in the creation or imposition of any Lien on any asset of the Company
or any Subsidiary, other than, in the case of clauses (b), (c) and (d), any such
conflict,
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violation, default, right, loss or Lien that, individually or in the aggregate,
would not have a Company Material Adverse Effect.
SECTION 4.5. Capitalization. The authorized capital stock of the
Company consists of 18,000,000 shares of Common Stock, 140 shares of Series A
Preferred Stock, par value $.01 per share (the "SERIES A PREFERRED STOCK") and
2,000,000 shares of Serial Preferred Stock, par value $.00l per share (the
"SERIAL PREFERRED STOCK") of which 300,000 shares have been designated as Series
B Participating Cumulative Preferred Stock pursuant to the Rights Agreement,
dated as of May 29, 1998, between the Company and ChaseMellon Shareholder
Services, LLC ("RIGHTS AGREEMENT"). As of April 30, 1999, there were outstanding
9,515,460 shares of Common Stock, zero shares of Series A Preferred Stock, zero
shares of Serial Preferred Stock and Stock Options to purchase an aggregate of
811,557 Shares (of which options to purchase an aggregate of 260,774 Shares were
exercisable). All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable. Except
as set forth in this Section and in the Rights Agreement and the Stock Purchase
Plan, and except for changes since April 30, 1999 resulting from the exercise of
Stock Options outstanding on such date, there are outstanding (a) no shares of
capital stock or other voting securities of the Company, (b) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (c) no options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (the items in clauses (a), (b) and (c)
being referred to collectively as the "COMPANY SECURITIES"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Company Securities.
SECTION 4.6. Subsidiaries. Section 4.06 of the Company Disclosure
Schedule sets forth a list of each Subsidiary of the Company. Each Subsidiary of
the Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has all requisite
corporate power and authority to carry on its business as now conducted and is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, except for
those jurisdictions where failure to be so qualified would not have a Company
Material Adverse Effect. All of the outstanding shares of capital stock or other
ownership interests in each of the Subsidiaries have been validly issued, and
are fully paid, non-assessable and are owned by the Company or another
Subsidiary free and clear of all Liens. There are no (i) securities of the
Company or any Subsidiary convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any Subsidiary and
(ii) options or other rights to acquire from the Company or any Subsidiary, or
other obligation of the Company or any Subsidiary to issue any capital stock,
voting securities or other ownership interests in, or any securities convertible
into or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses (i) and (ii) being referred
to collectively as the
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"SUBSIDIARY SECURITIES"). There are no outstanding obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
SECTION 4.7. Company SEC Documents and Other Reports. Except for the
Company's Annual Report on Form 10-K for fiscal year 1998, since June 25, 1996
the Company has timely filed all required forms, reports and documents with the
SEC required to be filed by it pursuant to the federal securities laws and the
SEC rules and regulations (including under applicable extensions) thereunder
(collectively, the "COMPANY SEC DOCUMENTS"), all of which have complied as of
their respective filing dates in all material respects with all applicable
requirements of the Securities Act of 1933, as amended, and the rules
promulgated thereunder (the "SECURITIES ACT") and the Exchange Act. None of such
forms, reports or documents required by the Exchange Act at the time filed, nor
any of such forms, reports or documents required by the Securities Act as of the
date of their effectiveness contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except to the extent that information contained
in any Company SEC Document has been revised or superseded by a later-filed
Company SEC Document filed and publicly available prior to the date hereof. The
financial statements of the Company included in the Company SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
SECTION 4.8. Proxy Statement. If a Proxy Statement is required for the
consummation of the Merger under applicable law, the Proxy Statement will comply
as to form in all material respects with the Exchange Act, except that no
representation is made by the Company with respect to information supplied by
Parent or any affiliate of Parent specifically for inclusion in the Proxy
Statement or incorporated by reference therein. None of the information supplied
by the Company specifically for inclusion in the Proxy Statement shall, at the
time the Proxy Statement is mailed or at the time of the Stockholder Action
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
SECTION 4.9. Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in (i)
the Offer Documents, (ii) the Schedule 14D-9 or (iii) the Information Statement,
will, at the respective times the Offer Documents, the Schedule 14D-9 and the
Information Statement are filed with
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the SEC or first published, sent or given to the Company's stockholders, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9 and the Information Statement will comply as to
form in all material respects with the requirements of the Exchange Act, except
that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Merger Subsidiary specifically for inclusion or
incorporation by reference therein.
SECTION 4.10. Absence of Certain Changes. Except as disclosed in the
Company SEC Documents or as contemplated by this Agreement, since December 31,
1998, until the date of acceptance and payment for the Shares under the Offer,
there has not been any material adverse change in the financial condition,
assets, liabilities, business or results of operations of the Company and its
Subsidiaries taken as a whole, except for general economic changes, changes that
affect the industry of the Company or any Subsidiary generally, and changes in
the Company's business after the date hereof attributable solely to actions
taken by Parent or Merger Subsidiary. Except as disclosed in the Company SEC
Documents and Section 4.10 of the Company Disclosure Schedule, since December
31, 1998, there has not been (a) any declaration, setting aside or payment of
any dividend or other distribution in respect of the capital stock of the
Company or any redemption or other acquisition by the Company of any Shares; (b)
any split, combination or reclassification of the Company's capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (c) (i) any
granting by the Company or any of the Subsidiaries to any officer or key
employee of the Company or any of the Subsidiaries of any increase in
compensation, except in the ordinary course of business or as was required under
employment agreements in effect as of the date of the most recent financial
statements included in the Company SEC Documents or (ii) any entry by the
Company or any Subsidiary into any employment, severance or termination
agreement with any such officer or key employee or granting by the Company or
any Subsidiary to any such officer or key employee of any increase in severance
or termination pay, except as was required under employment, severance or
termination agreements in effect as of the date of the most recent financial
statements included in the Company SEC Documents, (d) any damage, destruction or
loss, whether or not covered by insurance, that has or would have a Company
Material Adverse Effect, or (e) any change in accounting methods, principles or
practices by the Company or any Subsidiary materially affecting its assets,
liabilities or business, except insofar as may have been required by a change in
generally accepted accounting principles.
SECTION 4.11. Litigation. Except as disclosed in Section 4.11 of the
Company Disclosure Schedule, as of the date hereof there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary before any court or arbitrator or before or by any
governmental body, agency or official that, individually or in the aggregate,
would be reasonably likely to result in a claim against the Company in excess of
$500,000.
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SECTION 4.12. Benefit Plans; ERISA. (a) Section 4.12 of the Company
Disclosure Schedule sets forth a complete list of all "EMPLOYEE BENEFIT PLANS"
(as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), whether or not subject to ERISA, including, but not
limited to, any bonus, pension, profit sharing, deferred compensation, incentive
compensation, excess benefit, stock, stock option, stock purchase, severance
pay, termination pay, unemployment benefit, vacation pay, savings, medical,
dental, post-retirement medical, accident, disability, weekly income, salary
continuation, health, life or other insurance fringe benefits, change in control
or other material employee benefit plans, programs or arrangements currently
maintained, or contributed to, or required to be maintained or contributed to,
by the Company or any other Person that, together with the Company, is treated
as a single employer under Section 414 of the Internal Revenue Code of 1986, as
amended (the "CODE") (each a "COMMONLY CONTROLLED ENTITY"), for the benefit of
any current or former employees, officers, directors or independent contractors
of the Company or any Commonly Controlled Entity and with respect to which the
Company or any Commonly Controlled Entity has any unsatisfied liability
(collectively, the "BENEFIT PLANS"). Section 4.12 of the Company Disclosure
Schedule also includes a list of each written employment, severance,
compensation, termination or similar type of agreement between the Company or a
Commonly Controlled Entity and any current or former employees with respect to
which the Company or any Commonly Controlled Entity has any unsatisfied
liability (the "EMPLOYMENT AGREEMENTS").
(b) Except as indicated in Section 4.12 of the Company Disclosure
Schedule, the Company has delivered or made available to Parent true, complete
and correct copies of each Benefit Plan (including all amendments adopted since
the most recent restatement), and each Employment Agreement (including all
amendments or riders). Except as indicated in Section 4.12 of the Company
Disclosure Schedule, with respect to each Benefit Plan that is subject to ERISA
(an "ERISA PLAN"), the Company has delivered or made available to Parent where
applicable (i) the most recent summary plan description (including all summaries
of material modifications prepared since the most recent summary plan
description); (ii) annual reports on Form 5500 for the three most recent years
such reports have been filed; (iii) each related trust agreement, (including all
amendments), (iv) the most recent Internal Revenue Service (the "IRS")
determination letter, and (v) any participation or collective bargaining
agreement referenced in any ERISA Plan. Except as set forth in Section 4.12 of
the Company Disclosure Schedule, the Company has no unfunded liabilities with
respect to any ERISA Plan as of the end of the Company's most recent fiscal year
that are not reflected on the Company's financial statements for such fiscal
year.
(c) To the Company's knowledge, and except as indicated in Section 4.12
of the Company Disclosure Schedule, each Benefit Plan, has been administered in
all material respects with its terms and with the applicable provisions of ERISA
and the Code. Except as may be provided under any collective bargaining
agreement or as may otherwise be required by law, the Company has no commitment,
whether or not legally binding, to create any
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additional Benefit Plan or to change the terms of any existing Benefit Plan.
Except as disclosed in the Company Disclosure Schedule, the transactions
contemplated by this Agreement will not, solely as a result of their
consummation, increase or accelerate any amount due under any Employment
Agreement or a Benefit Plan, require assets to be set aside or other forms of
security to be provided with respect to any liability under any Employment
Agreement or Benefit Plan, or result in any "PARACHUTE PAYMENT" (within the
meaning of Code Section 280G) under any Benefit Plan.
(d) Each ERISA Plan, other than a "multiemployer plan", as defined in
Section 3(37) of ERISA (a "Multiemployer Plan) intended to be qualified under
Section 401(a) of the Code has been the subject of a determination letter(s)
from the IRS to the effect that such ERISA Plan is qualified under Section
401(a), and its related trust is exempt from Federal income taxation under
Section 501(a) of the Code as amended at least through the statutory changes
implemented under the Tax Reform Act of 1986, and no such determination letter
has been revoked nor, to the knowledge of the Company, has revocation been
threatened, nor has any such ERISA Plan been amended nor, to the knowledge of
the Company, has anything occurred since the date of its most recent
determination letter or application therefor in any respect that would adversely
affect its qualification. Except as indicated in Section 4.12 of the Company
Disclosure Schedule, no Benefit Plan that is not a Multiemployer Plan is subject
to any ongoing audit, administrative proceeding or, to the knowledge of the
Company, any investigation by any governmental entity. Except as indicated in
Section 4.12 of the Company Disclosure Schedule, to the knowledge of the
Company, no event or condition exists or is reasonably expected to occur in
connection with the administration of any Benefit Plan that would either (i)
subject the Company to any material liability, contingent or otherwise to the
IRS, the Department of Labor ("DOL") or the Pension Benefit Guarantee
Corporation (other than any liability for premiums payments to the Pension
Benefit Guarantee Corporation) or (ii) cause the imposition of any lien on the
assets of the Company under the Code or ERISA. Except as indicated in Section
4.12 of the Company Disclosure Schedule, no ERISA Plan that is not a
Multiemployer Plan is the subject of any pending application for administrative
relief under any voluntary compliance program or closing agreement program of
the IRS or the DOL, and to the knowledge of the Company, no Multiemployer Plan
is subject to any such application for administrative relief. To the knowledge
of the Company, no Person has engaged in any "PROHIBITED TRANSACTION" (as such
term is defined in ERISA and the Code) with respect to any ERISA Plan (other
than any prohibited transaction with respect to which an exemption has been
granted). The Company has paid or remitted all contributions to each ERISA Plan
that is not a Multiemployer Plan within the time period required by applicable
law.
(e) No ERISA Plan that is a "SINGLE-EMPLOYER PLAN" (as defined in
Section 4001(a)(15) of ERISA and which is subject to Title IV of ERISA ("SINGLE
EMPLOYER PLAN")) has incurred an "ACCUMULATED FUNDING DEFICIENCY" (as such term
is defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived.
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(f) No "REPORTABLE EVENT" (as that term is defined in Section 4043 of
ERISA) has occurred with respect to any Single Employer Plan, for which the
30-day notice requirement has not been waived (other than with respect to
transactions contemplated by this Agreement).
(g) Except as set forth in the Company Disclosure Schedule, with
respect to any Benefit Plan that is an employee welfare benefit plan (as defined
in Section 3(l) of ERISA), no such Benefit Plan provides benefits, including
without limitation, death or medical benefits, beyond termination of employment
or retirement other than (A) coverage mandated by law or (B) death or retirement
benefits under an ERISA Plan qualified under Section 401(a) of the Code.
(h) Section 4.12 of the Company Disclosure Schedule identifies each
ERISA Plan that is a Multiemployer Plan. To the Company's knowledge, (i) each
such plan has been operated and administered, in all material respects, in
accordance with its terms and all applicable laws, (ii) each such plan is
qualified under Section 401(a) of the Code, (iii) all required material
contributions or other material payments of any type that the Company or any
Commonly Controlled Entity has been obligated to make to any such plan have been
duly and timely made, (iv) with respect to each such plan, no claims (other than
routine claims for benefits) are pending and (v) neither the Company nor any
Commonly Controlled Entity has made or incurred a "COMPLETE WITHDRAWAL" or
"PARTIAL WITHDRAWAL" as those terms are respectively defined in Sections 4203
and 4205 of ERISA from any Plan that would reasonably be expected to result in a
withdrawal liability (as determined in accordance with Section 4201(b) of ERISA)
that would have a Company Material Adverse Effect. With respect to any
Multiemployer Plan in which any employee of the Company participates, any
complete withdrawal from such plan by the Company and/or any Commonly Controlled
Entity would not result in a liability to the Company or any Commonly Controlled
Entity in excess of $2,000,000.
(i) Except as identified in Section 4.12 of the Company Disclosure
Schedule, with respect to any Benefit Plan that is not a Multiemployer Plan, no
claims (other than routine claims for benefits) are pending, or to the knowledge
of the Company, threatened.
