<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
-------------------------
OMNIQUIP INTERNATIONAL, INC.
(NAME OF SUBJECT COMPANY)
TELESCOPE ACQUISITION INC.
TEXTRON INC.
(BIDDERS)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(AND THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS(1))
(TITLE OF CLASS OF SECURITIES)
-------------------------
681969101
(CUSIP NUMBER OF CLASS OF SECURITIES)
-------------------------
WAYNE W. JUCHATZ, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
TEXTRON INC.
40 WESTMINSTER STREET
PROVIDENCE, RI 02903
TELEPHONE: (401) 457-7800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPY TO:
RICHARD A. GARVEY, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
TELEPHONE: (212) 455-2000
-------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Transaction Valuation(2) $322,787,325.00 Amount of Filing Fee(3) $64,557.47
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes associated rights to purchase one one-hundreth of a share of the
Subject Company's Series A Preferred Stock (the "Rights"). Until the
occurrence of certain prescribed events, the Rights are not exercisable, are
evidenced by the Certificate representing common stock, par value $0.01 per
share (the "Common Stock") and will be transferred only with such shares of
Common Stock.
(2) Based on the offer to purchase all of the outstanding shares of Common Stock
of the Subject Company at $21.00 cash per share, 14,277,500 shares of Common
Stock outstanding and 1,093,325 outstanding options as of August 20, 1999.
(3) 1/50 of 1% of Transaction Valuation.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
This Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
relates to the offer by Telescope Acquisition Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Textron Inc., a Delaware
corporation ("Parent"), to purchase for cash all of the outstanding shares of
Common Stock, par value $0.01 per share (the "Shares"), of OmniQuip
International, Inc., a Delaware corporation (the "Company"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated August 21, 1998, as amended, between the Company and First
Chicago Trust Company of New York, as Rights Agent, at a purchase price of
$21.00 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 as
of August 27, 1999 (the "Offer to Purchase"), a copy of which is attached hereto
as Exhibit (a)(1), and in the related Letter of Transmittal (which, together
with the Offer to Purchase, as amended from time to time, constitute the
"Offer"), a copy of which is attached hereto as Exhibit (a)(2).
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is OmniQuip International, Inc. The
information set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, par value $0.01 per share, of the Company and the
associated preferred stock purchase rights. The information set forth in the
Introduction ("Introduction") of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information set forth in Section 8 ("Certain Information Concerning Purchaser
and Parent") of the Offer to Purchase and in Schedule I thereto is incorporated
herein by reference.
(e) and (f) During the last five years, neither Purchaser nor Parent nor,
to the best knowledge of Purchaser or Parent, any of the persons listed in
Schedule I to the Offer to Purchase (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction 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 Section 8 ("Certain Information
Concerning Purchaser and Parent"), Section 10 ("Background of the Offer;
Contacts with the Company") and Section 11 ("The Merger Agreement, Stock
Purchase Agreements and Discussions Regarding Employment") of the Offer to
Purchase is incorporated herein by reference.
2
<PAGE> 3
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, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("The Merger
Agreement, Stock Purchase Agreements and Discussions Regarding Employment"),
Section 12 ("Purpose of the Offer; The Merger; Plans for the Company; Rights
Agreement") and 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.
(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.
Except as contemplated by the Merger Agreement and the Stock Purchase
Agreements (as such terms are defined in the Offer to Purchase), neither Parent
nor Purchaser has any plans or proposals which relate to or would result in (x)
the acquisition by any person of additional securities of the Company or the
disposition of securities of the Company, or (y) changes to the Company's
charter, by-laws or instruments corresponding thereto or other action which may
impede the acquisition of control of the Company by any person.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction and Section 8
("Certain Information Concerning Purchaser and Parent") of and Schedule I to 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 Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company"), Section 11 ("The Merger Agreement, Stock
Purchase Agreements and Discussions Regarding Employment") and Section 12
("Purpose of the Offer; The Merger; Plans for the Company; Rights Agreement") 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
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
3
<PAGE> 4
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("The Merger Agreement, Stock
Purchase Agreements and Discussions Regarding Employment") 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") and
Section 16 ("Certain Legal Matters and Regulatory Approvals") of the Offer to
Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated August 27, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published on August 27, 1999.
(a)(8) Press Release issued by Parent and the Company on August 23, 1999.
(b) 5-Year Credit Agreement dated as of April 1, 1998, among Textron
Inc., the Banks listed therein and Morgan Guaranty Trust Company of
New York as Administrative Agent.((1))
(c)(1) Agreement and Plan of Merger, dated as of August 21, 1999, by and
among Textron Inc., Telescope Acquisition Inc. and OmniQuip
International, Inc.
(c)(2) Stock Purchase Agreement, dated as of August 20, 1999, between
Telescope Acquisition Inc. and P. Enoch Stiff.
(c)(3) Stock Purchase Agreement, dated as of August 20, 1999, among
Telescope Acquisition Inc., Curtis Laetz and Linda Laetz.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
- ---------------
(1) Incorporated by reference to Exhibit 10.2 to Textron Inc.'s Quarterly Report
on Form 10-Q for the fiscal quarter ended April 4, 1998.
4
<PAGE> 5
SIGNATURE
After due inquiry and to the best of our knowledge and belief, we hereby
certify that the information set forth in this statement is true, complete and
correct.
TEXTRON INC.
By: /s/ WAYNE W. JUCHATZ, ESQ.
-----------------------------------
Name: Wayne W. Juchatz, Esq.
Title: Executive Vice President and
General Counsel
TELESCOPE ACQUISITION INC.
By: /s/ BHIKHAJI MANECKJI
-----------------------------------
Name: Bhikhaji Maneckji
Title: Vice President
Date: August 27, 1999
5
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
- ------- ----------- --------
<S> <C> <C>
(a)(1) Offer to Purchase dated August 27, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published on August 27, 1999.
(a)(8) Press Release issued by Parent on August 23, 1999.
(b) 5-Year Credit Agreement dated as of April 1, 1998, among
Textron Inc., the Banks listed therein and Morgan Guaranty
Trust Company of New York as Administrative Agent.(2)
(c)(1) Agreement and Plan of Merger, dated as of August 21, 1999,
by and among Textron Inc., Telescope Acquisition Inc. and
OmniQuip International, Inc.
(c)(2) Stock Purchase Agreement, dated as of August 20, 1999,
between Telescope Acquisition Inc. and P. Enoch Stiff.
(c)(3) Stock Purchase Agreement, dated as of August 20, 1999,
among Telescope Acquisition Inc., Curtis Laetz and Linda
Laetz.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
- ---------------
<TABLE>
<S> <C> <C>
(2) Incorporated by reference to Exhibit 10.2 to Textron Inc.'s
Quarterly Report on Form 10-Q for the fiscal quarter ended April
4, 1998.
</TABLE>
6
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
AT
$21.00 NET PER SHARE
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE OFFER IS EXTENDED.
-------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION OF THE
OFFER SUCH NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE
"SHARES"), AND THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS (THE "RIGHTS"), OF
OMNIQUIP INTERNATIONAL, INC. (THE "COMPANY"), WHICH CONSTITUTES MORE THAN 50% OF
THE SHARES (DETERMINED ON A FULLY-DILUTED BASIS) THEN OUTSTANDING AND (II) THE
EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1,
11 AND 15.
-------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS
THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE
PURCHASER PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares and the associated Rights issued pursuant to the Rights Agreement, dated
as of August 21, 1998, as amended (as so amended, the "Rights Agreement"),
between the Company and First Chicago Trust Company of New York, as Rights
Agent, 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 Rights, if
applicable) and any other required documents to the Depositary or tender such
Shares (and Rights, if applicable) 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 (and Rights, if
applicable) 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 Rights) and whose
certificates representing such Shares (and Rights, if applicable) are not
immediately available, or who cannot deliver the certificates for Shares (and
Rights, if applicable) and all other required documents to reach the Depository
on or prior to the Expiration Date (as defined herein), or who cannot comply
with the procedure for book-entry transfer on a timely basis may tender such
Shares (and Rights, if applicable) by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to Salomon Smith
Barney Inc. (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:
SALOMON SMITH BARNEY
August 27, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
THE OFFER................................................... 3
1. Terms of the Offer; Expiration Date.................. 3
2. Acceptance for Payment and Payment for Shares........ 5
3. Procedure for Tendering Shares and Rights............ 6
4. Withdrawal Rights.................................... 10
5. Certain Federal Income Tax Consequences.............. 11
6. Price Range of Shares; Dividends..................... 12
7. Certain Information Concerning the Company........... 13
8. Certain Information Concerning the Purchaser and
Parent................................................. 16
9. Source and Amount of Funds........................... 19
10. Background of the Offer; Contacts with the Company... 20
11. The Merger Agreement, Stock Purchase Agreements and
Discussions Regarding Employment..................... 23
12. Purpose of the Offer; the Merger; Plans for the
Company; Rights Agreement............................ 35
13. Dividends and Distributions.......................... 38
14. Effect of the Offer on the Market for the Shares,
Nasdaq Listing and Exchange Act Registration......... 38
15. Certain Conditions of the Offer...................... 39
16. Certain Legal Matters and Regulatory Approvals....... 41
17. Fees and Expenses.................................... 43
18. Miscellaneous........................................ 43
SCHEDULE I -- DIRECTORS AND EXECUTIVE OFFICERS.............. I-1
SCHEDULE II -- CERTAIN INFORMATION REGARDING PURCHASES OF
SHARES OF COMPANY COMMON STOCK BY PARENT AND ITS
SUBSIDIARIES.............................................. II-1
</TABLE>
i
<PAGE> 3
To the Stockholders of
OmniQuip International, Inc.
INTRODUCTION
Telescope Acquisition Inc., a Delaware corporation (the "Purchaser"), which
is a wholly owned subsidiary of Textron Inc., a Delaware corporation (the
"Parent" or "Textron"), hereby offers to purchase all of the outstanding shares
of common stock, par value $.01 per share (the "Shares"), and the associated
preferred stock purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of August 21, 1998, as amended (as so amended, the "Rights
Agreement"), between the Company and First Chicago Trust Company of New York, as
Rights Agent, of OmniQuip International, Inc., a Delaware corporation (the
"Company"), at a purchase price of $21.00 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which,
together with this Offer to Purchase, as amended from time to time, constitute
the "Offer"). The Rights Agreement is described in greater detail below in
Section 12. Unless the context requires otherwise, all references in this Offer
to Purchase to Shares shall be deemed to refer also to the associated Rights,
and all references to Rights shall be deemed to include all benefits that may
inure to the stockholders of the Company or to holders of the Rights pursuant to
the Rights Agreement. In connection with the Merger Agreement (as defined
below), the Company has amended the Rights Agreement so that (a) the execution
of the Merger Agreement, the Stock Purchase Agreements (as defined below) and
the consummation of the transactions contemplated by such agreements, do not (i)
give any holder of Rights or any other person any right, remedy or claim under
the Rights Agreement, (ii) result in the Parent or the Purchaser becoming an
Acquiring Person (as defined in the Rights Agreement) or (iii) result in the
occurrence of a Distribution Date or a Stock Acquisition Date (each as defined
in the Rights Agreement) and (b) the Rights will expire at the earliest of (i)
the close of business on the Final Expiration Date (as defined in the Rights
Agreement), (ii) the time at which the Rights are redeemed as provided in
Section 23 of the Rights Agreement and (iii) immediately prior to the Effective
Time (as defined in the Merger Agreement). Unless and until the Distribution
Date occurs, the Rights will be transferred with and only with the Shares and,
therefore, the surrender for transfer of any of the certificates representing
Shares (the "Share Certificates"), including upon acceptance for payment of such
Shares pursuant to the Offer, will also constitute the surrender for transfer of
the Rights associated with the Shares represented by such Share Certificates.
See Section 12.
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 and Rights pursuant to the
Offer. The Purchaser will pay all fees and expenses of Salomon Smith Barney
Inc., which is acting as Dealer Manager for the Offer (in such capacity, the
"Dealer Manager"), Citibank, N.A. 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" OR THE
"BOARD") HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER (AS DEFINED
1
<PAGE> 4
BELOW), AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS
THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES AND
THE ASSOCIATED RIGHTS TO THE PURCHASER PURSUANT TO THE OFFER.
The Board of Directors has received the written opinion dated August 21,
1999 of Morgan Stanley & Co. Incorporated ("Morgan Stanley"), financial advisor
to the Company, to the effect that, as of such date and based upon and subject
to certain matters stated therein, the $21.00 per Share cash consideration to be
received in the Offer and the Merger by holders of Shares (other than the
Parent, the Purchaser or any direct or indirectly wholly owned subsidiary of the
Parent or the Purchaser) is fair to such holders from a financial point of view.
A copy of the written opinion of Morgan Stanley is attached to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being
distributed to the stockholders of the Company, and stockholders are urged to
read the opinion carefully in its entirety for the assumptions made, matters
considered and limitations on the review undertaken by Morgan Stanley.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN SECTION 1) SUCH NUMBER OF SHARES WHICH CONSTITUTES MORE THAN 50%
OF THE SHARES (DETERMINED ON A FULLY DILUTED BASIS) THEN OUTSTANDING (THE
"MINIMUM CONDITION") AND (ii) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE
WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976,
AS AMENDED (THE "HSR ACT") (THE "HSR ACT CONDITION"). SEE SECTIONS 1, 11 AND 15.
IF THE PURCHASER PURCHASES NOT LESS THAN THAT NUMBER OF SHARES NEEDED TO SATISFY
THE MINIMUM 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 August 21, 1999 (the "Merger Agreement"), by and among the Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), the Purchaser 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 Purchaser
will cease. 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 (i)
Shares owned by the Company and Shares owned by the Parent, the Purchaser or any
other direct or indirectly wholly owned subsidiary of the Parent or the
Purchaser, which shall be cancelled, and (ii) Shares, if any (collectively,
"Dissenting Shares"), held by stockholders who have properly exercised appraisal
rights under Section 262 of the DGCL) will, by virtue of the Merger and without
any action on the part of the holders of the Shares be cancelled, extinguished
and converted into and become a right to receive $21.00 in cash (the "Merger
Consideration"), payable to the holder thereof, without interest, upon surrender
of the certificate formerly representing such Share, less any required
withholding taxes.
2
<PAGE> 5
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 Merger Consideration pursuant to the Merger are
described in Section 5.
The Company has represented to the Parent and the Purchaser that, as of the
close of business on August 20, 1999, there were 14,277,500 Shares issued and
outstanding and 1,093,325 Shares issuable upon exercise of outstanding options.
Based upon the foregoing, the Purchaser believes that approximately 7,685,413
Shares constitutes 50% of the outstanding Shares on a fully diluted basis.
On August 21, 1999, Purchaser acquired 346,275 shares from P. Enoch Stiff,
President and Chief Executive Officer of the Company, and 63,938 shares from
Curtis J. Laetz, Senior Vice President, Chief Administrative Officer and
Assistant Secretary of the Company, for $21.00 per Share, subject to the terms
and conditions of the Stock Purchase Agreements entered into by the Purchaser
with each of Messrs. Stiff and Laetz. The Stock Purchase Agreements (as defined
in Section 11) are more fully described in Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE 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 Purchaser 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 Friday, September
24, 1999, unless and until the Purchaser, in its sole 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
Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND THE HSR ACT CONDITION AND CERTAIN OTHER CONDITIONS. SEE
SECTION 15, WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER. SUBJECT TO THE
PROVISIONS OF THE MERGER AGREEMENT AND THE APPLICABLE RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"), THE PURCHASER
RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO WAIVE ANY OR ALL CONDITIONS TO
THE OFFER (OTHER THAN THE MINIMUM CONDITION) AND TO MODIFY THE TERMS OF THE
OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT, INCLUDING THE
PROVISIONS OF THE MERGER AGREEMENT DESCRIBED IN THE NEXT TWO PARAGRAPHS, AND THE
APPLICABLE RULES AND REGULATIONS OF THE COMMISSION, IF BY THE EXPIRATION DATE
ANY OR ALL OF SUCH CONDITIONS TO THE OFFER HAVE NOT BEEN SATISFIED, THE
PURCHASER 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 TERMINATION OF THE OFFER, AS EXTENDED.
3
<PAGE> 6
Subject to the applicable rules and regulations of the Commission and the
provisions of the Merger Agreement, the Purchaser 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, 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 or (ii) amend the Offer in
any respect by giving oral or written notice of such amendment to the
Depositary. During any such extension, all Shares previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the right of a
tendering stockholder to withdraw such stockholder's Shares. Under the terms of
the Merger Agreement, the Purchaser has agreed with the Company that it will
not, without the prior written consent of the Company, (i) decrease the price
per Share payable in the Offer to below $21.00, (ii) change the form of
consideration to be paid in the Offer, (iii) reduce the maximum number of Shares
to be purchased in the Offer or the Minimum Condition, (iv) impose conditions to
the Offer in addition to the Offer conditions set forth in Annex A to the Merger
Agreement (the "Offer Conditions") or modify the Offer conditions in a manner
adverse to the holders of Shares or (v) amend any other term of the Offer in a
manner adverse to the holders of the Shares (provided that a waiver by Purchaser
of any condition other than the Minimum Condition shall not be deemed to be
adverse to the holders of the Shares).
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer on one or more occasions for up to ten business
days for each such extension beyond the then scheduled expiration date (the
initial scheduled expiration date being 20 business days following commencement
of the Offer), if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligation to accept for payment and pay for the
Shares shall not be satisfied or waived, until such time as such conditions are
satisfied or waived (and, at the request of the Company, Purchaser shall,
subject to Purchaser's right to terminate the Merger Agreement pursuant to
Article IX thereof, extend the Offer for additional periods, unless the only
conditions not satisfied or earlier waived on the then scheduled expiration date
are one or more of the Minimum Condition and the conditions set forth in
paragraph (b) of the Offer Conditions, provided that (x) if the only condition
not satisfied is the Minimum Condition, the satisfaction or waiver of all other
conditions shall have been publicly disclosed at least five business days before
termination of the Offer, and (y) if paragraph (b) of the Offer Conditions has
not been satisfied and the failure to so satisfy can be remedied, the Offer
shall not be terminated unless the failure is not remedied within 10 calendar
days after Purchaser has furnished the Company written notice of such failure)
and (ii) 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 and (iii) extend the Offer for an aggregate period of not more than 5
business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence if there shall not have been
tendered sufficient Shares so that the Merger could be effected without a
meeting of the Company's stockholders in accordance with Section 253 of the
DGCL. The Purchaser shall have no obligation to pay interest on the purchase
price of tendered Shares. The rights reserved by the Purchaser in this Section 1
are in addition to the Purchaser's rights to terminate the Offer pursuant to
Section 15.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser 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 Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The minimum period
4
<PAGE> 7
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 Purchaser 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 Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment Shares that have been 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, including without
limitation the Minimum Condition and the HSR Act Condition. In addition, subject
to applicable rules of the Commission, the Purchaser expressly reserves the
right to delay acceptance for payment of or payment for Shares pending receipt
of any other regulatory approvals specified in Section 16. Any such delays will
be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to
a bidder's obligation to pay for or return tendered securities promptly after
the termination or withdrawal of such bidder's offer).
For information with respect to approvals required to be obtained prior to
the consummation of the Offer, including 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)
Share Certificates and, if applicable, certificates evidencing the Rights
("Rights Certificates"), or timely confirmation (a "Book-Entry Confirmation") of
a book-entry transfer of such Shares and, if applicable, Rights into the
Depositary's account at The Depositary 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 and, if applicable, Rights that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Purchaser may enforce such agreement against such
participant.
5
<PAGE> 8
PRIOR TO A DISTRIBUTION DATE, A VALID TENDER OF SHARES WILL ALSO CONSTITUTE
A TENDER OF THE ASSOCIATED RIGHTS. See Sections 3 and 12.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares and Rights
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares and Rights 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 Purchaser and transmitting such payments to stockholders whose
Shares and Rights have been accepted for payment. UNDER NO CIRCUMSTANCES WILL
INTEREST ON THE PURCHASE PRICE FOR SHARES AND RIGHTS BE PAID BY THE PURCHASER,
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 and Rights tendered pursuant to the Offer is delayed or the Purchaser is
unable to accept for payment or pay for Shares and Rights tendered pursuant to
the Offer, then without prejudice to the Purchaser's rights set forth herein,
the Depositary may nevertheless, on behalf of the Purchaser and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Shares and Rights and such
Shares and Rights 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 and Rights are not accepted for payment for any
reason or if Share Certificates are submitted for more Shares and Rights than
are tendered, Share Certificates evidencing unpurchased or untendered Shares and
Rights will be returned without expense to the tendering stockholder (or, in the
case of Shares and Rights tendered by book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares and Rights will be credited to an account maintained
at such Book-Entry Transfer Facility), in each case with the related Rights
Certificates, if any, as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Share pursuant to the Offer, Purchaser will pay the increased
consideration for all Shares purchased pursuant to the Offer, whether or not
such Shares were tendered prior to the increase in consideration.
The Purchaser reserves the right to transfer or assign to any direct or
indirect wholly owned subsidiary or subsidiaries of Parent, the right to
purchase all of the Shares and Rights tendered pursuant to the Offer, but any
such transfer or assignment will not relieve the Purchaser of its obligations
under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares and Rights validly tendered and
accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES AND RIGHTS.
Valid Tenders. Except as set forth below, in order for Shares and Rights
to be validly tendered pursuant to the Offer, either (a) 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 Rights, 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
6
<PAGE> 9
Date and either (i) Share Certificates and Rights Certificates, if applicable,
evidencing tendered Shares and Rights must be received by the Depositary at such
address or such (ii) Shares and Rights 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 (b) the guaranteed delivery procedures described below must be complied
with by tendering stockholders.
Rights Certificates. PRIOR TO A DISTRIBUTION DATE, A VALID TENDER OF
SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. If the
Distribution Date has occurred and Rights Certificates have been distributed to
such holders prior to the date of tender pursuant to the Offer, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered must be delivered to the Depositary or, if available, a Book-Entry
Confirmation must be received by the Depositary with respect thereto, in order
for such Shares to be validly tendered. If the Distribution Date has occurred
and Rights Certificates have not been distributed prior to the time Shares are
tendered pursuant to the Offer, Rights may be tendered prior to a stockholder
receiving Rights Certificates by use of the guaranteed delivery procedures
described below. A tender of Shares without Rights Certificates constitutes an
agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within three business days after the date Rights
Certificates are distributed. See Section 1.
Book-Entry Transfer. The Depositary will make a request to establish
accounts 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 such 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 tendering stockholder
must comply with the guaranteed delivery procedures described below. If the
Distribution Date occurs, to the extent that the Rights become eligible for
book-entry transfer under procedures established by the Book-Entry Transfer
Facility, the Depositary will make a request to establish an account with
respect to the Rights at the Book-Entry Transfer Facility as soon as
practicable. If book-entry delivery of Rights is available, the foregoing
book-entry transfer procedure will also apply to Rights. However, no assurance
can be given that book-entry delivery of Rights will be available. If book-entry
delivery is not available and if separate Rights Certificates have been issued,
a tendering stockholder is not relieved of delivery requirements hereunder and
thus will be required to tender Rights by means of actual physical delivery of
Rights Certificates to the Depositary or pursuant to the guaranteed delivery
procedures set forth below.
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 RIGHTS CERTIFICATES, IF
APPLICABLE, 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,
7
<PAGE> 10
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 firm which is 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 and Rights are tendered
(i) by a registered holder of Shares and Rights 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.
If the Share Certificates and Rights Certificates, if applicable, 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 and Rights
Certificates, if applicable, not accepted for payment or not tendered are to be
returned, to a person other than the registered holder, the Share Certificates
and Rights Certificate, if applicable, 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 and Rights Certificates, if applicable, 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 and Rights
pursuant to the Offer and such stockholder's Share Certificates and Rights
Certificates, if applicable, are not immediately available, or such stockholder
cannot deliver the Share Certificates and Rights Certificates, if applicable,
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 and Rights 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 Purchaser, is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates and Rights Certificates, if applicable
(or a Book-Entry Confirmation), representing all tendered Shares and Rights
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 trading days after the date of
execution of such Notice of Guaranteed Delivery. A trading day is any day
on which the Nasdaq National Market is open for business.
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 and Rights tendered within the meaning of, and that
the tender of the Shares and Rights effected
8
<PAGE> 11
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 and Rights Certificates, if
applicable, for, or of Book-Entry Confirmation with respect to, such Shares and
Rights, 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 and Rights Certificates, if applicable, or Book-Entry Confirmations
with respect to such Shares and Rights are received into the Depositary's
account at a Book-Entry Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser 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 and Rights
tendered by such stockholder and accepted for payment by the Purchaser (and with
respect to any and all other Shares or Rights or other securities issued or
issuable in respect of such Shares or Rights 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 Purchaser accepts such Shares and Rights
for payment. Upon such acceptance for payment, all prior powers of attorney and
proxies given by such stockholder with respect to such Shares and Rights (and
such other Shares, Rights and other 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 Purchaser will, with respect to the
Shares and Rights (and such other Shares, Rights and other securities) for which
such appointment is effective, 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 Purchaser reserves the right to require that, in order for Shares
and Rights to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares and Rights, the Purchaser must be able to exercise full
voting rights with respect to such Shares, Rights 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 and Rights will be determined by the Purchaser in its sole discretion,
which determination shall be final and binding. The Purchaser 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 Purchaser also reserves the absolute right to waive any
of the conditions of the Offer (subject to the provisions of the Merger
Agreement) or any defect or irregularity in any tender of Shares and Rights of
any particular stockholder whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares or Rights will be
deemed to have been validly made until all defects and irregularities have been
cured or waived. None of the Purchaser, 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
9
<PAGE> 12
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Backup 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.
Other Requirements. The Purchaser's acceptance for payment of Shares and
Rights tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering stockholder's representation and warranty that the stockholder is
the holder of the Shares and Rights within the meaning of, and that the tender
of the Shares and Rights complies with, Rule 14e-4 under the Exchange Act.
4. WITHDRAWAL RIGHTS. Tenders of Shares and Rights made pursuant to the
Offer are irrevocable, except that Shares and Rights 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 Purchaser pursuant to the Offer,
may also be withdrawn at any time after October 25, 1999. If the Purchaser
extends the Offer, is delayed in its acceptance for payment of Shares and Rights
or is unable to purchase Shares and Rights validly tendered pursuant to the
Offer for any reason, then without prejudice to the Purchaser's rights under the
Offer, the Depositary may nevertheless, on behalf of the Purchaser, retain
tendered Shares and Rights and such Shares and Rights 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.
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 and Rights to be withdrawn, the number of Shares and Rights
to be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares or Rights. If Share Certificates or Rights
Certificates to be withdrawn have been delivered or otherwise identified to the
Depositary,
10
<PAGE> 13
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 or Rights have been tendered for the account of
an Eligible Institution. If Shares or Rights 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 or Rights, 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 Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, 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 and Rights may not be rescinded. Any Shares and
Rights properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer. However, withdrawn Shares and Rights 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 summary of tax
consequences set forth below is for general information only and is based on the
law as currently in effect. The tax treatment of each stockholder will depend in
part upon such stockholder's particular situation. Special tax consequences not
described herein may be applicable to particular classes of taxpayers, such as
financial institutions, broker-dealers, insurance companies, foreign
corporations, foreign partnerships, foreign trusts, foreign estates, persons who
are not citizens or residents of the United States, tax-exempt entities,
stockholders who acquired their Shares through the exercise of an employee stock
option or otherwise as compensation, and persons who received payments in
respect of options to acquire Shares. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR
OWN TAX 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 receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, for Federal income tax
purposes, a stockholder will recognize gain or loss in an amount equal to the
difference between the cash received by the stockholder pursuant to the Offer or
the Merger and the stockholder's adjusted tax basis in the Shares and the
associated Rights tendered by the stockholder and purchased pursuant to the
Offer or the Merger. Gain or loss will be calculated separately for each block
of Shares 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
will be a capital gain or loss if the Shares are a capital asset in the hands of
the stockholder, and a long-term capital gain or loss if the stockholder's
holding period is more than one year as of the date the Purchaser accepts such
Shares for payment pursuant to the Offer or the effective date of the Merger, as
the case may be. There are limitations on the deductibility of capital losses.
Capital gains of individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation which may vary
depending upon the holding period of such capital assets.
11
<PAGE> 14
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed on the Nasdaq
National Market under the symbol "OMQP" and have traded since March 21, 1997.
The following table sets forth, for the calendar quarters indicated, the high
and low sales prices per Share on the Nasdaq National Market as reported in the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1998 (the "1998 Annual Report") with respect to the fiscal years covered by such
Annual Report and as reported by Bloomberg L.P. thereafter and the amount of
cash dividends paid or declared per Share for each quarter based on publicly
available sources.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
Fiscal 1997:
Second Quarter (beginning March 21, 1997)......... $14 5/8 $14 1/4 $ --
Third Quarter..................................... $24 1/4 $11 7/8 $ --
Fourth Quarter.................................... $25 5/8 $11 1/8 $0.01
Fiscal 1998:
First Quarter..................................... $21 1/4 $15 1/2 $0.01
Second Quarter.................................... $26 5/8 $19 1/2 $0.01
Third Quarter..................................... $25 3/4 $17 1/4 $0.01
Fourth Quarter.................................... $19 1/4 $ 9 $0.01
Fiscal 1999:
First Quarter..................................... $ 17 $8 5/8 $0.01
Second Quarter.................................... $15 1/2 $9 1/2 $0.01
Third Quarter..................................... $13 1/4 $ 7 $0.01
Fourth Quarter (through August 25, 1999).......... $20 3/4 $7 1/2 $0.01
</TABLE>
On July 23, 1999, one month prior to announcement of the Offer, the closing
sale price per Share of the Company's common stock reported on the Nasdaq
National Market was $8.125. On August 20, 1999, the last full trading day prior
to announcement of the Offer, the closing sale price per Share of the Company's
common stock reported on the Nasdaq National Market was $13.125. STOCKHOLDERS
ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
Pursuant to the Merger Agreement, the Company, among other things, has
agreed that it will not declare or pay dividends on, or make other distributions
in respect of, the Shares, other than the regular quarterly cash dividend on the
Shares of $0.01 per Share, payable on September 30, 1999 to holders of record on
September 15, 1999, which dividend was declared on August 10, 1999. Tendering
stockholders who are holders of record on September 15, 1999 will be entitled to
receive and retain such regular quarterly dividend regardless of when Shares are
tendered or accepted for payment pursuant to the Offer.
The Rights are currently attached to the outstanding Shares and may not be
traded separately. If a Distribution Date occurs, the Rights could begin trading
separately from the Shares. See Section 12. IN SUCH EVENT, STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION, IF ANY, FOR THE RIGHTS. Holders of
Shares are required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. Accordingly, if a Distribution Date occurs,
stockholders who sell their Rights separately from their Shares and do not
12
<PAGE> 15
otherwise acquire Rights may not be able to satisfy the requirements of the
Offer for a valid tender of Shares.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company in this Section 7 and elsewhere in this Offer to Purchase has been
furnished by the Company or has been taken from or based upon the 1998 Annual
Report and other publicly available documents and records on file with the
Commission and other public sources. Although the Purchaser does not have any
knowledge that would indicate that any information concerning the Company
contained in such documents and records is untrue, the Purchaser does not assume
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 information
concerning the Company, but which are unknown to the Parent and the Purchaser.