SECTION 4.13. Environmental Matters. Except as set forth in Section
4.13 of the Company Disclosure Schedule or any non-compliances, violations or
environmental conditions or matters that are inconsistent with the following
representations and warranties and that individually or in the aggregate, would
not have a Company Material Adverse Effect:
(a) the Company, its Subsidiaries, and their respective predecessors in
interest, as well as the facilities owned, leased, used, or operated by the
Company, its Subsidiaries, and their respective predecessors in interest, are,
and have at all times been, in compliance with all applicable Environmental
Laws, including without limitation, obtaining and maintaining in force all
permits, licenses, registrations, and other governmental authorizations (and
complying
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with all terms and conditions thereof), making all notifications, and involving
all governmental authorities in environmental activities, as required under the
Environmental Laws;
(b) the Company, its Subsidiaries, and their respective predecessors in
interest have not received any claim, notice, allegation, suggestion, or other
communication (whether in writing or otherwise) from any Person that alleges
that the Company is or was not in compliance with any Environmental Law or that
the Company, its Subsidiaries, or their respective predecessors in interest are
subject to liability or responsibility of any kind under or relating to any
Environmental Law;
(c) there are no facts, events, or circumstances (whether on
Company-owned property or off-site) that may prevent or interfere with the
Company's compliance with any Environmental Laws in the future, or that would
give rise to liability under any Environmental Law, or that would materially
restrict Parent from operating the Company and operating or using its properties
after the Effective Time;
(d) the Company, its Subsidiaries, and their respective predecessors in
interest, their agents, contractors, lessees, lessors, subtenants and third
parties have at all times received, handled, used, stored, treated, shipped,
transported, and disposed of all Hazardous Substances at or from such facilities
owned, leased, used, or operated by the Company, its Subsidiaries, or their
respective predecessors in interest in compliance with all Environmental Laws;
(e) there are no conditions at, on, about, under, adjacent to, or near
any real property currently or formerly owned, leased, used or operated by the
Company, its Subsidiaries, or their respective predecessors in interest, that
are in violation of the Environmental Laws;
(f) there are no conditions at, on, about, under, adjacent to, or near
any real property currently or formerly owned, leased, used or operated by the
Company, its Subsidiaries, or their respective predecessors in interest for
which remedial, response, removal, corrective action, abatement, or other
cleanup-related or corrective work is required under the Environmental Laws;
(g) there has been no release, discharge, deposit, placement, disposal,
or migration of Hazardous Substances at, on, about, under, adjacent to, or near
any real property currently or formerly owned, leased, used or operated by the
Company, its Subsidiaries, or their respective predecessors in interest, and no
real property currently or formerly owned, leased, used or operated by the
Company, its Subsidiaries, or their respective predecessors in interest is or
was otherwise contaminated by a Hazardous Substance, or has been used at any
time as a landfill or waste disposal site for Hazardous Substances or
non-hazardous wastes;
(h) neither the Company, its Subsidiaries, nor their respective
predecessors in interest, has disposed of or treated, or arranged for the
disposal or treatment of any Hazardous Substance at any site or location that
was not authorized or licensed to receive such materials
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for disposal or treatment, or at any site or location for which it has received
a notice of potential liability or request for information under the
Environmental Laws, or at any site or location which, pursuant to any
Environmental Law has been placed on the National Priorities List or state or
local equivalent cleanup priorities list, has been proposed by any person or
entity for consideration for or placement on such a list, or is the subject of a
claim, order, decree, request, settlement, or other demand from any person or
entity for removal, remedial, response, corrective action, abatement, or cleanup
or corrective work, or is the site or location of an event or occurrence in
violation of the Environmental Laws;
(i) neither the Company, its Subsidiaries, any of their respective
predecessors in interest, nor any third party uses, or has used, places, or has
placed, in any underground storage tanks, oil/water separators, septic tanks or
other subsurface process tanks or containment devices (whether or not presently
abandoned and whether or not on property now or previously occupied by the
Company, its Subsidiaries, or their respective predecessors in interest) as
defined in the Environmental Laws (whether or not such tanks are subject to any
exemption included in the Environmental Laws);
(j) neither the Company, its Subsidiaries, nor their respective
predecessors in interest are subject to any fine or penalty as a result of a
violation of any Environmental Law;
(k) no litigation, judicial or administrative proceeding,
investigation, order, judgment or decree is pending or threatened relating to
violation of or liability under or relating to any Environmental Law, including
without limitation violations or liabilities relating to any off-site disposal
or contamination, and/or the ownership, use, maintenance or operation of the
facilities currently or formerly owned, leased, used or operated by the Company,
its Subsidiaries, or their respective predecessors in interest, nor is there any
basis for any such proceedings being instituted or filed;
(l) none of the Company, its Subsidiaries, or their respective
predecessors in interest has entered into, has agreed to, or is subject to any
settlement, judgment, decree, order, agreement, or negotiation or other similar
obligation or proceeding under or relating to any Environmental Law;
(m) there are no environmental reports of which the Company has
knowledge and possession and no material environmental data, audits, or
assessments describing the condition of any property owned, leased, used or
operated by the Company, its Subsidiaries, or their respective predecessors in
interest that have not been provided (in true and correct form) to Parent; and
(n) the Company, its Subsidiaries, and their respective predecessors in
interest have exercised due diligence to determine the presence, location and
amount of asbestos-containing material and presumed asbestos-containing material
at the facilities currently owned, leased, used or operated by the Company, its
Subsidiaries, and their respective predecessors, in full
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compliance with 29 C.F.R. 1919 et seq., and all documents concerning the
presence, location and quantity of asbestos-containing material and presumed
asbestos-containing material are identified on the Company Disclosure Schedule.
"ENVIRONMENTAL LAW" means any and all applicable Federal, state, local,
or other law (including, without limitation, common law, tort principles, toxic
tort, contribution, and equity), statute, regulation, rule, code, guidance,
standard, ordinance, order, judgment, directive, permit, license, registration,
authorization, approval, injunction, decree or judicial opinion or other
governmental requirement relating to the manufacture, processing, distribution,
use, treatment, storage, handling, emission, discharge, release, threatened
release, transport, or disposal of Hazardous Substances or relating to pollution
or protection of human health, natural resources, or the environment (including
air, surface water, groundwater, soil, ground, land surface, land subsurface
areas, and terms of similar import).
"HAZARDOUS SUBSTANCE" means any hazardous material, hazardous
substance, hazardous chemical, toxic chemical, toxic substance, hazardous waste,
solid waste, liquid waste, pollutant, contaminant, or substance or term of
similar import (including constituents thereof) that was, is now, or hereafter
becomes regulated by or under authority of any Environmental Law or that could
result in liability under any Environmental Law, or that is otherwise a danger
to human health, reproduction, natural resources, or the environment, including
without limitation, any petroleum products or by-products, asbestos or
asbestos-containing material, polychlorinated biphenyls, chlorofluorocarbons,
flammables or explosives, lead paint, radioactive material, including radon gas,
and urea formaldehyde foam insulation.
SECTION 4.14. Taxes. (a) Except as disclosed in Section 4.14 of the
Company Disclosure Schedule: (i) all Tax Returns required to be filed by or with
respect to the Company and each of its Subsidiaries have been filed and such Tax
Returns were true, correct, and complete in all material respects, and (ii) the
Company and each of its Subsidiaries has paid (or there has been paid on its
behalf) all Taxes that are due whether or not shown on any Tax Return, except
for Taxes being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in the Company's financial statements
(as of the date thereof) and other than, in the case of clauses (i) and (ii),
any such failure to file, inaccuracy, omission or failure to pay that
individually or in the aggregate, would not have a Company Material Adverse
Effect.
(b) To the Company's knowledge, no claim has ever been made by an
authority in a jurisdiction where any of the Company and its Subsidiaries does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. To the Company's knowledge, there are no security interests on any
of the assets of any of the Company and its Subsidiaries that arose in
connection with any failure (or alleged failure) to pay any Tax, except for any
lien for taxes not yet due. Each of the Company and its Subsidiaries has
withheld and paid all Taxes
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required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party other than any such failure to withhold or pay that individually or in the
aggregate, would not have a Company Material Adverse Effect.
(c) Except as disclosed in Section 4.14 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries, (i) currently is the
beneficiary of any extension of time within which to file any Tax Return; (ii)
has filed a consent under Section 341(f) of the Code concerning collapsible
corporations; (iii) has made any payments, is obligated to make any payments, or
is a party to any agreement that under certain circumstances could obligate it
to make any payments that will not be deductible under Section 280G of the Code;
(iv) has been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the five-year period ending on
the date the Offer commences; (v) is a party to any tax allocation or sharing
agreement; (vi) has any liability for the taxes of any person (other than any of
the Company and its Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise; or (vii) has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a tax assessment or deficiency.
(d) Section 4.14 of the Company Disclosure Schedule lists all federal,
state, local, and foreign Tax Returns filed with respect to any of the Company
and its Subsidiaries for taxable periods ending after December 31, 1993,
indicates those Tax Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. The Company has delivered to
Purchaser correct and complete copies of all Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by any of the
Company and its Subsidiaries for taxable periods ending after December 31, 1993.
(e) The unpaid income Taxes of the Company and its Subsidiaries (A) did
not, as of December 31, 1998, exceed by any material amount the reserve for
Income Tax liability (other than any reserve for deferred taxes established to
reflect timing differences between book and tax income) set forth on the face of
the December 31, 1998 audited balance sheet (other than in any notes thereto)
and (B) will not exceed by any material amount that reserve as adjusted for
operations and transactions through the Effective Time in accordance with the
past custom and practice of the Company and its Subsidiaries in filing their
income Tax Returns.
(f) The term "TAXES" shall mean all taxes, charges, fees, levies, or
other similar assessments or liabilities imposed by the United States of
America, or by any state, local, or foreign government, or any subdivision,
agency, or other similar person of the United States or any such government,
including without limitation (i) income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on
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minimum, and estimated taxes and (ii) any interest, penalties or additions
thereto, whether disputed or not.
(g) The term "TAX RETURNS" shall mean any report, return, declaration,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
SECTION 4.15. Delaware Takeover Statute. The Board of Directors of the
Company has approved the Offer, the Merger and the other transactions
contemplated by this Agreement in accordance with the provisions of Section 203
of the DGCL.
SECTION 4.16. Fees and Commissions. Other than amounts payable to
Merrill Lynch and Morgan Lewis Githens & Ahn in accordance with the agreements
attached to the Company Disclosure Schedule, no Person is entitled to receive
from the Company or any Subsidiary of the Company any investment banking,
brokerage or finder's fee in connection with this Agreement or the transactions
contemplated hereby.
SECTION 4.17. Material Contracts. (a) Except as disclosed in the
Company Disclosure Schedule, neither the Company nor any Subsidiary is currently
a party to or bound by, and none of the assets of the Company or any Subsidiary
is covered by or subject to, any of the following (whether oral or written):
(i) any lease (whether of real or personal property) providing
for annual rentals of $500,000 or more;
(ii) any agreement for the purchase of materials, software,
supplies, goods, services, equipment or other assets providing for either (A)
annual payments to be made by the Company and the Subsidiaries of $2,000,000 or
more or (B) aggregate payments to be made by the Company and the Subsidiaries of
$2,000,000 or more;
(iii) any sales, distribution or other similar agreement
providing for the sale by the Company or any Subsidiary of materials, supplies,
goods, services, equipment or other assets that provides for either (A) annual
payments to be made to the Company and the Subsidiaries of $2,000,000 or more or
(B) aggregate payments to be made to the Company and the Subsidiaries of
$2,000,000 or more;
(iv) any partnership, joint venture or other similar agreement
or arrangement;
(v) any agreement relating to the acquisition or disposition
of any business (whether by merger, sale of stock, sale of assets or otherwise)
under which the Company retains any rights or obligations including any such
agreement relating to any recapitalization of the Company or any predecessor;
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(vi) any agreement relating to indebtedness for borrowed money
or the deferred purchase price of property (in either case, whether incurred,
assumed, guaranteed or secured by any asset), except any such agreement with an
aggregate outstanding principal amount not exceeding $500,000 and which may be
prepaid on not more than 30 days notice without the payment of any penalty;
(vii) any material option to purchase or sell assets, license,
franchise or similar agreement;
(viii) any agency, dealer, sales representative, marketing or
other similar agreement (other than the Company's standard form of
dealer/distributor agreement);
(ix) any agreement that limits the freedom of the Company or
any Subsidiary to compete in any line of business or with any Person or in any
geographic area or which would so limit the freedom of the Company or any
Subsidiary after the Effective Time;
(x) any agreement with (A) any Person directly or indirectly
owning, controlling or holding with power to vote, 5% or more of the outstanding
voting securities of the Company or any of its Subsidiaries, (B) any Person 5%
or more of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote by the Company or any of its Subsidiaries;
(xi) any agreement with any director or officer of the Company
or any Subsidiary or with any "ASSOCIATE" or any member of the "IMMEDIATE
FAMILY" (as such terms are respectively defined in Rules 12b-2 and 16a-l of the
Exchange Act) of any such director or officer;
(xii) any material agreement (A) creating any obligation of
the Company or any Subsidiary to indemnify any person or (B) (other than
commercial insurance policies) creating any obligation of any other person to
indemnify the Company or any Subsidiary; or
(xiii) any escrow agreement relating to escrowed assets having
a value in excess of $100,000.
(b) Except as set forth in the Company Disclosure Schedule, each
agreement contract, plan, lease arrangement or commitment disclosed in the
Company Disclosure Schedule to this Agreement or required to be disclosed
pursuant to this Section 4.17 (collectively, the "MATERIAL CONTRACTS") is a
valid and binding agreement of the Company or a Subsidiary, as the case may be,
and is in full force and effect, and none of the Company, any Subsidiary or, to
the knowledge of the Company, any other party thereto is in default or breach in
any material respect under the terms of any such Material Contract, and, to the
knowledge of the Company, no event or circumstance has occurred that, with
notice or lapse of time or
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both, would constitute an event of default thereunder. True and complete copies
of each such written Material Contract have been delivered to Parent.
SECTION 4.18. Intellectual Property Rights. The Company and its
Subsidiaries possess rights to use, whether through ownership, licensing or
otherwise, all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes that are
necessary for their business as now conducted and that the failure to possess
would reasonably be expected to have a Company Material Adverse Effect
(collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any
of its Subsidiaries have assigned, hypothecated or otherwise encumbered any of
the Intellectual Property Rights. Except as disclosed in Section 4.18 of the
Company Disclosure Schedule, (i) to the Company's knowledge, there are no
infringements by any other party of any of the Intellectual Property Rights and
(ii) neither the Company nor any of its Subsidiaries have entered into any
agreement to indemnify any other Person against any charge of infringement of
any of its Intellectual Property Rights except for such matters as would not
reasonably be expected to have, individually or in the aggregate, have a Company
Material Adverse Effect. Except as disclosed in Section 4.18 of the Company
Disclosure Schedule, to (i) the knowledge of the Company, the Company and its
Subsidiaries have not since 1990 and do not violate or infringe any intellectual
property right of any other Person, (ii) without regard to the knowledge of the
Company, the Company and its Subsidiaries have not since 1990 and do not violate
or infringe any intellectual property right of any other Person where such
infringement would reasonably be expected to have a Company Material Adverse
Effect, and (iii) the Company and its Subsidiaries have not since 1990 received
any written communication alleging that it violates or infringes the
intellectual property right of any other Person where such infringement would
reasonably be expected to have a Company Material Adverse Effect. The Company
and its Subsidiaries have not since 1990 received any written notice that it has
been sued for infringing any intellectual property right of another Person.