General. The Company was incorporated in Delaware on May 16, 1995. The
Company's principal executive offices are located at 222 East Main Street, Port
Washington, Wisconsin 53074, and its telephone number is (414) 268-8965. As of
August 20, 1999, the Company has approximately 1,600 employees.
The Company is the largest North American manufacturer of telescopic
material handlers and one of the leading North American producers of aerial work
platforms. Other products manufactured by the Company include skid steer loaders
and a range of other material handling equipment. OmniQuip's products are used
in a variety of applications for construction, industrial, maintenance, military
and agricultural markets. The Company's principal products are marketed under
the SKY TRAK, LULL, SNORKELIFT and WILDCAT brand names.
Financial Information. Set forth below are certain selected consolidated
financial data for the Company's last three fiscal years which were derived from
the 1998 Annual Report. 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 are qualified in their
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.
13
<PAGE> 16
OMNIQUIP INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
--------------------------------
1998(1) 1997(2) 1996(3)
-------- -------- --------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales..................................... $455,653 $264,213 $124,861
Cost of sales................................. 349,584 192,270 92,688
-------- -------- --------
Gross profit.................................. 106,069 71,943 32,173
Selling, general and administrative
expenses.................................... 47,365 27,717 16,311
-------- -------- --------
Operating income.............................. 58,704 44,226 15,862
Interest expense.............................. 10,261 6,106 3,434
Other finance charges......................... 2,553 2,182 2,012
-------- -------- --------
Income before income taxes.................... 45,890 35,938 10,416
Provision for income taxes.................... 18,547 14,556 4,060
-------- -------- --------
Income before extraordinary item.............. 27,343 21,382 6,356
Extraordinary item, net(4).................... (545) (782) (314)
Net income.................................... $ 26,798 $ 20,600 $ 6,042
-------- -------- --------
Basic Earnings Per Share:
Income before extraordinary item............ $ 1.92 $ 1.66 $ 0.56
Extraordinary item(4)....................... (0.04) (0.06) (0.03)
-------- -------- --------
Net income.................................. $ 1.88 $ 1.60 $ 0.53
-------- -------- --------
Diluted Earnings Per Share:
Income before extraordinary item............ $ 1.90 $ 1.66 $ 0.56
Extraordinary item(4)....................... (0.04) (0.06) (0.03)
-------- -------- --------
Net income.................................. $ 1.86 $ 1.60 $ 0.53
-------- -------- --------
Dividends Per Share........................... $ 0.04 $ 0.01 $ 0.00
-------- -------- --------
Weighted average number of shares outstanding:
Basic....................................... 14,261 12,845 11,250
Diluted..................................... 14,392 12,905 11,250
BALANCE SHEET DATA:
Working capital............................... $ 58,892 $ 14,402 $ 13,393
Total assets.................................. 316,462 144,298 139,580
Short-term debt............................... 13,750 8,625 3,875
Long-term debt................................ 124,250 25,609 84,566
Total Stockholders' equity.................... 94,969 70,398(5) 12,425(5)
</TABLE>
- -------------------------
(1) Amounts as of and for the fiscal year ended September 30, 1998 reflect the
acquisition of Snorkel on November 17, 1997.
(2) Amounts as of and for the fiscal year ended September 30, 1997 reflect the
effects of the Company's initial public offering of common shares on March
20, 1997.
(3) Amounts as of and for the fiscal year ended September 30, 1996 reflect the
acquisition of Lull on August 15, 1996.
(4) Amount in fiscal year 1998 reflects the write-off of deferred finance
charges, net of $371 of income tax benefits, in connection with the
refinancing of debt. Amount in fiscal 1997 reflects the write-off of
deferred finance charges, net of $521 of income tax benefits, in connection
with the refinancing of debt. Amount in fiscal year 1996 reflects the
write-off of deferred finance charges, net of $200 of income tax benefits,
in connection with the refinancing of debt.
(5) The change in stockholders' equity as of September 30, 1997 versus September
30, 1996 includes $37,156 of proceeds from the Company's initial public
offering of common stock which was completed in March 1997.
14
<PAGE> 17
Other 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. 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 is required to be disclosed in such proxy statements and distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission 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. In addition, such material should also be
available for inspection at the library of the Nasdaq Stock Market, 1735 K
Street, N.W., Washington, D.C. 20006. Except as otherwise noted in this Offer to
Purchase, all of the information with respect to the Company set forth in this
Offer to Purchase has been derived from publicly available information.
Certain Projections. To the knowledge of the Parent and the Purchaser, the
Company does not as a matter of course make public forecasts as to its future
operating performance. However, in connection with the Parent's and the
Purchaser's business investigation of the Company and during the course of
negotiations between the Parent and the Purchaser, the Company and their
respective advisors described in Section 10 of this Offer to Purchase, as well
as negotiations with respect to the Stock Purchase Agreements described in
Section 11, the Company provided the Parent and the Purchaser with certain
projections of future operating performance of the Company which the Parent and
the Purchaser believe are not publicly available. Neither the Parent nor the
Purchaser has verified the accuracy of such projections. Such projections
covered the period through the fiscal year ending September 30, 2000 (the
Company has not provided Parent or Purchaser with projections for periods
following such date) and, among other things, contained the following
information regarding the Company's future consolidated operating results:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
SEPTEMBER 30,
--------------------------
1999 2000
----------- -----------
(IN THOUSANDS OF DOLLARS)
(PROJECTED)
<S> <C> <C>
Net Sales................................................ $524,355 $567,171
Operating Profit......................................... 44,980 80,753
Net Income............................................... 17,461 37,468
</TABLE>
It is the understanding of the Parent and the Purchaser that the
projections were not prepared with a view to public disclosure or compliance
with published guidelines of the Commission or the guidelines of the American
Institute of Certified Public Accountants regarding projections or forecasts.
The foregoing summary of the projections is included
15
<PAGE> 18
herein only because such information was provided to the Parent and the
Purchaser as described above.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
PROJECTIONS. THE COMPANY HAS ADVISED THE PARENT AND THE PURCHASER THAT ITS
INTERNAL FINANCIAL FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO THE PARENT
AND THE PURCHASER WERE BASED) ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE
AND CAPITAL BUDGETING PURPOSES 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
OR THE PURCHASER), ALL MADE BY 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 WAS SUBJECT TO APPROVAL
BY EITHER THE PARENT OR THE PURCHASER. 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 FOREGOING SUMMARY OF THE PROJECTIONS IN THIS
OFFER TO PURCHASE SHOULD NOT BE REGARDED AS AN INDICATION THAT ANY OF THE
PARENT, THE PURCHASER, THE COMPANY OR ANY OF THEIR RESPECTIVE 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 PURCHASER, THE COMPANY OR ANY OF THEIR REPRESENTATIVES ASSUMES ANY
RESPONSIBILITY FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE
PROJECTIONS. NONE OF THE PARENT, THE PURCHASER, THE COMPANY OR ANY OF THEIR
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 ARISING 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.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
The Purchaser. The Purchaser is a newly formed Delaware corporation
organized at the direction of the Parent in connection with the Offer and the
Merger. The address of the Purchaser is the same as the address of the Parent.
The Parent. The Parent is a Delaware corporation that was incorporated on
July 31, 1967 as a successor to a Rhode Island corporation which was
incorporated in 1928. The Parent is a global multi-industry company with
operations in four business segments --
16
<PAGE> 19
Aircraft, Automotive, Industrial and Finance. Textron consists of two borrowing
groups, Textron Finance and Textron Manufacturing. Textron Finance consists of
Textron Financial Corporation consolidated with its subsidiaries, which are the
entities through which Textron operates in the Finance segment. Textron
Manufacturing is Textron Inc., the parent company, consolidated with the
entities through which Textron operates in the Aircraft, Automotive and
Industrial business segments.
The Parent's principal executive offices are located at 40 Westminster
Street, Providence, R.I. 02903. The telephone number of the Parent at such
offices is (401) 421-2800.
Set forth below are certain selected consolidated financial data relating
to the Parent and its subsidiaries for the Parent's last three fiscal years
which should be read in conjunction with the financial statements contained in
the Parent's Annual Report on Form 10-K for the fiscal year ended January 2,
1999 (the "Form 10-K") filed by the Parent with the Commission. Certain prior
year balances have been reclassified to conform to the current year
presentation. 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 Parent with the
Commission, and the following financial data should be read in conjunction with
such reports and other documents, including the financial information and
related notes contained therein.
17
<PAGE> 20
TEXTRON INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(ALL DOLLAR AND SHARE AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR
--------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Textron Manufacturing
Revenues........................................ $ 9,316 $ 8,333 $ 7,179
Cost and Expenses
Cost of sales................................ 7,572 6,836 5,837
Selling and administrative................... 958 840 761
Interest expense............................. 146 117 137
Gain on sale of division..................... (97) -- --
Special charges.............................. 87 -- --
-------- -------- --------
Total costs and expenses................... 8,666 7,793 6,735
-------- -------- --------
Textron Manufacturing income.................... 650 540 444
-------- -------- --------
Textron Finance
Revenues........................................ 367 350 327
Cost and Expenses
Interest..................................... 155 153 147
Selling and administrative................... 79 66 58
Provision for losses on collection of finance
receivables................................ 20 23 26
-------- -------- --------
Total costs and expenses................... 254 242 231
-------- -------- --------
Textron Finance income.......................... 113 108 96
-------- -------- --------
Income from continuing operations before income
taxes and distributions on preferred securities
of subsidiary trust............................. 763 648 540
Income taxes...................................... (294) (250) (211)
Distribution on preferred securities of subsidiary
trust, net of income taxes...................... (26) (26) (23)
-------- -------- --------
Income from continuing operations................. 443 372 306
Discontinued operations, net of income taxes:
Income from operations............................ 165 186 192
Loss on disposal(1)............................... -- -- (245)
-------- -------- --------
Net income........................................ $ 608 $ 558 $ 253
======== ======== ========
Basic income from continuing operations per
share(2)........................................ $ 2.74 $ 2.25 $ 1.82
-------- -------- --------
Diluted income from continuing operations per
share(2)........................................ $ 2.68 $ 2.19 $ 1.78
-------- -------- --------
Weighted average number of shares outstanding:
Basic........................................... 161,254 164,830 167,453
Diluted......................................... 165,374 169,503 171,652
BALANCE SHEET DATA (AT PERIOD END):
Total assets...................................... $ 13,721 $ 11,330 $ 11,514
Total liabilities................................. 10,241 7,619 7,848
Preferred securities of subsidiary trust.......... 483 483 483
Total shareholders' equity........................ 2,997 3,228 3,183
</TABLE>
- -------------------------
(1) In 1996, Textron agreed to sell Paul Revere Corporation, resulting in a net
after tax loss of $245 million
(2) Basic and diluted income from continuing operations per share reflects the
effect of the two-for-one stock split in the form of a stock dividend paid
in May 1997.
18
<PAGE> 21
Textron is subject to the informational filing requirements of the Exchange
Act and in accordance therewith is obligated to file periodic reports and other
information with the Commission relating to its business, financial condition
and other matters. Such reports 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 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. The financial statements set forth in Item
1 of Textron's Quarterly Report on Form 10-Q for the period ended July 3, 1999
and in Item 8 of Textron's Annual Report on Form 10-K for the year ended January
2, 1999 are incorporated herein by reference.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent are set forth on Schedule I
hereto.
None of the Purchaser, the Parent nor, to the best knowledge of Purchaser
and the Parent, any of the persons listed on Schedule I hereto or any associate
or majority-owned subsidiary of the Purchaser, 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 Purchaser, the Parent nor, to the best knowledge of
the Purchaser and the Parent, any of the 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,
other than as set forth in Section 11 and in Schedule II.
Except as set forth in this Offer to Purchase, since March 21, 1997 there
have been no (i) transactions or series of similar transactions between any of
the Parent, the Purchaser or, to the best knowledge of the Purchaser and the
Parent, any of the persons listed in Schedule I hereto, on the one hand, and the
Company or any of its affiliates which are corporations or executive officers,
directors or affiliates of the Company which are not corporations, on the other
hand, involving an aggregate amount exceeding $40,000 or (ii) contacts,
negotiations or transactions between any of the Parent, the Purchaser or, to the
best knowledge of the Purchaser and the Parent, any of the persons listed in
Schedule I hereto, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets, in each case other than as described in
Section 11 or in Schedule II.
9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all of the
outstanding Shares and pay related fees and expenses is expected to be
approximately $320 million. The Purchaser will obtain such funds through capital
contributions by the Parent. Parent anticipates funding the capital
contributions through one or more of a combination of cash on hand, internally
generated funds, private or public sales of notes and arranged bank credit
facilities. The Purchaser has not conditioned the Offer on obtaining financing.
19
<PAGE> 22
The Parent is party to an unsecured revolving 5-year credit facility dated
as of April 1, 1998. The revolving credit facility is provided by a group of
lenders and Morgan Guaranty Trust Company of New York as administrative agent
(the "Agent"). The revolving credit facility allows the Parent to borrow up to
$1 billion through the incurrence of revolving credit loans or bid loans.
Amounts borrowed (other than the bid loans) pursuant to the revolving credit
facility bear interest at the following rates per annum, at the Parent's option:
(i) the higher of (a) the Federal Funds Effective Rate as published by the
Federal Reserve Bank of New York plus 0.5% and (b) the prime commercial lending
rate announced by the Agent from time to time ranging from .075% to .300% as
specified in the revolving credit facility. The Parent has agreed to pay a
facility fee ranging from .075% to .150% per annum on the daily average
commitment whether used or unused as specified in the revolving credit facility
and an annual administration fee. The covenants in the revolving credit
facility, among other things, restrict the Parent from liens other than as
permitted under the revolving credit facility. In addition, the revolving credit
facility requires that the Parent and its restricted subsidiaries, on a
consolidated basis, satisfy an interest coverage test and a minimum net worth
test.
It is anticipated that any indebtedness incurred by Parent in connection
with the Offer and the Merger will be repaid from funds generated internally by
Parent and its subsidiaries (including, after the Merger, if consummated, funds
generated by the Surviving Corporation and its subsidiaries), bank refinancing
or other sources. No final decisions have been made, however, concerning the
method Parent will employ to repay any such indebtedness. Such decisions, when
made, will be based on Parent's review from time to time of the advisability of
particular actions, as well as on prevailing interest rates and financial and
other economic conditions.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In early August 1998, the Company received separate informal inquiries,
from two publicly traded participants in the construction equipment industry
("Company 1" and "Company 2"), expressing an interest in exploring a possible
business combination with, or acquisition of, the Company. In light of such
inquiries, the Board of Directors appointed a special committee of directors
(the "Special Committee") to oversee inquiries received by the Company
concerning possible business combinations and to review steps that might be
taken to address the Company's stock price, which had fallen sharply from early
June 1998 to mid-August 1998. Separately, another special committee of the Board
of Directors had been appointed in July 1998 to evaluate the desirability of
adopting a stockholders' rights plan. That special committee engaged Morgan
Stanley & Co. Incorporated ("Morgan Stanley") to assist it in evaluating the
desirability of adopting a stockholder rights plan and the terms thereof. On
August 21, 1998, that special committee recommended to the Board of Directors,
and the Board of Directors approved, the adoption of the Rights Agreement.
From late August to early October 1998, the Special Committee met on
several occasions, consulted with the Company's financial and legal advisors and
considered various alternatives to enhance stockholder value and protect
stockholder interests. Although follow-up discussions between representatives of
Company 1 and Company 2 occurred, no formal process was initiated and the
Special Committee, as well as the Board of Directors, determined that it would
not be in the best interests of the Company and its stockholders to pursue
further any possible business combination or sale of the Company at that time.
During the first several weeks of 1999, the Company's share price traded
down by over 25% from the closing share price at the end of 1998. On February 5,
1999, the Chief
20
<PAGE> 23
Executive Officer of Company 1 wrote a letter (the "Letter") to the Company's
Chief Executive Officer, P. Enoch Stiff, expressing a desire to pursue a
business combination with the Company. The Special Committee requested that
Morgan Stanley make a presentation to the Board of Directors on the Company's
alternatives and discuss ways to respond to the Letter.
On February 16, 1999, the Board of Directors met in Milwaukee to discuss a
number of matters, including the Letter. Morgan Stanley presented a range of
possible alternatives available to the Company and discussed, on a preliminary
basis, issues and opportunities associated with those alternatives. At the
conclusion of the meeting, the Board of Directors determined to authorize
management and Morgan Stanley to initiate discussions with Company 1, Company 2
and other parties about a possible business combination.
On March 4, 1999, the Company formally retained Morgan Stanley to assist it
in connection with the exploration of a possible business combination.
Subsequent to February 16, 1999, Morgan Stanley contacted a number of
parties to explore their potential interest in a business combination with the
Company. Morgan Stanley and the Company provided information, subject to
confidentiality agreements, to Company 1, Company 2, and other third parties.
During May, June and July, potential acquirors of the Company, including
Company 1 and Company 2, undertook a business investigation of the Company,
including meetings with management, tours of certain of the Company's
manufacturing facilities, and a review of certain of the Company's financial,
legal and other documents and records.
On June 23, 1999, John Janitz, President and Chief Operating Officer of
Parent, called Mr. Stiff to express an interest in a possible business
combination. On July 9, 1999, Parent and the Company executed a confidentiality
agreement, pursuant to which the Company provided financial and other
information to the Parent. Mr. Janitz and Mr. Stiff met in Milwaukee on July 19,
1999, and discussed the merits of a possible business combination. Mr. Stiff
informed Mr. Janitz that the Company would be willing to make available to
Parent additional financial and other information about the Company. Commencing
on July 21, 1999 and continuing into August, representatives of Parent undertook
a due diligence investigation of the Company.
During the week of August 2, 1999, the Company received proposals for a
business combination from Company 1, Company 2 and Parent.
On August 6, 1999, the Special Committee convened a telephonic meeting to
review the proposals. It was determined to discuss the proposals with the Board
of Directors at a meeting held on August 10, 1999.
At the August 10 Board of Directors meeting, management and Morgan Stanley
reviewed the process conducted over the preceding months and reviewed the
proposals. Morgan Stanley presented a financial presentation on the Company
including a detailed discussion of valuation. The Board of Directors concluded
that Parent's proposal was superior to the indications of interest provided by
Company 1 and Company 2 and, accordingly, determined to authorize management and
the Company's legal and financial advisors to enter into contractual
negotiations with Parent concerning a transaction and to allow Parent to
conclude its due diligence investigation of the Company.
Prior to the August 10 meeting, representatives of Parent contacted Mr.
Stiff and indicated that, in connection with Parent's proposal, Parent also
desired to enter into certain
21
<PAGE> 24
arrangements with Mr. Stiff providing for the purchase of a portion of the
Shares owned by him and additional understandings concerning his employment by
the Company following an acquisition by Parent. Subsequently, those discussions
were broadened to include other members of management. Between August 10 and
August 20, various members of management and their counsel negotiated with
Parent and its counsel concerning the terms of such arrangements. See Section
11.
Following the August 10 meeting, the Company's counsel provided Parent's
counsel with a draft merger agreement and proceeded to negotiate the terms
thereof with Parent's counsel. On August 17, 1999, the Board of Directors of the
Company met by telephone to review developments since its meeting on August 10
and to evaluate progress made by Parent in completing its due diligence
investigation and the status of contract negotiations between the parties. In
addition, the Board of Directors received and reviewed a report from management
containing preliminary internal financial projections for fiscal 2000 and
subsequent years.
Between August 17 and August 20, 1999, counsel to the Company and counsel
to Parent substantially completed negotiations concerning the terms of the
Merger Agreement, and Messrs. Stiff and Laetz and their counsel completed
negotiations with Parent and its counsel concerning the terms of the Stock
Purchase Agreements.
On August 20, 1999, the Board of Directors met to consider the proposed
Merger Agreement and the transactions contemplated thereby. At such meeting, the
Board of Directors reviewed the discussions between the Company, Parent and
other parties and considered the proposed transaction with Parent. In
particular, the Board of Directors received reports from its legal and financial
advisers concerning the transaction process and reviewed the terms and
conditions of the proposed Merger Agreement. Morgan Stanley delivered its
opinion to the Board of Directors that, based upon and subject to the matters
set forth therein and as of the date thereof, the cash consideration to be
received by stockholders of the Company in the Offer and the Merger was fair to
the stockholders of the Company from a financial point of view. After
considering such presentations, the Board of Directors unanimously approved the
proposed Merger Agreement and all transactions contemplated thereby, including
the Offer and the Merger, and determined that the terms of the Offer and the
Merger are fair to, and in the best interests of, the stockholders of the
Company. The Board of Directors unanimously recommended that stockholders of the
Company accept the Offer and tender their Shares and the associated Rights to
the Purchaser pursuant to the Offer.
At the meeting, the Company also approved an amendment to the Rights
Agreement that provides that Parent shall not be deemed an Acquiring Person (as
defined in the Rights Agreement) and that the Rights will not separate from the
Shares as a result of entering into the Merger Agreement, commencing or
consummating the Offer or consummating the Merger pursuant to the terms of the
Merger Agreement. The Company has also taken actions necessary to ensure that
the Merger Agreement and the transactions contemplated thereby will not trigger
any "poison pill" or any other anti-takeover provision adopted by the Company or
available to it, to its knowledge, under applicable law.
Following the meeting on August 20, 1999 of the Board of Directors, the
Stock Purchase Agreements were executed and delivered. On August 21, 1999, the
Company's counsel and Parent's counsel completed final negotiations concerning
the terms of the Merger Agreement and the Merger Agreement was executed and
delivered.
22
<PAGE> 25
11. THE MERGER AGREEMENT, STOCK PURCHASE AGREEMENTS AND DISCUSSIONS
REGARDING EMPLOYMENT.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, which summary is
qualified in its entirety by reference to the copy thereof filed as an exhibit
to the Tender Offer Statement on Schedule 14D-1.
The Offer. The Merger Agreement provides that no later than five business
days from and including the date of initial public announcement of the Merger
Agreement the Purchaser will commence the Offer. The parties to the Merger
Agreement have agreed in the Merger Agreement that the obligations of the
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer will be subject only to the satisfaction or waiver of the conditions
described in Section 15 hereof, including the Minimum Condition. Under the
Merger Agreement, the Purchaser expressly reserves the right, in its sole
discretion, to waive any such condition (other than the Minimum Condition),
provided, that, without the prior written consent of the Company, the Purchaser
will not (i) decrease the amount to be paid per share in the Offer to below
$21.00, (ii) change the form of consideration to be paid in the Offer, (iii)
reduce the maximum number of Shares to be purchased in the Offer or the Minimum
Condition, (iv) impose conditions to the Offer in addition to the Offer
conditions set forth in Annex A to the Merger Agreement (the "Offer Conditions")
or modify the Offer conditions in a manner adverse to the holders of Shares or
(v) amend any other term of the Offer in a manner adverse to the holders of the
Shares, (provided that a waiver by Purchaser of any condition other than the
Minimum Condition shall not be deemed to be adverse to the holders of the
Shares).
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer on one or more occasions for up to ten business
days for each such extension beyond the then scheduled expiration date (the
initial scheduled expiration date being 20 business days following commencement
of the Offer), if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligation to accept for payment and pay for the
Shares shall not be satisfied or waived, until such time as such conditions are
satisfied or waived (and, at the request of the Company, Purchaser shall,
subject to Purchaser's right to terminate the Merger Agreement pursuant to
Article IX thereof, extend the Offer for additional periods, unless the only
conditions not satisfied or earlier waived on the then scheduled expiration date
are one or more of the Minimum Condition and the conditions set forth in
paragraph (b) of the Offer Conditions, provided that (x) if the only condition
not satisfied is the Minimum Condition, the satisfaction or waiver of all other
conditions shall have been publicly disclosed at least five business days before
termination of the Offer and (y) if paragraph (b) of the Offer Conditions has
not been satisfied and the failure to so satisfy can be remedied, the Offer
shall not be terminated unless the failure is not remedied within 10 calendar
days after Purchaser has furnished the Company written notice of such failure)
and (ii) 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 and (iii) extend the Offer for an aggregate period of not more than 5
business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence if there shall not have been
tendered sufficient Shares so that the Merger could be effected without a
meeting of the Company's stockholders in accordance with Section 253 of the
DGCL. The Purchaser shall have no obligation to pay interest on the purchase
price of tendered Shares. The rights reserved by the Purchaser in this
23
<PAGE> 26
Section 11 are in addition to the Purchaser's rights to terminate the Offer
pursuant to Section 15.
Company Board Representation. The Merger Agreement provides that, promptly
(but in any event within two business days) upon purchase by the Purchaser of a
majority of the outstanding Shares pursuant to the Offer, either (a) a majority
of the members of the Board of Directors of the Company shall resign and the
remaining members of the Board of Directors of the Company shall fill all of the
vacated Board positions with persons designated by Parent or (b) the size of the
Board of Directors of the Company shall be expanded and the vacant seats filled
with persons designated by Parent so that Parent's designees shall constitute a
majority of the members of the Board of Directors of the Company. In either
case, at all times thereafter through the Effective Time a majority of the
members of the Board of Directors of the Company shall be persons designated by
Parent. The Merger Agreement further provides that the Company's obligations to
appoint designees to its Board of Directors will be subject to Section 14(f) of
the Exchange Act and Rule 14f-1 thereunder.
The Merger. The Merger Agreement provides, upon the terms and subject to
the conditions thereof, at the Effective Time and in accordance with the DGCL,
the Purchaser will be merged with and into the Company. As a result of the
Merger, the separate corporate existence of the Purchaser will cease and the
Company will continue as a the Surviving Corporation.
The Merger Agreement provides that the certificate of incorporation of
Purchaser, as in effect immediately prior to Effective Time, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided by law (except that the name of the Surviving Corporation
shall be changed to OmniQuip Textron International Inc.). At the Effective Time,
the by-laws of the Purchaser, as in effect immediately prior to the Effective
Time will be the by-laws of the Surviving Corporation and until thereafter
altered, amended or repealed as provided by law. The Merger Agreement provides
that the directors of the Purchaser immediately prior to the Effective Time will
be the initial directors of the Surviving Corporation and the officers of the
Company immediately prior to the Effective Time will be the initial officers of
the Surviving Corporation, each to hold office until their respective successor
shall be duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation.
At the Effective Time, each Share and each associated Right that are issued
and outstanding immediately prior to the Effective Time (other than Shares (and
associated Rights) owned by the Company or by the Parent, the Purchaser or any
direct or indirectly wholly-owned subsidiary of the Company, the Parent or the
Purchaser, which shall be cancelled, and other than Shares (and associated
Rights), if any (collectively, "Dissenting Shares"), held by stockholders who
have properly exercised appraisal rights under Section 262 of the DGCL) will, by
virtue of the Merger and without any action on the part of the Company, the
Purchaser or the holders of the Shares, be cancelled, extinguished and converted
into and become a right to receive $21.00 in cash (the "Merger Consideration"),
payable to the holder thereof, without interest, upon surrender of the
certificate formerly representing such Share, less any required withholding
taxes. All Shares that are owned by the Company (as treasury stock or otherwise)
and all Shares owned by the Parent, the Purchaser or any direct or indirect
wholly-owned subsidiary of the Company, the Parent or the Purchaser, if any,
will be canceled and retired and cease to exist, and no cash or other
consideration will be delivered in exchange therefore.
24
<PAGE> 27
The Merger Agreement provides that Shares that are issued and outstanding
immediately prior to the Effective Time and which are held by a stockholder who
has not voted in favor of the Merger and who is otherwise entitled to demand and
who properly demands appraisal for such Shares in accordance with all the
provisions of the DGCL concerning the rights of holders of Shares to dissent
from the Merger and require appraisal of their Shares will not be converted into
or exchangeable for the right to receive the Merger Consideration unless such
holder fails to perfect or otherwise effectively withdraws or loses such
holder's right to appraisal, if any. Such holders will be entitled to receive
the appraised value of such Shares held by them in accordance with the
applicable provisions of the DGCL. If, after the Effective Time, such holder
fails to perfect or loses its right to appraisal, each Share of such holder will
be treated as if it had been converted as of the Effective Time into the right
to receive the Merger Consideration, without any interest thereon.
The Merger Agreement provides that each share of common stock of the
Purchaser will be converted into one share of common stock of the Surviving
Corporation.
The Merger Agreement provides that each option granted to a Company
employee or director pursuant to the Company's Amended and Restated 1996
Long-Term Incentive Plan (the "LTIP") and 1996 Directors Non-Qualified Stock
Option Plan (the "Directors Plan"; together, the "Stock Plans") to acquire
shares of Company Common Stock (each such option hereinafter is referred to as
an "Option") that is outstanding immediately prior to the Effective Time,
whether or not then vested or exercisable, with respect to which, as of the
Effective Time, $21.00 exceeds the exercise price per share shall, effective as
of immediately prior to the Effective Time, be canceled in exchange for a single
lump sum cash payment equal to the product of (1) the number of Shares subject
to such Option and (2) the excess of $21.00 over the exercise price per share of
such Option (subject to any applicable withholding taxes). Each Option that is
outstanding immediately prior to the Effective Time, whether or not then vested
or exercisable, with respect to which, as of the Effective Time, $21.00 does not
exceed the exercise price per share shall, effective as of immediately prior to
the Effective Time, be canceled and no payments shall be made with respect
thereto. Prior to the Effective Time, the Company (a) will obtain any consents
from holders of Options under the Directors Plan necessary to give effect to the
aforementioned discussed above and (b) will use its reasonable best efforts to
obtain consents to the cancellation of Options with exercise prices that exceed
$21.00 per Share from holders of Options under the LTIP.
Immediately prior to the Effective Time, each Share previously issued in
the form of restricted stock pursuant to the Company's Amended and Restated 1996
Long-Term Incentive Plan shall fully vest and all restrictions thereon shall be
removed.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including,
without limitation, representations and warranties by the Company as to the
Company's organization and authorizations, capital stock, subsidiaries,
noncontravention and consents, filings with the Commission, financial
statements, no material adverse change, legal proceedings, subsequent events,
commissions and fees, offering documents, employee benefit plans, compliance
with the law, rights plan, intellectual property, taxes and opinion of financial
advisor. Some of the representations are qualified by the limitation that, in
order for the representation to have been breached, the event breaching the
representation must have a Material Adverse Effect. A "Material Adverse Effect"
as to the Company means any adverse change or changes in the financial
condition, properties, business or results of operations of the Company or any
of its Subsidiaries, which individually or in the aggregate is or are material
to the Company and its Subsidiaries, taken as a whole, other than (i) any change
or effect arising out of general
25
<PAGE> 28
economic conditions or (ii) any change or effect which the Company has disclosed
in writing, prior to the date hereof, to Parent has occurred or is likely to
occur.
In addition, the Merger Agreement contains representations and warranties
of the Parent and the Purchaser concerning their organization, authorizations of
the agreement, noncontravention and consents, commissions and fees, and
financing.
AGREEMENTS OF THE COMPANY, THE PARENT AND THE PURCHASER.
CONDUCT OF BUSINESS PENDING THE MERGER. Pursuant to the Merger Agreement,
the Company has covenanted and agreed that, prior to the Effective Time, the
Company and its subsidiaries will conduct their operations according to their
ordinary and usual course of business and consistent with past practice. The
Merger Agreement further provides that, without limiting the generality of the
foregoing, and except as expressly contemplated by the Merger Agreement, or as
set forth in the Schedules, prior to the Effective Time, neither the Company nor
any of its subsidiaries will, without the prior written consent of the Parent:
(a) except for shares to be issued or delivered pursuant to awards
outstanding on the date hereof under the Company's Stock Plans, issue,
deliver, sell, dispose of, pledge or otherwise encumber, or authorize or
propose the issuance, sale, disposition or pledge or other encumbrance of
(A) any additional shares of capital stock of any class (including the
Shares), or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for any shares of capital stock, or any
rights, warrants, options, calls, commitments or any other agreements of
any character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of capital stock, or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding capital stock,
including the Shares;
(c) split, combine, subdivide or reclassify any Shares or declare, set
aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution in respect of any Shares or otherwise
make any payments to stockholders in their capacity as such, other than the
payment of a regular quarterly cash dividend on the Shares on or about
September 30, 1999 of $0.01 per Share payable to stockholders of record on
September 15, 1999 and except for dividends by a wholly-owned subsidiary of
the Company;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the
Merger);
(e) adopt any amendments to its Certificate of Incorporation or
By-Laws or alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
subsidiary of the Company;
(f) make any acquisition, by means of merger, consolidation or
otherwise, or material disposition (other than acquisition or disposition
of inventory, supplies and products in the ordinary course of business,
consistent with past practice), of assets or
26
<PAGE> 29
securities, or permit any assets to become subject, other than in the
ordinary course of business, to any material lien or encumbrance;
(g) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any
wholly-owned subsidiary of the Company;
(h) grant any increases in the compensation of any of its directors,
officers or key employees; for avoidance of doubt "compensation" being
defined to include all stock options, stock appreciation rights, phantom
stock units, restricted stock grants, contingent stock grants or similar
benefits;
(i) grant any increases in the compensation of any of its employees,
other than employees who are directors, officers or key employees, except
in the ordinary course of business consistent with past practice;
(j) pay or agree to pay or accelerate the payment of any pension,
retirement allowance or other employee benefit not required or contemplated
by any of the existing benefit, severance, termination, pension or
employment plans, agreements or arrangements as in effect on the date
hereof to any director or officer of the Company or any of its
Subsidiaries, whether past or present;
(k) enter into any new or amend any existing employment or severance
or termination agreement with any such director or officer;
(l) except as may be required to comply with applicable law, become
obligated under any new pension plan, welfare plan, multiemployer plan,
employee benefit plan, severance plan, benefit arrangement, or similar plan
or arrangement, which was not in existence on the date hereof, or amend any
such plan or arrangement in existence on the date hereof if such amendment
would have the effect of enhancing any benefits thereunder;
(m) settle or compromise any material claims (including any claims in
respect of tax liabilities or refunds) or litigation or, except in the
ordinary and usual course of business, modify, amend or terminate any of
its material contracts or waive, release or assign any material rights or
claims;
(n) make any change, other than as required by applicable law,
regulation or change in generally accepted accounting principles, in
accounting policies or procedures applied by the Company (including tax
accounting policies and procedures);
(o) except as otherwise required by applicable law or regulation, make
any tax election or permit any insurance policy naming it as a beneficiary
or a loss payable payee to be canceled or terminated, except in the
ordinary course of business;
(p) take any action to amend or alter the Rights Agreement in any
manner adverse to Parent's, Purchaser's or the Company's ability to
commence or consummate the transactions contemplated by the Merger
Agreement pursuant to the terms hereof;
(q) incur any capital expenditures, other than in the ordinary course
of business and consistent with past practices; or
(r) authorize, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
27
<PAGE> 30
No Solicitation of Transactions. The Merger Agreement provides that the
Company, its affiliates and their respective officers, directors, employees,
representatives and agents shall immediately cease any existing discussions or
negotiations, if any, with any parties conducted heretofore with respect to any
Takeover Proposal (as defined below). The Merger Agreement also provides that
the Company, its subsidiaries, directors, employees, representatives and agents
may furnish information and access, in each case only in response to a request
for such information or access to any person made after the date hereof which
was not initiated, solicited or knowingly encouraged by the Company or any of
its affiliates or any of its or their respective officers, directors, employees,
representatives or agents after the date hereof (with respect to confidential
information, pursuant to appropriate confidentiality agreements), and may
participate in discussions and negotiate with such entity or group concerning
any Takeover Proposal, only if such entity or group has submitted a bona fide
proposal to the Board of Directors relating to any such transaction and (a) if
the Board of Directors determines in good faith, after receiving advice from its
independent financial advisor, that such entity or group has submitted to the
Company a Takeover Proposal which is reasonably likely to be a Superior Proposal
(as defined below), and (b) if the Board of Directors determines, in its good
faith judgment, based on the opinion of outside legal counsel to the Company,
that failing to take such action would constitute a breach of such Board's
fiduciary obligations under applicable law. The Company shall promptly notify
Parent if any proposal or offer, or any inquiry or contact with any person with
respect thereto, is made and shall, in any such notice to Parent, indicate in
reasonable detail the identity of the offeror and the terms and conditions of
any proposal or offer, or any such inquiry or contact. The Company is required
to promptly provide to Parent any non-public information concerning the Company
or its Subsidiaries provided to any other person which was not previously
provided to Parent and to keep Parent promptly advised of all developments which
could reasonably be expected to culminate in the Board of Directors withdrawing,
modifying or amending its recommendation of the Offer, the Merger and other
transactions contemplated by the Merger Agreement. Except as set forth in
Section 7.2 of the Merger Agreement, neither the Company nor any of its
affiliates, nor any of its or their respective officers, directors, employees,
representatives or agents, shall, directly or indirectly, knowingly encourage or
solicit, participate in or initiate discussions or negotiations with, or provide
any information to, any corporation, partnership, person or other entity or
group (other than Parent and Purchaser, any affiliate or associate of Parent and
Purchaser, or any designees of Parent or Purchaser) concerning any Takeover
Proposal; provided, that the Company or the Board of Directors may take, and
disclose to the Company's stockholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act; provided further, that the Board
of Directors may not recommend that the stockholders of the Company tender their
Shares in connection with any such tender offer unless the Board of Directors
determines in its good faith judgment based on the opinion of independent
outside legal counsel to the Company, that failing to take such action would
constitute a breach of the fiduciary duty of the Board of Directors under
applicable law. As used in the Merger Agreement, "Takeover Proposal" shall mean
any tender or exchange offer, proposal for a merger, consolidation or other
business combination involving the Company or any subsidiary of the Company or
any proposal or offer to acquire in any manner a substantial equity interest in,
or a substantial portion of the assets of, the Company or its subsidiaries other
than transactions contemplated by the Merger Agreement. As used in the Merger
Agreement, "Superior Proposal" means a bona fide proposal made by a third party
to acquire all of the outstanding Shares of the Company pursuant to a tender
offer or a merger, or to purchase all or substantially all of the assets of the
Company, on terms which a majority of the members of the Board of Directors of
the Company determines in its good faith reasonable judgment (based on the
advice of its financial and legal advisors) to be more favorable to the
28
<PAGE> 31
Company and its stockholders than the transactions contemplated by the Merger
Agreement, after taking into account all relevant factors, including, without
limitation, (i) the consideration to be paid to stockholders pursuant thereto,
(ii) the time estimated to be required for consummation, and (iii) financial,
regulatory and other risks of nonconsummation.
Meeting of Stockholders; Proxy Statement. The Merger Agreement provides
that if required by applicable law in order to consummate the Merger, the
Company will duly call, give notice of, convene and hold an annual or special
meeting of stockholders ("Stockholders Meeting") promptly after the consummation
of the Offer to consider and vote upon the Merger Agreement and the Merger. At
the Stockholders Meeting, the Parent and the Purchaser will cause all Shares
then owned by them and their subsidiaries to be voted in favor of the approval
and adoption of the Merger Agreement and approve the Merger. If the Stockholders
Meeting is called, the Company will prepare and file with the Commission a proxy
statement (the "Proxy Statement") to be mailed to the stockholders of the
Company in connection with the meeting of such stockholders to consider and vote
upon the Merger which will include, subject to the fiduciary obligations of the
Board of Directors under applicable law, the recommendation of the Board that
the stockholders of the Company vote in favor of the approval and adoption of
the Merger Agreement and the transactions contemplated thereby. As soon as
practicable following the consummation of the Offer, the Company will file the
Proxy Statement with the Commission. The Company, the Parent and the Purchaser
will use their reasonable best efforts to respond promptly to all comments of
and requests by the Commission and to cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to holders of Shares entitled to
vote at the Stockholders Meeting at the earliest practicable time following
expiration or termination of the Offer. The Merger Agreement provides that in
the event that the Purchaser shall acquire at least 90% of the outstanding
Shares, the Company will, at the request of the Purchaser, subject to Article
VIII of the Merger Agreement, take all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Company's stockholders, in accordance with
Section 253 of the DGCL.
Access to Information; Confidentiality. The Merger Agreement provides that
the Company will and will cause each of its subsidiaries to give the Parent and
its representatives reasonable access, during regular business hours during the
period prior to the Effective Time upon reasonable notice, to all of the
properties, books and records and, during such period, shall (and shall cause
each of its subsidiaries) to furnish promptly to Parent and its representatives
all information concerning its business, properties and personnel as may
reasonably be requested. Information obtained by the Parent or the Purchaser
will be subject to the confidentiality agreement between the Company and Parent
(the "Confidentiality Agreement").
Public Disclosures. The Merger Agreement provides that the Parent and the
Company will consult with each other and mutually agree before issuing any press
release or otherwise making any public statement with respect to the Offer or
the Merger and will not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required by
applicable law or requirements of any exchange upon which the Shares or the
shares of the Parent are traded, in which case the party proposing to issue such
press release or make such public announcement will use its reasonable best
efforts to consult in good faith with the other party before issuing such press
releases or making any such public statements.
Indemnification and Insurance. The Merger Agreement provides that the
certificate of incorporation and by-laws of the Surviving Corporation will
contain the provisions with
29
<PAGE> 32
respect to indemnification set forth in the certificate of incorporation and
by-laws of the Company on the date of the Merger Agreement, which will not be
amended, repealed or otherwise modified for a period of six years after the
Effective Time in any manner that would adversely affect the rights of
individuals who prior to the Effective Time were directors, officers, employees
or agents of the Company in respect of actions or omissions occurring at or
prior to the Effective Time, (including, without limitation, the transactions
contemplated by the Merger Agreement), unless such modification is required by
law; provided, that in the event any claim or claims are asserted or made within
such six-year period, all rights to indemnification in respect of any such claim
or claims shall continue until disposition of any and all such claims.
In addition, the Merger Agreement provides that Parent shall cause to be
maintained in effect for the Indemnified Parties (as defined below) for not less
than six years the policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by the Company and the Company's
subsidiaries with respect to matters occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by the Merger
Agreement); provided, that Parent may substitute therefor policies of
substantially the same coverage containing terms and conditions which are no
less advantageous to the Company's present or former directors or officers or
other employees covered by such insurance policies prior to the Effective Time
(the "Indemnified Parties") and provided further that substitution does not
result in any gaps in coverage with respect to matters occurring prior to the
Effective Time.
Further Assurances. The Merger Agreement provides that, subject to the
other provisions of the Merger Agreement, each of the parties will use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
the Merger Agreement, including, without limitation, the Offer and the Merger,
which efforts shall include, without limitation, Parent, Purchaser and the
Company using their respective best efforts to prevent any preliminary or
permanent injunction or other order by a court of competent jurisdiction or
governmental entity relating to consummating the transactions contemplated by
the Merger Agreement, and, if issued, to appeal any such injunction or order
through the appellate court or body for the relevant jurisdiction; provided,
however, in no event shall Parent, Purchaser or the Company be obligated to
agree or consent to any divestiture of assets, hold-separate agreement or other
similar undertakings pursuant to any antitrust or similar laws or regulations
for the purposes of consummating or making effective transactions contemplated
by the Merger Agreement.
Notice of Subsequent Events. The Merger Agreement provides that each party
will give the other party notice of the occurrence, or non-occurrence, of any
event the respective occurrence, or non-occurrence, of which would be likely to
cause any representation or warranty contained in the Merger Agreement to be
untrue or inaccurate and any failure of a party to comply or satisfy any
covenant, condition or agreement to be complied with under the Merger Agreement.
Employment; Employee Welfare. The Merger Agreement provides that the
Parent will maintain for a period of one year following the Effective Time
employee benefit plans and programs, for the benefit of employees of the Company
and its subsidiaries (other than those employees covered by collective
bargaining arrangements) that are in the aggregate no less favorable than those
provided to such employees of the Company and its subsidiaries, as applicable,
under the plans as in effect immediately prior to the Closing (the "Existing
Plans"). The Parent will credit the prior service of all employees of the
Company and its
30
<PAGE> 33
subsidiaries for purposes of determining the eligibility, and vesting under any
employee benefit plan provided by Parent for the benefit of the employees.
Employees covered by collective bargaining agreements shall be provided with
such benefits as shall be required under the terms of any applicable collective
bargaining agreement. In addition, the Surviving Corporation will assume and
honor in accordance with their terms all existing employment and severance
agreements and arrangements which are set forth in the Company Disclosure
Schedule.
Conditions to the Merger. The Merger Agreement provides that the
respective obligation of each party to effect the Merger is subject to the
fulfillment, at or prior to the Effective Time, of each of the following
conditions: (i) there shall not be in effect any statute, rule, regulation,
executive order, decree, ruling or injunction or other order of a court or
governmental or regulatory agency of competent jurisdiction directing that the
transactions contemplated herein not be consummated; (ii) to the extent required
by applicable law and the certificate of incorporation and by-laws of the
Company, the Merger Agreement and the Merger shall have been approved and
adopted by the requisite vote of the holders of the Shares; (iii) all
governmental consents, orders and approvals legally required for the
consummation of the Merger and the transactions contemplated by the Merger
Agreement shall have been obtained and be in effect at the Effective Time,
except where the failure to obtain any such consent would not reasonably be
expected to have a Material Adverse Effect on Parent and its subsidiaries,
considered as whole (assuming the Merger had taken place), or on Parent's
ability to own, control and operate the Company and its subsidiaries, and the
waiting periods under the HSR Act shall have expired or been terminated; and
(iv) the Purchaser or its permitted assignee shall have purchased all Shares
tendered pursuant to the Offer. The conditions to the Merger set forth above are
different from the conditions to the Offer which are set forth in Section 15.
Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated at any time and the Offer and Merger may be abandoned at any time
prior to the Effective Time:
(a) by mutual written consent of the parties;
(b) by either the Parent or the Company if (i) any governmental or
regulatory agency located or having jurisdiction within the United States
or any country or economic region in which either the Company or Parent,
directly or indirectly, has material assets or operations shall have issued
an order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the acceptance for payment of, or
payment for, shares of Company Common Stock pursuant to the Offer or the
Merger and such order, decree or ruling or other action shall have become
final and nonappealable; or (ii) due to an occurrence or circumstance which
would result in a failure to satisfy any of the Offer Conditions, Purchaser
shall have failed to pay for Shares pursuant to the Offer on or prior to
the Outside Date (as defined below), unless such failure has been caused by
or results from the failure of the party seeking to terminate the Merger
Agreement to perform in any material respect any of its respective
covenants or agreements contained in the Merger Agreement. As used herein,
the term "Outside Date" shall mean the later of (A) 90 days following the
date of the Merger Agreement, or (B) the date on which either the
applicable waiting period under the HSR Act shall have expired or been
terminated;
(c) by the Company if (i), by action of the Board of Directors, (A)
the Company, based on the advice of outside legal counsel to the Company
that such action is necessary
31
<PAGE> 34
in order for the Board of Directors of the Company to comply with its
fiduciary duties under applicable law, subject to complying with the terms
of the Merger Agreement, proposes to enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal and the
Company notifies Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such
notice and (B) Parent does not make, within five business days of receipt
of the Company's written notification of its intention to enter into a
binding agreement for a Superior Proposal, an offer to enter into an
amendment to the Merger Agreement such that the Board of Directors
determines, in good faith after consultation with its financial advisors,
that the Merger Agreement as so amended is at least as favorable, from a
financial point of view, to the stockholders of the Company as the Superior
Proposal; and (ii) if (A) Purchaser shall have (x) failed to commence the
Offer within five business days following the date of the initial public
announcement of the Offer, (y) failed to pay for any Shares pursuant to the
Offer to the extent required under the Merger Agreement, or (z) terminated
the Offer without purchasing Shares pursuant to the Offer, or (B) there has
been a material breach by Parent or Purchaser of any representation,
warranty, covenant or agreement contained in the Merger Agreement that is
not curable or, if curable, is not cured within 10 calendar days after
written notice of such breach is given by the Company to the party
committing such breach. The Merger Agreement provides that (A) the Company
will not enter into a binding agreement referred to in clause (i) above
until at least the sixth business day after it has provided the notice to
Parent required thereby, and (B) the Company will notify Parent promptly if
its intention to enter into a written agreement referred to in its
notification shall change at any time after giving such notification and
(C) it shall be a condition precedent to the effectiveness of any
termination pursuant to clause (i) that the $20,000,000 fee required to be
paid as described below shall have been paid in full simultaneously with,
or prior to, such termination; and
(d) by the Parent if (i) the Board of Directors shall have withdrawn
or adversely modified its approval or recommendation of the Merger
Agreement or failed to reconfirm its recommendation thereof within five
business days after a written request by Parent to do so, (ii) there has
been a breach by the Company of any representation, warranty, covenant or
agreement contained in the Merger Agreement that is qualified as to
materiality or there has been a material breach of any other
representation, warranty, covenant or agreement contained in the Merger
Agreement, in any case that is not curable or, if curable, is not cured
within 10 calendar days after written notice of such breach is given by
Parent to the party committing such breach, or (iii) on a scheduled
expiration date all conditions to Purchaser's obligation to accept for
payment and pay for Shares pursuant to the Offer shall have been satisfied
or waived other than the Minimum Condition and Purchaser terminates the
Offer without purchasing Shares pursuant to the Offer, provided that the
satisfaction or waiver of all other conditions shall have been publicly
disclosed at least five business days before termination of the Offer, or
(iv) Purchaser shall have otherwise terminated the Offer in accordance with
the terms of the Merger Agreement without purchasing shares pursuant to the
Offer.
The Merger Agreement provides that if (i) the Merger Agreement is
terminated by the Company pursuant to (c)(i) above or (ii) is terminated by
Parent pursuant to (d)(i)above, then the Company shall simultaneously or prior
to such termination, pay Parent a termination fee of $ 20,000,000 and pay, in no
event later than two days after the date of such termination, the amount of all
documented out-of pocket expenses of the Parent and Purchaser incurred in
connection with the negotiation and execution of the Merger Agreement and the
consumma-
32
<PAGE> 35
tion of the transactions contemplated thereby. If the Merger Agreement is
terminated by Parent pursuant to (d)(ii) above, then the Company shall promptly
pay, but in no event later than two days after the date of such termination, a
termination fee of $1,000,000 representing liquidated damages for Parent's
internal costs and expenses plus the amount of all documented out-of pocket
expenses of the Parent and the Purchaser incurred in connection with the
negotiation and execution of the Merger Agreement and the consummation of the
transactions contemplated thereby. If the Merger Agreement is (i) terminated by
the Company pursuant to (c)(ii)(A)(x) or (y) or (c)(ii)(B), above, then Parent
shall promptly, but in no event later than two days after the date of such
termination or event, pay the Company a termination fee of $1,000,000, plus the
amount of all documented out of pocket expenses of the Company incurred in
connection with the negotiation and execution of the Merger Agreement and the
consummation of the transactions contemplated thereby.
The Merger Agreement provides that in the event of a termination by either
the Company, the Parent and the Purchaser pursuant to the terms of the Merger
Agreement, the Merger Agreement will then become null and void and there will be
no further liability or obligation on the part of either the Company, the Parent
or the Purchaser (or any of their respective directors, officers, employees,
agents, advisors or other representatives), subject to certain exceptions.
The Merger Agreement further provides that except as otherwise specifically
provided therein, each party will bear its own expenses in connection with the
Merger Agreement and the transactions contemplated thereby.
THE STOCK PURCHASE AGREEMENTS
The following is a summary of the Stock Purchase Agreements (collectively,
the "Stock Purchase Agreements"), each dated August 20, 1999, between the
Purchaser and each of Messrs. Stiff and Laetz (collectively, the "Sellers"),
which summary is qualified in its entirety by reference to the copies thereof
filed as exhibits to the Tender Offer Statement on Schedule 14D-1. See
"Background of the Offer; Contacts with the Company -- Background" for a
description of background of the Stock Purchase Agreements.
Consideration; Escrow Arrangements. The Purchaser has entered into Stock
Purchase Agreements, dated as of August 20, 1999, with each of (a) Mr. Stiff and
(b) Mr. Laetz and his wife (Mr. Laetz's shares were held jointly with Mrs.
Laetz). In consideration for the transfer and delivery of 346,275 and 63,938
Shares (collectively, the "Transferred Shares") to the Purchaser by Mr. Stiff
and the Laetz', respectively, the Purchaser paid $7,271,775 and $1,342,698,
respectively, for such Shares pursuant to the Stock Purchase Agreements. Of such
amounts, the Purchaser paid Mr. Stiff $5,194,125 and the Laetz' $959,070 upon
Purchaser's receipt of the Transferred Shares on August 21, 1999. The remaining
portions of the consideration, $2,077,650 in the case of Mr. Stiff and $383,628
in the case of the Laetz' (collectively, the "Escrow Amounts"), have been
deposited with an escrow agent who established accounts for such Escrow Amounts.
Under the terms of the Stock Purchase Agreements, the Escrow Amounts will
be paid to the Sellers or returned to Purchaser, depending upon the Company's
operating performance during the period beginning October 1, 1999 and ending
December 31, 2002. The Stock Purchase Agreements establish a Performance
Benchmark (as defined below) and provide that if the cumulative Performance
Benchmark over the applicable period does not exceed $164,597,000, all of the
Escrow Amounts will be payable to Purchaser. If the cumulative Performance
Benchmark equals or exceeds $222,696,000 over the applicable period, the
33
<PAGE> 36
Sellers will be entitled to receive all of the Escrow Amounts. If the cumulative
Performance Benchmark over the applicable period falls between the foregoing
amounts, the Stock Purchase Agreements provide for proportionate payments of the
Escrow Amounts to Sellers, with the balance being payable to Purchaser.
The Stock Purchase Agreements also contain provisions for the payment of
the Escrow Amounts in the event of termination of employment of a Seller during
the applicable performance period. If employment is terminated by the Company
for any reason but "cause," or by a Seller for "good reason" (as such terms are
defined in employment agreements that may be entered into with the Company) at
any time prior to December 31, 2002, such Seller will be entitled to receive the
entire Escrow Amount. In the event of termination for "cause" or without "good
reason," the Stock Purchase Agreements establish a formula for the proportionate
payment of the Escrow Amounts based upon lapse of time and partial proportionate
achievement of the Performance Benchmark over the period from October 1, 1999 to
the date of termination of employment. In addition, if the Purchaser fails to
commence the Offer for any reason or the Offer is terminated without purchases
being made thereunder for any reason other than a sale of the Company at a price
higher than the Purchaser's Offer, the Escrow Amounts are payable in full to the
Purchaser.
The Stock Purchase Agreements also provide for loans to the Sellers for
periods of up to four years at the lowest available interest rate that would not
result in imputed income to the Sellers for Federal income tax purposes in order
for the Sellers to meet obligations for the payment of taxes arising from the
Escrow Amounts.
For purposes of the Stock Purchase Agreements, "Performance Benchmark"
shall mean, net sales less finance charges less cost of sales less sales,
general and administrative expenses (SG&A) of the Company and its subsidiaries
on a consolidated basis. For the avoidance of doubt, the parties have agreed
that the definition of Performance Benchmark shall include acquisition goodwill
amortization of the Company (including its consolidated subsidiaries) for
acquisition goodwill created prior to the date of Purchaser's purchase of Shares
pursuant to the Offer of $4.152 million; and shall exclude (i) interest expense,
(ii) the Parent's corporate expenses; (iii) the goodwill amortization of the
Parent relating to the Merger and related purchase price adjustments; (iv)
additional depreciation expense resulting from the write up of assets following
the Merger; (v) expenses relating to the period after the Merger for
environmental, health and safety expenses, plant reorganization, product
liability insurance savings; (vi) savings resulting from the elimination of the
obligation of the Company to report its financial results publicly; and (vii)
the effect of acquisitions by the Company or its subsidiaries after the Merger
Date or of the transfer by the Parent of any business or product line to the
Company or its subsidiaries.
DISCUSSIONS REGARDING EMPLOYMENT
During the period in which the Parent and the Purchaser were engaged in
discussions regarding the terms of the Stock Purchase Agreements, the Parent and
the Purchaser were also engaged in discussions with Mr. Stiff regarding his
continued employment with the Company following the consummation of the
transactions contemplated by the Merger Agreement. Such discussions were
extended to include Mr. Laetz and two other executive officers of the Company.
Among the matters discussed were: (i) general terms and conditions of
employment; (ii) possible grants of options to purchase Parent common stock
pursuant to the terms of Parent's 1999 Long Term Incentive Plan; and (iii)
incentive compensation based on the performance of the Company following the
consummation of the transactions
34
<PAGE> 37
contemplated by the Merger. As of the date of this Offer to Purchase, such
discussions were continuing between the Parent (and its counsel) and Messrs.
Stiff and Laetz (and their counsel), but had ceased with respect to the other
two executive officers of the Company. Among the issues resolved in principle
between Parent and Messrs. Stiff and Laetz were the amount of the incentive
compensation and the duration of the employment agreement. Subject to resolving
certain other employment-related terms and conditions (including, among other
things, the amount payable in the event of a termination of their employment)
and the preparation of mutually satisfactory documentation, Mr. Stiff could
receive incentive compensation of up to approximately $3.1 million and Mr. Laetz
could receive incentive compensation of up to approximately $575,000 if the
Company reaches the applicable Cumulative Performance Benchmark in the periods
between October 1, 1999 and December 31, 2002. Such levels of performance were
determined by the Parent by adjusting the financial projections provided by the
Company (see "Certain Information Concerning the Company -- Certain Projections"
above) and extrapolating them for the applicable period. The Parent also expects
that any employment agreements with Messrs. Stiff and Laetz will provide for
grants to them of options to purchase Parent common stock pursuant to the terms
of the Parent's 1999 Long Term Incentive Plan and other customary fringe
benefits. The Parent and the Purchaser believe that it would be in their best
interests to successfully conclude negotiations with respect to the foregoing
employment agreements as promptly as possible and have committed to continue
negotiations in this regard. However, the consummation of the Offer and the
Merger are not conditioned upon the execution and delivery of any employment
agreement with either Mr. Stiff or Mr. Laetz.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY; RIGHTS
AGREEMENT.
Purpose. 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 Purchaser 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. The Board of Directors of the Company
has approved the Merger Agreement in accordance with the DGCL. If required for
approval of the Merger, the Company has agreed, subject to the satisfaction of
the conditions to the Merger set forth in the Merger Agreement, in accordance
with and subject to the DGCL, to duly convene a meeting of its stockholders as
promptly as practicable following the purchase of Shares pursuant to the Offer
for the purpose of considering and taking action on the Merger Agreement. If
stockholder approval is required, the Merger Agreement must generally be
approved by the vote of the holders of a majority of the outstanding Shares. As
a result, if the Minimum Condition is satisfied, the Purchaser will have the
power 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 Purchaser shall acquire at least 90% of the outstanding Shares,
the Company shall, at the Purchaser's request, take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders, 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
35
<PAGE> 38
PURCHASER OR THE COMPANY MAY MAKE WILL BE MADE ONLY PURSUANT TO SEPARATE PROXY
MATERIALS IN COMPLIANCE WITH SECTION 14(a) OF THE EXCHANGE ACT.
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 and comply with
all statutory requirements will have the right under the DGCL to 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, stockholders who properly demand appraisal and otherwise
comply with the applicable statutory procedures will be entitled to receive a
judicial determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
and to receive payment of such fair value in cash. 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. Stockholders should recognize that the value so determined
could be equal to or higher or lower than the price per Share paid pursuant to
the Offer or the consideration per Share to be paid in the Merger.
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 unfairness, including
fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF 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 PRESENTATION AND EXERCISE OF
APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
DELAWARE LAW.
The foregoing description of certain provisions of the DGCL is not
necessarily complete and is qualified in its entirety 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 Purchaser 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 Purchaser 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,
36
<PAGE> 39
in either case at a time when the Shares are still registered under the Exchange
Act, the Purchaser 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. If the Purchaser obtains control of the Company
pursuant to the Offer, the Parent expects to conduct a detailed review of the
Company and its businesses, assets, corporate structure, capitalization,
operations, properties, policies, management and personnel and to consider what,
if any, changes would be desirable in light of the circumstances that then
exist. Such changes could include changes in the Company's businesses, corporate
structure, certificate of incorporation, by-laws, capitalization, board of
directors, management or dividend policy.
Except as described in this Offer to Purchase, neither the Parent nor the
Purchaser has 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.
Rights Agreement. In 1998, the Board of Directors of the Company declared
a dividend, payable to stockholders of record as of August 31, 1998, of one
Right for each outstanding Share. The Rights Agreement provides that each Right,
when exercisable, will entitle the holder thereof until August 31, 2008, to
purchase one-hundredth of a share of Series A Preferred Stock, par value $.01
per share, at an exercise price of $85, subject to certain anti-dilution
adjustments. The Rights will not be exercisable or transferable apart from
Shares until the earlier of (i) the close of business on the tenth day after the
date on which there is a public announcement that a Person (as defined in the
Rights Agreement) or group has acquired beneficial ownership of 10% or more of
the outstanding Shares (an "Acquiring Person") or (ii) the close of business on
the tenth business day after the date that a tender or exchange offer for 10% or
more of the outstanding Shares is first published or sent or given within the
meaning of Rule 14d-2 under the Exchange Act. The Rights are redeemable by the
Company at $.01 per right at any time prior to the earlier of (i) the close of
business on the tenth day after the date that a Person or group becomes an
Acquiring Person or (ii) August 31, 2008. At any time after a Section 11(a)(2)
Event (as defined in the Rights Agreement) occurs, the Company's Board of
Directors may exchange all or any part of the Right for Shares at an exchange
ratio of one Share per Right.
In the event that the Company is a party to a merger or other business
combination transaction in which the Company is not the surviving entity, each
Right will entitle the holder to purchase, at the exercise price of the Right,
that number of shares of the common stock of the acquiring company which, at the
time of such transaction, would have a market value of two times the exercise
price of the Right. In addition, at any time after a Section 11(a)(2) Event
occurs, each Right would become exercisable for the number of
37
<PAGE> 40
shares of Common Stock which, at that time, would have a market value of two
times the exercise price of the Right.
In connection with executing the Merger Agreement, the Company has amended
the Rights Agreement to provide that Parent shall not be deemed an Acquiring
Person (as defined in the Rights Agreement) and that the Rights will not
separate from the Shares as a result of entering into the Merger Agreement,
commencing or consummating the Offer or consummating the Merger pursuant to the
terms of the Merger Agreement. The Company has also taken all action necessary
to ensure that the Merger Agreement and the transactions contemplated thereby
will not trigger any "poison pill" or any other anti-takeover provision adopted
by the Company or available to it under applicable law.