SECTION 4.19. Labor Matters. Except as set forth in Section 4.19 of the
Company Disclosure Schedule, there are no labor disputes pending or, to the
knowledge of the Company, threatened, between the Company or any of its
Subsidiaries and any of their respective employees, which disputes are
reasonably likely to have a Company Material Adverse Effect. Except as set forth
in Section 4.19 of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries is involved in or, to the knowledge of the Company,
threatened with any labor dispute, grievance, litigation, administrative
proceeding, petition or request relating to labor, safety or discrimination
matters involving any persons employed by the Company or its Subsidiaries,
(including, without limitation, charges of unfair labor practices or
discrimination complaints) that individually or in the aggregate would
reasonably be expected to have a Company Material Adverse Effect. To the
Company's knowledge, neither the Company nor any of its Subsidiaries has engaged
in any unfair labor practices within the meaning of the National Labor Relations
Act within the past five years of the date hereof. Except as set forth in the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
a party to, or bound by, any collective bargaining agreement or
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union contract with respect to any persons employed by the Company or its
Subsidiaries and no collective bargaining agreement is being negotiated by the
Company or any of its Subsidiaries. Except as set forth in Section 4.19 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any knowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
Subsidiaries, and there have been no such strikes, slowdowns, work stoppages or
lockouts within the past three years of the date hereof.
SECTION 4.20. Year 2000 Compliance. The computer systems of the Company
and its Subsidiaries (including all software, hardware, workstations and related
components, automated devices, embedded chips and other date sensitive
equipment) are Year 2000 compliant or will be Year 2000 compliant by December
31, 1999 except as would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 4.21. Compliance with Laws. Except as to Environmental Laws, as
to which the only representation is exclusively in Section 4.13 hereof, and
except as to ERISA and the Code with respect to the Benefit Plans, as to which
the only representation is exclusively in Section 4.12 hereof, neither the
Company nor any Subsidiary is in violation of, or has violated, any applicable
provisions of any laws, statutes, ordinances, regulations, judgments,
injunctions, orders or decrees, except for such violations which would not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Neither the Company nor any Subsidiary has received any
written notice to the effect that the Company or any Subsidiary is not in
compliance with any applicable law, statute, ordinance, regulation, judgment,
injunction, order or decree, except for such violations which would not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
SECTION 4.22. Insurance. Section 4.22 of the Company Disclosure
Schedule contains an accurate and complete list as of the date of this Agreement
of all material policies of fire, liability, workmen's compensation and other
forms of insurance policies (the "Insurance Policies") owned by the Company or
its Subsidiaries. All premiums due and payable on the Insurance Policies have
been paid in full. Except as set forth in Section 4.22 of the Company Disclosure
Schedule, none of the Insurance Policies will terminate or lapse (in any way
which would cause a Company Material Adverse Effect) by reason of the
transactions contemplated by this Agreement. The Company has not received any
written notice that any insurer under any Insurance Policy has canceled or
disclaimed a significant liability under any such policy or, to the Company's
knowledge, indicated any intent to do so or not to renew any such policy. All
material pending claims under the Insurance Policies have been filed in a timely
fashion, except where the failure to so file would not reasonably be expected to
result in a Company Material Adverse Effect.
SECTION 4.23. The Rights Agreement. The Company's Board of Directors
has approved, and the Company agrees within two business days of the date hereof
to enter into
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with its rights agent, an amendment to the Rights Agreement (the "RIGHTS PLAN
AMENDMENT") to, among other things, (i) render the Rights Agreement inapplicable
to the Offer, the Merger and the other transactions contemplated hereby and (ii)
ensure that (y) neither Parent nor any of its Subsidiaries is an Acquiring
Person pursuant to the Rights Agreement and (z) a Distribution Date (as defined
in the Rights Agreement) does not occur by reason of the execution of this
Agreement, the commencement or completion of the Offer, the consummation of the
Merger or the other transactions contemplated hereby.
ARTICLE 5
COVENANTS
SECTION 5.1. Conduct of Business of the Company. Except as contemplated
by this Agreement or as approved in writing by Parent, during the period from
the date of this Agreement to the acceptance of Shares for payment, the Company
and its Subsidiaries will each conduct its operations according to its ordinary
and usual course of business in accordance with past practices, including
substantial compliance with all applicable laws and the preservation, in
accordance with commercially reasonable practices, of the Company's material
business and assets (including its relationships with its significant customers
and suppliers). Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement, neither the Company nor any
Subsidiary of the Company, without the prior written consent of Parent, will
(i) issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of (A) additional shares of capital stock of
any class (including the Shares), or securities convertible into any
such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or grant or accelerate any
right to convert or exchange any securities of the Company for shares,
other than (1) Shares issuable pursuant to the terms of outstanding
Stock Options, the Stock Purchase Plan and commitment to the extent
disclosed in Section 4.05, or (2) issuance of shares of capital stock
to the Company by a wholly-owned Subsidiary of the Company, or (B) any
other securities in respect of, in lieu of or in substitution for
Shares outstanding on the date thereof or split, combine or reclassify
any of the Company's capital stock;
(ii) purchase, redeem or otherwise acquire, or propose to
purchase or otherwise acquire, any of its outstanding securities
(including the Shares);
(iii) declare, set aside or pay any dividend or other
distribution on any shares of capital stock of the Company, except that
a direct or indirect wholly-owned Subsidiary of the Company may pay a
dividend or distribution to its parent;
(iv) except as disclosed to Parent prior to the date hereof,
make any acquisition of any corporation or similar entity or a material
amount of the assets of any
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corporation or similar entity, or sell a material amount of its assets,
except in all instances for actions in the ordinary course of business;
(v) except in the ordinary course of business, (A) incur any
indebtedness for borrowed money or guarantee any such indebtedness of
another Person or (B) make any loans, advances of capital contributions
to, or investments in, any other Person, other than to the Company or
any direct or indirect wholly-owned Subsidiary of the Company;
(vi) propose or adopt any amendments to the certificate of
incorporation or bylaws of the Company;
(vii) except in the ordinary course of business and for any
labor or collective bargaining agreement, enter into any new
employment, severance or termination agreements with, or grant any
increase in severance or termination pay to, any officers, directors or
key employees or grant any material increases in the compensation or
benefits to officers, directors and key employees;
(viii) change any accounting methods, principles or practices
materially affecting their assets, liabilities or business, except
insofar as may be required by a change in generally accepted accounting
principles;
(ix) make any material tax election or settle or compromise
any material income tax liability;
(x) except for any labor or collective bargaining agreement,
permit any material amendment or waive any material rights with respect
to any Material Contract or permit any discretionary release of a
material amount of escrowed assets held pursuant to any escrow
agreement included within the definition of Material Contract;
(xi) without first consulting with Parent regarding any
material Company proposal, engage in any negotiations with officials or
representatives of any labor union with respect to such material
proposal regarding any possible modification, extension or replacement
of any union contract or collective bargaining agreement, provided that
the Company shall not be obligated to alter any such proposal after
consultation with Parent;
(xii) take or permit any action (over which it has control)
that would make any representation or warranty of the Company hereunder
inaccurate in any material respect or omit to take any action (which
action is commercially reasonable) necessary to prevent such
representation or warranty from being so inaccurate; or
(xiii) agree in writing or otherwise to take any of the
foregoing actions.
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SECTION 5.2. No Solicitation. (a) The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any officer,
director, employee, agent or representative of the Company or any of its
Subsidiaries ("COMPANY REPRESENTATIVES") to, directly or indirectly, (i)
solicit, initiate, or knowingly facilitate the submission of any Acquisition
Proposal or any inquiries regarding any Acquisition Proposal, (ii) participate
in any discussions or negotiations regarding, or furnish to any Person
(including any parties with which the Company or any representative of the
Company has previously engaged in discussions or negotiations with respect to
any Acquisition Proposal) any information with respect to its business,
properties or assets, for the purpose of facilitating the consummation of, any
Acquisition Proposal, or (iii) enter into any agreement with respect to any
Acquisition Proposal; provided, however, that the foregoing shall not prohibit
the Company or any of its Subsidiaries or the Company Representatives from,
prior to the acceptance for payment of Shares pursuant to the Offer, (A)
furnishing information pursuant to a confidentiality letter (provided for
informational purposes to Parent subject to the proviso in Section 5.02(c)),
with terms no less favorable than the Confidentiality Agreement (as defined in
Section 5.03) concerning the Company and its businesses, properties or assets to
a Person who has made an unsolicited written Acquisition Proposal, or (B)
engaging in discussions or negotiations with such Person who has made an
unsolicited written Acquisition Proposal, but in each case referred to in the
foregoing clauses (A) and (B) only to the extent that the Board of Directors of
the Company shall have concluded in good faith, after consultation with its
outside legal counsel, that such action is necessary in order for the Board of
Directors to comply with its fiduciary duties to the stockholders of the Company
under applicable law. For purposes of this Agreement, "ACQUISITION PROPOSAL"
means any proposal or offer for, or any expression of interest (by public
announcement or otherwise) by any Person, other than Parent or its affiliates,
in a merger or other business combination involving the Company or any
Subsidiary of the Company or any inquiry, proposal or offer to acquire in any
manner (including through a joint venture with the Company), directly or
indirectly, all or any significant portion of the assets or capital stock of the
Company or any Subsidiary of the Company.
(b) Except as permitted by this Section, neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
publicly propose to withdraw or modify, in a manner adverse to Parent or Merger
Subsidiary, the approval or recommendation by such Board of Directors or any
committee thereof of this Agreement or the Merger, (ii) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or (iii) cause the
Company or any Subsidiary to enter into any agreement with respect to any
Acquisition Proposal. Notwithstanding the foregoing, in the event the Board of
Directors of the Company receives an unsolicited bona fide Acquisition Proposal
that is a Superior Proposal, the Board of Directors of the Company may, if it
shall have concluded in good faith, after consultation with its outside legal
counsel, that such action is necessary in order for the Board of Directors to
comply with its fiduciary duties to the stockholders of the Company under
applicable law, withdraw or modify its approval or recommendation of the Offer,
this Agreement and the Merger taken together, or approve or recommend any such
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Superior Proposal, or terminate this Agreement in order to enter into an
agreement with respect to such a Superior Proposal or enter into any agreement
with respect to such a Superior Proposal, in each case after Parent's receipt of
written notice (a "NOTICE OF SUPERIOR PROPOSAL") advising Parent that the Board
of Directors of the Company has received a Superior Proposal and specifying the
material terms and conditions of such Superior Proposal. For purposes of this
Agreement, a "Superior Proposal" means any bona fide written Acquisition
Proposal on terms which the Board of Directors of the Company determines in its
good faith judgment, after consultation with Merrill Lynch or another financial
advisor of nationally recognized reputation, to be more favorable to the
Company's stockholders than the Offer and the Merger.
(c) In addition to the obligations of the Company set forth in
paragraph (b) above, the Company shall promptly, and in any event prior to
taking any of the actions in clauses (A) and (B) of Section 5.02(a), advise
Parent of any request for nonpublic information or of any Acquisition Proposal,
and the material terms and conditions of such request or Acquisition Proposal;
provided, however, that the Company is not required to provide to Parent any
information if and to the extent that the Board of Directors of the Company
determined in good faith and after consultation with outside counsel that in the
exercise of its fiduciary obligations it is necessary to refrain from furnishing
such information.
(d) Nothing contained in this Section 5.02 will prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of Directors
of the Company, after consultation with outside counsel, the failure to so
disclose would violate applicable law.
SECTION 5.3. Access to Information. (a) Between the date of this
Agreement and the Effective Time, the Company will upon reasonable notice (i)
give Parent and its authorized representatives reasonable access during regular
business hours to the Company's and each of its Subsidiary's plants, offices,
warehouses and other facilities and to its books and records, (ii) permit Parent
to make such inspections as it may require, and (iii) cause its officers,
employees and agents and those of its Subsidiaries to furnish Parent with such
financial and operating data and other information with respect to the business
and properties of the Company and the Subsidiaries as Parent may from time to
time reasonably request.
(b) Information obtained by Parent pursuant to this Section 5.03 shall
be subject to the provisions of the confidentiality agreement between the
Company and Parent, dated November 3, 1997, as amended on February 23, 1999 (the
"CONFIDENTIALITY AGREEMENT"), which remains in full force and effect.
SECTION 5.4. Best Efforts. (a) Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its best efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under
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applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Such best efforts shall include,
without limitation, obtaining as promptly as practicable all necessary consents,
approvals or waivers from third parties and governmental authorities necessary
to the consummation of the transactions contemplated by this Agreement.
(b) The Company agrees to provide, and will cause its
Subsidiaries and their respective officers, employees and advisors to provide,
all reasonable cooperation in connection with the arrangement of any financing
contemplated by Financing Commitment, including without limitation,
participation in meetings, due diligence sessions, and the preparation of any
necessary documents and financial statements. The Company will also provide
commercially reasonable assistance to Parent and the Merger Subsidiary in
connection with the execution and delivery of any agreements or instruments
necessary to obtain financing, or other certificates or documents as may be
requested by Parent or the Merger Subsidiary, provided that neither the Company
nor any of its Subsidiaries shall be required to enter into any written
agreement or other instrument in connection with providing such assistance.
(c) The Company and Merger Subsidiary will as promptly as
practicable file with the Federal Trade Commission and the Department of Justice
the notification and report forms required for the transactions contemplated
hereby and any supplemental information that may be reasonably requested in
connection therewith pursuant to the HSR Act, which notification and report
forms and supplemental information will comply in all materials respects with
the requirements of the HSR Act. Merger Subsidiary shall pay all filing fees
required with respect to the notification, report and other requirements of the
HSR Act.
(d) If at any time prior to the Effective Time any event or
circumstance relating to either the Company, Parent or Merger Subsidiary, or any
of their respective Subsidiaries, should be discovered by the Company or Parent,
as the case may be, and which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering parties will promptly inform the
other party of such event or circumstance.
SECTION 5.5. Indemnification, Exculpation and Insurance. (a) From and
after the Effective Time, Parent and Surviving Corporation shall indemnify,
defend and hold harmless each person who was, is now, or who becomes prior to
the Effective Time, an officer, director or employee of the Company against all
losses, expenses, claims, damage, liabilities, costs, expenses, judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval will not be unreasonably withheld) arising out of the
transactions contemplated by this Agreement to the fullest extent provided for
under the Company's Certificate of Incorporation and By Laws as in effect as of
the date hereof, including without limitation the advancement of expenses. All
rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time now existing in favor of the current
or former directors or officers of the Company and its
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Subsidiaries as provided in their respective certificates of incorporation or
by-laws (or comparable organizational documents) and any indemnification
agreements of the Company shall be assumed by the Surviving Corporation in the
Merger, without further action, as of the Effective Time and shall survive the
Merger and shall continue in full force and effect (to the extent consistent
with applicable law) in accordance with their terms.
(b) From and after the Effective Time, Parent shall cause the Surviving
Corporation to honor its commitments and obligations pursuant to this Section
5.05 and Parent hereby guarantees the due and prompt performance in full of the
Surviving Corporation's commitments and obligations pursuant to this Section
5.05. In the event that Parent or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any Person, then, and in each such case, proper
provision will be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, assume the obligations set forth in
this Section 5.05(b).
(c) For at least six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to or at the Effective Time,
including but not limited to the transactions contemplated by this Agreement,
covering each person currently covered by the Company's officers' and directors'
liability insurance policy, or who becomes covered by such policy prior to the
Effective Time, on terms with respect to coverage and amount no less favorable
as a whole than those of such policy in effect on the date hereof; provided that
in satisfying its obligation under this Section 5.05 the Surviving Corporation
shall not be obligated to pay total premiums in excess of $400,000.
(d) The provisions of this Section 5.05 are (i) intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives and (ii) in addition to, and not in substitution
or, any other rights to indemnification or contribution that any such person may
have by contract or otherwise.
SECTION 5.6. Employee Plans and Benefits and Employment Contracts. (a)
From and after the Effective Time, Parent shall cause the Surviving Corporation
to honor in accordance with their terms all existing employment, severance,
consulting or other compensation agreements, plans or contracts between the
Company or any Commonly Controlled Entity of the Company and any officer,
director or employee of the Company or any Commonly Controlled Entity which are
specifically disclosed on the Company Disclosure Schedule, provided that the
Company shall implement the change of the Share Purchase Date under the Stock
Purchase Plan prior to the acceptance for payment of Shares under the Offer.
(b) For the one-year period immediately following the Effective Time,
Parent shall cause the Surviving Corporation to provide the employees of the
Surviving Corporation with
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benefits and coverage under such benefit plans, programs and arrangements that
are no less favorable to the employees in the aggregate than the Benefit Plans;
provided, however, to the extent that any such benefit plans, programs and
arrangements that are pension plans (whether qualified or nonqualified,
including, but not limited to, the Gradall Industries, Inc. Restoration Plan and
the Gradall Industries, Inc. Amended and Restated Supplemental Executive
Retirement Plan) are terminated or suspended at any time after the one-year
period immediately following the Effective Time, Parent shall cause the
Surviving Corporation to fully vest any participant in any such pension plans
and pay the full accrued benefit on an unreduced and nondiscounted basis under
the nonqualified plans (and with respect to the Gradall Industries, Inc. Benefit
Restoration Plan, as if the participant retired at age 62 with 30 years of
service under such Plan) to the participant at the time of the termination or
suspension.
SECTION 5.7. Meeting of the Company's Stockholders. (a) After
consummation of the Offer, to the extent required by applicable law, the Company
shall promptly take all action necessary in accordance with the DGCL and its
certificate of incorporation and bylaws to convene the Company Stockholder
Meeting to consider and vote on the Merger and this Agreement. At the Company
Stockholder Meeting, all of the Shares then owned by Parent, Merger Subsidiary
or any other Subsidiary of Parent shall be voted to approve the Merger and this
Agreement. Subject to its fiduciary duties and Section 5.02, the Board of
Directors of the Company shall recommend that the Company's stockholders vote to
approve the Merger and this Agreement if such vote is sought and shall use its
best efforts to solicit from stockholders of the Company proxies in favor of the
Merger.
(b) If required under applicable law, the Company and Parent shall
prepare the Proxy Statement, file it with the SEC under the Exchange Act as
promptly as practicable after Merger Subsidiary purchases Shares pursuant to the
Offer, and use all reasonable efforts to have it cleared by the SEC. As promptly
as practicable after the Proxy Statement has been cleared by the SEC, the
Company shall mail the Proxy Statement to the stockholders of the Company as of
the record date for the Company Stockholder Meeting. If, at any time prior to
the Effective Time, any event occurs relating to Parent or any of its
Subsidiaries, affiliates, officers or directors that is required pursuant to
applicable law to be set forth in a supplement to the Proxy Statement, Parent
shall promptly inform the Company of such event.
(c) Parent and Merger Subsidiary shall not, and they shall cause their
Subsidiaries not to, sell, transfer, assign, encumber or otherwise dispose of
the Shares acquired pursuant to the Offer or otherwise prior to the Company
Stockholder Meeting; provided, however, that this Section 5.07(c) shall not
apply to the sale, transfer, assignment, encumbrance or other disposition of any
or all such Shares in transactions involving solely Parent, Merger Subsidiary
and/or one or more of their wholly-owned Subsidiaries.
(d) Notwithstanding the foregoing, in the event that Merger Subsidiary
shall acquire Shares representing at least 90% of the votes represented by all
outstanding Common Stock, the parties hereto agree, at the request of Merger
Subsidiary and subject to Article 6 hereof, to
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take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 253 of the DGCL, as soon as reasonably
practicable after such acquisition, without a meeting of the stockholders of the
Company.
(e) Notwithstanding the provisions of Section 5.07(a), in the event
that, pursuant to the Offer or otherwise, Parent or Merger Subsidiary shall
acquire in the aggregate a number of the outstanding shares of each class of
capital stock of the Company sufficient to enable Merger Subsidiary or the
Company to cause the Merger to become effective without a meeting of
stockholders of the Company, the parties hereto shall, at the request of Parent,
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition without a meeting of
stockholders of the Company, provided that the failure of such Merger to become
effective shall not constitute a breach of this provision.
SECTION 5.8. Public Announcements. Parent and the Company shall consult
with each other before issuing, and provide each other the opportunity to
review, comment upon and concur with, any press release or other public
statement with respect to the transactions contemplated by this Agreement,
including the Offer and the Merger, and shall not issue any such press release
or make any such public statement prior to such consultation, except as either
party may determine is required by applicable law or by obligations pursuant to
any listing agreement with any national securities exchange or the NASDAQ Stock
Market.
SECTION 5.9. Performance by Merger Subsidiary. Parent hereby agrees to
cause Merger Subsidiary to comply with its obligations hereunder and under the
Offer and to cause Merger Subsidiary to consummate the Merger as contemplated
herein.
SECTION 5.10. Notification of Certain Matters. Parent and the Company
shall promptly notify each other of any failure of the Company or Parent, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder in any material respect or of any
material breach of a representation or warranty; provided, however, that no such
notification shall affect the representations or warranties of any party or the
conditions to the obligations of any party hereunder nor shall it limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
ARTICLE 6
CONDITIONS TO THE MERGER
SECTION 6.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to consummate the Merger is
subject to the satisfaction or waiver, where permissible, prior to the Effective
Time, of the following conditions:
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(a) if required by applicable law, this Agreement shall have been
approved by the affirmative vote of the stockholders of the Company by the
requisite vote in accordance with applicable law;
(b) any applicable waiting period under the HSR Act (and any extension
thereof) relating to the Merger shall have expired or been earlier terminated;
(c) Merger Subsidiary shall have, pursuant to the Offer, accepted for
payment and paid for at least that number of Shares which would represent at
least a majority of the voting power represented by the Shares and other
securities entitled generally to vote in the election of directors of the
Company outstanding on a fully diluted basis after giving effect to the exercise
or conversion of all options, rights and securities exercisable or convertible
into or exchangeable for Shares or such voting securities; provided, however,
that Parent may not invoke this condition if Merger Subsidiary shall have failed
to purchase Shares so tendered in violation of the terms of this Agreement;
(d) no preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body or
authority which enjoins, restrains or prohibits the transactions contemplated
hereby, including the consummation of the Merger or has the effect of making the
Merger illegal and which is in effect at the Effective Time (each party agreeing
to use its best efforts to have any such injunction or order lifted).
(e) no statute, rule, regulation, executive order, decree or order of
any kind shall have been enacted, entered, promulgated or enforced by any court
or governmental authority which prohibits the consummation of the Merger or has
the effect of making the Merger illegal.
ARTICLE 7
TERMINATION; AMENDMENT; WAIVER
SECTION 7.1. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time (except with respect to 7.01(h) or (i) which shall be prior to acceptance
for payment of Shares under the Offer) and notwithstanding approval thereof by
the stockholders of the Company:
(a) by mutual written consent of the Company and Parent;
(b) by the Company, if the Offer has not been timely commenced in
accordance with Section 1.01, or if Parent or Merger Subsidiary shall have
breached any covenant in Section 1.01 or its representation in Section 3.06;
(c) by either the Company or Parent, if there shall be any law or
regulation of any competent authority that makes consummation of the Offer or
the Merger illegal or otherwise
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prohibited or if any judgment, injunction, order or decree of any competent
authority enjoining Parent or the Company from consummating the Offer or the
Merger is entered and such judgment, injunction, order or decree shall become
final and unappealable;
(d) by either the Company or Parent, if the Board of Directors of the
Company shall have (i) withdrawn or modified in a manner adverse to Parent and
Merger Subsidiary its approval or recommendation of the Offer or the Merger or
(ii) approved or recommended any Acquisition Proposal in respect of the Company
or (iii) resolved to take any of the foregoing actions, in each case in
compliance with the provisions contained in Section 5.02;
(e) by either Parent or the Company if the Merger has not been
consummated by September 30, 1999; provided, however, that the right to
terminate this Agreement pursuant to this sentence will not be available to any
party whose failure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by such time;
(f) by either the Company or Parent, if the required approval of the
Company's stockholders shall not have been obtained at a Company Stockholders
Meeting duly convened therefor or at any adjournment or postponement thereof,
subject to the provisions of Section 5.07;
(g) by either the Company or Parent if, without any material breach by
such terminating party of its obligations under this Agreement, the purchase of
Shares pursuant to the Offer shall not have occurred on or before September 30,
1999;
(h) by Parent or the Company prior to acceptance for payment of Shares
under the Offer, if the non-terminating party shall have breached in any
material respect or failed to perform in any material respect any of its
representations, warranties, covenants or other obligations under this Agreement
which breach or failure to perform cannot be or has not been cured within 10
days after the giving of written notice to the non-terminating party of such
breach or failure to perform (provided that the terminating party is not then in
breach in any material respect or failing to perform in any material respect any
of its representations, warranties, covenants or other obligations under this
Agreement that cannot be or has not been cured within 10 days after giving
written notice to the terminating party of such breach or failure to perform);
or
(i) by Parent prior to acceptance for payment of Shares under the
Offer, if MLGA Fund II, L.P. shall have breached in any material respect or
failed to perform in any material respect any of its representations,
warranties, covenants or other obligations under the Stockholders Agreement,
dated the date hereof, between the Company, Parent, Merger Subsidiary and the
Stockholders party thereto (the "Stockholders Agreement") which breach or
failure to perform cannot be or has not been cured within 10 days after the
giving of written notice to the breaching stockholder of such breach or failure
to perform (provided that Parent is not then in breach in any material respect
or failing to perform in any material respect any of
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<PAGE> 41
its representations, warranties, covenants or other obligations under the
Stockholder's Agreement that cannot be or has not been cured within 10 days
after giving written notice to the Parent of such breach or failure to perform).
SECTION 7.2. Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party or its directors, officers or stockholders, other than
the provisions of Section 5.03(b), this Section 7.02 and Section 8.10, which
provisions will survive such termination, and except to the extent that such
termination results from the willful and material breach by a party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.3. Amendment. To the extent permitted by applicable law, this
Agreement may be amended by the parties at any time before or after approval of
this Agreement by the stockholders of the Company; provided, however, that after
any such stockholder approval, no amendment shall be made which (a) by law
requires further approval of the Company's stockholders or (b) reduces the
Merger Consideration, in each case without the subsequent approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 7.4. Extension; Waiver. At any time prior to the Effective
Time, a party hereto may (a) extend the time for the performance of any of the
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 by any other party or (c) subject to Section
7.03, waive compliance by any other party with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 7.5. Procedure for Termination, Extension or Waiver. Subject to
Section 1.02(e), a termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or waiver
pursuant to Section 7.04 in order to be effective shall require, in the case of
Parent or the Company, action by its Board of Directors or, with respect to any
amendment of this Agreement, a duly authorized committee of its Board of
Directors.
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ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Non-Survival of Representations and Warranties. None of
the representations and warranties made in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive after the Effective Time.
This Section 8.01 shall not limit any covenant or agreement of the parties
hereto which by its terms contemplates performance after the Effective Time.
SECTION 8.2. Entire Agreement; Assignment. This Agreement (including
the Company Disclosure Schedule) and, to the extent contemplated in Section
5.03(b), the Confidentiality Agreement, (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof and (b) shall
not be assigned by operation of law or otherwise, provided that Parent or Merger
Subsidiary may assign any of their rights and obligations to any direct or
indirect wholly-owned Subsidiary of Parent, but no such assignment shall relieve
Parent or Merger Subsidiary of its obligations hereunder. Either Parent, Merger
Subsidiary or any direct or indirect wholly-owned Subsidiary of Parent may
purchase Shares under the Offer.
SECTION 8.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 8.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by facsimile transmission with confirmation
of receipt, by overnight courier (with delivery confirmed), or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:
(a) if to Parent or Merger Subsidiary:
JLG Industries, Inc.
1 JLG Drive
McConnelsburg, PA 17233
Attention: General Counsel
Fax No. (717) 485-6541
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<PAGE> 43
with a copy to:
Covington & Burling
1201 Pennsylvania Ave. N.W.
Washington, D.C. 20044-7566
Attention: W. Andrew Jack, Esq.
Fax No. (202) 662-6291
(b) if to the Company:
Gradall Industries, Inc.
406 Mill Avenue, S.W.
New Philadelphia, Ohio 44663
Attention: Barry L. Phillips
Fax No. (330) 339-5224
with copies to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Arnold S. Jacobs
Fax No. 212-969-2900
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 8.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of laws provisions thereof.