The foregoing description of the Rights Agreement, as amended, and of the
Rights is qualified in its entirety by the terms of the Rights Agreement, dated
as of August 21, 1998, by and between the Company and the Rights Agent, a copy
of which has been filed as an exhibit to the Company's Current Report on Form
8-K dated August 21, 1998, the terms of the First Amendment to the Rights
Agreement, dated as of October 2, 1998, a copy of which has been filed as an
exhibit to the Company's Current Report on Form 8-K dated October 2, 1998, the
terms of the Second Amendment to the Rights Agreement, dated as of February 16,
1999, a copy of which has been filed as an exhibit to the Company's Current
Report on Form 8-K dated February 24, 1999, and a copy of the Third Amendment to
the Rights Agreement, dated as of August 20, 1999, which has been filed as an
exhibit to the Schedule 14D-9 of the Company, dated August 27, 1999, all of
which are incorporated herein by reference. A copy of the Rights Agreement is
available free of charge from the Company.
13. DIVIDENDS AND DISTRIBUTIONS. If on or after the date of the Merger
Agreement (except as set forth in the Merger Agreement -- See Section 6), the
Company should declare or pay any cash or stock dividend or other distribution
on, or issue any right 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 Purchaser or the nominee or transferee of the Purchaser on the
Company's stock transfer records of such Shares that are purchased pursuant to
the Offer, then without prejudice to the Purchaser's rights under Section 15,
(i) the purchase price payable per Share by the Purchaser 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 Purchaser, accompanied by appropriate documentation of
transfer. Pending such remittance or appropriate assurance thereof, the
Purchaser 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 Purchaser 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 will reduce
the number of holders of Shares. This could adversely affect the liquidity and
market value of the remaining Shares held by the public. Depending upon the
number of Shares purchased pursuant to the Offer, the Shares may no longer meet
the requirements of Nasdaq for continued inclusion on the Nasdaq National
Market. If as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of Nasdaq for continued
inclusion on Nasdaq and
38
<PAGE> 41
the Shares are no longer included on Nasdaq, as the case may be, the market for
the Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of Nasdaq, it
is possible that such Shares would continue to trade on other securities
exchanges or in the over-the-counter market and that price quotations would be
reported by such exchanges or through other sources. However, the extent of the
public market for the Shares and the availability of such quotations would
depend upon such factors as the number of stockholders and/or the aggregate
market value of the Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below and other factors. The
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares.
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.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer and provided that Purchaser shall not be obligated to accept for
payment any Shares until (i) expiration of all applicable waiting periods under
the HSR Act and (ii) the Minimum Condition shall have been satisfied, Purchaser
shall not be required to accept for payment or pay for, or may delay the
acceptance for payment of or payment for, any Shares tendered pursuant to the
Offer, and may, subject to the terms of the Merger Agreement, terminate or amend
the Offer if on or after August 21, 1999, and at or before the time of payment
for any of such Shares, any of the following events shall occur (or become known
to Parent) and remain in effect:
(a) there shall have occurred and be continuing as of the then
scheduled expiration date of the Offer: (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange or the Nasdaq National Market; (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States; (iii) a commencement or escalation of a war, armed hostilities or
other international or national calamity directly involving the United
States; or (iv) any material limitation (whether or not mandatory) by any
governmental or regulatory authority, agency or commission, domestic or
foreign ("Governmental Entity"), on the extension of credit by banks or
other lending institutions in the United States;
(b) (i) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Merger Agreement; (ii) any representation or warranty of the Company set
forth in the Merger Agreement which is qualified by materiality shall not
have been true and correct as of the date of the
39
<PAGE> 42
Merger Agreement and as of the then scheduled expiration date of the Offer
as though made on and as of the then scheduled expiration date of the
Offer; or (iii) any representation or warranty of the Company set forth in
the Merger Agreement which is not qualified by materiality shall not have
been true and correct in all material respects as of the date of the Merger
Agreement and as of the then scheduled expiration date of the Offer as
though made on and as of the then scheduled expiration date of the Offer,
except in the case of clauses (ii) and (iii) of this paragraph (b) for
representations and warranties which by their terms speak only as of
another date, which representations and warranties, if qualified by
materiality, shall not have been true and correct as of such date and, if
not qualified, shall not have been true and correct in all material
respects as of such other date;
(c) any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which:
(i)prevents, prohibits or materially restricts consummation of the Offer or
the Merger; (ii) prohibits or materially limits the ownership or operation
by the Company, Parent or any of their subsidiaries of all or any material
portion of the business or assets of the Company and its subsidiaries taken
as a whole, or as a result of the Offer or the Merger compels the Company,
Parent or any of their subsidiaries to dispose of or hold separate all or
any material portion of their respective business or assets; (iii) imposes
material limitations on the ability of Parent or any subsidiary of Parent
to exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser
pursuant to the Offer or otherwise on all matters properly presented to the
Company's stockholders including, without limitation, the approval and
adoption of the Merger Agreement and the transactions contemplated thereby;
or (iv) requires divestiture by Parent or any affiliate of Parent of any
Shares;
(d) any change in the financial condition, properties, business or
results of operations of the Company and its subsidiaries after the date of
the Merger Agreement that, individually or in the aggregate, has or is
reasonably likely to have a Material Adverse Effect;
(e) the Board of Directors (or a special committee thereof) shall have
withdrawn or amended, or modified in a manner adverse to Parent and
Purchaser its recommendation of the Offer or the Merger, or shall have
endorsed, approved or recommended any Superior Proposal;
(f) any Person, other than Parent, Purchaser or their affiliates or
any group of which any of them is a member, acquires beneficial ownership
of twenty percent or more of the Shares or rights to acquire twenty percent
or more of the Shares; or
(g) the Merger Agreement shall have been terminated by the Company or
Parent or Purchaser in accordance with its terms or Parent or Purchaser
shall have reached an agreement or understanding in writing with the
Company providing for termination or amendment of the Offer or delay in
payment for the Shares;
which makes it inadvisable, as determined by the Purchaser in good faith, to
proceed with the Offer or with such acceptance for payment or payments.
The foregoing conditions (other than the Minimum Condition) are for the
sole benefit of Parent and Purchaser and may be asserted by Parent or Purchaser
or may be waived by Parent or Purchaser, in whole or in part at any time and
from time to time in its sole
40
<PAGE> 43
discretion. The failure of Parent or Purchaser at any time to enforce any of the
foregoing rights shall not be deemed a waiver of such right, the waiver of such
right with respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances, and each right shall
be deemed an ongoing right that may be asserted at any time and from time to
time.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as set forth below, neither the Purchaser 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 Purchaser'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 Purchaser pursuant to the Offer as contemplated herein.
Should any such approval or other action be required, it is the Parent's present
intention to seek such approval or action. 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 Purchaser or that certain parts of the businesses of
the Company, the Parent or the Purchaser 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
Purchaser to elect (subject to the terms of the Merger Agreement) to terminate
the Offer without the purchase of the Shares thereunder. The Purchaser'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 16.
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. 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
41
<PAGE> 44
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for purchase or pay for, any Shares
tendered. See Section 16.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission ("FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied.
Parent filed on August 25, 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, unless both the Antitrust Division and the FTC terminate the waiting
period prior thereto. If, within such 15-calendar day waiting period, either the
Antitrust Division or the FTC requests additional information or documentary
material from the Parent, the waiting period would be extended for an additional
10 calendar days following 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 (except as otherwise provided in the
Merger Agreement), be extended and in any event the purchase of and payment for
Shares will be deferred until 10 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. 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 Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser 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 Purchaser 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.
Based upon an examination of publicly available information relating to the
businesses in which the Company and its subsidiaries are engaged, the Parent and
the Purchaser believe that the acquisition of Shares pursuant to the Offer would
not violate the antitrust laws. There can be no assurance, however, that a
challenge to the Offer on antitrust grounds will not be
42
<PAGE> 45
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 G, 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. Salomon Smith Barney Inc. is acting as Dealer
Manager in connection with the Offer and serving as the Parent's exclusive
financial advisor in connection with the Parent's proposed acquisition of the
Company, for which services Salomon Smith Barney Inc. will obtain customary
compensation contingent upon the successful consummation of the Offer. Parent
will also reimburse Salomon Smith Barney Inc. for all reasonable travel and
other out-of-pocket expenses, including reasonable fees and expenses of its
legal counsel, and has also agreed to indemnify Salomon Smith Barney Inc. and
certain related parties against certain liabilities, including certain
liabilities under the Federal securities laws, arising out of its engagement. In
the ordinary course of business, Salomon Smith Barney Inc. and its affiliates
may actively trade or hold the securities of the Parent and the Company for
their account or for the account of customers and, accordingly, may at any time
hold a long or short position in such securities.
The Purchaser has retained D. F. King & Co., Inc. to act as the Information
Agent and Citibank, N.A. 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 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 Purchaser and the Parent have 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 Purchaser 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 Purchaser 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 Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If after such good faith effort, the Purchaser 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.
43
<PAGE> 46
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 Purchaser by the Dealer Manager or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
The Purchaser 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 8 of this Offer to Purchase.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser 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.
Telescope Acquisition Inc.
August 27, 1999
44
<PAGE> 47
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. Directors and executive officers of Purchaser. The name and position of
each director and executive officer of the Purchaser are set forth below. All
directors and executive officers listed below are citizens of the United States
of America. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Purchaser. Unless otherwise
indicated the business address of each such director and officer is c/o Textron
Inc., 40 Westminster Street, Providence, Rhode Island 02903.
<TABLE>
<CAPTION>
NAME AND AGE, PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------- -----------------------------------------------
<S> <C>
Frank J. Feraco Mr. Feraco, 52, has been President of Telescope
Acquisition Inc. since August 1999. Mr. Feraco
has been President, Textron Industrial Products
since September 1998. Previously, Mr. Feraco was
President, Outdoor Leisure Division, Sunbeam
Corporation from January 1998 to August 1998.
From 1996 to 1998, Mr. Feraco was President and
Sector Executive, Kohler
International -- Sterling Plumbing Group, Kohler
Company, and from 1994 to 1996, he was President,
Danaher Tool Group, Danaher Corporation. Mr.
Feraco is a director of the American Hardware
Association.
Edward C. Arditte Mr. Arditte, 44, has been Vice President and
Treasurer of Telescope Acquisition Inc. since
August 1999. Mr. Arditte is Vice President and
Treasurer of Textron Inc., a position he has held
since 1997. Previously, Mr. Arditte was Vice
President Finance and Business Development,
Textron Fastening Systems from 1995 to 1997, and
Vice President -- Communications and Risk
Management of Textron Inc. from 1994 to 1995.
John R. Curran Mr. Curran, 44, has been Vice President of
Telescope Acquisition Inc. since August 1999. Mr.
Curran is Vice President, Business
Development -- Industrial Products Segment of
Textron Inc., a position he has held since July
1998. Previously, Mr. Curran was Director,
Business Development, Textron Industrial Products
from 1995 to June 1998, and Director, Tax
Planning and Senior Tax Counsel, Textron Inc.
from 1994 to 1995.
Arnold M. Friedman Mr. Friedman, 56, has been Vice President of
Telescope Acquisition Inc. since August 1999. Mr.
Friedman has been Vice President and Deputy
General Counsel of Textron Inc. since 1984.
Gregory E. Hudson Mr. Hudson, 52, has been Vice President -- Taxes
of Telescope Acquisition Inc. since August 1999.
Mr. Hudson has been Vice President -- Taxes of
Textron Inc. since 1987.
</TABLE>
I-1
<PAGE> 48
<TABLE>
<CAPTION>
NAME AND AGE, PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------- -----------------------------------------------
<S> <C>
Wayne W. Juchatz Mr. Juchatz, 53, has been Vice President of
Telescope Acquisition Inc. since August 1999. Mr.
Juchatz is Executive Vice President and General
Counsel of Textron Inc., a position he has held
since 1995. Previously, Mr. Juchatz was Executive
Vice President and General Counsel, R. J.
Reynolds Tobacco Company from 1994 to 1995, and
Senior Vice President, General Counsel and
Secretary, R. J. Reynolds Tobacco Company from
1987 to 1994.
Bhikhaji M. Maneckji Mr. Maneckji, 50, has been a director and Vice
President, General Counsel and Assistant
Secretary of Telescope Acquisition Inc. since
August 1999. Mr. Maneckji is Vice President and
General Counsel, Textron Industrial Products, a
position he has held since 1997. Previously, Mr.
Maneckji was General Counsel, Textron Industrial
Products from 1995 to 1997, and Assistant General
Counsel and Assistant Secretary, Textron Inc.
from 1986 to 1995. Mr. Maneckji was a director of
Bridgeport Machines, Inc. from 1995 through
August 1999.
Lawrence J. O'Connell Mr. O'Connell, 36, has been a director and Vice
President of Telescope Acquisition Inc. since
August 1999. Mr. O'Connell is Group Counsel -
Golf, Turf Care and Specialty Products, Textron
Industrial Products, a position he has held since
May 1999. Previously, Mr. O'Connell was Risk
Management Counsel, Textron Inc. from 1994 to May
1999.
Ann T. Willaman Ms. Willaman, 45, has been a director and Vice
President and Secretary of Telescope Acquisition
Inc. since August 1999. Ms. Willaman has been
Legal Department Administrator and Assistant
Secretary of Textron Inc. since 1989.
</TABLE>
I-2
<PAGE> 49
2. Directors of Parent. The name, business address, age, present principal
occupation or employment and five-year employment history of each director and
executive officer of the Parent are set forth below. All directors listed below
are citizens of the United States of America except for Mr. Gagne (who is a
citizen of Canada). Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with the Parent. Unless
otherwise indicated the business address of each such director is c/o Textron
Inc., 40 Westminster Street, Providence, Rhode Island 02903.
<TABLE>
<CAPTION>
AGE, PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME BUSINESS ADDRESS EMPLOYMENT HISTORY
---- ---------------- ---------------------------------
<S> <C> <C>
H. Jesse Arnelle Womble, Carlyle, Sandridge & Rice, Mr. Arnelle, 65, was a senior partner in the law firm of
200 W. Second Street, Arnelle, Hastie, McGee, Willis & Greene, San Francisco,
Winston-Salem, NC 27102 with which he had been associated from 1985 through his
retirement in 1996. Following his retirement, he became
Of Counsel to the North Carolina law firm of Womble,
Carlyle, Sandridge & Rice. Mr. Arnelle is a director of
FPL Group, Inc., Waste Management, Inc., Eastman Chemical
Corporation, Armstrong World Industries and Union Pacific
Resources, Inc. and served from November 1990 through
1998 as a director of Wells Fargo Bank, N.A. and Wells
Fargo & Company.
Teresa Beck 1681 South Mohawk Way, Ms. Beck, 44, is the former President of American Stores
Salt Lake City, UT 84108 Company, one of the nation's largest food and drug
retailers. She joined American Stores Company in 1982 and
progressed through various executive positions. Ms. Beck
was named Senior Vice President of Finance and Assistant
Secretary in 1989, became Executive Vice President,
Administration in 1992 and Executive Vice President,
Finance in 1994 and assumed the additional position of
Chief Financial Officer from 1995. She became President
in 1998 and served in that capacity until 1999 when she
left the Company.
Lewis B. Campbell Mr. Campbell, 53, is Chairman and Chief Executive Officer
of Textron. He joined Textron in 1992 as Executive Vice
President and Chief Operating Officer, became President
and Chief Operating Officer in 1994, assumed the title of
Chief Executive Officer and relinquished the title of
Chief Operating Officer in July 1998 and assumed the
title of Chairman and relinquished the title of President
in February 1999. Prior to joining Textron he was a Vice
President of General Motors Corporation and General
Manager of its GMC Truck Division. Mr. Campbell is a
director of Bristol Myers Squibb Co.
R. Stuart Dickson Ruddick Corporation, Mr. Dickson, 70, was Chairman of the Board of Ruddick
2000 First Union Plaza, Corporation, a diversified holding company with interests
Charlotte, NC 28282 in industrial sewing thread and regional supermarkets,
from 1968 until 1994. Mr. Dickson currently serves as
Chairman of the Ruddick Executive Committee. Mr. Dickson
is a director of Ruddick Corporation, First Union
Corporation, PCA International, United Dominion
Industries and Dimon Incorporated.
</TABLE>
<TABLE>
<S> <C> <C>
Lawrence K. Fish Citizens Financial Group, Inc., Mr. Fish, 54, is Chairman, President and Chief Executive Officer of
One Citizens Plaza, Citizens Financial Group, Inc., a multi-state bank holding company
Providence, RI 02903 headquartered in Providence, Rhode Island, a position he has held
since joining the bank in 1992. He is a director of the Royal Bank of
Scotland Group. Mr. Fish is a member of the Federal Reserve
Advisory Council and the past co-chair of the Rhode Island
Economic Development Council.
I-3
</TABLE>
<PAGE> 50
<TABLE>
<S> <C> <C>
Joe T. Ford ALLTEL Corporation, Mr. Ford, 62, is Chairman of the Board and chief executive officer of
One Allied Drive, ALLTEL Corporation, a telecommunications and information
Little Rock, AR 72202 services company. He was named President of ALLTEL upon its
formation in 1983 from a merger between Allied Telephone
Company in Little Rock and Mid-Continental Telephone
Corporation, became chief executive officer in 1987 and assumed his
current position in 1991. Mr. Ford is a director of The Dial
Corporation.
Paul E. Gagne Kroger, Inc., Mr. Gagne, 53, was President and Chief Executive Officer of Avenor
3285 Bedford Road, Inc., a forest products company, and is now a consultant in the area
Montreal, Quebec H35 1G5 Canada of corporate strategic planning and acquisitions. He joined Avenor in
1976, became President and chief operating officer in 1990 and
assumed the additional position of chief executive officer in 1991
serving in that capacity until November 1997, when he left the
company. In 1998, Mr. Gagne joined Kroger Inc., a major privately
held producer of paper and tissue, as advisor, corporate strategy and
acquisitions. He is a director of Inmet Mining Corporation, Wajax
Limited, Celanese Canada Limited and Kroger Tissue Group (U.K.), and
a member of the board of the C.D. Howe Institute.
John A. Janitz Mr. Janitz, 56, is President and Chief Operating Officer of Textron.
He joined Textron in 1996 as Chairman, President and Chief Executive
Officer of Textron Automotive Company and assumed his present
position in March 1999. From 1990 to 1996 he was Executive Vice
President and General Manager of TRW Inc.'s Occupant Restraint Group
based in Cleveland, Ohio, a worldwide business that develops,
manufactures and markets air bags, seat belts and fastening systems.
Prior to joining TRW, he was President of Wickes Manufacturing
Company, an automotive supplier based in Southfield, Michigan.
John D. Macomber JDM Investment Group, Mr. Macomber, 71, is Principal of JDM Investment Group, a private
2806 N Street, N.W., investment firm. He joined the firm as Principal in 1992. He served
Washington, DC 20007 as Chairman and President of the Export-Import Bank of the United
States from 1989 to 1992. Mr. Macomber was chief executive officer of
Celanese Corporation, a diversified chemical company, from 1977 to
1986 and also served as Chairman from 1980 to 1986. He is a director
of The Brown Group, Inc., IRI International, Lehman Brothers Holdings
Inc., and Mettler-Toledo International Inc.
Dana G. Mead Tenneco, Inc., Mr. Mead, 63, is Chairman and chief executive officer of Tenneco
1275 King Street, Inc., a global manufacturing company that owns and manages businesses
Greenwich, CT 06831 in two sectors: automotive parts and packaging. He joined the company
as President and chief operating officer in 1992 and assumed his
current position in 1994. Prior to joining Tenneco, Mr. Mead was
Executive Vice President and a director of International Paper
Company, a manufacturer of paper, pulp and wood products. Mr. Mead is
also a director of Pfizer Inc., the Zurich Insurance Group, Unisource
Worldwide, Inc. and Newport News Shipbuilding Inc., a former Tenneco
subsidiary.
</TABLE>
I-4
<PAGE> 51
<TABLE>
<S> <C> <C>
Brian H. Rowe GE Aircraft Engines, Mr. Rowe, 66, is the retired Chairman and now a consultant of GE
General Electric Company, Aircraft Engines, General Electric Company, a manufacturer of
1 Neumann Way, N178, combustion turbine engines for aircraft, marine and industrial
Cincinnati, OH 45215 applications. He joined General Electric in 1957, became President
and Chief Executive Officer of GEAE in 1979 and Chairman in
1993, serving in that capacity until his retirement in 1994. Mr. Rowe
is a director of Atlas Air, Inc., B/ E Aerospace, Canadian Marconi,
Fifth Third Bank, Stewart & Stevenson Services, Inc., Cincinnati
Bell Inc., Convergys and Dynatech Corporation.
Sam F. Segnar 10077 Grogan's Mill Road, Mr. Segnar, 71, is the retired Chairman and Chief Executive Officer
Suite 530, of Enron Corporation and former Chairman of the Board of Vista
The Woodlands, TX 77380 Chemical Co. and Collecting Bank, N.A., Houston, TX. Mr. Segnar is a
director of Seagull Energy Corporation and Gulf States Utilities
Company, and an advisory director of Pilko and Associates Inc.
Jean Head Sisco Sisco Associates, Mrs. Sisco, 74, is a partner in the international trade consulting
5335 Wisconsin Avenue, firm of Sisco Associates. She is a director of The Neiman Marcus
Suite 440, Group, Inc., Newmont Mining Corporation, Chiquita Brands
Washington, DC 20015-2034 International, Inc., K-Tron International, Inc., American
Funds -- Series I and Socrates Technology. She held various executive
offices with the Washington, D.C. department store chain of Woodward
& Lothrop from 1950 to 1974. She served as a consultant on
governmental and public affairs to the American Retail Federation
from 1974 to 1977 and is a past Chairman and a director of the
National Association of Corporate Directors.
Martin D. Walker M.A. Hanna Company, Mr. Walker, 67, is Chairman and Chief Executive Officer of M. A.
200 Public Square, Hanna Company, an international specialty chemicals company, a
Suite 36-50000 position he was elected to in October 1998. He held this position
Cleveland, OH 44114-2304 previously from September 1986 until December 1996, and then
continued as chairman of the board until June 1997, when he retired.
Mr. Walker is a director of Comerica, Inc., The Timken Company, The
Goodyear Tire & Rubber Co. and Lexmark International, Inc.
Thomas B. Wheeler Massachusetts Mutual Life Insurance Mr. Wheeler, 63, is Chairman of Massachusetts Mutual Life Insurance
Company, Company. He was a member of the Massachusetts Mutual field sales
1295 State Street, force from 1962 to 1983, served as Executive Vice President of
Springfield, MA 01111 Massachusetts Mutual's insurance and financial management line from
1983 to 1986, became President and chief operating officer in 1987,
President and Chief Executive Officer in 1988 and Chairman and Chief
Executive Officer in 1996. He relinquished the title of Chief
Executive Officer in January 1999. He is a director of The Bank of
Boston Corporation and Chairman of Oppenheimer Acquisition Corp. and
David L. Babson & Co. Inc.
</TABLE>
I-5
<PAGE> 52
4. Executive officers of Parent. The name, business address, age, present
principal occupation or employment and five-year employment history of each
executive officer of the Parent are set forth below. All executive officers
listed below are citizens of the United States of America. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with the Parent. The business address of each such executive officer
is c/o Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903.
<TABLE>
<CAPTION>
AGE, PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS EMPLOYMENT HISTORY
- ------------------------- ---------------------------------
<S> <C>
Lewis B. Campbell See "Directors of Parent" above.
John A. Janitz See "Directors of Parent" above.
John D. Butler Mr. Butler, 52, is Executive Vice President
Administration and Chief Human Resources Officer, a
title he assumed in January 1999. He previously was
Executive Vice President and Chief Human Resources
Officer (1997 to December 1998) and Vice President
Personnel of General Motors International Operations,
Zurich, Switzerland (1993 to 1997).
Mary L. Howell Ms. Howell, 46, is Executive Vice President
Government, International, Communications and Investor
Relations, a title she assumed in July 1998. She
previously was Executive Vice President Government and
International (1995 to July 1998) and Senior Vice
President Government and International Relations (1993
to 1995).
Wayne W. Juchatz See "Directors and executive officers of Purchaser"
above.
Stephen L. Key Mr. Key, 55, is Executive Vice President and Chief
Financial Officer, a title he assumed in 1995. He
previously was Executive Vice President and Chief
Financial Officer of ConAgra, Inc. (1992 to 1995).
</TABLE>
I-6
<PAGE> 53
5. Persons Who May Be Designated by Parent to Serve as Directors on the
Company's Board of Directors. The name of each person who may be designated by
Parent to serve as directors on the Company's Board of Directors is set forth
below. All persons listed below are citizens of the United States of America.
The other required information with respect to each such person is set forth
under "Executive Officers of Parent" above. The business address of each such
designee is c/o Textron Inc., 40 Westminster Street, Providence, Rhode Island
02903.
<TABLE>
<CAPTION>
AGE, PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS EMPLOYMENT HISTORY
- ------------------------- ---------------------------------
<S> <C>
Robert J. Ayotte Mr. Ayotte, 46, is Chief Financial Officer, Textron
Industrial Products, an office he has held since
January 1999. Previously, Mr. Ayotte was Vice
President - Finance, Textron Fastening Systems-
Europe from January 1997 to December 1998, Vice
President - Finance of Avdel Textron from September
1994 to December 1996, and Vice President - Finance
of Textron Systems Division from April 1991 to August
1994.
John R. Curran See "Directors and executive officers of Purchaser"
above.
Frank J. Feraco See "Directors and executive officers of Purchaser"
above.
Bhikhaji M. Maneckji See "Directors and executive officers of Purchaser"
above.
Lawrence J. O'Connell See "Directors and executive officers of Purchaser"
above.
</TABLE>
6. Ownership of Shares by Directors and Officers. None.
I-7
<PAGE> 54
SCHEDULE II
PURCHASES OF SHARES OF COMMON STOCK
BY PARENT AND ITS SUBSIDIARIES
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES PRICE PER SHARE SELLER
- ---- ---------------- --------------- ----------------------
<S> <C> <C> <C>
August 21, 1999........ 346,275 $21* P. Enoch Stiff
August 21, 1999........ 63,938 $21* Curtis and Linda Laetz
</TABLE>
- -------------------------
* Subject to adjustment as described under "The Merger Agreement, Stock Purchase
Agreements and Discussions Regarding Employment" in Section 11.
II-1
<PAGE> 55
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
(and, if a Distribution Date shall have occurred, certificates for Rights) 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:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY HAND: BY MAIL: BY OVERNIGHT COURIER
DELIVERY:
Citibank, N.A. Citibank, N.A.
Corporate Trust Window P. O. Box 685 Citibank, N.A.
111 Wall Street, 5th Floor Old Chelsea Station 915 Broadway, 5th Floor
New York, New York 10043 New York, New York 10113 New York, New York 10010
FACSIMILE:
(for Eligible Institutions
Only)
(212) 505-2248
FACSIMILE CONFIRMATION BY
TELEPHONE:
(800) 270-0808
</TABLE>
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, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 848-2998
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
388 Greenwich Street
New York, New York 10013
Call Toll-Free: (800) 772-7865
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 27, 1999
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY
OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY HAND: BY MAIL: BY OVERNIGHT COURIER DELIVERY:
Citibank, N.A. Corporate Trust Window 111 Citibank, N.A. P. O. Box 685 Old Chelsea Citibank, N.A. 915 Broadway, 5th Floor New
Wall Street, 5th Floor New York, New York Station New York, New York 10113 York, New York 10010
10043
FACSIMILE: (for Eligible Institutions
Only) (212) 505-2248 CONFIRM BY TELEPHONE:
(800) 270-0808
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares or Rights (as such terms are defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if tenders of Shares or Rights are to be made by
book-entry transfer into the account of Citibank, N.A. as Depositary (the
"Depositary"), at the Depository Trust Company ("DTC") (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below). Stockholders who tender Shares or Rights by
book-entry transfer are referred to herein as "Book-Entry Stockholders".
<PAGE> 2
Holders of Shares will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share. Unless and until a
Distribution Date (as defined in the Offer to Purchase) occurs, a tender of
Shares will also constitute a tender of the associated Rights. See Section 3 of
the Offer to Purchase. If the Distribution Date has occurred, and certificates
representing Rights (the "Rights Certificates") have been distributed to holders
of Shares, such holders will be required to tender Rights Certificates
representing a number of Rights equal to the number of Shares being tendered in
order to effect a valid tender of such Shares.
Holders of Shares and Rights whose certificates for such Shares (the "Share
Certificates") and, if applicable, Rights Certificates are not immediately
available or who cannot deliver their Share Certificates or, if applicable,
Rights 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 and Rights 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
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) & ADDRESSES OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S)
NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED NUMBER OF
CERTIFICATE BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares...........................
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4.
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
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 Owner(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution that Guaranteed Delivery:
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
Account Number ____________________ Transaction Code Number
3
<PAGE> 4
- --------------------------------------------------------------------------------
DESCRIPTION OF RIGHTS TENDERED*
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) & ADDRESSES OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS RIGHT(S) CERTIFICATE(S) AND RIGHT(S)
NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF RIGHTS
RIGHTS REPRESENTED NUMBER OF
CERTIFICATE BY RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Rights...........................
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if the Distribution Date has not occurred.
** Need not be completed by Book-Entry Stockholders.
*** Unless otherwise indicated, all Rights represented by certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4.
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF RIGHTS ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER RIGHTS BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
Account Number
--------------------------- Transaction Code Number
[ ] CHECK HERE IF RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution that Guaranteed Delivery:
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
Account Number ____________________ Transaction Code Number
4
<PAGE> 5
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Telescope Acquisition Inc., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Textron
Inc., a Delaware corporation (the "Parent"), the shares of common stock, par
value $.01 per share (the "Shares"), of OmniQuip International, Inc., a Delaware
corporation (the "Company"), and the associated preferred stock purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated August 21, 1998,
as amended (as so amended, the "Rights Agreement"), between the Company and
First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"),
at a purchase price of $21.00 per Share (and associated Right), 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 August 27, 1999 (the "Offer
to Purchase") and in this Letter of Transmittal (which, as amended from time to
time, together constitute the "Offer"). Unless the context requires otherwise,
all references to Shares shall be deemed to refer also to the associated Rights,
and all references to Rights shall be deemed to include all benefits that may
inure to the stockholders of the Company or to holders of the Rights pursuant to
the Rights Agreement. The undersigned understands that the Purchaser reserves
the right to transfer or assign, in whole or from time to time in part, to any
direct or indirect wholly owned subsidiary or subsidiaries of Parent, the right
to purchase all or any portion of the Shares and Rights tendered pursuant to the
Offer, receipt of which is hereby acknowledged.