SECTION 8.6. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought
against any of the parties only in a federal court located in the State of
Delaware or a Delaware state court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and waives
any objection to venue laid therein. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the State of Delaware. Without limiting the generality of the foregoing,
each party hereto agrees that service of process upon such party at
39
<PAGE> 44
the address referred to in Section 8.04, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party.
SECTION 8.7. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and shall not constitute a part of or
affect the meaning or interpretation of this Agreement.
SECTION 8.8. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this Agreement
except Section 1.01 (which is intended to be for the benefit of the Company's
stockholders and may be enforced by them) and except for Sections 5.05 and 5.06
(which are intended to be for the benefit of the Persons entitled to therein,
and may be enforced by such Persons).
SECTION 8.9. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
SECTION 8.10. Fees and Expenses. (a) All fees, costs and expenses
incurred in connection with the transactions contemplated by this Agreement
shall be paid by the party incurring such fees and expenses, whether or not the
Offer or the Merger is consummated; provided, however, that if this Agreement is
terminated as a result of the breach by Parent or Merger Subsidiary of any of
their covenants or representations and warranties in this Agreement, all fees,
costs and expenses incurred by the Company in connection with the transactions
contemplated by this Agreement shall be paid by Parent.
(b) In the event that this Agreement is terminated by Parent
(i) pursuant to Section 7.01(d), or
(ii) pursuant to Section 7.01 (h) or (i) hereof and within
six months thereafter, the Company enters into an
agreement with respect to an Acquisition Proposal or
has completed a transaction pursuant to an
Acquisition Proposal,
the Company shall pay to Parent by wire transfer of immediately available funds
to an account designated by Parent (A) within two business days following such
termination referred to in the preceding clause (i) or (B) upon the Company
entering into such agreement or completing such transaction referred to in the
preceding clause (ii) an amount equal to $6,000,000 (the "TERMINATION FEE").
(c) The Company acknowledges that the agreements contained in this
Section 8.10 are an integral part of the transactions contemplated by this
Agreement, and that, without these
40
<PAGE> 45
agreements, Parent would not enter into this Agreement. Accordingly, if the
Company fails to promptly pay any amount due pursuant to this Section 8.10, and,
in order to obtain such payment, the other party commences a suit which results
in a judgment against the Company for the fee or fees and expenses set forth in
this Section 8.10, the Company shall also pay to Parent its reasonable costs and
expenses incurred in connection with such litigation together with interest or
such unpaid amounts commencing on the date the Termination Fee became due at a
rate equal to the rate of interest announced by Citibank N.A. from time to time,
in the City of New York at such bank's prime or base rate.
SECTION 8.11. Certain Definitions. For purposes of this Agreement
(including Annex A hereto), the following terms shall have the meanings ascribed
to them below:
(a) "AFFILIATE" of a Person shall mean (i) a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first-mentioned Person and (ii) an
"ASSOCIATE", as that term is defined in Rule 12b-2 promulgated under the
Exchange Act as in effect on the date of this Agreement.
(b) "BENEFICIAL OWNER" (including the term "BENEFICIALLY OWN" or
correlative terms) with respect to any securities means a Person who shall be
deemed to be the beneficial owner of such securities which (i) such Person or
any of its affiliates beneficially owns, directly or indirectly, (ii) such
Person or any of its affiliates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement or
understanding or (iii) are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of its affiliates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any of such securities.
(c) "CONTROL" (including the terms "CONTROLLING", "CONTROLLED BY" and
"UNDER COMMON CONTROL WITH" or correlative terms) shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract, or otherwise.
(d) "FULLY DILUTED" in reference to the Shares means all outstanding
securities entitled generally to vote in the election of directors of the
Company on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights and securities exercisable or convertible into
such voting securities.
(e) "KNOWLEDGE" shall mean the actual knowledge of Barry Phillips,
Bruce Jonker, Jim Cahill, David Williams, Joe Keller, Jerry Hall, and Stan
Swope.
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(f) "SUBSIDIARY" shall mean, when used with reference to a Person means
a corporation (or other entity) the majority of the outstanding voting
securities (or equity interests) of which are owned directly or indirectly by
such Person.
[END OF TEXT]
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<PAGE> 47
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officer thereunto duly authorized, on the day and
year first above written.
JLG INDUSTRIES, INC.
By: /s/ L. David Black
______________________
Name: L. David Black
Title: Chairman & President & CEO
JLG ACQUISITIONS CORP.
By: /s/ L. David Black
______________________
Name: L. David Black
Title: Chairman & President
GRADALL INDUSTRIES, INC.
By: /s/ Barry L. Phillips
______________________
Name: Barry L. Phillips
Title: President & CEO
43
<PAGE> 48
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Merger Subsidiary
shall not be obligated to accept for payment or pay for, subject to Rule
14e-l(c) of the Exchange Act, any Shares not theretofore accepted for payment,
and, subject to the terms of the Agreement, may terminate or amend the Offer if
(i) that number of Shares which would represent at least a majority of the
voting power represented by the Shares and other securities entitled generally
to vote in the election of directors of the Company outstanding on a fully
diluted basis after giving effect to the exercise or conversion of all options,
rights and securities exercisable or convertible into or exchangeable for Shares
or such voting securities shall not have been validly tendered and not withdrawn
immediately prior to the expiration of the Offer (the "MINIMUM TENDER
CONDITION"), (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer or (iii) at any
time on or after the date of commencement of the Offer and before the acceptance
of such Shares for payment or the payment therefor, any of the following
conditions exist or shall occur and be continuing:
(a there shall be pending by any Governmental Entity any suit,
action or proceeding, (i) challenging the acquisition by Parent or
Merger Subsidiary of any Shares, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of
any of the other transactions contemplated by this Agreement, (ii)
seeking to prohibit or limit the ownership or operation by the Company,
Parent or any of their respective Subsidiaries of a material portion of
the business or assets of the Company or the Subsidiaries, or Parent or
its Subsidiaries, or to compel the Company or Parent to dispose of or
hold separate any material portion of the business or assets of the
Company or its Subsidiaries, or Parent or its Subsidiaries, as a result
of the Offer or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Parent
or Merger Subsidiary to acquire or hold, or exercise full rights of
ownership of, any Shares accepted for payment pursuant to the Offer
including, without limitation, the right to vote the Shares accepted
for payment by it on all matters properly presented to the stockholders
of the Company, or (iv) seeking to prohibit Parent or any of its
Subsidiaries from effectively controlling in any material respect the
business or operations of the Company or its Subsidiaries;
(b the Company shall have entered into an agreement concerning
any Superior Proposal, or the Board of Directors of the Company or any
committee thereof shall have resolved to enter into such an agreement;
<PAGE> 49
(c) any Person or group (as defined in Section 13(d)(3)of the
Exchange Act) (other than Parent, Merger Subsidiary or any affiliate
thereof or the Stockholders described in the Stockholders Agreement)
shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of Shares representing a majority
of the total votes represented by all outstanding Shares;
(d) the Merger Agreement shall have been terminated in
accordance with its terms;
(e) there shall have occurred and be continuing (i) any
general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market in the United States, (ii) a commencement and
continuation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States which would have a Company Material Adverse Effect (other than
the events in Yugoslavia and neighboring countries), (iii) a change in
general conditions in the market for syndicated bank credit facilities
which, based on the written advice of Gleacher & Co. LLC addressed to
Parent (with a copy to be provided to the Company), materially and
adversely affects the ability of financial institutions in the United
States to extend credit or syndicate loans, or (iv) in the case of any
of the foregoing existing at the time of commencement of the Offer, a
material acceleration or worsening thereof; and
(f) there shall have occurred any material adverse change in
the financial condition, assets, liabilities, business or results of
operations of the Company and its Subsidiaries taken as a whole, except
for general economic changes, changes that affect the industry of the
Company or any Subsidiary generally and changes in the Company's
business attributable solely to actions taken by Parent or Merger
Subsidiary;
which, in the reasonable judgment of Parent and regardless of the circumstances
giving rise to any such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment, purchase of, or payment for Shares.
Unless otherwise defined in this Annex A, capitalized terms used in
this Annex A have the meanings ascribed to them in the Merger Agreement among
the Parent, Merger Subsidiary and the Company to which this Annex A is attached.
<PAGE> 1
EXHIBIT (c)(2)
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of
May 10, 1999, is by and among JLG Industries, Inc., a Pennsylvania corporation
("Parent"), JLG Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Subsidiary"), Gradall Industries, Inc., a Delaware
corporation (the "Company"), and the stockholder identified on the signature
page hereof (the "Stockholder").
W I T N E S S E T H :
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, Merger Subsidiary and the Company have entered into an
Agreement and Plan of Merger (as such agreement may hereafter be amended from
time to time, (the "Merger Agreement"), pursuant to which Merger Subsidiary will
be merged with and into the Company (the "Merger");
WHEREAS, in accordance with the Merger Agreement, Merger
Subsidiary shall commence an Offer (as defined in the Merger Agreement) to
purchase all outstanding shares, together with associated rights to purchase
Series B Participating Cumulative Preferred Stock, of Common Stock (as defined
in Section 1 hereof) of the Company, including all of the Shares (as defined in
Section 2 hereof) beneficially owned by the Stockholders; and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Parent has required that the Stockholder and the Company
agree, and the Stockholder and the Company have agreed, to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Adverse Proposal" shall mean any (1) proposal or action
that would reasonably be expected to result in a breach of any
covenant, representation or warranty of Company set forth in the Merger
Agreement, or (2) the following actions (other than the Offer, the
Merger and the other transactions contemplated by the Merger
Agreement), (i) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the
Company or its Subsidiaries; (ii) a sale, lease or transfer of a
material amount of assets of the Company or one of its Subsidiaries, or
a reorganization, recapitalization, dissolution or liquidation of the
Company or any of its Subsidiaries; (iii) (A) any change in a majority
of the persons who constitute the board of directors of the Company as
of the date hereof-, (B) any change in the present capitalization of
the Company or any amendment of the Company's certificate of
<PAGE> 2
2
incorporation or bylaws, as amended to date; (C) any other material
change in the Company's or any of its Subsidiaries' corporate structure
or business; or (D) any other action that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
adversely affect the Merger and the other transactions contemplated by
this Agreement and the Merger Agreement.
(b) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing. Without duplicative counting of the same securities by the
same holder, securities Beneficially Owned by a Person shall include
securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" as within the meaning of Section
13(d)(3) of the Exchange Act.
(c) "Common Stock" shall mean the Common Stock, $.001 par
value, of the Company.
(d) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
(e) "Termination Date" shall mean the earlier of (i) the date
of termination of the Merger Agreement by the Company pursuant to
7.01(b) thereof, and (ii) the date of the expiration or termination of
the Offer.
(f) Capital terms used and not defined herein have the
respective meanings ascribed to them in the Merger Agreement.
2. TENDER OF SHARES.
2.1 TENDER. In order to induce Parent and Merger Subsidiary to enter
into the Merger Agreement, the Stockholder hereby agrees to validly tender (or
cause the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
fifteenth business day after commencement of the Offer pursuant to the Merger
Agreement and Rule l4d-2 under the Exchange Act, the number of shares of Common
Stock set forth opposite such Stockholder's name on Schedule A hereto (the
"Existing Shares"), all of which are Beneficially Owned by such Stockholder, and
any shares of Common Stock acquired by such Stockholder in any capacity after
the date hereof and prior to the termination of this Agreement by means of
purchase, exercise of any option, dividend, distribution or in any other way
(such shares of Common Stock, together with the Existing Shares, the "Shares").
The Stockholder hereby acknowledges and agrees that Parent's and Merger
Subsidiary's obligation to accept for payment and pay for the Shares in the
Offer,
<PAGE> 3
3
including the Shares Beneficially Owned by such Stockholder, is subject
to the terms and conditions of the Offer.
2.2 DISCLOSURE. The Stockholder hereby permits Parent and Merger
Subsidiary to publish and disclose in the Offer Documents and, if approval of
the Company's stockholders is required under applicable law, in the Proxy
Statement or Information Statement (including all documents and schedules filed
with the Securities and Exchange Commission) its identity and ownership of the
Shares and the nature of its commitments, arrangements and understandings under
this Agreement.
3. AGREEMENT TO VOTE SHARES.
During the term of this Agreement, at any meeting of the stockholders
of the Company called to consider and vote upon the adoption of the Merger
Agreement (and at any and all postponements and adjournments thereof), and in
connection with any action to be taken in respect of the adoption of the Merger
Agreement by written consent of stockholders of the Company, the Stockholder
will vote or cause to be voted (including by written consent, if applicable) all
of such Stockholder's Shares in favor of the adoption of the Merger Agreement
and in favor of any other matter necessary or appropriate for the consummation
of the transactions contemplated by the Merger Agreement which is considered and
voted upon at any such meeting or made the subject of any such written consent,
as applicable. During the term of this Agreement, at any meeting of the
stockholders of the Company called to consider and vote upon any Adverse
Proposal (and at any and all postponements and adjournments thereof), and in
connection with any action to be taken in respect of any Adverse Proposal by
written consent of stockholders of Company, the Stockholder will vote or cause
to be voted (including by written consent, if applicable) all of such
Stockholder's Shares against the adoption of such Adverse Proposal.
4. IRREVOCABLE PROXY.
The Stockholder hereby irrevocably appoints Merger Subsidiary or any
designee of Merger Subsidiary the lawful agent, attorney and proxy of such
Stockholder, during the term of this Agreement, at any meeting of the
stockholders of the Company, however called, or in connection with any written
consent of the stockholders of the Company, to vote (or cause to be voted) the
Stockholder's Shares (a) in favor of the Merger, the execution and delivery by
the Company of the Merger Agreement and the approval of the terms thereof and
each of the other actions contemplated by the Merger Agreement, this Agreement
and any actions required in furtherance hereof and thereof and (b) against
adoption of any Adverse Proposal. The Stockholder intends this proxy to be
irrevocable and coupled with an interest and will take such further action or
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by it with respect to
the Shares. The Stockholder shall not hereafter, until the termination of this
Agreement, purport to vote (or
<PAGE> 4
4
execute a consent with respect to) such Shares (other than through this
irrevocable proxy) or grant any other proxy or power of attorney with respect to
any Shares, deposit any Shares into a voting trust or enter into any agreement
(other than this Agreement), arrangement or understanding with any Person,
directly or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of such Shares.