Prior to the occurrence of a Distribution Date (as defined in the Rights
Agreement), a valid tender of Shares will constitute a tender of the associated
Rights. The undersigned understands that if the Distribution Date has occurred
and certificates representing Rights (the "Rights Certificates") have been
distributed to holders prior to the date of tender of the Shares and Rights
tendered herewith pursuant to the Offer, Rights Certificates representing a
number of Rights equal to the number of Shares being tendered herewith must be
delivered to Citibank, N.A. (the "Depositary") or, if available, a Book-Entry
Confirmation (as defined herein) must be received by the Depositary with respect
thereto in order for such Shares tendered herewith to be validly tendered. If
the Distribution Date has occurred and Rights Certificates have not been
distributed prior to the time Shares are tendered herewith pursuant to the
Offer, the undersigned agrees to deliver Rights Certificates representing a
number of Rights equal to the number of Shares tendered herewith to the
Depositary within three business days after the date such Rights Certificates
are distributed. A tender of Shares without Rights Certificates constitutes an
agreement by the tendering shareholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within three business days after the date such
Rights Certificates are distributed. The undersigned understands that if the
Distribution Date occurs prior to the Expiration Date, the Purchaser reserves
the Right to require that the Depositary receive such Rights Certificates or a
Book-Entry Confirmation with respect to such Rights prior to accepting Shares
for payment. In that event, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of, or Book-Entry Confirmation with respect to, among other things, Rights
Certificates, if Rights Certificates have been distributed to holders of Shares.
Subject to, and effective upon, acceptance for payment for the Shares and
Rights tendered herewith in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares and Rights
that are being tendered hereby and any and all dividends, distributions
(including Rights and additional Shares) or rights declared, paid or issued with
respect to the tendered Shares and Rights on or after the date hereof and
payable or distributable to the undersigned on a date prior to the transfer to
the name of the Purchaser or nominee or transferee of the Purchaser on the
Company's stock transfer records of the Shares and Rights tendered herewith
(other than a regular quarterly cash dividend of $0.01 per share, payable on
September 30, 1999 to holders of record on September 15, 1999) (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 Rights (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
5
<PAGE> 6
Certificates (as defined herein) and Rights Certificates (and any Distribution)
or transfer ownership of such Shares and Rights (and any Distribution) on the
account books maintained by a Book-Entry Transfer Facility, together in either
case with appropriate evidences of transfer, to the Depositary for the account
of the Purchaser, (b) present such Shares and Rights (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 Rights (and any
Distribution), all in accordance with the terms and subject to the conditions of
the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's attorney in fact and proxy, with full power of substitution, to
the full extent of such stockholder's rights with respect to the Shares and
Rights tendered by such stockholder and accepted for payment by the Purchaser
and with respect to any and all other shares or other securities issued or
issuable in respect of such Shares or Rights on or after the date hereof. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts such Shares and Rights for payment. Upon such acceptance for payment,
all prior proxies given by such stockholder with respect to such Shares and
Rights (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 Purchaser 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 Purchaser reserves the right to require that, in order for Shares
and Rights to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares and Rights the Purchaser must be able to exercise full
voting rights with respect to such Shares and Rights.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights (and any Distribution) tendered hereby and (b) when the Shares and Rights
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title to the Shares and Rights (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 Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and Rights tendered
hereby (and any Distribution). In addition, the undersigned shall promptly remit
and transfer to the Depositary for the account of the Purchaser any and all
Distributions in respect of the Shares and Rights tendered hereby, accompanied
by appropriate documentation of transfer; and pending such remittance or
appropriate assurance thereof, the Purchaser 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 Purchaser 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 and Rights made pursuant to the Offer are irrevocable, except that Shares
and Rights 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 Purchaser pursuant to the Offer, may
also be withdrawn at any time after October 25, 1999. See Section 4 of the Offer
to Purchase.
The undersigned understands that tenders of Shares and Rights 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 Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares and Rights 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 and Rights not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered", respectively. Similarly, unless
otherwise indicated herein under "Special
6
<PAGE> 7
Delivery Instructions", please mail the check for the purchase price and/or any
certificates) for Shares and Rights 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" and
"Description of Rights Tendered", respectively. 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 and Rights 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. Unless otherwise indicated herein under "Special Payment
Instructions", please credit any Shares and Rights tendered herewith by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility (as defined herein) designated above. The
undersigned recognizes that the Purchaser has no obligation, pursuant to the
Special Payment Instructions, to transfer any Shares or Rights from the name(s)
of the registered holder(s) thereof if the Purchaser does not accept for payment
any of the Shares or Rights so tendered.
7
<PAGE> 8
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered
or not accepted for payment and/or the check for the purchase price of
Shares and Rights accepted for payment are to be issued in the name of
someone other than the undersigned or if Shares or Rights tendered by
book-entry transfer which are not accepted for payment are to be returned
by credit to an account maintained at a Book-Entry Transfer Facility other
than the account indicated above.
Issue: [ ] check [ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX ID. OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
[ ] Credit Shares and Rights tendered by book-entry transfer that are not
accepted for payment to the Book-Entry Transfer Facility account.
------------------------------------------------------------
(DTC ACCOUNT NO.)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares and Rights not tendered
or not accepted for payment and/or the check for the purchase price of
Shares and Rights accepted for payment are to be sent to someone other
than the undersigned at an address other than that shown above.
Issue: [ ] check [ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX ID. OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
8
<PAGE> 9
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9
X
------------------------------------------------------------------------------
X
------------------------------------------------------------------------------
(Signature(s) of Stockholder(s))
Dated:
- ------------------------------------------------------------------------------ ,
1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificate(s) or Rights certificate(s) or on a security position listing or
by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s)
------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
------------------------------------------------------------------------------
Address
------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
------------------------------------------------------------------------------
Tax Identification or Social Security Number
----------------------------------------------------------------------------
COMPLETE SUBSTITUTE FORM W-9
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
------------------------------------------------------------------------------
Name(s)
------------------------------------------------------------------------------
Name of Firm
------------------------------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
------------------------------------------------------------------------------
Dated
- ------------------------------------------------------------------------------ ,
1999
9
<PAGE> 10
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 and Rights (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares and/or
Rights) 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 and/or Rights are tendered for the
account of a firm which is 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 evidencing tendered Shares, or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of 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) and, if a Distribution Date occurs, Rights
Certificates evidencing tendered Rights, or timely confirmation of a book-entry
transfer of Rights into the Depositary's account at the Book-Entry Transfer
Facility, if available (together with, if Rights are forwarded separately from
Shares, a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), 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 or, if later, within
three business days after the date such Rights Certificates are distributed.
Stockholders whose Share Certificates or Rights Certificates are not immediately
available (including Rights Certificates that have not yet been distributed by
the Company) or who cannot deliver their Share Certificates or Rights
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 and Rights 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 Purchaser,
must be received by the Depositary prior to the Expiration Date; (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; and (iv)
the Rights Certificates, if issued, representing the appropriate number of
Rights or a Book-Entry Confirmation, if available, in each case together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), with any required signature guarantees (or, in the case of a
book-entry 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, or if later, three business days after Rights
Certificates are distributed to shareholders, all as provided in Section 3 of
the Offer to Purchase. If Share Certificates and Rights Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery. Prior to a Distribution
Date, a valid tender of Shares will constitute a tender of the associated
Rights.
10
<PAGE> 11
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
(AND, IF A DISTRIBUTION DATE OCCURS, RIGHTS 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares and Rights will be purchased. All tendering stockholders, by
execution of this Letter of Transmittal (or a facsimile hereof), waive any right
to receive any notice of the acceptance of their Shares and Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and Rights 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 Certificates submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered". If fewer than all the Rights evidenced by
any Rights Certificates submitted are to be tendered, fill in the number of
Rights which are to be tendered in the box entitled "Number of Rights Tendered".
In such cases, new Share Certificates or Rights Certificates, as the case may
be, for the Shares or Rights that were evidenced by your old Share Certificates
or Rights 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 and all Rights represented by Rights Certificates delivered
to the Depositary will be deemed to have been tendered unless otherwise
indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the Share Certificate(s) or Rights Certificate(s), as the
case may be, without alteration, enlargement or any change whatsoever.
If any of the Shares and Rights 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 and Rights are registered in different names
on several Share Certificates or Rights Certificates, as the case may be, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any Share Certificates, Rights
Certificates or stock powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and proper evidence satisfactory to the Purchaser of their authority so
to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares and Rights listed and transmitted hereby, no endorsements of Share
Certificates, Rights Certificates or separate stock powers are required unless
payment is to be made to or Share Certificates or Rights Certificates for Shares
or Rights 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 Share Certificate(s) or
Rights Certificate(s), as the case may be, must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the certificate(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
11
<PAGE> 12
If Rights Certificates have been distributed to holders of Shares, such
holders are required to tender Rights Certificate(s) representing a number of
Rights equal to the number of Shares tendered in order to effect a valid tender
of such Shares. It is necessary that shareholders follow all signature
requirements of this Instruction 5 with respect to the Rights in order to tender
such Rights. Prior to a Distribution Date, a valid tender of Shares will
constitute a tender of the associated Rights.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares and Rights 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 and Rights 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 and Rights 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. A Book-Entry Stockholder may request that Shares and/or Rights not
accepted for payment be credited to such account maintained at the Book-Entry
Transfer Facility as such Book-Entry Stockholder may designate under "Special
Payment Instructions". If no such instructions are given, such Shares or Rights
not accepted for payment will be returned by crediting the account at the
Book-Entry Transfer Facility designated above.
8. WAIVER OF CONDITIONS. Subject to the terms and conditions of the Merger
Agreement (as defined in the Offer to Purchase), the conditions of the Offer
(other than the Minimum Condition (as defined in the Offer to Purchase)) may be
waived by the Purchaser 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 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
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in
12
<PAGE> 13
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 the
Dealer Manager or from brokers, dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares (or, if a Distribution Date occurs, Rights) 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.
12. DIVIDENDS. Pursuant to the Merger Agreement, the Company, among other
things, has agreed that it will not declare or pay dividends on, or make other
distributions in respect of, the Shares, other than a regular quarterly cash
dividend of $0.01 per Share, payable on September 30, 1999 to holders of record
on September 15, 1999, which was declared on August 10, 1999. Tendering
shareholders who are holders of record on September 15, 1999 will be entitled to
receive and retain such regular quarterly dividend regardless of when Shares are
tendered or accepted for payment pursuant to the Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH SHARE CERTIFICATES (AND, IF A DISTRIBUTION DATE OCCURS, RIGHTS
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.
13
<PAGE> 14
<TABLE>
<S> <C> <C>
PAYER'S NAME: Citibank, N.A.
- ------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9 Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW or
Employer Identification Number
-------------------------------
-------------------------------------------------------------------------------------------
Part 2 -- Certification -- Under the penalties of perjury, I certify that:
DEPARTMENT OF THE
TREASURY INTERNAL (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
REVENUE SERVICE waiting for a number to be issued to me), and
PAYEE'S REQUEST FOR (2) I am not subject to backup withholding because (a) I am exempt from backup withholding,
TAXPAYER IDENTIFICATION or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am
NUMBER ("TIN") subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified
by the IRS that you are currently subject to backup withholding because of under-reporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out such item (2).
- ------------------------------------------------------------------------------------------------------------------------
Signature ---------------------------------
SIGN HERE: Date ------------------------------- , 1999 PART 3 --
Awaiting TIN [ ]
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld.
Signature
- ------------------------------------------------------------------
Date ------------------------ , 1999
14
<PAGE> 15
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent at its address and telephone number set forth
below:
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 848-2998
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
388 Greenwich Street
New York, New York 10013
Call Toll-Free: (800) 772-7865
August 27, 1999
15
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if certificates for Shares (as defined below) or the
associated preferred stock purchase rights (the "Rights") are not immediately
available or the certificates for Shares or Rights and all other required
documents cannot be delivered to Citibank, N.A. (the "Depositary") on or prior
to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or if
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This instrument may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary.
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY HAND: BY MAIL: BY OVERNIGHT COURIER DELIVERY:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window P. O. Box 685 915 Broadway, 5th Floor
111 Wall Street, 5th Floor Old Chelsea Station New York, New York 10010
New York, New York 10043 New York, New York 10113
FACSIMILE:
(for Eligible Institutions Only)
(212) 505-2248
CONFIRM BY TELEPHONE:
(800) 270-0808
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER
OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE
INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE
SPACE PROVIDED IN THE SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tender(s) to Telescope Acquisition Inc., a Delaware
corporation, which is a wholly owned subsidiary of Textron Inc., a Delaware
corporation (the "Parent"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated August 27, 1999 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"), receipt of which is hereby acknowledged, the
number of shares of common stock, par value $.01 per share (the "Shares"), of
OmniQuip International, Inc., a Delaware corporation, and the associated
preferred stock purchase rights (the "Rights"), pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
Signature(s)
----------------------------------------------
Name(s) of Record Holders
-----------------------------------------------------------
Please Type or Print
Number of Shares and Rights
-----------------------------
Certificate Nos. (if Available)
-----------------------------------------------------------
-----------------------------------------------------------
Dated
--------------------, 1999
Address(es)
----------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Zip Code
Area Code and Tel. No(s)
--------------------------------
Check box if Shares and Rights will be tendered by book-entry transfer:
[ ] The Depository Trust Company
Account Number
-----------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is 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, (a) represents that the above
named person(s) "own(s)" the Shares and Rights tendered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended
("Rule 14e-4"), (b) represents that such tender of Shares and Rights complies
with Rule 14e-4, (c) guarantees to deliver to the Depositary either the
certificates evidencing all tendered Shares, in proper form for transfer, or to
deliver Shares pursuant to the procedure for book-entry transfer into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), in either case together with 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 in the Offer to Purchase)
in the case of a book-entry delivery, and any other required documents, all
within three Nasdaq National Market trading days after the date hereof and (d)
guarantees, if a Distribution Date (as defined in the Offer to Purchase) occurs,
to deliver certificates representing the Rights ("Rights Certificates") in
proper form for transfer, or to deliver such Rights pursuant to the procedure
for book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, together with, if Rights are forwarded separately, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees or an Agent's Message in the case of a
book-entry delivery, and any other required documents, all within the later of
(1) three Nasdaq National Market trading days after the date hereof and (2)
three business days after the date the Rights Certificates are distributed to
holders of Shares.
<TABLE>
<S> <C>
- ----------------------------------------------------------- -----------------------------------------------------------
Name of Firm Authorized Signature
- ----------------------------------------------------------- Name -----------------------------------------------------
Address Please Type or Print
Title
- ----------------------------------------------------------- -------------------------------------------------------
Zip Code
Dated -----------------------------------------------, 1999
- -----------------------------------------------------------
Area Code and Tel. No
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR, IF A DISTRIBUTION DATE OCCURS,
CERTIFICATES FOR RIGHTS WITH THIS NOTICE. CERTIFICATES FOR SHARES OR, IF A
DISTRIBUTION DATE OCCURS, CERTIFICATES FOR RIGHTS SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
AT
$21.00 NET PER SHARE
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY
OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE OFFER IS EXTENDED.
August 27, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Telescope Acquisition Inc., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Textron
Inc., a Delaware corporation (the "Parent"), to act as dealer manager in
connection with the Purchaser's offer to purchase for cash all the outstanding
shares of common stock, par value $.01 per share (the "Shares"), of OmniQuip
International, Inc., a Delaware corporation (the "Company"), and the associated
preferred stock purchase rights ("the Rights") issued pursuant to the Rights
Agreement dated August 21, 1998, as amended, between the Company and First
Chicago Trust Company of New York, at a purchase price of $21.00 per Share (and
associated Right), 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
August 27, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Holders of Shares will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
If the Distribution Date (as defined in the Offer to Purchase) has not occurred
prior to the time Shares are tendered pursuant to the Offer, a tender of Shares
will constitute a tender of the associated Rights. If the Distribution Date has
occurred and the certificates representing such Rights ("Rights Certificates")
have been distributed by the Company to holders of Shares, such holders of
Shares will be required to tender Rights Certificates representing a number of
Rights equal to the number of Shares being tendered in order to effect valid
tender of such Shares. Holders of Shares and Rights whose certificates for such
Shares (the "Share Certificates") and, if applicable, Rights 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 and Rights according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. As used herein, unless the context otherwise
requires, the term "Shares" includes the associated Rights.
<PAGE> 2
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 for
whom you hold Shares registered in your name or in the name of your nominee are
copies of the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. 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 Share Certificates or, if applicable, Rights Certificates are not
immediately available or if such certificates and all other required documents
cannot be delivered to Citibank, N.A. (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 President and Chief Executive Officer of the Company, accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9, which
includes the recommendation of the Board of Directors of the Company that
stockholders accept the Offer and tender their Shares to the Purchaser pursuant
to the Offer.
5. A printed form of 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.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
7. A return envelope addressed to 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 FRIDAY, SEPTEMBER 24, 1999, UNLESS THE
OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of August 21, 1999 (the "Merger Agreement"), by and among the Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement, and in accordance with the Delaware General
Corporation Law, the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation and become a wholly owned subsidiary of the Parent, and the separate
corporate existence of the Purchaser will cease.
The Board of Directors of the Company has approved, by unanimous vote of
the directors, the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger and determined that the terms of the Offer
and the Merger are fair to, and in the best interests of, the holders of the
Shares and recommends that the holders of the Shares accept the Offer and tender
their Shares to the Purchaser pursuant to the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PURSUANT TO THE OFFER PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN SECTION 1 OF THE OFFER TO PURCHASE) SUCH NUMBER OF SHARES WHICH
CONSTITUTES MORE THAN 50% OF THE SHARES (DETERMINED ON A FULLY DILUTED BASIS)
(THE "MINIMUM CONDITION"), AND (II) THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED.
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
2
<PAGE> 3
book-entry delivery of Shares, and other required documents should be sent to
the Depositary, and (ii) either Share Certificates and, if applicable, Rights
Certificates, representing the tendered Shares and, if applicable, tendered
Rights should be delivered to the Depositary, or such Shares and Rights 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.
The Purchaser 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 Purchaser 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
Purchaser 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.
Inquiries you may have with respect to the Offer should be addressed to the
Information Agent or the undersigned, at the 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,
Salomon Smith Barney Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, 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.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
AT
$21.00 NET PER SHARE
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY
OF
TEXTRON INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE OFFER IS EXTENDED.
August 27, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 27,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal relating
to an offer by Telescope Acquisition Inc., a Delaware corporation (the
"Purchaser"), which is a wholly owned subsidiary of Textron Inc., a Delaware
corporation (the "Parent"), to purchase all of the outstanding shares of common
stock, par value $.01 per share (the "Shares"), of OmniQuip International, Inc.,
a Delaware corporation (the "Company"), and the associated preferred stock
purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as
of August 21, 1998, as amended (as so amended, the "Rights Agreement"), between
the Company and First Chicago Trust Company of New York, as Rights Agent, at a
purchase price of $21.00 per Share (and associated Right), 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"). Unless the
context requires otherwise, all references to "Shares" shall be deemed to refer
also to the associated Rights, and all references to Rights shall be deemed to
include all benefits that may inure to the stockholders of the Company or to the
holders of the Rights pursuant to the Rights Agreement. Holders of Shares and
Rights whose certificates for such Shares (the "Share Certificates") and, if a
Distribution Date (as defined in the Offer to Purchase) has occurred, for such
Rights (the "Rights Certificates") are not immediately available or who cannot
deliver their Share Certificates and, if applicable, Rights Certificates and all
other required documents to Citibank, N.A., the Depositary, 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.
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.
<PAGE> 2
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 tender price is $21.00 per share, net to the seller in cash,
without interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of August 21, 1999 (the "Merger Agreement"), by and among the Parent,
the Purchaser and the Company. The Merger Agreement provides, among other
things, for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement, and in accordance with the Delaware General
Corporation Law, the Purchaser will be merged with and into the Company (the
"Merger"). Following the Merger, the Company will continue as the surviving
corporation and become a wholly owned subsidiary of the Parent, and the separate
corporate existence of the Purchaser will cease.
4. The Board of Directors of the Company has approved, by unanimous vote
of the directors, the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, and determined that the terms of
the Offer and the Merger are fair to, and in the best interests of, the holders
of Shares and recommends that holders of Shares accept the Offer and tender
their Shares and the associated Rights to the Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Friday, September 24, 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, (a) there being
validly tendered and not withdrawn pursuant to the Offer prior to the expiration
of the Offer such number of Shares and the associated preferred stock purchase
rights which constitutes more than 50% of the Shares (determined on a
fully-diluted basis) then outstanding and (b) the expiration or termination of
any applicable waiting period 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 Purchaser
is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, the Purchaser 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 Purchaser by Salomon Smith
Barney Inc., the Dealer Manager for the Offer, 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
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY
OF
TEXTRON INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated August 27, 1999 (the "Offer to Purchase") and the related
Letter of Transmittal pursuant to an offer by Telescope Acquisition Inc., a
Delaware corporation, which is a wholly owned subsidiary of Textron Inc., a
Delaware corporation, to purchase all of the outstanding shares of common stock,
par value $.01 per share (the "Shares"), of OmniQuip International, Inc., a
Delaware corporation, and the associated preferred stock purchase rights (the
"Rights"), at a purchase price of $21.00 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 the related Letter of Transmittal.
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 (and Rights)
to be Tendered*
------------------------ Shares (and Rights)
Date:
-------------------------
------------------------------------------------------
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 (and
Rights) held by us for your account are to be tendered. Prior to a
Distribution Date (as defined in the Offer to Purchase), a valid tender of
Shares will constitute a tender of the associated Rights.
3
<PAGE> 1
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 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" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Give the social security
For this type of account: number of --
- ---------------------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of the
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 savings The grantor-trustee(1)
trust account (grantor is also
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ---------------------------------------------------------------------
Give the employer
For this type of account: identification number of --
- ---------------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
account
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
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.
------------------------------------------------------------------
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't 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. If
you have applied for a TIN check the box in Part 3 of the Form W-9.
PAYEE EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted 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 2 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
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES (AS DEFINED BELOW) OR THE ASSOCIATED RIGHTS (AS DEFINED BELOW).
THE OFFER (AS DEFINED BELOW) IS MADE SOLELY BY THE OFFER TO PURCHASE DATED
AUGUST 27, 1999 AND THE RELATED LETTER OF TRANSMITTAL (AND ANY AMENDMENTS
THERETO) AND IS BEING MADE TO ALL HOLDERS OF SHARES AND THE ASSOCIATED RIGHTS.
THE PURCHASER (AS DEFINED BELOW) 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 PURCHASER BECOMES AWARE OF ANY STATE WHERE THE
MAKING OF THE OFFER IS PROHIBITED, THE PURCHASER WILL MAKE A GOOD FAITH EFFORT
TO COMPLY WITH ANY SUCH STATUTE. IF, AFTER SUCH GOOD FAITH EFFORT, THE PURCHASER
CANNOT COMPLY WITH ANY SUCH STATUTE, THE OFFER WILL NOT BE MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) THE HOLDERS OF SHARES AND THE
ASSOCIATED RIGHTS IN SUCH STATE. IN THOSE JURISDICTIONS 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 PURCHASER BY
SALOMON SMITH BARNEY INC., THE DEALER MANAGER, OR ONE OR MORE REGISTERED BROKERS
OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTIONS. UNLESS THE CONTEXT
OTHERWISE REQUIRES, ALL REFERENCES TO "SHARES" SHALL BE DEEMED TO REFER ALSO TO
THE ASSOCIATED RIGHTS, ALL REFERENCES TO THE RIGHTS SHALL BE DEEMED TO INCLUDE
ALL BENEFITS THAT MAY INURE TO STOCKHOLDERS OF THE COMPANY (AS DEFINED BELOW) OR
TO THE HOLDERS OF THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT (AS DEFINED
BELOW).
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OMNIQUIP INTERNATIONAL, INC.
AT
$21.00 NET PER SHARE
BY
TELESCOPE ACQUISITION INC.,
A WHOLLY OWNED SUBSIDIARY OF
TEXTRON INC.
Telescope Acquisition Inc., a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of Textron Inc., a Delaware corporation (the
"Parent"), hereby offers to purchase for cash all of the outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of OmniQuip
International, Inc., a Delaware corporation (the "Company"), and the associated
preferred stock purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of August 21, 1998, as amended (as so amended, the "Rights
Agreement"), between the Company and First Chicago Trust Company of New York, as
Rights Agent, at a purchase price of $21.00 per Share, net to the seller in
cash, without interest thereon, upon the
<PAGE> 2
2
terms and subject to the conditions set forth in the Offer to Purchase dated
August 27, 1999 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 24, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING
VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER
A MAJORITY OF SHARES OF COMMON STOCK OF OMNIQUIP INTERNATIONAL, INC. (DETERMINED
ON A FULLY-DILUTED BASIS) THEN OUTSTANDING (THE "MINIMUM CONDITION") AND (2) THE
EXPIRATION OR TERMINATION OF ANY WAITING PERIODS UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of August 21, 1999 (as amended from time to time, the "Merger
Agreement"), among the Parent, the Purchaser and the Company. The Merger
Agreement provides, among other things, for the making of the Offer by the
Purchaser, and further 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 ("DGCL"), the Purchaser will be merged with and
into the Company (the "Merger"). The purpose of the Offer is to acquire control
of, and the entire equity interest in, the Company. Following the consummation
of the Offer and after satisfaction or waiver of all conditions to the Merger
set forth in the Merger Agreement, the Purchaser intends to acquire the
remaining equity interest in the Company not acquired by the Offer by
consummating 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 (1) any Shares held by Parent, the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger,
shall be cancelled and shall cease to exist with no payment being made with
respect thereto, and (2) Shares, if 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 DGCL) will, by virtue of the Merger and without any action on the part of
the holders be cancelled, extinguished and converted into the right to receive
$21.00 in cash payable to the holder thereof, and without interest, upon
surrender of the certificate formerly representing such Share. The Merger
Agreement is more fully described in Section 11 of the Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY 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, THE COMPANY AND RECOMMENDS THAT ALL STOCKHOLDERS ACCEPT THE
OFFER AND TENDER ALL OF THEIR SHARES AND THE ASSOCIATED RIGHTS TO THE PURCHASER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment (and thereby purchased) Shares validly tendered and not
properly withdrawn as, if and when the Purchaser gives oral or written notice to
Citibank, N.A. (the "Depositary") of the Purchaser's acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the
<PAGE> 3
3
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 Purchaser 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. In all cases, payment for Shares and
associated Rights 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 (the "Share Certificates") or timely 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 of the Offer to Purchase, (ii) if a
Distribution Date (as defined in the Rights Agreement) shall have occurred,
Certificates representing such Rights (the "Rights Certificates") or timely
confirmations of a book-entry transfer of such Rights into the Depositary's
account at the Book-Entry Transfer Facility pursuant to procedures set forth in
Section 3 of the Offer to Purchase, (iii) 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 in Section 2 of the
Offer to Purchase) in connection with a book-entry transfer, and (iv) any other
documents required by the Letter of Transmittal.
Subject to the provisions of the Merger Agreement and the applicable
rules and regulations of the Securities and Exchange Commission (the
"Commission"), the Purchaser reserves the right, in its sole discretion, to
waive any or all conditions to the Offer (other than the Minimum Condition) and
to make any other changes in the terms and conditions to the Offer. Subject to
the provisions of the Merger Agreement and the applicable rules and regulations
of the Commission, if by the Expiration Date any or all of such Offer conditions
have not been satisfied, the Purchaser 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 (other than the
Minimum Condition) 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 termination of the Offer, as extended.
Subject to the applicable rules and regulations of the Commission
and the terms of the Merger Agreement, the Purchaser 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 of the Offer to
Purchase shall have occurred or shall have been determined by the Purchaser 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.
Any extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof to be made no
later than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw such stockholder's
Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time,
on Friday, September 24, 1999, unless and until the Purchaser, 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 Purchaser, shall expire.
<PAGE> 4
4
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
Purchaser pursuant to the Offer, may also be withdrawn at any time after October
25, 1999. 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 the 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 (and, if a Distribution Date shall
have occurred, Rights Certificates) to be withdrawn have been delivered or
otherwise identified to the Depositary, then prior to the physical release of
such certificates, the name of the registered holder (if different from the
tendering stockholder) and the serial numbers shown on such certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase) unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, 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 second 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 Purchaser, in its sole discretion, whose
determination will be final and binding. None of the Purchaser, the Parent, any
of their affiliates, successors or assigns, the Dealer Manager, the Depositary,
the Information Agent or any 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 such notification. Withdrawal of Shares and Rights
may not be rescinded. Any Shares properly withdrawn will thereafter be deemed
not to have been validly tender for purposes of the Offer. However, withdrawn
Shares and Rights may be re-tendered at any time prior to the Expiration Date by
following one of the procedures described in Section 3 of the Offer to Purchase.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's
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 and other relevant materials will be mailed by the Purchaser to
record holders of Shares and furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent or the above-described
brokers, dealers, commercial banks and trust companies, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer
<PAGE> 5
5
or any other person (other than the Dealer Manager and the Information Agent)
for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 848-2998
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
388 Greenwich Street
New York, New York 10013
Call Toll-Free (800) 772-7865
August 27, 1999
<PAGE> 1
- ------------------------------------------------------ ---------------------
TEXTRON NEWS
- ------------------------------------------------------ ---------------------
Corporate Communications
Department
TEXTRON INC.
40 Westminister Street
Providence, R.I. 02903-2596
(401) 421-2800
CONTACT INFORMATION:
Mary Lovejoy (Textron Investor Contact): 401-457-6009
Brian Sullivan (Textron Media Contact): 401-457-2502
Tom Breslin (OmniQuip Contact): 414-268-3105
FOR IMMEDIATE RELEASE
TEXTRON AGREES TO ACQUIRE OMNIQUIP INTERNATIONAL
ACQUISITION PROVIDES NEW GROWTH PLATFORM, SYNERGY OPPORTUNITIES
PROVIDENCE, RI AND PORT WASHINGTON, WI - AUGUST 23, 1999 - Textron Inc.
(NYSE: TXT) and OmniQuip International, Inc. (NASDAQ: OMQP) today announced the
signing of a definitive merger agreement whereby Textron will acquire the entire
outstanding capital stock of OmniQuip for $21 per share in a cash transaction
valued at approximately $477 million including the assumption of debt. The
agreement has been approved by the Boards of Directors of both companies.
The Agreement provides for an all-cash tender offer by Textron for all of
OmniQuip's outstanding shares of common stock to commence within five business
days. The tender is expected to close by September 24, unless extended, and is
subject to the valid tender of at least a majority of the outstanding OmniQuip
shares on a fully diluted basis, and to customary government filings and other
customary conditions.
-more-
<PAGE> 2
Textron Agrees to Acquire OmniQuip/Page 2
With estimated fiscal 1999 sales of approximately $520 million, OmniQuip
is a leading manufacturer of light construction equipment including telescopic
material handlers, aerial work platforms and skid steer loaders. Over the past
three years, OmniQuip has achieved strong, consistent revenue growth through
acquisitions as well as increased sales, primarily to the fast-growing
rental-fleet sector of the market.
"With demand for its products expected to increase 10-20% per year,
OmniQuip establishes a promising growth platform within our Industrial segment
while being accretive to Textron's earnings in the first year," said Textron
Chairman and Chief Executive Officer Lewis B. Campbell.
"Textron's strategy is to buy good businesses and make them better," said
Textron President and Chief Operating Officer John A. Janitz. "OmniQuip will
benefit from Textron's manufacturing processes, materials sourcing and
distribution networks in international markets. Further opportunities to provide
leasing and financing for OmniQuip's products could also be realized with
Textron Financial Corporation, our commercial finance operation," Janitz added.
"This is an excellent strategic move for OmniQuip. With Textron's strong
financial backing, we will be able to grow OmniQuip's business at a much faster
pace than we would have been able to on our own. We will be actively pursuing
opportunities to improve and further develop our existing brands, while
acquiring new, complementary product lines that will offer our customers a broad
range of light construction equipment," said P. Enoch Stiff, President and Chief
Executive Officer of OmniQuip.
-more-
<PAGE> 3
Textron Agrees to Acquire OmniQuip/Page 3
"This merger provides tremendous growth opportunities for OmniQuip which
will in turn benefit our employees, customers and suppliers. From attractive
financing programs to opportunities to enhance the product line, the merger puts
OmniQuip in a solid position to strengthen its relationships with the large
national rental fleets and aggressively grow this new line of business for
Textron," said Stiff.
Since 1992 Textron has made 39 acquisitions with proforma revenues of
approximately $6.5 billion. With $2.9 billion in after-tax proceeds from the
divestiture of its consumer finance operation, Textron plans to spend $1 billion
per year on strategic acquisitions and is on track to meet or exceed this target
for 1999.
"Our rigorous acquisition criteria ensures that each transaction is
undertaken with keen attention to shareholder and customer value. OmniQuip is a
perfect fit for Textron and is wholly supportive of our acquisition strategy,"
said Campbell. "The strength and expertise of OmniQuip's management team will be
a great asset to Textron as we actively pursue growth opportunities in this
business," he added.
The tender offer for shares of OmniQuip common stock will be made only
through definitive tender offer documents, which will be filed with the
Securities and Exchange Commission and mailed to the shareholders of OmniQuip.
Following completion of the tender offer, it is contemplated that the holders of
any then-outstanding shares of common stock will receive, in a second-step
merger, the same $21 per share cash consideration as holders will receive in the
tender offer.
-more-
<PAGE> 4
Textron Agrees to Acquire OmniQuip/Page 4
OmniQuip, which has approximately 1600 employees at 16 locations in the
U.S., U.K., Australia and New Zealand, is the largest North American producer of
telescopic material handlers. The company also manufactures aerial work
platforms, skid steer loaders, power lifters and power haulers and markets a
line of mini-excavators. OmniQuip's products are used in a wide variety of
applications by commercial and residential building contractors, as well as by
customers in other construction, military, industrial and agricultural markets.
Additional information is available at www.omniquip.com.
Textron Inc. is a $10 billion, global, multi-industry company with
market-leading businesses in Aircraft, Automotive, Industrial and Finance.
Textron has a workforce of over 64,000 employees and major manufacturing
facilities in 23 countries. Textron is among Fortune magazine's "America's Most
Admired Companies." Additional information is available at www.textron.com.
###
Forward-looking Information: Certain statements in this release are
forward-looking statements including those that discuss strategies, goals,
outlook or other non-historical matters; or projected revenues, income, returns
or other financial measures. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ materially from
those contained in the statements, and are detailed in Textron's and OmniQuip's
Annual Reports and other filings under the Securities Exchange Act of 1934.
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TEXTRON INC.,
TELESCOPE ACQUISITION INC.
AND
OMNIQUIP INTERNATIONAL, INC.
DATED AS OF
AUGUST 21, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
THE OFFER................................................. 2
Section 1.1 The Offer.................................... 2
Section 1.2 Company Action............................... 3
ARTICLE II
THE MERGER; EFFECTIVE TIME; CLOSING....................... 4
Section 2.1 The Merger................................... 4
Section 2.2 Effective Time............................... 5
Section 2.3 Closing...................................... 5
ARTICLE III
SURVIVING CORPORATION..................................... 5
Section 3.1 Certificate of Incorporation................. 5
Section 3.2 By-Laws...................................... 5
Section 3.3 Directors.................................... 5
Section 3.4 Officers..................................... 5
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF SHARES
IN THE MERGER.......................................... 6
Section 4.1 Share Consideration for the Merger;
Conversion or Cancellation of Shares in the
Merger....................................... 6
Section 4.2 Shareholders' Meeting........................ 6
Section 4.3 Payment for Shares in the Merger............. 7
Section 4.4 Transfer of Shares After the Effective Time;
No Further Ownership Rights in the
Shares....................................... 9
Section 4.5 Stock Options and Other Plans................ 9
Section 4.6 Dissenting Stock............................. 10
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............. 10
Section 5.1 Corporate Organization and Qualification..... 10
Section 5.2 Capitalization............................... 11
Section 5.3 Authority Relative to This Agreement......... 12
Section 5.4 Consents and Approvals; No Violation......... 13
Section 5.5 SEC Reports; Financial Statements............ 13
Section 5.6 Absence of Certain Changes or Events......... 14
Section 5.7 Litigation and Liabilities................... 15
Section 5.8 Information Supplied......................... 15
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 5.9 Employee Benefit Plans; Labor Matters........ 15
Section 5.10 Brokers and Finders.......................... 16
Section 5.11 Compliance with Laws; Permits................ 16
Section 5.12 Takeover Statutes............................ 17
Section 5.13 Rights Plan.................................. 17
Section 5.14 Intellectual Property........................ 17
Section 5.15 Opinion of Financial Advisor................. 17
Section 5.16 Taxes........................................ 18
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.... 18
Section 6.1 Corporate Organization and Qualification..... 18
Section 6.2 Authority Relative to This Agreement......... 18
Section 6.3 Consents and Approvals; No Violation......... 18
Section 6.4 Brokers and Finders.......................... 19
Section 6.5 Financing.................................... 19
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS....................... 19
Section 7.1 Conduct of Business of the Company........... 20
Section 7.2 No Solicitation of Transactions.............. 22
Section 7.3 Approvals and Consents; Cooperation.......... 23
Section 7.4 Further Assurances........................... 23
Section 7.5 Access to Information........................ 24
Section 7.6 Publicity.................................... 24
Section 7.7 Indemnification of Directors and Officers.... 24
Section 7.8 Employees.................................... 25
Section 7.9 Notification of Certain Matters.............. 25
Section 7.10 Company Board................................ 26
Section 7.11 Stockholder Approval......................... 27
Section 7.12 Related Parties.............................. 27
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER.................. 27
Section 8.1 Conditions to Each Party's Obligations to
Effect the Merger...................................... 28
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER............................ 28
Section 9.1 Termination by Mutual Consent................ 28
Section 9.2 Termination by Either Parent or the
Company................................................ 28
Section 9.3 Termination by the Company................... 29
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 9.4 Termination by Parent....................... 30
Section 9.5 Effect of Termination and Abandonment....... 30
Section 9.6 Extension; Waiver........................... 31
ARTICLE X
MISCELLANEOUS AND GENERAL................................. 31
Section 10.1 Payment of Expenses......................... 31
Section 10.2 Survival of Representations and Warranties;
Survival of Confidentiality............... 31
Section 10.3 Modification or Amendment................... 32
Section 10.4 Waiver of Conditions........................ 32
Section 10.5 Governing Law............................... 32
Section 10.6 Notices..................................... 33
Section 10.7 Entire Agreement; Assignment................ 34
Section 10.8 Parties in Interest......................... 34
Section 10.9 Certain Definitions......................... 34
Section 10.10 Specific Performance........................ 35
Section 10.11 Obligation of Parent........................ 35
Section 10.12 Validity.................................... 35
Section 10.13 Captions.................................... 35
Section 10.14 Counterparts................................ 35
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of August
21, 1999, by and among Textron Inc., a Delaware corporation ("Parent"),
Telescope Acquisition Inc., a Delaware corporation and a wholly-owned subsidiary
of Parent ("Purchaser"), and OmniQuip International, Inc., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the Board of Directors of the Company has unanimously determined
that the terms of the Offer and the Merger (each as defined below) are fair to,
and in the best interests of, the shareholders of the Company and approved and
adopted this Agreement and the transactions contemplated hereby; and
WHEREAS, in furtherance thereof, it is proposed that Purchaser shall make a
tender offer (the "Offer") to acquire all of the outstanding shares (the
"Shares") of common stock, par value $0.01 per share (the "Company Common
Stock"), of the Company, together with the associated Rights (as hereafter
defined), at a price of Twenty-One Dollars ($21) per Share (such amount, or any
greater amount per share paid pursuant to the Offer, being hereinafter referred
to as the "Per Share Amount"), net to the seller in cash, in accordance with the
terms and subject to the conditions of this Agreement;
WHEREAS, as a condition to Parent's and Purchaser's entering into this
Agreement and incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Parent, Purchaser and the officers of
the Company listed in Annex B hereto (the "Key Employees") are entering into
Share Purchase Agreements (collectively, the "Key Employee Share Purchase
Agreements") whereby such Key Employees are selling Shares to the Purchaser all
upon terms and subject to the conditions set forth in the Key Employee Share
Purchase Agreements; and
WHEREAS, Parent, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article IX, Purchaser shall commence the Offer as promptly as
practicable, but in no event later than the fifth business day from and
including the date of initial public announcement of this Agreement. Purchaser
shall accept for payment Shares that have been validly tendered and not
withdrawn pursuant to the Offer at the earliest practicable time following
expiration of the Offer that all conditions to the Offer, as set forth on Annex
A (the "Offer Conditions"), shall have been satisfied or waived by Purchaser.
The obligation of Purchaser to accept for
2
<PAGE> 6
payment, purchase and pay for Shares tendered pursuant to the Offer shall be
subject only to such Offer Conditions and to the further condition that a number
of Shares representing not less than a majority of the Shares then outstanding
on a fully diluted basis shall have been validly tendered and not withdrawn
prior to the final expiration date of the Offer (the "Minimum Condition").
Unless previously approved by the Company in writing, no change in the Offer may
be made (i) which decreases the Per Share Amount payable in the Offer, (ii)
which changes the form of consideration to be paid in the Offer, (iii) which
reduces the maximum number of Shares to be purchased in the Offer or the Minimum
Condition, (iv) which imposes conditions to the Offer in addition to the Offer
Conditions or which modifies the Offer Conditions in a manner adverse to the
holders of Shares or (v) which amends any other term of the Offer in a manner
adverse to the holders of the Shares (it being agreed that a waiver by Purchaser
of any condition other than the Minimum Condition shall not be deemed to be
adverse to the holders of the Shares). Notwithstanding the foregoing, Purchaser
may, without the consent of the Company, (i) extend the Offer on one or more
occasions for up to 10 business days for each such extension beyond the then
scheduled expiration date (the initial scheduled expiration date being 20
business days following commencement of the Offer), if at the then scheduled
expiration date of the Offer any of the conditions to Purchaser's obligation to
accept for payment and pay for the Shares shall not be satisfied or waived,
until such time as such conditions are satisfied or waived (and, at the request
of the Company, Purchaser shall, subject to Purchaser's right to terminate this
Agreement pursuant to Article IX, extend the Offer for additional periods,
unless the only conditions not satisfied or earlier waived on the then scheduled
expiration date are one or more of the Minimum Condition and the conditions set
forth in paragraph (b) of the Offer Conditions, provided that (x) if the only
condition not satisfied is the Minimum Condition, the satisfaction or waiver of
all other conditions shall have been publicly disclosed at least five business
days before termination of the Offer and (y) if paragraph (b) of the Offer
Conditions has not been satisfied and the failure to so satisfy can be remedied,
the Offer shall not be terminated unless the failure is not remedied within 10
calendar days after Purchaser has furnished the Company written notice of such
failure) and (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer and (iii) extend the
Offer for an aggregate period of not more than 5 business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence if there shall not have been tendered sufficient Shares so that
the Merger could be effected without a meeting of the Company's shareholders in
accordance with Section 253 of the Delaware General Corporation Law (the
"DGCL"). Subject to the terms and conditions of the Offer and this Agreement,
Purchaser shall pay for all Shares validly tendered and not wit hdrawn pursuant
to the Offer that Purchaser becomes obligated to purchase pursuant to the Offer
as soon as practicable after the expiration of the Offer.
(b) As soon as practicable on the date of commencement of the Offer, Parent
or Purchaser shall file with the SEC a Tender Offer Statement on Schedule 14D-1
with respect to the Offer (together with any supplements or amendments thereto,
the "Offer Documents"). The Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws, except that no
representation is made by Parent or Purchaser with respect to information
supplied by the Company in writing for inclusion or incorporation by reference
in the Offer Documents. Parent or Purchaser and the Company each agree promptly
to correct any information provided by them for use in the Offer Documents if
and to the extent that it shall have become false or misleading in any material
respect and Purchaser further agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each
3
<PAGE> 7
case as and to the extent required by applicable federal securities laws. Parent
and Purchaser agree to provide the Company and its counsel with any comments
Parent, Purchaser or their counsel receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments. In
addition, to the extent practicable, the Company and its counsel shall be given
an opportunity to review and comment upon the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and represents
that the Board of Directors of the Company, including all of its disinterested
directors, at a meeting duly called and held, has, subject to the terms and
conditions set forth herein, unanimously (i) approved this Agreement and the
transactions contemplated hereby, including the Offer and the Merger and (ii)
resolved to recommend that the shareholders of the Company accept the Offer,
tender their Shares and associated Rights thereunder to Purchaser and approve
and adopt this Agreement and the Merger; provided, that such recommendation may
be withdrawn, modified or amended pursuant to Section 7.2. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Board of Directors described in this Section 1.2(a).
(b) The Company hereby agrees to file with the SEC as soon as practicable
on the date of commencement of the Offer a Solicitation/ Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "Schedule 14D-9") containing the recommendation described in
Section 1.2(a). The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws, except that no representation
is made by the Company with respect to information supplied by Parent or
Purchaser in writing for inclusion or incorporation by reference in the Schedule
14D-9. The Company, Parent and Purchaser each agree promptly to correct any
information provided by them for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to the holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Notwithstanding anything to the contrary in this Agreement, the
Board of Directors of the Company may withdraw, modify or amend its
recommendation pursuant to Section 7.2. The Company agrees to provide Parent,
Purchaser and their counsel with any comments the Company or its counsel
receives from the SEC or its staff with respect to Schedule 14D-9 promptly after
receipt of such comments. In addition, to the extent practicable, Parent,
Purchaser and their counsel shall be given an opportunity to review and comment
upon the Schedule 14D-9 and any amendments thereto prior to the filing thereof
with the SEC.
(c) In connection with the Offer, the Company will promptly furnish
Purchaser with mailing labels, security position listings and any available
listing or computer files containing the names and addresses of the record
holders of the Shares as of a recent date and shall furnish Purchaser with such
additional information and assistance (including, without limitation, updated
lists of shareholders, mailing labels and lists of securities positions) as
Purchaser or its agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Purchaser and its affiliates, associates, agents and advisors shall use the
information contained in any such labels, listings and files only in
4
<PAGE> 8
connection with the Offer and the Merger, and, if this Agreement shall be
terminated, will deliver to the Company all copies of such information then in
their possession.
ARTICLE II
THE MERGER; EFFECTIVE TIME; CLOSING
Section 2.1 The Merger. Subject to the terms and conditions of this Agreement
and in accordance with the DGCL, at the Effective Time (as defined in Section
2.2), the Company and Purchaser shall consummate a merger (the "Merger") in
which (a) Purchaser shall be merged with and into the Company and the separate
corporate existence of Purchaser shall thereupon cease, and (b) the Company
shall be the surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Delaware. The corporation surviving the
Merger is sometimes hereinafter referred to as the "Surviving Corporation." The
Merger shall have the effects set forth in Section 259 of the DGCL.
Section 2.2 Effective Time. Parent, Purchaser and the Company will cause an
appropriate Certificate of Merger (the "Certificate of Merger") to be executed
and filed on the date of the Closing (as defined in Section 2.3) (or on such
other date as Purchaser and the Company may agree) as provided in the DGCL. The
Merger shall become effective upon the latest to occur of (i) the date on which
the Certificate of Merger is filed with the Secretary of State of the State of
Delaware or (ii) such later date as is agreed upon by the parties and specified
in the Certificate of Merger, and the time of such effectiveness is hereinafter
referred to as the "Effective Time."
Section 2.3 Closing. The closing of the Merger (the "Closing") shall take place
(a) at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, NY 10017-3954, at 10:00 a.m., local time, on the first business day
following the date on which the last of the conditions set forth in Article VIII
hereof shall be fulfilled or waived in accordance with this Agreement or (b) at
such other place, time and date as Parent and the Company may agree.
ARTICLE III
SURVIVING CORPORATION
Section 3.1 Certificate of Incorporation. The Certificate of Incorporation of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation, except that the name
of the Surviving Corporation shall be changed to OmniQuip Textron International
Inc.
Section 3.2 By-Laws. The By-Laws of Purchaser, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation.
Section 3.3 Directors. The directors of Purchaser at the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-Laws.
Section 3.4 Officers. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-
5
<PAGE> 9
Laws. Nothing in the foregoing shall limit the ability of the Parent to cause
the Surviving Corporation to elect or appoint different or additional officers
of the Surviving Corporation.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
Section 4.1 Share Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger. At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any Shares or capital stock of
Purchaser:
(a) Common Stock; Rights. Each Share, together with any preferred stock
purchase rights (the "Rights"), issued pursuant to the Rights Agreement, dated
as of August 21, 1998, as amended, by and between the Company and First Chicago
Trust Company of New York, as Rights Agent (the "Rights Agreement"), that are
issued and outstanding immediately prior to the Effective Time (other than (i)
Shares (and associated Rights) owned by Parent, Purchaser or any direct or
indirect wholly-owned Subsidiary of Parent (collectively, "Parent Companies") or
any of the Company's direct or indirect wholly-owned Subsidiaries or Company
Common Stock held in the treasury of the Company and (ii) Shares held by
Dissenting Stockholders (as defined in Section 4.6 hereof) shall, by virtue of
the Merger and without any action on the part of Purchaser, the Company or the
holder thereof, be canceled and extinguished and converted into the right to
receive, pursuant to Section 4.3, the Per Share Amount in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon, less
any required withholding of taxes, upon the surrender of the certificate
formerly representing such Share.
(b) Parent and Company Owned Shares. Each Share (and associated Right)
issued and outstanding and owned by any of the Parent Companies or any of the
Company's direct or indirect wholly-owned Subsidiaries or authorized but
unissued shares of Company Common Stock held in the treasury of the Company
immediately prior to the Effective Time shall cease to be outstanding, be
canceled and retired without payment of any consideration therefor and cease to
exist.
(c) Capital Stock of Purchaser. Each share of common stock, par value
$1.00 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $1.00 per share, of the Surviving
Corporation.
Section 4.2 Shareholders' Meeting.
(a) The Company, acting through the Board of Directors, shall, if required
by applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its shareholders (the "Shareholders Meeting"), to be held as soon as
practicable after Purchaser shall have purchased Shares pursuant to the
Offer, for the purpose of considering and taking action upon this
Agreement;
(ii) prepare and file with the SEC as soon as practicable a
preliminary proxy statement, together with a form of proxy, or information
statement with respect to the Shareholders Meeting and as promptly as
practicable thereafter, subject to compliance
6
<PAGE> 10
with the rules and regulations of the SEC, mail a definitive proxy
statement or information statement to shareholders of the Company (the term
"Proxy Statement" shall mean such proxy statement or information statement
at the time it initially is mailed to the Company's shareholders and all
amendments and supplements thereto, if any, similarly filed and mailed);
(iii) except as provided in Section 7.2, include in the Proxy
Statement the recommendation of the Board of Directors that shareholders of
the Company vote in favor of the adoption and approval of this Agreement
and the transactions contemplated hereby; and
(iv) use all reasonable best efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Parent and Purchaser, respond promptly to any comments
made by the SEC with respect to the Proxy Statement and any preliminary
version thereof and cause the Proxy Statement to be mailed to its
shareholders at the earliest practicable time following the expiration or
termination of the Offer and (B) except as provided in Section 7.2, obtain
the necessary approvals by its shareholders of this Agreement and the
transactions contemplated hereby.
At the Shareholders Meeting, Parent, Purchaser and their affiliates will
vote all Shares owned by them in favor of adoption and approval of this
Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90 percent (90%) of the then outstanding Shares, the parties
hereto agree, at the request of Purchaser, subject to Article VIII, 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 shareholders of the Company.
Section 4.3 Payment for Shares in the Merger. The manner of making payment for
Shares in the Merger shall be as follows:
(a) At the Effective Time, Parent shall make available to First Chicago
Trust Company of New York (the "Exchange Agent"), or such other exchange agent
selected by Parent and reasonably acceptable to the Company, for the benefit of
the holders of Shares, the funds necessary to make the payments contemplated by
Section 4.1 (the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the Merger Consideration out of the Exchange
Fund. The Exchange Fund shall not be used for any other purpose.
(b) As soon as reasonably practicable, after the Effective Time, the
Exchange Agent shall mail to each holder of record (other than holders of
certificates representing Shares referred to in Section 4.1(b)) of a certificate
or certificates which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates") (i) 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 Exchange Agent) and (ii) instructions for use in effecting the surrender of
the Certificates for payment therefor. Upon surrender of Certificates for
cancellation to the Exchange Agent, together with such letter of transmittal
duly executed and any other required documents, the holder of such Certificates
shall be entitled to receive for each of the Shares represented by such
Certificates the Merger Consideration, without any interest thereon, less any
required withholding of taxes, and the Certificates so surrendered shall
forthwith be canceled. Until so surrendered,
7
<PAGE> 11
such Certificates shall represent solely the right to receive the Merger
Consideration with respect to each of the Shares represented thereby, without
any interest thereon. If payment is to be made to a person other than the person
in whose name a Certificate so surrendered is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such payment shall pay to the Exchange Agent any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the Certificate surrendered, or shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not applicable.
(c) Any portion of the Exchange Fund made available to the Exchange Agent
which remains unclaimed by the former shareholders of the Company six (6) months
after the Effective Time shall be delivered (along with any interest received
with respect thereto) to Parent, upon demand, and any former shareholders of the
Company shall thereafter look only to Parent (subject to abandoned property,
escheat or other similar laws) for payment of their claim for the Merger
Consideration for the Shares, but only as general creditors of Parent.
Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the
Exchange Agent shall be liable to any holder of a certificate representing
Shares for Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(d) In the event that any certificate representing Shares shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen or destroyed and, if
required by Purchaser, the posting by such person of a bond in such reasonable
amount as Purchaser may direct as indemnity against any claim that may be made
against it with respect to such certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed certificate the Merger Consideration
with respect to such certificate, to which such person is entitled pursuant
hereto.
Section 4.4 Transfer of Shares After the Effective Time; No Further Ownership
Rights in the Shares. At the Effective Time, the stock transfer books of the
Company shall be closed, and thereafter no transfers of Shares shall be made on
the stock transfer books of the Company. From and after the Effective Time, the
holders of certificates representing Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided herein or by applicable law. If, after the
Effective Time, certificates representing Shares are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
Section 4.3.
Section 4.5 Stock Options and Other Plans.
(a) Each option granted to a Company employee or director pursuant to the
Company's Amended and Restated 1996 Long-Term Incentive Plan and 1996 Directors
Non-Qualified Stock Option Plan to acquire shares of Company Common Stock (each
such option hereinafter is referred to as an "Option") that is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable, with respect to which, as of the Effective Time, the Per Share
Amount exceeds the exercise price per share, shall, effective as of immediately
prior to the Effective Time, be canceled in exchange for a single lump sum cash
payment equal to the product of (1) the number of shares of Company Common Stock
subject to such Option and (2) the excess of the Per Share Amount over the
exercise price per share of such Option (subject to any applicable withholding
taxes).
8
<PAGE> 12
(b) Each Option that is outstanding immediately prior to the Effective
Time, whether or not then vested or exercisable, with respect to which, as of
the Effective Time, the Per Share Amount does not exceed the exercise price per
share shall, effective as of immediately prior to the Effective Time, be
canceled and no payments shall be made with respect thereto.
(c) Prior to the Effective Time, the Company shall obtain consents from
holders of Options under the 1996 Directors Non-Qualified Stock Option Plan
necessary to give effect to the provisions of Sections 4.5(a) and 4.5(b), and
shall take the steps set forth in Schedule 4.5(c) to effect the provisions of
Sections 4.5(a) and 4.5(b) with respect to options granted pursuant to the
Company's Amended and Restated 1996 Long-Term Incentive Plan.
(d) Immediately prior to the Effective Time, each Share of Company Common
Stock previously issued in the form of restricted stock pursuant to the
Company's Amended and Restated 1996 Long-Term Incentive Plan shall fully vest
and all restrictions thereon shall be removed.
(e) For purposes of this Agreement, the Company's Amended and Restated 1996
Long-Term Incentive Plan and 1996 Directors Non-Qualified Stock Option Plan are
referred to collectively herein as the "Stock Plans."
Section 4.6 Dissenting Stock. Notwithstanding anything in this Agreement to the
contrary, but only to the extent required by the DGCL, Shares that are issued
and outstanding immediately prior to the Effective Time and are held by holders
of Shares who comply with all the provisions of the DGCL concerning the right of
holders of Shares to dissent from the Merger and require appraisal of their
Shares ("Dissenting Stockholders") shall not be converted into the right to
receive the Merger Consideration but shall become the right to receive such
consideration as may be determined to be due such Dissenting Stockholder
pursuant to the law of the State of Delaware; provided, however, that (i) if any
Dissenting Stockholder shall subsequently deliver a written withdrawal of his or
her demand for appraisal (with the written approval of the Surviving
Corporation, if such withdrawal is not tendered within 60 days after the
Effective Time), or (ii) if any Dissenting Stockholder fails to establish and
perfect his or her entitlement to appraisal rights as provided by applicable
law, or (iii) if within 120 days of the Effective Time neither any Dissenting
Stockholder nor the Surviving Corporation has filed a petition demanding a
determination of the value of all Shares outstanding at the Effective Time and
held by Dissenting Stockholders in accordance with applicable law, then such
Dissenting Stockholder or Stockholders, as the case may be, shall forfeit the
right to appraisal of such Shares and such Shares shall thereupon be deemed to
have been converted into the right to receive, as of the Effective Time, the
Merger Consideration, without interest. The Company shall give Parent and
Purchaser (A) prompt notice of any written demands for appraisal of Shares,
withdrawals of demands for appraisal and any other related instruments received
by the Company, and (B) the opportunity to direct all negotiations and
proceedings with respect to any such demands for appraisal. The Company will
not, except with the prior written consent of Parent, voluntarily make any
payment with respect to any demands for appraisal or settle or offer to settle
any demand.
9
<PAGE> 13
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
Section 5.1 Corporate Organization and Qualification. Each of the Company and
its Subsidiaries (as defined in Section 10.9) is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and is qualified and in good standing as a foreign
corporation in each jurisdiction where the properties owned, leased or operated,
or the business conducted, by it require such qualification, except where
failure to so qualify or be in good standing is not reasonably likely to have a
Material Adverse Effect (as defined in Section 10.9). Each of the Company and
its Subsidiaries has all requisite power and authority (corporate or otherwise)
to own its properties and to carry on its business as it is now being conducted.
The Company has heretofore made available to Parent complete and correct copies
of its and its Subsidiaries' Certificates of Incorporation and By-Laws or other
organizational documents as in effect on the date hereof. Schedule 5.1 of the
disclosure schedules delivered by the Company simultaneously with the execution
and delivery of this Agreement (the "Disclosure Schedules"; reference herein to
a Schedule, unless otherwise indicated to the contrary, being a reference to a
Schedule of the Disclosure Schedules) contains a correct and complete list of
each jurisdiction where the Company and each of its Subsidiaries is organized
and qualified to do business. Exhibit 21 to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1998 and Schedule 5.1 together
include all of the Subsidiaries of the Company. The Company does not directly or
indirectly beneficially own any securities or other beneficial ownership
interests in any other entity (including through joint ventures or partnership
agreements) other than (i) the Subsidiaries of the Company and (ii) as disclosed
in Schedule 5.1.
Section 5.2 Capitalization. The authorized capital stock of the Company
consists of (i) 100,000,000 shares of Company Common Stock of which, as of
August 20, 1999, 14,277,500 Shares were issued and outstanding and (ii)
1,500,000 shares of preferred stock, par value $0.01 per share, none of which is
issued or outstanding. Except as set forth on Schedule 5.2, all of the
outstanding shares of capital stock of the Company and of each Subsidiary of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and all of the Shares which may be exchanged for the Merger
Consideration will be, when so exchanged, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. As of August 20,
1999, (i) 1,822,500 shares of Company Common Stock were reserved for issuance
pursuant to the Stock Plans, and (ii) 350,000 shares of Series A Preferred
Stock, par value $.01 per share, were reserved for issuance in connection with
the Rights. Except as set forth on Schedule 5.2, as of the date hereof all
outstanding shares of capital stock of the Company's Subsidiaries are owned by
the Company or a direct or indirect wholly-owned Subsidiary of the Company, free
and clear of all liens, charges, encumbrances, claims, Options and restrictions
of any nature (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock). Schedule 5.2 sets forth the number of Options
and shares of restricted stock outstanding and, in the case of the Options, the
exercise price thereof. Except as set forth above and on Schedule 5.2, there are
not any outstanding or authorized options, warrants, calls, rights (including
preemptive rights), commitments or any other agreements or arrangements of any
character which the Company or any of its Subsidiaries is a party to, or may be
bound by, requiring it to issue, transfer, sell, purchase, redeem or acquire any
shares of capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock of the Company or any of its Subsidiaries (or to cause any of the
foregoing to
10
<PAGE> 14
occur). Except as set forth on Schedule 5.2, the Company does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of the Company on any
matter. Except as set forth above or on Schedule 5.2, (i) no shares of the
capital stock or other voting securities of the Company or any of its
Subsidiaries are issued, reserved for issuance or outstanding; and (ii) there
are no stock appreciation rights, phantom stock units, restricted stock grants,
contingent stock grants, or Benefit Plans which grant awards of any of the
foregoing, and there are no outstanding contractual rights to which the Company
or any of its Subsidiaries is a party the value of which is based on the value
of the Shares or which require the issuance of any shares of Company Common
Stock. Except as set forth on Schedule 5.2, there are no programs in place, nor
any outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of the capital stock of the
Company or any of its Subsidiaries.
Section 5.3 Authority Relative to This Agreement.
(a) The Company has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. This Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval of this Agreement by the shareholders of the Company, including
Purchaser, in accordance with the Company's Certificate of Incorporation). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes the valid and binding agreement of each of
Parent and Purchaser, constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that the enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(b) The Board of Directors of the Company has duly and validly approved and
taken all corporate action required to be taken by the Board of Directors for
the consummation of the transactions (including the Offer, the acquisition of
Shares pursuant to the Offer and the Merger) contemplated herein in accordance
with the terms hereof, including but not limited to, all actions required to (i)
render the provisions of Section 203 of the DGCL restricting business
combinations with "interested stockholders" inapplicable to such transactions
and (ii) amend the Rights Agreement to provide that certificates with respect to
the Rights will not be distributed and the Rights will not become exercisable as
a result of any of the execution of this Agreement, the commencement or
consummation of the Offer or the consummation of the Merger.