5. REPRESENTATIONS AND WARRANTIES.
5.1 CERTAIN REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. The
Stockholder, severally and not jointly, represents and warrants to Parent and
Merger Subsidiary, as of the date hereof and as of the acceptance for payment of
shares of Common Stock under the Offer, as follows:
(a) OWNERSHIP. Such Stockholder is the sole Beneficial Owner
of the number of shares of Common Stock set forth opposite such
Stockholder's name on Schedule A hereto. The Shares are now, and at all
times during the term hereof will be (except as provided in Section 6.2
hereof), held exclusively by such Stockholder, or by a nominee or
custodian for the exclusive benefit of such Stockholder, free and clear
of all liens, proxies, or other restrictions on disposition or voting,
except for any liens, proxies or restrictions, arising hereunder. The
tender by such Stockholder of its Shares to Merger Subsidiary or Parent
pursuant to the Offer will pass to Merger Subsidiary or Parent the
Stockholder's interest in the Shares free of any adverse claims under
Section 8-102(a)(1) of the Uniform Commercial Code. Except as set forth
in Schedule A hereto, such Stockholder does not (a) Beneficially Own
any securities of the Company on the date hereof or (b) directly or
indirectly, Beneficially Own or have any option, warrant or other right
to acquire any securities of the Company that are or may by their terms
become entitled to vote or any securities that are convertible or
exchangeable into or exercisable for any securities of the Company that
are or may by their terms become entitled to vote; nor is the
Stockholder subject to any contract, commitment, arrangement,
understanding or relationship (whether or not legally enforceable),
other than this Agreement, that allows or obligates such Stockholder to
vote, dispose of or acquire any securities of the Company.
(b) POWER AND AUTHORITY; EXECUTION AND DELIVERY. Such
Stockholder has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated
hereby have been duly authorized by all necessary action, if any, on
the part of such Stockholder. This Agreement has been duly executed and
delivered by such Stockholder and constitutes a valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
<PAGE> 5
5
(c) NO CONFLICTS. The execution and delivery of this Agreement
do not, and, subject to compliance with the HSR Act and appropriate
filings under securities laws (which each Stockholder agrees to make
promptly), to the extent applicable, the consummation of the
transactions contemplated hereby and compliance with the provisions
hereof will not, conflict with, result in a breach or violation of or
default (with or without notice or lapse of time or both) under, or
give rise to any material obligation, any right of termination, benefit
under, or require notice to or the consent of any person under any
agreement, instrument, undertaking, law, rule, regulation, judgment,
order, injunction, decree, determination or award binding on such
Stockholder, other than such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate
would not impair the ability of such Stockholder to perform such
Stockholder's obligations under this Agreement.
(d) BROKERS. Except as provided in the Merger Agreement, no
broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement or the Merger Agreement based upon
arrangements made by or on behalf of the Stockholder that is or will be
payable by the Company or any of its Subsidiaries.
5.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Merger Subsidiary, as of the date hereof
and as of the acceptance for payment of Shares of Common Stock under the Offer,
as follows:
(a) ORGANIZATION; AUTHORITY. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware,
has the requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and has taken
all necessary corporate action to authorize the execution; and delivery
of, and the performance of its obligations under, this Agreement.
(b) EXECUTION AND DELIVERY. This Agreement has been duly
executed and delivered by the Company and, assuming that this Agreement
constitutes the valid and binding obligation of the other parties
hereto, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(c) NO CONFLICTS. The execution and delivery of this Agreement
by the Company does not and, subject to compliance with the HSR Act and
appropriate filings under securities laws (which the Company agrees to
make promptly), to the extent applicable, the performance of its
obligations hereunder and compliance with the provisions hereof will
not, conflict with, result in a breach or violation of or default (with
or without notice or lapse of time or both) under, or give rise to any
material obligation, any right of termination, cancellation, or
acceleration of any obligation or any loss of a material benefit under,
or require notice to or the consent of any person under (i) its
<PAGE> 6
6
certificate of incorporation or bylaws, (ii) any agreement, instrument,
undertaking, law, rule, regulation, judgment, order, injunction,
decree, determination or award by which it is bound, or (iii) any
judgment, writ, decree, order or ruling applicable to the Company;
except in the case of clauses (ii) and (iii) for conflicts, violations,
breaches or defaults that would not impair the ability of the Company
to perform its obligations under this Agreement.
(d) ANTITAKEOVER STATUTES. The Company's Board of Directors
has approved the Offer, the Merger, the Merger Agreement, this
Agreement and the transactions contemplated thereby and hereby and such
approval is sufficient to render inapplicable to the Offer, the Merger,
the Merger Agreement, this Agreement and the transactions contemplated
thereby and hereby, the provisions of Section 203 of the Delaware
General Corporations Law (the "DGCL").
5.3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY.
Each of Parent and Merger Subsidiary hereby represents and warrants, jointly and
severally, to the Company and the Stockholder, as of the date hereof and as of
the acceptance for payment of Shares of Common Stock under the Offer, that:
(a) ORGANIZATION; AUTHORITY. Each of Parent and Merger
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
has the requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and has taken
all necessary corporate action to authorize the execution and delivery
of, and the performance of its obligations under, this Agreement.
(b) EXECUTION AND DELIVERY. This Agreement has been duly
executed and delivered by Parent and Merger Subsidiary and, assuming
that this Agreement constitutes the valid and binding obligation of the
other parties hereto, constitutes a valid and binding obligation of
Parent and Merger Subsidiary, enforceable against Parent and Merger
Subsidiary in accordance with its terms.
(c) NO CONFLICTS. The execution and delivery of this Agreement
by Parent and Merger Subsidiary do not, and, subject to compliance with
the HSR Act and appropriate filings under securities laws (which Parent
and Merger Subsidiary agree to make it promptly), to the extent
applicable, the performance of its obligations hereunder and compliance
with the provisions hereof will not, conflict with, result in a breach
or violation of or default (with or without notice or lapse of time or
both) under, or give rise to any material obligation, any right of
termination, cancellation, or acceleration of any obligation or any
loss of a material benefit under, or require notice to or the consent
of any person under (i) its articles of incorporation or bylaws or
equivalent organizational documents, (ii) any agreement, instrument,
undertaking, law, rule, regulation, judgment,
<PAGE> 7
7
order, injunction, decree, determination or award by which it is bound,
or (iii) any judgment, writ, decree, order or ruling applicable to
Parent or Merger Subsidiary; except in the case of clauses (ii) and
(iii) for conflicts, violations, breaches or defaults that would not
impair the ability of Parent or Merger Subsidiary to perform its
obligations under this Agreement.
6. CERTAIN COVENANTS OF STOCKHOLDER. The Stockholder hereby severally covenants
and agrees as follows:
6.1 NO SOLICITATION. Neither Stockholder nor any officer, director,
employee, representative or agent of the Stockholder shall, in that
Stockholder's capacity as such and not in such Stockholder's capacity as an
officer, director, employee, representative or agent of the Company, directly or
indirectly, solicit, initiate, or knowingly facilitate; participate in or
initiate any inquiries or the making of any proposal by any person or entity
(other than Merger Subsidiary, Parent or any affiliate of Parent) which
constitutes, or may reasonably be expected to lead to, (a) any sale of the
Shares or (b) any Adverse Proposal. If the Stockholder, or any officer,
director, employee, representative or agent of the Stockholder, receives an
inquiry or proposal with respect to the sale of Shares, then the Stockholder
shall promptly inform Parent of the terms and conditions, if any, of such
inquiry or proposal and the identity of the person making it. The Stockholder
shall cause its officers, directors, employees, representatives and agents to,
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
6.2 RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE. The
Stockholder hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the Shares without
notifying Parent in advance and obtaining and delivering to Parent any evidence
that Parent may reasonably request to evidence the transferee's agreement to be
bound by this Agreement; provided, however, that in the event of the
Stockholder's death during the term of this Agreement, the Shares may be
transferred in accordance with the Stockholder's last will and testament, or if
none, in accordance with the applicable laws of intestate succession, in either
of which cases, the Shares shall remain subject in all respects to the terms of
this Agreement, or (b) grant any proxies, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any Shares, or (c) take any
action that would make any representation or warranty of the Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling in any material respect such Stockholder from performing the
Stockholder's obligations under this Agreement.
6.3 LEGENDING OF CERTIFICATES; NOMINEE SHARES. If requested by Merger
Subsidiary, the Stockholder agrees to submit to Merger Subsidiary
contemporaneously with or within five
<PAGE> 8
8
business days following execution of this Agreement all certificates
representing the Shares so that Merger Subsidiary may note thereon a legend
referring to the proxy and other rights granted to it by this Agreement. If any
of the Shares beneficially owned by a Stockholder are held of record by a
brokerage firm in "street name" or in the name of any other nominee (a
"Nominee", and, as to such Shares, "Nominee Shares"), the Stockholder agrees
that, upon written notice by Merger Subsidiary requesting it, the Stockholder
will within five business days of the giving of such notice execute and deliver
to Merger Subsidiary a limited power of attorney in such form as shall be
reasonably satisfactory to Merger Subsidiary enabling Merger Subsidiary to
require the Nominee to (i) tender such Nominee Shares in the Offer pursuant to
Section 2, (ii) agree to vote the Nominee Shares to the same effect as Section
3, (iii) grant to Merger Subsidiary an irrevocable proxy to the same effect as
Section 4 with respect to the Nominee Shares held by such Nominee, (iv) submit
to Merger Subsidiary the certificates representing such Nominee Shares for
notation of the above-referenced legend thereon, and (v) effect any other
obligation of the Stockholder hereunder.
6.4 STOP TRANSFER ORDER. In furtherance of this Agreement, concurrently
herewith, the Stockholder shall and hereby does authorize the Company's counsel
to notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Shares (and that this Agreement places limits on the
voting and transfer of such Shares).
7. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement.
8. STOCK DIVIDENDS, ETC. In the event of a stock dividend or distribution, or
any change in the Company's Common Stock by reason of any stock dividend,
split-up, reclassification, recapitalization, combination or the exchange of
shares, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged. I
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise.
9.2 AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
<PAGE> 9
9
9.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following address:
If to Stockholder: At such Stockholder's address set
forth on Schedule A hereto
copy to: Gradall Industries, Inc.
406 Mill Avenue, S.W.
New Philadelphia, Ohio 44663
Facsimile No: (330) 339-5224
Attention: Barry L. Phillips
copy to: Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Facsimile No: (212) 969-2900
Attention: Robert A. Cantone, Esq.
If to Parent or Merger Subsidiary: JLG Industries, Inc.
1 JLG Drive
McConnelsburg, PA 17233
Facsimile No: (717) 485-6542
Attention: General Counsel
copy to: Covington & Burling
1201 Pennsylvania Ave., N.W.
Washington, D.C. 20044-7566
Facsimile No: (202) 662-6291
Attention: W. Andrew Jack, Esq.
If to the Company: Gradall Industries, Inc.
406 Mill Avenue, S.W.
New Philadelphia, Ohio 44663
Facsimile No: (330) 339-5224
Attention: Barry L. Phillips
copy to: Proskauer Rose LLP
1585 Broadway
<PAGE> 10
10
New York, New York 10036
Facsimile No: (212) 969-2900
Attention: Robert A. Cantone, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
9.5 COOPERATION AS TO REGULATORY MATTERS. If so requested by Parent or
Merger Subsidiary, promptly after the date hereof, the Stockholder will use its
reasonable best efforts, and will use reasonable best efforts to cause the
Company (if required in either case) to make all filings which are required
under the HSR Act and applicable requirements and to seek all regulatory
approvals required in connection with the transactions contemplated hereby. The
parties hereto shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. The Stockholder shall
also use its reasonable best efforts to cause the Company to supply Merger
Subsidiary with copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between the Company and its
representatives and the Federal Trade Commission, the Department of Justice and
any other governmental agency or authority and members of their respective
staffs with respect to this Agreement and the transactions contemplated hereby.
9.6 TERMINATION. This Agreement shall terminate on the Termination
Date.
9.7 SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
<PAGE> 11
11
9.9 DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
9.10 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
9.11 STOCKHOLDER CAPACITY. The Stockholder executing this Agreement
makes no agreement hereunder with respect to certain affiliates of Stockholder
who are directors or officers of the Company. The Stockholder is executing and
delivering this Agreement solely in that Stockholder's capacity as the record
and/or beneficial owner of that Stockholder's Shares. Notwithstanding anything
to the contrary in this Agreement, no action or inaction by any affiliate of the
Stockholder in his capacity as a director, officer, or employee of the Company
shall be deemed to contravene Section 6.1 hereof.
[The remainder of this page has been left blank.]
<PAGE> 12
(Page 1 of 2 Signature Pages)
IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto, all as of the date first above written.
JLG INDUSTRIES, INC.
By: /s/ L. David Black
-----------------------
Name: L. David Black
Title: Chairman, President & CEO
JLG ACQUISITION CORP.
By: /s/ L. David Black
-----------------------
Name: L. David Black
Title: Chairman & President
GRADALL INDUSTRIES, INC.
By: /s/ Barry L. Phillips
-----------------------
Name: Barry L. Phillips
Title: President & CEO
<PAGE> 13
(Page 2 of 2 Signature Pages)
Stockholders:
MLGA FUND II, L.P.
By: /s/ Sangwoo Ahn
_______________________
Name: Sangwoo Ahn
Title: General Partner
<PAGE> 14
SCHEDULE A
NAME: COMMON STOCK SHARES
MLGA FUND II, L.P. 2,615,637
2 Greenwich Plaza
Greenwich, CT 06830
<PAGE> 1
EXHIBIT (c)(3)
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of
May 10, 1999, is by and among JLG Industries, Inc., a Pennsylvania corporation
("Parent"), JLG Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Subsidiary"), Gradall Industries, Inc., a Delaware
corporation (the "Company"), and the stockholders identified on the signature
page hereof (the "Stockholders").