Section 5.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement nor the consummation by the Company of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of the respective Certificates of Incorporation or By-Laws of
the Company or any of its Subsidiaries; (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (i) in connection with the applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"),
11
<PAGE> 15
(ii) pursuant to the applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), (iii) the filing of the Certificate of Merger pursuant to the
DGCL and appropriate documents with the relevant authorities of other states in
which the Company or any of its Subsidiaries is authorized to do business, or
(iv) where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, would not be reasonably likely
to, in the aggregate, have a Material Adverse Effect or prevent, materially
delay or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement; (c) except as set forth in Schedule
5.4(c), result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation, modification or acceleration or lien or other charge
or encumbrance) under any of the terms, conditions or provisions of any note,
license, agreement or other instrument or obligation to which the Company or any
of its Subsidiaries or any of their assets may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation,
modification or acceleration or lien or other charge or encumbrance) as to which
requisite waivers or consents have been obtained or which, in the aggregate,
would not be reasonably likely to have a Material Adverse Effect or prevent,
materially delay or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement; or (d) assuming the consents,
approvals, authorizations or permits and filings or notifications referred to in
this Section 5.4 are duly and timely obtained or made and, with respect to the
Merger, the approval of this Agreement by the Company's shareholders has been
obtained, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of its Subsidiaries or to any of
their respective assets, except for violations which would not in the aggregate
be reasonably likely to have a Material Adverse Effect or prevent, materially
delay or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement.
Section 5.5 SEC Reports; Financial Statements.
(a) The Company has filed all reports, proxy statements, forms and other
documents required to be filed by it with the SEC under the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act (collectively, the
"Company SEC Reports"). As of their respective dates, the Company SEC Reports
filed with the SEC since October 1, 1997 (i) complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Report and (ii) did not contain, and any reports and other
documents filed after the date hereof will not contain, as of their respective
dates, any untrue statement of a material fact required to be stated therein or
any omission to state a material fact necessary to make any statement of fact
contained therein not misleading.
(b) The Company's consolidated statements of operations and cash flows for
the three fiscal years ended September 30, 1998 and the nine months ended June
30, 1999 and the Company's consolidated balance sheets as of September 30, 1998
and June 30, 1999 (including the related notes thereto), all of which have been
heretofore furnished to Parent, present fairly the consolidated financial
position of the Company and its Subsidiaries and the consolidated results of
their operations and cash flows as of, and for the periods ended on, the dates
specified, in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods covered except as specifically
referred to in such financial statements (subject, in the case of the unaudited
interim financial statements, to normal year-end adjustments).
12
<PAGE> 16
Section 5.6 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports, as set forth on Schedule 5.6 or as contemplated by this
Agreement, since September 30, 1998 (i) the business of the Company has been
carried on only in the ordinary and usual course; (ii) there has not been any
change in the financial condition, properties, business or results of operations
of the Company and its Subsidiaries or any development or combination of
developments of which the Company has knowledge that, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect;
(iii) neither the Company nor any of its Subsidiaries has amended its
Certificate of Incorporation or By-laws; (iv) the Company has not split,
combined or reclassified the Shares or any capital stock of any of its
Subsidiaries; (v) neither the Company nor any of its Subsidiaries has entered
into or amended in any material respect any employment or severance agreement
with any officer, director or key employee of the Company or any of its
Subsidiaries; (vi) except in the ordinary course of business consistent with
past practice, neither the Company nor any of its Subsidiaries has increased the
compensation or fringe benefits of, or paid any bonuses to, any current director
or officer thereof; (vii) neither the Company nor any of its Subsidiaries has
declared or set aside or paid any dividend or other distribution payable in
cash, stock or property with respect to the Company's capital stock or that of
any of its Subsidiaries (other than regular quarterly cash dividends on the
Company Common Stock not exceeding $.01 per share or dividends or advances from
a wholly-owned Subsidiary of the Company to its parent or the Company); and
(viii) neither the Company nor any of its Subsidiaries has changed its
accounting methods, except as required by GAAP or the SEC.
Section 5.7 Litigation and Liabilities. Except as disclosed in the Company SEC
Reports or as set forth on Schedule 5.7, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of management of the Company and its Subsidiaries,
threatened against the Company or any of its Subsidiaries; (ii) obligations or
liabilities, whether or not accrued, contingent or otherwise and whether or not
required to be disclosed in the Company SEC Reports, or any other facts or
circumstances of which management of the Company and its Subsidiaries has
knowledge that could result in any claims against, or obligations or liabilities
of, the Company or any of its Subsidiaries; (iii) judgments, decrees,
injunctions or orders of any Governmental Entity or arbitrator outstanding
against the Company or any of its Subsidiaries; or (iv) orders, writs,
judgments, injunctions, decrees, determinations or awards with respect to the
Intellectual Property Rights (as hereinafter defined), except, in the case of
all of the foregoing, for those that are not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect or prevent, materially delay
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
Section 5.8 Information Supplied. None of the information supplied by the
Company in writing for inclusion or incorporation by reference in the Offer
Documents or provided by the Company in the Schedule 14D-9 will, at the
respective times that the Offer Documents and the Schedule 14D-9 or any
amendments or supplements thereto are filed with the SEC and are first published
or sent or given to holders of Shares, 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 5.9 Employee Benefit Plans; Labor Matters.
(a) Schedule 5.9 contains an accurate and complete list of all Benefit
Plans maintained or sponsored by the Company, contributed to by the Company, or
covering any employees of
13
<PAGE> 17
the Company, to which the Company is obligated to contribute or with respect to
which the Company has any material liability. For purposes of this Agreement,
the term "Benefit Plans" shall mean: (i) employee benefit plans as defined in
Section 3(3) of ERISA (as defined in Section 10.9), (ii) employment agreements,
and (iii) any other plans, policies, programs and arrangements, whether or not
subject to ERISA, and whether or not funded, which provide any benefit for
current or former employees of the Company. The Company has no obligations to
contribute to, and has not suffered or otherwise caused a complete withdrawal or
partial withdrawal as defined in Sections 4203 and 4205 of ERISA with respect
to, any "multiemployer pension plan," as such term is defined in Section 3(37)
of ERISA, or with respect to any employee benefit plan of the type described in
Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code (as defined in
Section 10.9).
(b) Except as set forth on Schedule 5.9, the Company does not contribute to
or have any material liability with respect to any Benefit Plan which provides
health, life insurance, accident or other "welfare-type" benefits to current or
future retirees or current or future former employees, their spouses or
dependents, other than in accordance with Section 4908B of the Code or
applicable state continuation coverage law.
(c) Except as set forth on Schedule 5.9, each material Benefit Plan and all
related trusts, insurance contracts and funds have been maintained, funded and
administered in compliance in all material respects with all reporting and
disclosure requirements and applicable laws and regulations, including but not
limited to ERISA and the Code. No material actions, suits, claims (other than
routine claims for benefits), taxes, penalties or liens with respect or relating
to the Benefit Plans are pending or, to the knowledge of the Company,
threatened, or have been assessed or incurred.
(d) Except as set forth on Schedule 5.9, each material Benefit Plan that is
intended to be qualified under Section 401(a) of the Code, and each trust (if
any) forming a part thereof, has received a current favorable determination
letter from the United States Internal Revenue Service as to the qualification
under the Code of such Benefit Plan and the tax-exempt status of such related
trust, and, to the knowledge of the Company, nothing has occurred since the date
of such determination that could adversely affect the qualification of such
Benefit Plan or the tax-exempt status of such related trust.
(e) Except as disclosed on Schedule 5.9 or included or incorporated by
reference as exhibits to the Company SEC Reports, there are no employment,
consulting, severance, termination, change in control or indemnification
agreements, arrangements or understandings between the Company or any of its
Subsidiaries and any (i) current officer or director of the Company or any of
its Subsidiaries and (ii) former officer or director of the Company or any of
its Subsidiaries which agreement, arrangement or understanding imposes
continuing obligations on the Company or any of its Subsidiaries.
Section 5.10 Brokers and Finders. Except for the fees and expenses payable to
Morgan Stanley & Co. Incorporated (whose fees and expenses will be paid by the
Company in accordance with the Company's agreement with Morgan Stanley & Co.
Incorporated), a true and complete copy of which has been furnished to Parent,
the Company has not employed any investment banker, broker, finder, consultant
or intermediary in connection with the transactions contemplated by this
Agreement which would be entitled to any investment banking, brokerage, finder's
or similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
14
<PAGE> 18
Section 5.11 Compliance with Laws; Permits. Except as disclosed in the Company
SEC Reports and as set forth on Schedule 5.11, the Company and its Subsidiaries
are, and since January 1, 1998 have been, in compliance with all applicable
laws, statutes, ordinances, rules, regulations, judgments, orders, injunctions,
decrees, arbitration awards, agency requirements, licenses and permits of any
Governmental Entity (as defined in Annex A), (including, without limitation, all
laws relating to the environment, health and safety), except for violations or
possible violations that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect.
Section 5.12 Takeover Statutes. The Board of Directors of the Company has
approved the Offer, the Merger and this Agreement and such approval is
sufficient to render inapplicable to the Offer, the Merger, this Agreement and
the other transactions contemplated by this Agreement, the provisions of Section
203 of the DGCL.
Section 5.13 Rights Plan. The Company has amended the Rights Agreement to
provide that Parent shall not be deemed an Acquiring Person (as defined in the
Rights Agreement) and that the Rights will not separate from the Shares as a
result of entering into this Agreement, commencing or consummating the Offer or
consummating the Merger pursuant to the terms of this Agreement. The Company has
taken all action necessary to ensure that this Agreement and the transactions
contemplated hereby will not trigger any "poison pill" or any other anti-
takeover provision adopted by the Company or available to it under applicable
law.
Section 5.14 Intellectual Property. To the knowledge of the management of the
Company and its Subsidiaries, the Company or its Subsidiaries own, or have the
lawful right to use, all intellectual property rights necessary or used in the
operations of the Company or its Subsidiaries (the "Intellectual Property
Rights"), except for such failures to own or have the lawful right to use as
would not, individually or in the aggregate, have a Material Adverse Effect.
Except as set forth on Schedule 5.14: (i) to the knowledge of the management of
the Company and its Subsidiaries, there are no pending oppositions,
cancellations, invalidity proceedings, interferences or re-examination
proceedings with respect to the material Intellectual Property Rights or any
other proceedings pertaining to or challenging the rights of the Company or any
of its Subsidiaries to use any of the material Intellectual Property Rights;
(ii) neither the Company nor its Subsidiaries has received notice during the
past twelve (12) months from any other person or entity pertaining to or
challenging the right of the Company or any of its Subsidiaries to use any of
the material Intellectual Property Rights; and (iii) neither the Company nor any
of its Subsidiaries has made any claim or has knowledge of a violation or
infringement of its right to or in connection with the material Intellectual
Property Rights which, in either case, is still pending.
Section 5.15 Opinion of Financial Advisor. The Company has received the opinion
of Morgan Stanley & Co. Incorporated to the effect that, as of the date of this
Agreement, the Per Share Amount to be received by the shareholders of the
Company is fair to such shareholders from a financial point of view, and a
complete and correct signed copy of such opinion has been, or promptly upon
receipt thereof will be, delivered to Parent.
Section 5.16 Taxes. The Company has filed or caused to be filed all tax returns
that are required to be filed by it and has paid or caused to be paid all taxes
that have become due as indicated thereon, except where such tax is being
contested in good faith or where the failure to so file or pay would not have a
Material Adverse Effect.
15
<PAGE> 19
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Each of Parent and Purchaser represent and warrant jointly and severally to
the Company that:
Section 6.1 Corporate Organization and Qualification. Each of the Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation and is qualified
and in good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by it require
such qualification, except where the failure to so qualify or be in such good
standing would not prevent, materially delay or materially impair the ability of
Parent or Purchaser to consummate the transactions contemplated by this
Agreement.
Section 6.2 Authority Relative to This Agreement. Each of the Parent and
Purchaser has the requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement and the consummation by Parent and Purchaser of the transactions
contemplated hereby have been duly and validly authorized by the respective
Boards of Directors of Parent and Purchaser (and by Parent as the sole
shareholder of Purchaser), and no other corporate proceedings on the part of
Parent and Purchaser are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Purchaser and, assuming this
Agreement constitutes the valid and binding agreement of the Company,
constitutes valid and binding agreements of each of Parent and Purchaser,
enforceable against each of them in accordance with its terms, except that the
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
Section 6.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Parent or Purchaser nor the consummation by Parent
and Purchaser of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Certificate of Incorporation or the
By-Laws, respectively, of Parent or Purchaser; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) in connection with the
applicable requirements of the HSR Act, (ii) pursuant to the applicable
requirements of the Exchange Act, (iii) the filing of the Certificate of Merger
pursuant to the DGCL and appropriate documents with the relevant authorities of
other states in which Parent is authorized to do business, or (iv) where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not in the aggregate prevent, materially
delay or materially impair the ability of Parent or Purchaser to consummate the
transactions contemplated by this Agreement; (c) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, modification or
acceleration or lien or other charge or encumbrance) under any of the terms,
conditions or provisions of any note, license, agreement or other instrument or
obligation to which Parent or Purchaser may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation,
modification or acceleration or lien or other charge or encumbrance) as to which
requisite waivers or consents have been obtained or which, in the aggregate,
would not prevent, materially delay or materially impair the ability of Parent
or Purchaser to consummate the transactions contem-
16
<PAGE> 20
plated by this Agreement; or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 6.3 are duly and timely obtained or made, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent or any of
its Subsidiaries or to any of their respective assets, except for violations
which would not in the aggregate prevent, materially delay or materially impair
the ability of Parent or Purchaser to consummate the transactions contemplated
by this Agreement.
Section 6.4 Brokers and Finders. Except for the fees and expenses payable to
Salomon Smith Barney (whose fees and expenses will be paid by Parent or
Purchaser in accordance with the Parent's agreement with such firm), Parent and
Purchaser have not employed any investment banker, broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
which would be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or the transactions
contemplated hereby.
Section 6.5 Financing. Purchaser will have, and Parent will cause Purchaser to
have, at the time required, sufficient funds available to purchase all of the
Shares outstanding on a fully diluted basis and to pay all fees and expenses
related to the transactions contemplated by this Agreement.
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
Section 7.1 Conduct of Business of the Company.
(a) The Company agrees that during the period from the date of this
Agreement to the Effective Time (unless the other parties shall otherwise agree
in writing and except as otherwise contemplated by this Agreement), the Company
will, and will cause each of its Subsidiaries to, conduct its operations
according to its ordinary and usual course of business consistent with past
practice. Without limiting the generality of the foregoing, and except as
otherwise permitted in this Agreement or set forth on Schedule 7.1, prior to the
Effective Time, neither the Company nor any of its Subsidiaries will, without
the prior written consent of Parent:
(i) except for shares to be issued or delivered pursuant to awards
outstanding on the date hereof under the Company's Stock Plans, issue,
deliver, sell, dispose of, pledge or otherwise encumber, or authorize or
propose the issuance, sale, disposition or pledge or other encumbrance of
(A) any additional shares of capital stock of any class (including the
Shares), or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for any shares of capital stock, or any
rights, warrants, options, calls, commitments or any other agreements of
any character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of capital stock, or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof;
(ii) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding capital stock,
including the Shares;
(iii) split, combine, subdivide or reclassify any Shares or declare,
set aside for payment or pay any dividend, or make any other actual,
constructive or deemed
17
<PAGE> 21
distribution in respect of any Shares or otherwise make any payments to
shareholders in their capacity as such, other than the payment of a regular
quarterly cash dividend on the Company Common Stock on or about September
30, 1999 of $.01 per share payable to shareholders of record on September
15, 1999 and except for dividends by a wholly-owned Subsidiary of the
Company;
(iv) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the
Merger);
(v) adopt any amendments to its Certificate of Incorporation or
By-Laws or alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
Subsidiary of the Company;
(vi) make any acquisition, by means of merger, consolidation or
otherwise, or material disposition (other than acquisition or disposition
of inventory, supplies and products in the ordinary course of business,
consistent with past practice), of assets or securities, or permit any
assets to become subject, other than in the ordinary course of business, to
any material lien or encumbrance;
(vii) other than in the ordinary course of business consistent with
past practice, incur any indebtedness for borrowed money or guarantee any
such indebtedness or make any loans, advances or capital contributions to,
or investments in, any other person, other than to the Company or any
wholly-owned Subsidiary of the Company;
(viii) grant any increases in the compensation of any of its
directors, officers or key employees; for the avoidance of doubt
"compensation" being defined to include all stock options, stock
appreciation rights, phantom stock units, restricted stock grants,
contingent stock grants or similar benefits;
(ix) grant any increases in the compensation of any of its employees,
other than employees who are directors, officers or key employees, except
in the ordinary course of business consistent with past practice;
(x) pay or agree to pay or accelerate the payment of any pension,
retirement allowance or other employee benefit not required or contemplated
by any of the existing benefit, severance, termination, pension or
employment plans, agreements or arrangements as in effect on the date
hereof to any director or officer of the Company or any of its
Subsidiaries, whether past or present;
(xi) enter into any new or amend any existing employment or severance
or termination agreement with any such director or officer;
(xii) except as may be required to comply with applicable law, become
obligated under any new pension plan, welfare plan, multiemployer plan,
employee benefit plan, severance plan, benefit arrangement, or similar plan
or arrangement, which was not in existence on the date hereof, or amend any
such plan or arrangement in existence on the date hereof if such amendment
would have the effect of enhancing any benefits thereunder;
(xiii) settle or compromise any material claims (including any claims
in respect of tax liabilities or refunds) or litigation or, except in the
ordinary and usual course of business, modify, amend or terminate any of
its material contracts or waive, release or assign any material rights or
claims;
18
<PAGE> 22
(xiv) make any change, other than as required by applicable law,
regulation or change in generally accepted accounting principles, in
accounting policies or procedures applied by the Company (including tax
accounting policies and procedures);
(xv) except as otherwise required by applicable law or regulation,
make any tax election or permit any insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated, except in
the ordinary course of business;
(xvi) take any action to amend or alter the Rights Agreement in any
manner adverse to Parent's, Purchaser's or the Company's ability to
commence or consummate the transactions contemplated by this Agreement
pursuant to the terms hereof;
(xvii) incur any capital expenditures, other than in the ordinary
course of business and consistent with past practice; or
(xviii) authorize, or enter into any contract, agreement, commitment
or arrangement to do any of the foregoing.
Section 7.2 No Solicitation of Transactions. The Company, its affiliates and
their respective officers, directors, employees, representatives and agents
shall immediately cease any existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any Takeover Proposal (as
hereinafter defined). The Company, its Subsidiaries, directors, employees,
representatives and agents may furnish information and access, in each case only
in response to a request for such information or access to any person made after
the date hereof which was not initiated, solicited or knowingly encouraged by
the Company or any of its affiliates or any of its or their respective officers,
directors, employees, representatives or agents after the date hereof (with
respect to confidential information, pursuant to appropriate confidentiality
agreements), and may participate in discussions and negotiate with such entity
or group concerning any Takeover Proposal, only if such entity or group has
submitted a bona fide proposal to the Board of Directors of the Company relating
to any such transaction and (a) if the Board of Directors of the Company
determines in good faith, after receiving advice from its independent financial
advisor, that such entity or group has submitted to the Company a Takeover
Proposal which is reasonably likely to be a Superior Proposal (as hereinafter
defined), and (b) if the Board of Directors of the Company determines, in its
good faith judgment, based on the opinion of outside legal counsel to the
Company, that failing to take such action would constitute a breach of such
Board's fiduciary obligations under applicable law. The Company shall promptly
notify Parent if any proposal or offer, or any inquiry or contact with any
person with respect thereto, is made and shall, in any such notice to Parent,
indicate in reasonable detail the identity of the offeror and the terms and
conditions of any proposal or offer, or any such inquiry or contact. The Company
will promptly provide to Parent any non-public information concerning the
Company or its Subsidiaries provided to any other person which was not
previously provided to Parent. The Company shall keep Parent promptly advised of
all developments which could reasonably be expected to culminate in the Board of
Directors withdrawing, modifying or amending its recommendation of the Offer,
the Merger and other transactions contemplated by this Agreement. Except as set
forth in this Section 7.2, neither the Company nor any of its affiliates, nor
any of its or their respective officers, directors, employees, representatives
or agents, shall, directly or indirectly, knowingly encourage or solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Parent and Purchaser, any affiliate or associate of Parent and
Purchaser, or any designees of Parent or Purchaser) concerning any Takeover
Proposal; provided, that nothing in this Section 7.2 shall prevent the Company
or the Board of Directors of the Company from
19
<PAGE> 23
taking, and disclosing to the Company's stockholders, a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act; provided further, that
the Board shall not recommend that the stockholders of the Company tender their
Shares in connection with any such tender offer unless the Board of Directors of
the Company determines in its good faith judgment based on the opinion of
independent outside legal counsel to the Company, that failing to take such
action would constitute a breach of the fiduciary duty of the Board of Directors
of the Company under applicable law.
As used in this Agreement, "Takeover Proposal" shall mean any tender or
exchange offer, proposal for a merger, consolidation or other business
combination involving the Company or any Subsidiary of the Company or any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the assets of, the Company or its Subsidiaries other
than transactions contemplated by this Agreement.
Section 7.3 Approvals and Consents; Cooperation. Subject to the other provisions
of this Agreement, the parties hereto shall use their respective reasonable best
efforts, and cooperate with each other, to obtain as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including, without limitation, pursuant to the HSR Act, required in order to
consummate the transactions contemplated by this Agreement, including, without
limitation, the Offer and the Merger.
Section 7.4 Further Assurances. Subject to the other provisions of this
Agreement, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, the Offer and the Merger, which efforts shall
include, without limitation, Parent, Purchaser and the Company using their
respective reasonable best efforts to prevent any preliminary or permanent
injunction or other order by a court of competent jurisdiction or governmental
entity relating to consummating the transactions contemplated by this Agreement,
and, if issued, to appeal any such injunction or order through the appellate
court or body for the relevant jurisdiction; provided, however, in no event
shall Parent, Purchaser or the Company be obligated to agree or consent to any
divestiture of assets, hold-separate agreement or other similar undertakings
pursuant to any antitrust or similar laws or regulations for the purposes of
consummating or making effective the transactions contemplated by this
Agreement. If at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
hereto shall take or cause to be taken all such necessary action, including,
without limitation, the execution and delivery of such further instruments and
documents as may be reasonably requested by the other party for such purposes or
otherwise to consummate and make effective the transactions contemplated hereby.
Section 7.5 Access to Information. Upon reasonable notice, the Company shall
(and shall cause each of its Subsidiaries to) afford to officers, employees,
counsel, accountants and other authorized representatives of Parent
("Representatives"), reasonable access, during normal business hours (to the
extent feasible without undue interference with or disruption to the operation
of the Company or any of its Subsidiaries) throughout the period prior to the
Effective Time, to its properties, books and records and, during such period,
shall (and shall cause each of its Subsidiaries to) furnish promptly to such
Representatives all information concerning its business, properties and
personnel as may reasonably be requested. Parent agrees that it will not, and
will cause its Representatives not to, use any information obtained pursuant to
this Section 7.5 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. The Confidentiality Agreement,
dated July 9,
20
<PAGE> 24
1999 (the "Confidentiality Agreement"), by and between the Company and Parent
shall apply with respect to information furnished by the Company, its
Subsidiaries and the Company's officers, employees, counsel, accountants and
other authorized representatives hereunder.
Section 7.6 Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining to the
Offer or the Merger and shall not issue any such press releases or make any such
public announcements prior to such consultation and agreement, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange, in which case the party proposing to
issue such press release or make such public announcement shall use its
reasonable efforts to consult in good faith with the other party before issuing
any such press releases or making any such public announcements.
Section 7.7 Indemnification of Directors and Officers.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Certificate of Incorporation and By-Laws of the Company on the date
of this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers, employees or agents of the
Company in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law; provided, that in
the event any claim or claims are asserted or made within such six-year period,
all rights to indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims.
(b) Parent shall cause to be maintained in effect for the Indemnified
Parties (as defined below) for not less than six years the current policies of
directors' and officers' liability insurance and fiduciary liability insurance
maintained by the Company and the Company's Subsidiaries with respect to matters
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement); provided, that Parent may
substitute therefor policies of substantially the same coverage containing terms
and conditions which are no less advantageous to the Company's present or former
directors or officers or other employees covered by such insurance policies
prior to the Effective Time (the "Indemnified Parties") and provided further
that said substitution does not result in any gaps in coverage with respect to
matters occurring prior to the Effective Time.
(c) This Section 7.7 is intended to benefit the Indemnified Parties and
shall be binding on all successors and assigns of Parent, Purchaser, the Company
and the Surviving Corporation.
Section 7.8 Employees.
(a) For a period of one year following the Effective Time, Parent agrees to
provide employee benefit plans and programs for the benefit of employees of the
Company and its Subsidiaries (other than those employees covered by collective
bargaining agreements) that are in the aggregate no less favorable than the
employee benefit plans and programs offered to such employees immediately prior
to Closing (excluding plans or programs which provide for issuance of Shares or
options on Shares). All service credited to each employee by the Company through
the Effective Time shall be recognized by Parent for purposes of eligibility
21
<PAGE> 25
and vesting under any employee benefit plan provided by Parent for the benefit
of the employees. Employees covered by collective bargaining agreements shall be
provided with such benefits as shall be required under the terms of any
applicable collective bargaining agreement.
(b) Parent hereby agrees to cause the Surviving Corporation to honor and
perform (without modification unless agreed to in writing by the parties
thereto) the written employment agreements, severance agreements and other
agreements listed on Schedule 7.8(b), all as in effect on the date of this
Agreement.
Section 7.9 Notification of Certain Matters. The Company shall give prompt
notice to Parent and Purchaser, and Parent and Purchaser shall give prompt
notice to the Company, of (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which would be reasonably likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any failure of the Company, Parent
or Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. Each of
the Company, Parent and Purchaser shall give prompt notice to the other parties
of any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
Section 7.10 Company Board.
(a) Promptly (but in any event within two business days) upon the purchase
by Parent of a majority of the outstanding Shares pursuant to the Offer, either
(a) a majority of the members of the Board of Directors of the Company shall
resign and the remaining members of the Board of Directors of the Company shall
fill all of the Board positions so vacated with persons designated by Parent or
(b) the size of the Board of Directors of the Company shall be expanded and the
vacant seats filled with persons designated by Parent so that Parent's designees
shall constitute a majority of the members of the Board of Directors of the
Company. In either case, at all times thereafter through the Effective Time a
majority of the members of the Board of Directors of the Company shall be
persons designated by Parent.
(b) The Company's obligation to appoint designees to the Board of Directors
of the Company shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its obligations
under this Section 7.10 and shall include in the Schedule 14D-9 such information
with respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 to fulfill such obligations. Parent or Purchaser
shall supply to the Company and be solely responsible for any information with
respect to either of them and their nominees, officers, directors and affiliates
required by such Section 14(f) and Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to this
Section 7.10, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or By-laws of the Company, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Purchaser or
waiver of any of the Company's rights hereunder shall require the concurrence of
a majority of the directors of the Company then in office who are directors as
of the date hereof or persons designated by such directors and who were neither
designated by Purchaser nor employees of the Company ("Continuing Directors").
Prior to the Effective
22
<PAGE> 26
Time, the Company and Purchaser shall use all reasonable efforts to ensure that
the Company's Board of Directors at all times includes at least three Continuing
Directors.
Section 7.11 Stockholder Approval.
(a) Promptly after the consummation of the Offer, if required by the DGCL
in order to consummate the Merger, the Company, acting through its Board of
Directors, shall, in accordance with applicable law and the Company's
Certificate of Incorporation and By-laws duly call, give notice of and convene a
meeting of the holders of Company Common Stock for the purpose of voting upon
this Agreement and the Merger and the Company agrees that this Agreement and the
Merger shall be submitted at such meeting. The Company shall use its reasonable
best efforts to solicit from its stockholders proxies and, subject always to the
fiduciary obligations of the Company's directors under applicable law, shall
take all other action necessary and advisable, to secure the vote of
stockholders required by applicable law to obtain the approval for this
Agreement and the Merger. Subject always to the fiduciary obligations of the
Company's directors under applicable law, the Company agrees that it will
include in the Proxy Statement the recommendation of its Board of Directors that
holders of Company Common Stock approve and adopt this Agreement and approve the
Merger. Parent and Purchaser will cause all shares of Company Common Stock owned
by them and their Subsidiaries to be voted in favor of the approval and adoption
of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90% of the outstanding Company Common Stock, the Company
agrees, at the request of Purchaser, subject to Article VIII, to take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after such acquisition, without a meeting of the
Company's stockholders, in accordance with Section 253 of the DGCL.
Section 7.12 Related Parties. The Company shall cause each contract, agreement
or other arrangement between the Company or any of its Subsidiaries and Harbour
Group Industries Inc. or any of its Affiliates to be terminated, effective not
later than the consummation of the Offer, without penalty to, or payment of
other consideration by, the Company or any of its Subsidiaries; provided that
the foregoing covenant shall not apply to (a) the Insurance Agreement, dated
September 27, 1996, between Harbour Group Ltd. and the Company, (b) the 1996
Directors Non Qualified Stock Option Plan or awards thereunder, (c) the
Indemnification Agreement, dated as of March 20, 1997, by and among Harbour
Group Investments III, L.P., Uniquip-HGI Associates, L.P. and the Company or (d)
the Indemnification Agreement, dated as of March 11, 1998, by and among Harbour
Group Investments III, L.P., Uniquip-HGI Associates, L.P., P. Enoch Stiff and
the Company.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Shareholder Approval. To the extent required by applicable law, this
Agreement and the Merger shall have been duly approved and adopted by the
shareholders of the Company in accordance with applicable law and the
Certificate of Incorporation and By-laws
23
<PAGE> 27
of the Company; provided that Parent and Purchaser shall cause all shares of the
Company Common Stock owned by them or their Subsidiaries to be voted in favor of
the approval and adoption of this Agreement and the Merger.
(b) Injunction. There shall not be in effect any statute, rule,
regulation, executive order, decree, ruling or injunction or other order of a
court or governmental or regulatory agency of competent jurisdiction directing
that the transactions contemplated herein not be consummated.
(c) Governmental Filings and Consents. All governmental consents, orders
and approvals legally required for the consummation of the Merger and the
transactions contemplated hereby shall have been obtained and be in effect at
the Effective Time, except where the failure to obtain any such consent would
not reasonably be expected to have a Material Adverse Effect on Parent and its
Subsidiaries, considered as whole (assuming the Merger had taken place), or on
Parent's ability to own, control and operate the Company and its Subsidiaries,
and the waiting periods under the HSR Act shall have expired or been terminated.
(d) The Offer. Purchaser shall have purchased all Shares tendered pursuant
to the Offer.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
Section 9.1 Termination by Mutual Consent. This Agreement may be terminated and
the Offer and the Merger may be abandoned at any time prior to the Effective
Time, by the mutual written consent of Parent and the Company.
Section 9.2 Termination by Either Parent or the Company. This Agreement may be
terminated and the Offer and Merger may be abandoned by Parent or the Company if
(i) any governmental or regulatory agency located or having jurisdiction within
the United States or any country or economic region in which either the Company
or Parent, directly or indirectly, has material assets or operations shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for payment of,
or payment for, shares of Company Common Stock pursuant to the Offer or the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable; or (ii) due to an occurrence or circumstance which would
result in a failure to satisfy any of the Offer Conditions, Purchaser shall have
failed to pay for Shares pursuant to the Offer on or prior to the Outside Date,
unless such failure has been caused by or results from the failure of the party
seeking to terminate this Agreement to perform in any material respect any of
its respective covenants or agreements contained in this Agreement. As used
herein, the term "Outside Date" shall mean the later of (A) 90 days following
the date hereof, or (B) the date on which either the applicable waiting period
under the HSR Act shall have expired or been terminated.