W I T N E S S E T H :
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, Merger Subsidiary and the Company have entered into an
Agreement and Plan of Merger (as such agreement may hereafter be amended from
time to time, (the "Merger Agreement"), pursuant to which Merger Subsidiary will
be merged with and into the Company (the "Merger");
WHEREAS, in accordance with the Merger Agreement, Merger
Subsidiary shall commence an Offer (as defined in the Merger Agreement) to
purchase all outstanding shares, together with associated rights to purchase
Series B Participating Cumulative Preferred Stock, of Common Stock (as defined
in Section 1 hereof) of the Company, including all of the Shares (as defined in
Section 2 hereof) beneficially owned by the Stockholders; and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Parent has required that the Stockholders and the Company
agree, and the Stockholders and the Company have agreed, to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Adverse Proposal" shall mean any (1) proposal or action
that would reasonably be expected to result in a breach of any
covenant, representation or warranty of Company set forth in the Merger
Agreement, or (2) the following actions (other than the Offer, the
Merger and the other transactions contemplated by the Merger
Agreement), (i) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the
Company or its Subsidiaries; (ii) a sale, lease or transfer of a
material amount of assets of the Company or one of its Subsidiaries, or
a reorganization, recapitalization, dissolution or liquidation of the
Company or any of its Subsidiaries; (iii) (A) any change in a majority
of the persons who constitute the board of directors of the Company as
of the date hereof-, (B) any change in the present capitalization of
the Company or any amendment of the Company's certificate of
<PAGE> 2
2
incorporation or bylaws, as amended to date; (C) any other material
change in the Company's or any of its Subsidiaries' corporate structure
or business; or (D) any other action that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
adversely affect the Merger and the other transactions contemplated by
this Agreement and the Merger Agreement.
(b) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing. Without duplicative counting of the same securities by the
same holder, securities Beneficially Owned by a Person shall include
securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" as within the meaning of Section
13(d)(3) of the Exchange Act.
(c) "Common Stock" shall mean the Common Stock, $.001 par
value, of the Company.
(d) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
(e) "Termination Date" shall mean the earlier of (i) the date
of termination of the Merger Agreement by the Company pursuant to
7.01(b) thereof, and (ii) the date of the expiration or termination of
the Offer.
(f) Capital terms used and not defined herein have the
respective meanings ascribed to them in the Merger Agreement.
2. TENDER OF SHARES.
2.1 TENDER. In order to induce Parent and Merger Subsidiary to enter
into the Merger Agreement, the Stockholders hereby agrees to validly tender (or
cause the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
fifteenth business day after commencement of the Offer pursuant to the Merger
Agreement and Rule l4d-2 under the Exchange Act, the number of shares of Common
Stock set forth opposite each such Stockholder's name on Schedule A hereto (the
"Existing Shares"), all of which are Beneficially Owned by such Stockholder, and
any shares of Common Stock acquired by such Stockholder in any capacity after
the date hereof and prior to the termination of this Agreement by means of
purchase, exercise of any option, dividend, distribution or in any other way
(such shares of Common Stock, together with the Existing Shares, the "Shares").
Each of the Stockholders hereby acknowledges and agrees that Parent's and Merger
Subsidiary's obligation to accept for payment and pay for the Shares in the
Offer,
<PAGE> 3
3
including the Shares Beneficially Owned by such Stockholder, is subject to the
terms and conditions of the Offer.
2.2 DISCLOSURE. Each of the Stockholders hereby permits Parent and
Merger Subsidiary to publish and disclose in the Offer Documents and, if
approval of the Company's stockholders is required under applicable law, in the
Proxy Statement or Information Statement (including all documents and schedules
filed with the Securities and Exchange Commission) its identity and ownership of
the Shares and the nature of its commitments, arrangements and understandings
under this Agreement.
3. AGREEMENT TO VOTE SHARES.
During the term of this Agreement, at any meeting of the stockholders
of the Company called to consider and vote upon the adoption of the Merger
Agreement (and at any and all postponements and adjournments thereof), and in
connection with any action to be taken in respect of the adoption of the Merger
Agreement by written consent of stockholders of the Company, each Stockholder
will vote or cause to be voted (including by written consent, if applicable) all
of such Stockholder's Shares in favor of the adoption of the Merger Agreement
and in favor of any other matter necessary or appropriate for the consummation
of the transactions contemplated by the Merger Agreement which is considered and
voted upon at any such meeting or made the subject of any such written consent,
as applicable. During the term of this Agreement, at any meeting of the
stockholders of the Company called to consider and vote upon any Adverse
Proposal (and at any and all postponements and adjournments thereof), and in
connection with any action to be taken in respect of any Adverse Proposal by
written consent of stockholders of Company, each Stockholder will vote or cause
to be voted (including by written consent, if applicable) all of such
Stockholder's Shares against the adoption of such Adverse Proposal.
4. IRREVOCABLE PROXY.
Each Stockholder hereby irrevocably appoints Merger Subsidiary or any
designee of Merger Subsidiary the lawful agent, attorney and proxy of such
Stockholder, during the term of this Agreement, at any meeting of the
stockholders of the Company, however called, or in connection with any written
consent of the stockholders of the Company, to vote (or cause to be voted) the
Stockholder's Shares (a) in favor of the Merger, the execution and delivery by
the Company of the Merger Agreement and the approval of the terms thereof and
each of the other actions contemplated by the Merger Agreement, this Agreement
and any actions required in furtherance hereof and thereof and (b) against
adoption of any Adverse Proposal. Each Stockholder intends this proxy to be
irrevocable and coupled with an interest and will take such further action or
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by it with respect to
the Shares. Each Stockholder shall not hereafter, until the termination of this
Agreement, purport to vote (or
<PAGE> 4
4
execute a consent with respect to) such Shares (other than through this
irrevocable proxy) or grant any other proxy or power of attorney with respect to
any Shares, deposit any Shares into a voting trust or enter into any agreement
(other than this Agreement), arrangement or understanding with any Person,
directly or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of such Shares.
5. REPRESENTATIONS AND WARRANTIES.
5.1 CERTAIN REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder, severally and not jointly, represents and warrants to Parent and
Merger Subsidiary, as of the date hereof and as of the acceptance for payment of
shares of Common Stock under the Offer, as follows:
(a) OWNERSHIP. Such Stockholder is the sole Beneficial Owner
of the number of shares of Common Stock set forth opposite such
Stockholder's name on Schedule A hereto. The Shares are now, and at all
times during the term hereof will be (except as provided in Section 6.2
hereof), held exclusively by such Stockholder, or by a nominee or
custodian for the exclusive benefit of such Stockholder, free and clear
of all liens, proxies, or other restrictions on disposition or voting,
except for any liens, proxies or restrictions, arising hereunder. The
tender by such Stockholder of its Shares to Merger Subsidiary or Parent
pursuant to the Offer will pass to Merger Subsidiary or Parent the
Stockholder's interest in the Shares free of any adverse claims under
Section 8-102(a)(1) of the Uniform Commercial Code. Except as set forth
in Schedule A hereto, such Stockholder does not (a) Beneficially Own
any securities of the Company on the date hereof or (b) directly or
indirectly, Beneficially Own or have any option, warrant or other right
to acquire any securities of the Company that are or may by their terms
become entitled to vote or any securities that are convertible or
exchangeable into or exercisable for any securities of the Company that
are or may by their terms become entitled to vote; nor is the
Stockholder subject to any contract, commitment, arrangement,
understanding or relationship (whether or not legally enforceable),
other than this Agreement, that allows or obligates such Stockholder to
vote, dispose of or acquire any securities of the Company.
(b) POWER AND AUTHORITY; EXECUTION AND DELIVERY. Such
Stockholder has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated
hereby have been duly authorized by all necessary action, if any, on
the part of such Stockholder. This Agreement has been duly executed and
delivered by such Stockholder and constitutes a valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
<PAGE> 5
5
(c) NO CONFLICTS. The execution and delivery of this Agreement
do not, and, subject to compliance with the HSR Act and appropriate
filings under securities laws (which each Stockholder agrees to make
promptly), to the extent applicable, the consummation of the
transactions contemplated hereby and compliance with the provisions
hereof will not, conflict with, result in a breach or violation of or
default (with or without notice or lapse of time or both) under, or
give rise to any material obligation, any right of termination, benefit
under, or require notice to or the consent of any person under any
agreement, instrument, undertaking, law, rule, regulation, judgment,
order, injunction, decree, determination or award binding on such
Stockholder, other than such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate
would not impair the ability of such Stockholder to perform such
Stockholder's obligations under this Agreement.
(d) BROKERS. Except as provided in the Merger Agreement, no
broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement or the Merger Agreement based upon
arrangements made by or on behalf of the Stockholder that is or will be
payable by the Company or any of its Subsidiaries.
5.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Merger Subsidiary, as of the date hereof
and as of the acceptance for payment of Shares of Common Stock under the Offer,
as follows:
(a) ORGANIZATION; AUTHORITY. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware,
has the requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and has taken
all necessary corporate action to authorize the execution; and delivery
of, and the performance of its obligations under, this Agreement.
(b) EXECUTION AND DELIVERY. This Agreement has been duly
executed and delivered by the Company and, assuming that this Agreement
constitutes the valid and binding obligation of the other parties
hereto, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(c) NO CONFLICTS. The execution and delivery of this Agreement
by the Company does not and, subject to compliance with the HSR Act and
appropriate filings under securities laws (which the Company agrees to
make promptly), to the extent applicable, the performance of its
obligations hereunder and compliance with the provisions hereof will
not, conflict with, result in a breach or violation of or default (with
or without notice or lapse of time or both) under, or give rise to any
material obligation, any right of termination, cancellation, or
acceleration of any obligation or any loss of a material benefit under,
or require notice to or the consent of any person under (i) its
<PAGE> 6
6
certificate of incorporation or bylaws, (ii) any agreement, instrument,
undertaking, law, rule, regulation, judgment, order, injunction,
decree, determination or award by which it is bound, or (iii) any
judgment, writ, decree, order or ruling applicable to the Company;
except in the case of clauses (ii) and (iii) for conflicts, violations,
breaches or defaults that would not impair the ability of the Company
to perform its obligations under this Agreement.
(d) ANTITAKEOVER STATUTES. The Company's Board of Directors
has approved the Offer, the Merger, the Merger Agreement, this
Agreement and the transactions contemplated thereby and hereby and such
approval is sufficient to render inapplicable to the Offer, the Merger,
the Merger Agreement, this Agreement and the transactions contemplated
thereby and hereby, the provisions of Section 203 of the Delaware
General Corporations Law (the "DGCL").
5.3 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY.
Each of Parent and Merger Subsidiary hereby represents and warrants, jointly and
severally, to the Company and the Stockholders, as of the date hereof and as of
the acceptance for payment of Shares of Common Stock under the Offer, that:
(a) ORGANIZATION; AUTHORITY. Each of Parent and Merger
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
has the requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and has taken
all necessary corporate action to authorize the execution and delivery
of, and the performance of its obligations under, this Agreement.
(b) EXECUTION AND DELIVERY. This Agreement has been duly
executed and delivered by Parent and Merger Subsidiary and, assuming
that this Agreement constitutes the valid and binding obligation of the
other parties hereto, constitutes a valid and binding obligation of
Parent and Merger Subsidiary, enforceable against Parent and Merger
Subsidiary in accordance with its terms.
(c) NO CONFLICTS. The execution and delivery of this Agreement
by Parent and Merger Subsidiary do not, and, subject to compliance with
the HSR Act and appropriate filings under securities laws (which Parent
and Merger Subsidiary agree to make it promptly), to the extent
applicable, the performance of its obligations hereunder and compliance
with the provisions hereof will not, conflict with, result in a breach
or violation of or default (with or without notice or lapse of time or
both) under, or give rise to any material obligation, any right of
termination, cancellation, or acceleration of any obligation or any
loss of a material benefit under, or require notice to or the consent
of any person under (i) its articles of incorporation or bylaws or
equivalent organizational documents, (ii) any agreement, instrument,
undertaking, law, rule, regulation, judgment,
<PAGE> 7
7
order, injunction, decree, determination or award by which it is bound,
or (iii) any judgment, writ, decree, order or ruling applicable to
Parent or Merger Subsidiary; except in the case of clauses (ii) and
(iii) for conflicts, violations, breaches or defaults that would not
impair the ability of Parent or Merger Subsidiary to perform its
obligations under this Agreement.
6. CERTAIN COVENANTS OF STOCKHOLDER. Each Stockholder hereby severally covenants
and agrees as follows:
6.1 NO SOLICITATION. Neither Stockholder nor any officer, director,
employee, representative or agent of the Stockholder shall, in that
Stockholder's capacity as such and not in such Stockholder's capacity as an
officer, director, employee, representative or agent of the Company, directly or
indirectly, solicit, initiate, or knowingly facilitate; participate in or
initiate any inquiries or the making of any proposal by any person or entity
(other than Merger Subsidiary, Parent or any affiliate of Parent) which
constitutes, or may reasonably be expected to lead to, (a) any sale of the
Shares or (b) any Adverse Proposal. If the Stockholder, or any officer,
director, employee, representative or agent of the Stockholder, receives an
inquiry or proposal with respect to the sale of Shares, then the Stockholder
shall promptly inform Parent of the terms and conditions, if any, of such
inquiry or proposal and the identity of the person making it. The Stockholder
shall cause its officers, directors, employees, representatives and agents to,
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
6.2 RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE. Each
Stockholder hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the Shares without
notifying Parent in advance and obtaining and delivering to Parent any evidence
that Parent may reasonably request to evidence the transferee's agreement to be
bound by this Agreement; provided, however, that in the event of the
Stockholder's death during the term of this Agreement, the Shares may be
transferred in accordance with the Stockholder's last will and testament, or if
none, in accordance with the applicable laws of intestate succession, in either
of which cases, the Shares shall remain subject in all respects to the terms of
this Agreement, or (b) grant any proxies, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any Shares, or (c) take any
action that would make any representation or warranty of such Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling in any material respect such Stockholder from performing such
Stockholder's obligations under this Agreement.
6.3 LEGENDING OF CERTIFICATES; NOMINEE SHARES. If requested by Merger
Subsidiary, each Stockholder agrees to submit to Merger Subsidiary
contemporaneously with or within five
<PAGE> 8
8
business days following execution of this Agreement all certificates
representing the Shares so that Merger Subsidiary may note thereon a legend
referring to the proxy and other rights granted to it by this Agreement. If any
of the Shares beneficially owned by a Stockholder are held of record by a
brokerage firm in "street name" or in the name of any other nominee (a
"Nominee", and, as to such Shares, "Nominee Shares"), each such Stockholder
agrees that, upon written notice by Merger Subsidiary requesting it, each
Stockholder will within five business days of the giving of such notice execute
and deliver to Merger Subsidiary a limited power of attorney in such form as
shall be reasonably satisfactory to Merger Subsidiary enabling Merger Subsidiary
to require the Nominee to (i) tender such Nominee Shares in the Offer pursuant
to Section 2, (ii) agree to vote the Nominee Shares to the same effect as
Section 3, (iii) grant to Merger Subsidiary an irrevocable proxy to the same
effect as Section 4 with respect to the Nominee Shares held by such Nominee,
(iv) submit to Merger Subsidiary the certificates representing such Nominee
Shares for notation of the above-referenced legend thereon, and (v) effect any
other obligation of such Stockholder hereunder.
6.4 STOP TRANSFER ORDER. In furtherance of this Agreement, concurrently
herewith, the Stockholder shall and hereby does authorize the Company's counsel
to notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Shares (and that this Agreement places limits on the
voting and transfer of such Shares).
7. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement.
8. STOCK DIVIDENDS, ETC. In the event of a stock dividend or distribution, or
any change in the Company's Common Stock by reason of any stock dividend,
split-up, reclassification, recapitalization, combination or the exchange of
shares, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged. I
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise.
9.2 AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
<PAGE> 9
9
9.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following address:
If to Stockholder: At such Stockholder's address set
forth on Schedule A hereto
copy to: Gradall Industries, Inc.
406 Mill Avenue, S.W.
New Philadelphia, Ohio 44663
Facsimile No: (330) 339-5224
Attention: Barry L. Phillips
copy to: Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Facsimile No: (212) 969-2900
Attention: Robert A. Cantone, Esq.
If to Parent or Merger Subsidiary: JLG Industries, Inc.
1 JLG Drive
McConnelsburg, PA 17233
Facsimile No: (717) 485-6542
Attention: General Counsel
copy to: Covington & Burling
1201 Pennsylvania Ave., N.W.
Washington, D.C. 20044-7566
Facsimile No: (202) 662-6291
Attention: W. Andrew Jack, Esq.
If to the Company: Gradall Industries, Inc.
406 Mill Avenue, S.W.
New Philadelphia, Ohio 44663
Facsimile No: (330) 339-5224
Attention: Barry L. Phillips
copy to: Proskauer Rose LLP
1585 Broadway
<PAGE> 10
10
New York, New York 10036
Facsimile No: (212) 969-2900
Attention: Robert A. Cantone, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
9.5 COOPERATION AS TO REGULATORY MATTERS. If so requested by Parent or
Merger Subsidiary, promptly after the date hereof, the Stockholder will use its
reasonable best efforts, and will use reasonable best efforts to cause the
Company (if required in either case) to make all filings which are required
under the HSR Act and applicable requirements and to seek all regulatory
approvals required in connection with the transactions contemplated hereby. The
parties hereto shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. Each Stockholder shall
also use its reasonable best efforts to cause the Company to supply Merger
Subsidiary with copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between the Company and its
representatives and the Federal Trade Commission, the Department of Justice and
any other governmental agency or authority and members of their respective
staffs with respect to this Agreement and the transactions contemplated hereby.
9.6 TERMINATION. This Agreement shall terminate on the Termination
Date.
9.7 SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
<PAGE> 11
11
9.9 DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
9.10 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
9.11 STOCKHOLDER CAPACITY. Each Stockholder executing this Agreement
makes no agreement hereunder in his capacity as a director or officer of the
Company. Each Stockholder is executing and delivering this Agreement solely in
that Stockholder's capacity as the record and/or beneficial owner of that
Stockholder's Shares. Notwithstanding anything to the contrary in this
Agreement, no action or inaction by any Stockholder in his capacity as a
director, officer, or employee of the Company shall be deemed to contravene
Section 6.1 hereof as long as the action or inaction does not contravene Section
5.02 of the Merger Agreement.
[The remainder of this page has been left blank.]
<PAGE> 12
(Page 1 of 2 Signature Pages)
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
JLG INDUSTRIES, INC.
By: /s/ L. David Black
_________________________________
Name: L. David Black
Title: Chairman, President & CEO
JLG ACQUISITION CORP.
By: /s/ L. David Black
_________________________________
Name: L. David Black
Title: Chairman & President
GRADALL INDUSTRIES, INC.
By: /s/ Barry L. Phillips
_________________________________
Name: Barry L. Phillips
Title: President and CEO
<PAGE> 13
(Page 2 of 3 Signature Pages)
Stockholders:
By: /s/ Sangwoo Ahn
_________________________________
Sangwoo Ahn
Director, Gradall Industries, Inc.
By: /s/ Barry L. Phillips
_________________________________
Barry L. Phillips
Director, Gradall Industries, Inc.
By: /s/ David S. Williams
_________________________________
David S. Williams
Director, Gradall Industries, Inc.
By: /s/ Perry J. Lewis
_________________________________
Perry J. Lewis
Director, Gradall Industries, Inc.
By: /s/ Jack D. Rutherford
_________________________________
Jack D. Rutherford
Director, Gradall Industries, Inc.
<PAGE> 14
(Page 3 of 3 Signature Pages)
/s/ Bruce A. Jonker
_________________________________
Bruce Jonker
/s/ James C. Cahill
_________________________________
James Cahill
/s/ Joseph Keller
_________________________________
Joseph Keller
<PAGE> 15
SCHEDULE A
<TABLE>
<CAPTION>
NAME * COMMON STOCK SHARES **
- ----- - ------------------- --
<S> <C> <C> <C>
BARRY PHILLIPS -- 277,000 74,994
DAVID WILLIAMS -- 48,500 50,680
BRUCE JONKER -- 27,700 31,010
JAMES CAHILL 330 27,700 31,010
(Note #1)
JOSEPH KELLER 51 11,350 17,255
SANGWOO AHN -- 70,821 --
PERRY J. LEWIS -- 55,821 --
JACK D. RUTHERFORD -- 138,507 --
-------- -------- --------
381 657,399 204,949
======== ======== ========
</TABLE>
* Does not include additional shares purchased in Employee Stock
Purchase Plan.
** Identifying number of options under this agreement not required to exercise
but if exercised are obligated to tender, i.e. Total Shares Exercisable as
of 5/1/99.
Note #1: 330 shares (Mrs. James C. Cahill - 300; Cahill Children, J.C.
Cahill, Custodian - 30).
<PAGE> 1
[GRADALL LETTERHEAD]
EXHIBIT (c)(4)
November 3, 1997
JLG Industries, Inc.
1 JLG Drive
McConnellsburg, PA 17233-9533
Attention: Mr. Tom Singer
Vice President & General Counsel
Gentlemen:
In order to allow you to evaluate the possible acquisition (the "Proposed
Acquisition") of Gradall Industries, Inc. (the "Company"), we will deliver to
you, upon your execution and delivery to us of this letter agreement, certain
information about the properties and operations of the Company. All information
about the Company furnished by us or our Representatives (as defined below),
whether furnished before or after the date hereof, whether oral or written, and
regardless of the manner in which it is furnished, is referred to in this
letter agreement as "Proprietary Information". Propriety Information does not
include, however, information which (a) is or becomes generally available to the
public other than as a result of a disclosure by you or your Representatives,
(b) was available to you on a nonconfidential basis prior to its disclosure by
us or our Representatives or (c) becomes available to you on a nonconfidential
basis from a person other than us or our Representatives who is not otherwise
bound by a confidentiality agreement with us or any Representative of ours, or
is otherwise not under an obligation to us or any Representative of ours not to
transmit the information to you. As used in this letter agreement, the term
"Representative" means, as to any person, such person's affiliates and its and
their directors, officers, employees, agents, advisors (including, without
limitation, financial advisors, counsel and accountants) and controlling
persons. As used in this letter agreement, the term "person" shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership, other entity or individual.
Except as required by law, unless otherwise agreed to in writing by us,
you agree (a) to keep all Proprietary Information confidential and not to
disclose or reveal any Proprietary Information to any person other than your
Representatives who are actively and directly participating in your evaluation
of the Proposed Acquisition or who otherwise need to know the Proprietary
Information for the purpose of evaluating the Proposed Acquisition and to cause
those persons to observe the terms of this letter agreement, (b) not to use
Proprietary Information for any purpose other than in connection with your
evaluation of the Proposed Acquisition or the consummation of the Proposed
Acquisition and (c) not to disclose to any person (other than those of your
Representatives who are actively and directly participating in your evaluation
of the Proposed Acquisition or who otherwise need to know for the purpose of
evaluating the Proposed Acquisition and, in the case of your Representatives,
whom you will cause to observe the terms of this letter agreement) any
information about the Proposed Acquisition, or the terms or conditions or any
other facts relating thereto, including, without limitation, the fact that
discussions are taking place with respect thereto or the status thereof, or the
fact that Proprietary
<PAGE> 2
-2-
Information has been made available to you or your Representatives. You will be
responsible for any breach of the terms of this letter agreement by you or your
Representatives.
In the event that you are requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any Proprietary
Information or any other information concerning the Company or the Proposed
Acquisition, you agree that you will provide us with prompt notice of such
request or requirement in order to enable us to seek an appropriate protective
order or other remedy, to consult with you with respect to our taking steps to
resist or narrow the scope of such request or legal process; provided that your
disclosure of any Proprietary Information pursuant to any such law, regulation
or legal process shall not be deemed a violation of this letter agreement. In
any such event you will use your reasonable best efforts to ensure that all
Proprietary Information and other information that is so disclosed will be
accorded confidential treatment.
You also agree that for a period of 18 months from the date of this letter
agreement, neither you nor any of your Representatives will, without the prior
written consent of the Company or its Board or Directors:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct
or indirect rights to acquire any voting securities of the Company or
any subsidiary thereof, or of any successor to or person in control of
the Company, or any assets of the Company or any subsidiary or
division thereof or of any such successor or controlling person;
(b) make or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise or
influence any person or entity with respect to the voting of any
voting securities of the Company;
(c) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in
connection with any of the foregoing; or
(d) request the Company or any of our Representatives, directly or
indirectly, to amend or waive any provision of this paragraph.
You will promptly advise the Company of any inquiry or proposal made to you
with respect to any of the foregoing.
If you determine that you do not wish to proceed with the Proposed
Acquisition, you will promptly advise us of that decision. In that case, or in
the event that we, in our sole discretion, so request or the Proposed
Acquisition is not consummated by you, you will, upon our request, promptly
deliver to us all Proprietary Information, including all copies,
reproductions, summaries, analyses or extracts thereof or based thereon in your
possession or in the possession of any Representative of yours.
You acknowledge that none of the Company, Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") or our other Representatives and none of
the respective officers, directors, employees, agents or controlling persons of
Merrill Lynch or such other Representatives makes any express or implied
representation or warranty as to the accuracy or completeness of any
Proprietary Information, and you agree that none of such persons shall have any
liability to you or any of your Representatives relating to or arising from
your or their use of any Proprietary Information or for any errors therein or
omissions therefrom. You also agree that you are not entitled to rely on the
accuracy or completeness of any Proprietary Information and that you shall be
entitled to rely solely on such representations and warranties regarding
Proprietary Information as may be made to you in any final acquisition
agreement relating to the Proposed Acquisition, subject to the terms and
conditions of such agreement.
<PAGE> 3
-3-
You agree that, without our prior written consent, you will not for a
period of 18 months from the date hereof directly or indirectly solicit for
employment or employ any person who is now employed by us or any of our
subsidiaries and who is identified by you as a result of your evaluation or
otherwise in connection with the Proposed Acquisition; provided, however, that
you shall not be prohibited from employing any such person who contacts you on
his or her own initiative and without any direct or indirect solicitation by
you.
You agree that until a final acquisition agreement regarding the Proposed
Acquisition has been executed by you and us, neither we nor any of our
Representatives are under any legal obligation and shall have no liability to
you of any nature whatsoever with respect to the Proposed Acquisition by
virtue of this letter agreement or otherwise. You also acknowledge and agree
that (i) we and our Representatives may conduct the process that may or may
not result in the Proposed Acquisition in such manner as we, in our sole
discretion, may determine (including, without limitation, negotiating and
entering into a final acquisition agreement with any third party without notice
to you) and (ii) we reserve the right to change (in our sole discretion, at any
time and without notice to you) the procedures relating to our and your
consideration of the Proposed Acquisition (including, without limitation,
terminating all further discussions with you and requesting that you return all
Proprietary Information to us).
Without prejudice to the rights and remedies otherwise available to us,
you agree we shall be entitled to equitable relief by way of injunction or
otherwise if you or any of your Representatives breach or threaten to breach
any of the provisions of this letter agreement.
It is further understood and agreed that no failure or delay by us in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and
to be performed in that state.
Any assignment of this letter agreement by you without our prior written
consent shall be void.
Your obligations under this letter agreement shall be for three years from
your acceptance hereof.
<PAGE> 4
-4-
This letter agreement contains the entire agreement between you and us
concerning confidentiality of the Proprietary Information, and no modification
of this letter agreement or waiver of the terms and conditions hereof shall be
binding upon you or us, unless approved in writing by each of you and us.
Please confirm your agreement with the foregoing by signing and returning
to the undersigned the duplicate copy of this letter enclosed herewith.
GRADALL INDUSTRIES, INC.
By /s/ BARRY L. PHILLIPS
----------------------
Barry L. Phillips
President & Chief Executive Officer
Accepted and Agreed
as of the date
first written above:
By /s/ THOMAS SINGER
---------------------------------------
Title Vice President & General Counsel
--------------------------------
Company JLG Industries, Inc.
------------------------------
<PAGE> 5
Gradall Industries, Inc.
February 23, 1999
CONFIDENTIAL
- ------------
JLG Industries Inc.
2 JLG Drive
McConnellsburg, PA 17233-9533
Attention: Mr. Tom Singer
Vice President and General Counsel
Ladies and Gentlemen:
We refer to the letter agreement entered into as of November 3, 1997 (the
"Confidentiality Letter") between Gradall Industries, Inc. ("Gradall") and JLG
Industries Inc. ("JLG") in connection with a possible acquisition of Gradall.
This letter agreement (the "Amendment") is to confirm our understanding with
respect to amending the Confidentiality Letter. Capitalized terms used and not
otherwise defined herein shall have the meanings given to them in the
Confidentiality Letter.
In consideration of continuing discussions between JLG and Gradall, the
parties hereby agree to amend the Confidentiality Letter to replace the term
"18 months" appearing on the first line of the second full paragraph on page 2
of the Confidentiality Letter and on the first line of page 3 with the term "30
months". Additionally, you hereby agree to amend the Confidentiality Letter to
replace the term "three years" appearing on the last line of page 3 of the
Confidentiality Letter with the term "four years".
Except as otherwise amended hereby, the Confidentiality Letter shall
remain in full force and effect, and that the terms and conditions of the
Confidentiality Letter shall each apply with respect to the Amendment.
<PAGE> 6
Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to the undersigned the duplicate copy of this letter
agreement enclosed herewith.
Very truly yours,
GRADALL INDUSTRIES, INC.
By:
-------------------------
Barry L. Phillips
President & Chief Executive Officer
Accepted and Agreed
to as of the date first
above written:
JLG INDUSTRIES INC.
By /s/ THOMAS SINGER
------------------
Vice President & General Counsel
2