Section 9.3 Termination by the Company. This Agreement may be terminated and
the Offer and the Merger may be abandoned at any time prior to the Effective
Time, by action of the Board of Directors of the Company:
(a) if (i) the Company, based on the advice of outside legal counsel to the
Company that such action is necessary in order for the Board of Directors of the
Company to comply
24
<PAGE> 28
with its fiduciary duties under applicable law, subject to complying with the
terms of this Agreement, proposes to enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal and the Company
notifies Parent in writing that it intends to enter into such an agreement,
attaching the most current version of such agreement to such notice and (ii)
Parent does not make, within five business days of receipt of the Company's
written notification of its intention to enter into a binding agreement for a
Superior Proposal, an offer to enter into an amendment to this Agreement such
that the Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, that this Agreement as so amended is
at least as favorable, from a financial point of view, to the shareholders of
the Company as the Superior Proposal. The Company agrees (A) that it will not
enter into a binding agreement referred to in clause (i) above until at least
the sixth business day after it has provided the notice to Parent required
thereby, (B) to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after giving
such notification, and (C) that it shall be a condition precedent to the
effectiveness of any termination pursuant to this Section 9.3(a) that the fee
required to be paid pursuant to Section 9.5(b) shall have been paid in full
simultaneously with, or prior to, such termination.
For purposes of this Agreement, the term "Superior Proposal" shall mean a
bona fide proposal made by a third party to acquire all of the outstanding
Shares of the Company pursuant to a tender offer or a merger, or to purchase all
or substantially all of the assets of the Company, on terms which a majority of
the members of the Board of Directors of the Company determines in its good
faith reasonable judgment (based on the advice of its independent financial and
legal advisors) to be more favorable to the Company and its stockholders than
the transactions contemplated hereby, after taking into account all relevant
factors, including, without limitation, (i) the consideration to be paid to
shareholders pursuant thereto, (ii) the time estimated to be required for
consummation, and (iii) financial, regulatory and other risks of
nonconsummation.
(b) if (i) Purchaser shall have (x) failed to commence the Offer within
five business days following the date of the initial public announcement of the
Offer, (y) failed to pay for any Shares pursuant to the Offer to the extent
required under Section 1.1(a), or (z) terminated the Offer without purchasing
Shares pursuant to the Offer, or (ii) there has been a material breach by Parent
or Purchaser of any representation, warranty, covenant or agreement contained in
this Agreement that is not curable or, if curable, is not cured within 10
calendar days after written notice of such breach is given by the Company to the
party committing such breach.
Section 9.4 Termination by Parent. This Agreement may be terminated and the
Offer and Merger may be abandoned at any time prior to the Effective Time by
action of the Parent if (i) the Board of Directors of the Company shall have
withdrawn or adversely modified its approval or recommendation of this Agreement
or failed to reconfirm its recommendation of this Agreement within five business
days after a written request by Parent to do so, (ii) there has been a breach by
the Company of any representation, warranty, covenant or agreement contained in
this Agreement that is qualified as to materiality or there has been a material
breach of any other representation, warranty, covenant or agreement contained in
this Agreement, in any case that is not curable or, if curable, is not cured
within 10 calendar days after written notice of such breach is given by Parent
to the party committing such breach, or (iii) on a scheduled expiration date all
conditions to Purchaser's obligation to accept for payment and pay for Shares
pursuant to the Offer shall have been satisfied or waived other than the Minimum
Condition and Purchaser terminates the Offer without purchasing Shares
25
<PAGE> 29
pursuant to the Offer, provided that the satisfaction or waiver of all other
conditions shall have been publicly disclosed at least five business days before
termination of the Offer, or (iv) Purchaser shall have otherwise terminated the
Offer in accordance with the terms of this Agreement, including Annex A, without
purchasing shares pursuant to the Offer.
Section 9.5 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the abandonment of
the Merger pursuant to this Article IX, this Agreement (other than, with respect
to the parties hereto, the obligations pursuant to this Section 9.5 and Sections
10.1 and 10.2) shall become void and of no effect with no liability on the part
of any party hereto (or of any of its directors, officers, employees, agents,
legal and financial advisors or other representatives).
(b) In the event that (i) this Agreement is terminated by the Company
pursuant to Section 9.3(a) or (ii) this Agreement is terminated by Parent
pursuant to Section 9.4(i), then the Company shall, simultaneously with or prior
to such termination, pay Parent a termination fee of $20,000,000 and pay, in no
event later than two business days after the date of such termination, Parent
the amount of all documented out-of-pocket expenses of Parent and Purchaser
incurred in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
(c) In the event that this Agreement is terminated by Parent pursuant to
Section 9.4(ii), then the Company shall promptly pay, but in no event later than
two days after the date of such termination, a termination fee of $1,000,000
representing liquidated damages for Parent's internal costs and expenses plus
the amount of all documented out-of pocket expenses of Parent and Purchaser
incurred in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
(d) In the event that (i) this Agreement is terminated by the Company
pursuant to Section 9.3(b)(i)(x) or (y) or Section 9.3(b)(ii), then Parent shall
promptly, but in no event later than two days after the date of such termination
or event, pay the Company a termination fee of $1,000,000 plus the amount of all
documented out-of-pocket expenses of the Company incurred in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby.
Section 9.6 Extension; Waiver. Subject to the applicable provisions of the DGCL
and the provisions of this Agreement, including Section 7.10, at any time prior
to the Effective Time, each of Parent, Purchaser and the Company may (i) extend
the time for the performance of any of the obligations or other acts of the
other party, (ii) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto 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
either party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE X
MISCELLANEOUS AND GENERAL
Section 10.1 Payment of Expenses. Except as set forth in the reimbursement
provisions of Sections 9.5, whether or not the Offer and the Merger shall be
consummated, each party
26
<PAGE> 30
hereto shall pay its own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.
Section 10.2 Survival of Representations and Warranties; Survival of
Confidentiality. The representations and warranties made herein shall not
survive beyond the earlier of (i) termination of this Agreement and (ii) the
Effective Time, in the case of the representations and warranties of Parent or
Purchaser or the purchase of Shares by Purchaser pursuant to the Offer, in the
case of the representations and warranties of the Company. This Section 10.2
shall not limit any covenant or agreement of the parties hereto which by its
terms contemplates performance after the Effective Time or the purchase of
Shares by Purchaser pursuant to the Offer. The Confidentiality Agreement shall
survive any termination of this Agreement and the provisions of such
Confidentiality Agreement shall apply to all information and material delivered
by any party hereunder.
Section 10.3 Modification or Amendment. Subject to the applicable provisions of
the DGCL and the provisions of this Agreement, including Section 7.10, at any
time prior to the Effective Time, the parties hereto may modify or amend this
Agreement by written agreement executed and delivered by duly authorized
officers of the respective parties.
Section 10.4 Waiver of Conditions. Subject to the applicable provisions of the
DGCL and the provisions of this Agreement, including Section 7.10, the
conditions to each of the parties' obligations to consummate the Merger are for
the sole benefit of such party and may be waived by such party in whole or in
part.
Section 10.5 Governing Law.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof.
(b) Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (iii) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated hereby in any
court other than a Federal or state court sitting in the State of Delaware.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN
27
<PAGE> 31
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 10.5.
Section 10.6 Notices. All notices, requests, consents and other communications
hereunder shall be deemed given: (i) when delivered if delivered personally
(including by courier); (ii) on the third day after mailing, if mailed, postage
prepaid, by registered or certified mail (return receipt requested); (iii) on
the day after mailing if sent by a nationally recognized overnight delivery
service which maintains records of the time, place, and recipient of delivery;
or (iv) upon receipt of a confirmed transmission, if sent by telex, telecopy or
facsimile transmission, in each case to the parties at the following addresses
or to other such addresses as may be furnished in writing by one party to the
others:
(a) if to the Company, to:
OmniQuip International, Inc.
222 East Main Street
Port Washington, Wisconsin 53704
Attention: Chief Executive Officer
(414) 268-8965 (telephone)
(414) 269-3100 (facsimile)
with a copy to:
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037
Attn: Matthew G. Maloney, Esq.
(202) 785-9700 (telephone)
(202) 887-0689 (facsimile)
(b) if to Parent or Purchaser, to:
Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention: Executive Vice President & General Counsel
(401) 457-2228 (telephone)
(401) 457-3666 (facsimile)
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Richard A. Garvey, Esq.
(212) 455-2578 (telephone)
(212) 455-2502 (facsimile)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
Section 10.7 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof, and (b) shall
28
<PAGE> 32
not be assigned by operation of law or otherwise, except that Purchaser may
assign all or any of its rights and obligations hereunder to any direct or
indirect wholly owned Subsidiary or Subsidiaries of Parent, provided that no
such assignment shall relieve the Purchaser of its obligations hereunder if such
assignee does not perform such obligations.
Section 10.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and assigns. Nothing in this Agreement, express or implied, other than the right
to receive the consideration payable in the Merger pursuant to Article IV hereof
is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement;
provided, however, that the provisions of Section 7.7 shall inure to the benefit
of and be enforceable by the Indemnified Parties and the provisions of Section
7.8(b) shall inure to the benefit of and be enforceable by the officers and
directors of the Company.
Section 10.9 Certain Definitions. As used herein:
(a) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Material Adverse Effect" shall mean any adverse change or changes in
the financial condition, properties, business or results of operations of the
Company or any of its Subsidiaries or Parent or any of its Subsidiaries, as the
case may be, which individually or in the aggregate is or are material to the
Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries,
taken as a whole, as the case may be, other than (i) any change or effect
arising out of general economic conditions or (ii) any change or effect which
the Company or Parent, as the case may be, has disclosed in writing, prior to
the date hereof, to Parent or the Company, as the case may be, has occurred or
is likely to occur.
(d) "Subsidiary" shall mean, when used with reference to any entity, any
entity a majority of the outstanding voting securities of which are owned
directly or indirectly by such entity; provided, however, for purposes of this
Agreement, Great Southern Rental & Sales, Inc. shall not be deemed a Subsidiary
of the Company.
(e) Any act or decision of the "Board of Directors of the Company" shall
mean such action or decision by a majority of the disinterested members of the
Board of Directors of the Company.
Section 10.10 Specific Performance.
(a) The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
(b) It is accordingly agreed that the parties hereto shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
Section 10.11 Obligation of Parent. Whenever this Agreement requires Purchaser
to take any action, such requirement shall be deemed to include an undertaking
on the part of Parent to take such action and or guarantee of the performance
thereof.
29
<PAGE> 33
Section 10.12 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, each of which shall remain in full force and
effect.
Section 10.13 Captions. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Section 10.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. Any such counterpart may be executed by
facsimile signature with only verbal confirmation, and when so executed and
delivered shall be deemed an original and such counterpart(s) together shall
constitute only one original.
[The Remainder of This Page Intentionally Left Blank]
30
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
of Merger to be executed by their respective duly authorized officers as of the
date first above written.
TEXTRON INC.
By: /s/ WAYNE W. JUCHATZ
-----------------------------------
Name: Wayne W. Juchatz
Title: Executive Vice President
TELESCOPE ACQUISITION INC.
By: /s/ BHIKHAJI MANECKJI
-----------------------------------
Name: Bhikhaji Maneckji
Title: Vice President
OMNIQUIP INTERNATIONAL, INC.
By: /s/ P. ENOCH STIFF
-----------------------------------
Name: P. Enoch Stiff
Title: President and Chief
Executive Officer
31
<PAGE> 35
Annex A
Certain Conditions of the Offer
Notwithstanding any other provision of the Offer and provided that
Purchaser shall not be obligated to accept for payment any Shares until (i)
expiration of all applicable waiting periods under the HSR Act and (ii) the
Minimum Condition shall have been satisfied, Purchaser shall not be required to
accept for payment or pay for, or may delay the acceptance for payment of or
payment for, any Shares tendered pursuant to the Offer, and may, subject to the
terms of the Agreement, terminate or amend the Offer if on or after August 21,
1999, and at or before the time of payment for any of such Shares, any of the
following events shall occur (or become known to Parent) and remain in effect:
(a) there shall have occurred and be continuing as of the then
scheduled expiration date of the Offer: (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange or the Nasdaq National Market; (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States; (iii) a commencement or escalation of a war, armed hostilities or
other international or national calamity directly involving the United
States; or (iv) any material limitation (whether or not mandatory) by any
governmental or regulatory authority, agency or commission, domestic or
foreign ("Governmental Entity"), on the extension of credit by banks or
other lending institutions in the United States;
(b) (i) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Agreement; (ii) any representation or warranty of the Company set forth in
the Agreement which is qualified by materiality shall not have been true
and correct as of the date of the Agreement and as of the then scheduled
expiration date of the Offer as though made on and as of the then scheduled
expiration date of the Offer; or (iii) any representation or warranty of
the Company set forth in the Agreement which is not qualified by
materiality shall not have been true and correct in all material respects
as of the date of this Agreement and as of the then scheduled expiration
date of the Offer as though made on and as of the then scheduled expiration
date of the Offer, except in the case of clauses (ii) and (iii) of this
paragraph (b) for representations and warranties which by their terms speak
only as of another date, which representations and warranties, if qualified
by materiality, shall not have been true and correct as of such date and,
if not qualified, shall not have been true and correct in all material
respects as of such other date;
(c) any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which: (i)
prevents, prohibits or materially restricts consummation of the Offer or
the Merger; (ii) prohibits or materially limits the ownership or operation
by the Company, Parent or any of their Subsidiaries of all or any material
portion of the business or assets of the Company and its Subsidiaries taken
as a whole, or as a result of the Offer or the Merger compels the Company,
Parent or any of their Subsidiaries to dispose of or hold separate all or
any material portion of their respective business or assets; (iii) imposes
material limitations on the ability of Parent or any Subsidiary of Parent
to exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser
pursuant to the Offer or otherwise on all matters properly presented to the
Company's shareholders including, without limitation, the approval and
adoption of the Agreement
A-1
<PAGE> 36
and the transactions contemplated thereby; or (iv) requires divestiture by
Parent or any affiliate of Parent of any Shares;
(d) any change in the financial condition, properties, business or
results of operations of the Company and its Subsidiaries after the date of
this Agreement that, individually or in the aggregate, has or is reasonably
likely to have a Material Adverse Effect;
(e) the Board of Directors of the Company (or a special committee
thereof) shall have withdrawn or amended, or modified in a manner adverse
to Parent and Purchaser its recommendation of the Offer or the Merger, or
shall have endorsed, approved or recommended any Superior Proposal;
(f) any Person, other than Parent, Purchaser or their affiliates or
any group of which any of them is a member, acquires beneficial ownership
of twenty percent or more of the Shares or rights to acquire twenty percent
or more of the Shares; or
(g) the Agreement shall have been terminated by the Company or Parent
or Purchaser in accordance with its terms or Parent or Purchaser shall have
reached an agreement or understanding in writing with the Company providing
for termination or amendment of the Offer or delay in payment for the
Shares;
which makes it inadvisable, as determined by Purchaser in good faith, to proceed
with the Offer or with such acceptance of payment or payments.
The foregoing conditions (other than the Minimum Condition) are for the
sole benefit of Parent and Purchaser and may be asserted by Parent or Purchaser
or may be waived by Parent or Purchaser, in whole or in part at any time and
from time to time in its sole discretion. The failure of Parent or Purchaser at
any time to enforce any of the foregoing rights shall not be deemed a waiver of
such right, the waiver of such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-2
<PAGE> 37
Annex B
P. Enoch Stiff
Curtis Laetz
B-1
<PAGE> 1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of August
20, 1999, is entered into between P. Enoch Stiff, (the "Seller") and Telescope
Acquisition Inc., a Delaware corporation (the "Purchaser").
WHEREAS, the Seller owns, beneficially and of record, whether or not
subject to restrictions, 562,550 shares of common stock, par value $0.01 per
share, together with the associated preferred stock purchase rights (the
"Rights"), issued pursuant to the Rights Agreement, dated as of August 21, 1998,
as amended, by and between Omniquip International, Inc., a Delaware corporation
(the "Company") and First Chicago Trust Company of New York as Rights Agent,
(the "Shares") of the Company, and options, whether vested or unvested, to
purchase 130,000 Shares of the Company at a price equal to or less than $21 per
Share pursuant to the Company's Amended and Restated 1996 Long-Term Incentive
Plan; and
WHEREAS, the Purchaser desires to purchase from the Seller, and the
Seller desires to sell to the Purchaser, 346,275 Shares owned by the Seller (the
"Seller Shares") upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto agree as follows:
1. PURCHASE AND SALE OF SHARES
1.1 Transfer by Seller of Shares. Simultaneously with the execution
of this Agreement and subject to the terms and conditions set forth in this
Agreement, the Seller is selling, assigning, transferring and delivering to the
Purchaser the Seller Shares, free and clear of all options, pledges, mortgages,
security interests, liens, restrictions on voting or transfer or other
encumbrances of any nature ("Encumbrances"), other than the restrictions imposed
by Federal and state securities laws.
1.2 Consideration. Simultaneously with the execution of this
Agreement and subject to the terms and conditions set forth in this Agreement,
in reliance on the representations, warranties, covenants and agreements of the
parties contained herein and in consideration of the sale, assignment, transfer
and delivery of the Seller Shares, the Purchaser is paying the consideration set
forth in Section 1.3(b) hereof (the "Purchase Price").
1.3 The Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement is taking place at the offices of Michael, Best &
Friedrich in Milwaukee, Wisconsin, simultaneously with the execution of this
Agreement by all the parties hereto.
(a) Deliveries by Seller. At the Closing, the Seller is delivering
or causing to be delivered to the Purchaser the following:
<PAGE> 2
2
(i) certificates evidencing the Seller Shares, which certificates
are properly endorsed for transfer or accompanied by duly executed stock
powers, in either case executed in blank or in favor of the Purchaser, and
otherwise in a form acceptable for transfer on the books of the Company;
and
(ii) all other previously undelivered documents required by this
Agreement to be delivered by the Seller to the Purchaser at the Closing in
connection with the transactions contemplated hereby.
(b) Deliveries by the Purchaser. At or prior to the Closing, the
Purchaser is delivering or causing to be delivered to or for the benefit of the
Seller the following:
(i) to the Seller, as full an complete consideration for the Seller
Shares an aggregate amount equal to $ $7,271,775 (less (A) the Deposit (as
defined in Section 1.4) which is being delivered to the Escrow Agent
pursuant to Section 1.4 and (B) any amounts paid to Robert W. Baird & Co.,
Inc. as previously directed by the Seller), by bank check;
(ii) all other previously undelivered documents required by this
Agreement to be delivered by the Purchaser to the Seller at the Closing in
connection with the transactions contemplated hereby; and
(iii) the Deposit to the Escrow Agent as set forth in Section 1.4.
1.4 Escrow Arrangements.
(a) Concurrently with the execution of this Agreement, (x) (a) the
Purchaser, the Parent, the Seller, and LaSalle Bank National Association, a
national banking corporation (the "Escrow Agent") are entering into an Escrow
Agreement in substantially the form attached hereto as Exhibit 1.4 (the "Escrow
Agreement") pursuant to which the Purchaser and the Seller are establishing an
interest-bearing escrow account (the "Escrow Account") with Escrow Agent and (b)
the Purchaser acting at the direction of the Seller (which is hereby irrevocably
given ) is depositing Two Million Seventy Seven Thousand Six Hundred Fifty
dollars ($2,077,650) from the Purchase Price (the "Deposit") into the Escrow
Account, which Deposit shall be held by the Escrow Agent pursuant to the
provisions of the Escrow Agreement. The Deposit, together with interest thereon
(it being the intent of the parties that as principal is distributed, interest
will be distributed proportionately), is referred to herein as the "Escrow
Amount". The parties agree that any losses to the principal amount on deposit in
the Escrow Account shall be shared equally and that in the event of any such
loss all payments hereunder will be reduced accordingly.
1.5 Application of Escrow Amount.
Except as set forth in Section 1.9, the Escrow Amount shall be
applied as follows:
<PAGE> 3
3
(i) if the Cumulative Performance Benchmark is less than the Minimum
Cumulative Escrow Performance Benchmark, then the Escrow Amount shall be
paid to the Parent; or
(ii) if the Cumulative Performance Benchmark equals or exceeds the
Minimum Cumulative Escrow Performance Benchmark, then the Escrow Amount as
set forth on Exhibit 1.5 against the level of Cumulative Performance
Benchmark which is the closest to the Cumulative Performance Benchmark
achieved shall be paid to Seller promptly following the Instruction Date,
and any remaining Escrow Amount shall be paid to the Parent; or
(iii) if, Purchaser fails to commence the Offer or for any reason,
or Purchaser's Offer is terminated without Shares being purchased pursuant
to the Offer for any reason other than a sale of the Company at a price
higher than Purchaser's Offer, the Escrow Amount shall be paid to the
Parent on demand (with all interest earned thereon).
1.6 Instructions to Escrow Agent. Purchaser and Seller each hereby
agrees to instruct the Escrow Agent to apply the amounts in the Escrow Account
in accordance with Section 1.5 and each acknowledges and agrees that the Escrow
Account shall only be used as provided herein and shall not be used for any
other purposes whatsoever.
1.7 Specific Performance. Each of the parties agrees that monetary
damages would be inadequate for any breach of Sections 1.5 and 1.9 and that the
other party shall be entitled to specific performance in the event of any such
breach. The fees and expenses of the Escrow Agent shall be borne by the
Purchaser.
1.8 Payment Not Compensation. It is expressly agreed that any
payment to the Seller from the Escrow Account shall not be treated as or deemed
to constitute "compensation" for any purpose, other than as required by law or
generally accepted accounting principles.
1.9 Termination of Employment.
(a) Notwithstanding any of the foregoing to the contrary, in the
event the Seller terminates his employment without good reason or is terminated
for cause (as defined in an Employment Agreement between the Seller and the
Company) at any time prior to December 31, 2002, the Seller shall receive, from
the Escrow Account, an amount equal to the lesser of (a) a pro rata portion of
the Escrow Amount that the Seller would have been entitled to receive pursuant
to Section 1.5 hereof based upon the percentage of the full calendar months in
the period from the Effective Date to December 31, 2002 (the "Employment Term")
that shall have elapsed through the date of Seller's termination of employment,
and (b) the fraction of the Escrow Amount, the numerator of which is the number
of full calendar months between the Merger Date and the end of the month
immediately prior to the date on which the Seller's employment with the Company
is terminated, and the denominator of which is the number of
<PAGE> 4
4
full calendar months in the period from the Merger Date to December 31, 2002, in
either case payable when the payment pursuant to Section 1.5 would have
otherwise been payable had the Seller's employment not terminated, in each case
plus interest on such sum as earned by the Escrow Account from the date the
Seller's employment terminated to the date of payment. The remainder shall be
paid to Parent.
(b) If the Seller's employment by the Company terminates for any
reason other than a reason described in Section 1.9(a) above, the Escrow Amount
shall be paid to the Seller.
1.10 Tax Liability Loans.
(i) If requested by the Seller not earlier than the date upon which
any taxes are due, based upon the good faith advice of the Seller's tax
advisor, the Purchaser shall provide a loan (the "Loan") to the Seller to
enable the Seller to pay any 1999 tax liability that is incurred by the
Seller by virtue of the Escrow Amount.
(ii) The Loans will (i) have a scheduled maturity date of 4 years
from the date of issuance, (ii) accrue interest at the lowest permissible
rate without imputation of income, compounded annually (currently
approximately 4.8%), (iii) become payable in full (together with accrued
interest) upon the earliest to occur of (A) the scheduled maturity date,
(B) 30 days following the Seller's termination of employment for any
reason, and (C) upon the occurrence of a default or insolvency or
bankruptcy of the Seller and (iv) become payable with respect to the
amount of any after-tax proceeds received by the Seller from the Escrow
Amount.
1.11 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Cumulative Performance Benchmark" shall mean the cumulative
consolidated Performance Benchmark of the Company and its subsidiaries for
the period beginning on the Effective Date and ending on December 31,
2002, as reported to the Parent as part of the Company's normal financial
reporting and based on the Company's consolidated financial statements for
the period from the Effective Date through December 31, 1999, and the
years ended December 31, 2000, 2001 and 2002. Such calculation and report
shall be final and binding on all parties.
"Determination Date" shall mean the date that the Chief Financial
Officer of the Parent finally determines the Cumulative Performance
Benchmark, which date shall be no more than five business days after the
Company's consolidated financial statements for the year ended December
31, 2002 have been approved by the Parent as part of its normal financial
reporting.
<PAGE> 5
5
"Effective Date" shall mean October 1, 1999.
"Employment Agreement" shall mean an Employment Agreement between
the Company and the Seller which may be entered into after the Tender
Offer Closing Date.
"Instruction Date" shall mean the date that the Seller and the Chief
Financial Officer of the Parent notify the Escrow Agent the amount of the
Cumulative Performance Benchmark and whether or not the Cumulative
Performance Benchmark exceeded the Minimum Cumulative Escrow Performance
Benchmark.
"Merger Date" shall mean the date of the Effective Time of the
Merger (as defined in the Merger Agreement).
"Minimum Cumulative Escrow Performance Benchmark" shall mean a
Cumulative Performance Benchmark of at least $164,600,000.
"Offer" shall have the meaning assigned to such term in the Merger
Agreement.
"Performance Benchmark" shall mean, net sales less finance charges
less cost of sales less sales, general and administrative expenses (SG&A)
of the Company and its subsidiaries on a consolidated basis. For the
avoidance of doubt, Performance Benchmark shall include acquisition
goodwill amortization of the Company (including its consolidated
subsidiaries) for acquisition goodwill created prior to the Tender Offer
Closing Date of $4.152 million; and shall exclude (i) interest expense,
(ii) the Parent's corporate expenses; (iii) the goodwill amortization of
the Parent relating to the Merger and related purchase price adjustments;
(iv) additional depreciation expense resulting from the write up of assets
following the Merger; (iv) expenses relating to the period after the
Merger for environmental, health and safety expenses, plant
reorganization, product liability insurance savings; (v) savings resulting
from the elimination of the obligation of the Company to report its
financial results publicly; and (vi) the effect of acquisitions by the
Company or its subsidiaries after the Merger Date or of the transfer by
the Parent of any business or product line to the Company or its
subsidiaries.
"Tender Offer Closing Date" shall mean the date of Purchaser's
purchase of Shares pursuant to the Offer.
Should the Employment Agreement contain definitions of the foregoing
terms which are different from those set forth above, this Agreement will be
deemed to have been amended to contain such different definitions.
1.12 Further Assurances. After the Closing, each party hereto shall
from time to time, at the request of the other party and without further cost or
expense to such other party, execute and deliver such other instruments of
conveyance and transfer and take such other actions as such other party may
reasonably request in order to more effectively consummate the
<PAGE> 6
6
transactions contemplated hereby and to vest in the Purchaser good and valid
title to the Seller Shares.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and warrants to the Purchaser as
follows:
2.1 Ownership of Stock. Seller is the record and beneficial owner of
the Seller Shares. The Seller Shares are owned free and clear of all
Encumbrances, other than the restrictions imposed by Federal and state
securities laws. At the Closing, Purchaser is acquiring a title to the Seller
Shares free and clear of all Encumbrances, other than the restrictions imposed
by Federal and state securities laws and Encumbrances arising as a result of any
action taken by the Purchaser or any of its affiliates ("Affiliates") as defined
in Rule 12b-2 of the regulations promulgated pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
2.2 Authorization, Etc. Seller has full power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed by Seller
and, assuming this Agreement constitutes the legal, valid and binding agreement
of the other parties hereto, constitutes a legal, valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms, except that (i)
the enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.3 No Approvals or Conflicts. The execution, delivery and
performance by the Seller of this Agreement and the consummation by the Seller
of the transactions contemplated hereby will not (i) violate, conflict with or
result in a breach of any provision of, or constitute a default by the Seller
(or an event which, with notice or lapse of time or both, would constitute a
default) or give rise to any right of termination, cancellation or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties of the Company or on the Seller's
interest in the Seller Shares under, any note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, lease, contract, agreement or other
instrument to which any of the Seller, or any of Seller's properties may be
bound, (iii) violate or result in a breach of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority applicable to
the Seller or any of Seller's properties or (iv) require any order, consent,
approval or authorization of, or notice to, or declaration, filing, application,
qualification or registration with, any governmental or regulatory authority.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller as
follows:
<PAGE> 7
7
3.1 Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.2 Authorization Etc. The Purchaser has full corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby to be carried out by it. The execution and
delivery by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby have been duly approved and
authorized by all necessary corporate action on the part of the Purchaser, and
no other proceedings on the part of the Purchaser are necessary to approve and
authorize the execution and delivery by the Purchaser of this Agreement and the
consummation by the Purchaser of the transactions contemplated hereby. This
Agreement has been duly and validly executed by the Purchaser and, assuming this
Agreement constitutes the legal, valid and binding agreement of the other
parties hereto, constitutes a legal, valid and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except that (i) the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
3.3 No Approvals or Conflicts. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation by the Purchaser of the
transactions contemplated hereby to be consummated by it will not (i) violate,
conflict with or result in a breach by the Purchaser of any provision of the
Certificate of Incorporation or By-laws of the Purchaser, (ii) violate, conflict
with or result in a breach of any provision of, or constitute a default by the
Purchaser (or an event which, with notice or lapse of time or both, would
constitute a default) or give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the Purchaser's properties under, any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit, lease,
contract, agreement or other instrument to which the Purchaser or any of its
properties may be bound, (iii) violate or result in a breach of any order,
injunction, judgment, ruling, law or regulation of any court or governmental
authority applicable to the Purchaser or any of its properties, or (iv) require
any order, consent, approval or authorization of, or notice to, or declaration,
filing, application, qualification or registration with, any governmental or
regulatory authority.
4. MISCELLANEOUS
4.1 Transfer and Conveyance Taxes. The Seller shall be liable for
and shall pay all applicable, transfer, recording, stamp and other similar
taxes, resulting from the consummation of the transactions contemplated by this
Agreement.
4.2 Fees and Expenses. Except as otherwise provided in this
Agreement, the Seller shall bear its own expenses and the Purchaser shall bear
its own expenses in connection with the preparation and negotiation of this
Agreement and the consummation of the transactions
<PAGE> 8
8
contemplated by this Agreement. The Seller and the Purchaser shall bear the fees
and expenses of any broker or finder retained by such party or parties and their
respective affiliates in connection with the transactions contemplated herein.
4.3 Governing Law. This Agreement shall be construed under and
governed by the laws of the State of Wisconsin.
4.4 Amendment. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement
executed by the Purchaser and the Seller.
4.5 Survival of Representations and Warranties. The representations
and warranties of the parties contained in this Agreement or in any instrument
delivered pursuant hereto will survive the Closing and remain in full force and
effect.
4.6 No Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the Purchaser, in the case of assignment by the
Seller, and the Seller, in the case of any assignment by the Purchaser; provided
that the Purchaser may assign its rights and interests under this Agreement to
any of its Affiliates.
4.7 Waiver. Any of the terms or conditions of this Agreement which
may be lawfully waived may be waived in writing at any time by each party which
is entitled to the benefits thereof. Any waiver of any of the provisions of this
Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
4.8 Notices. Any notice, demand, or communication required or
permitted to be given by any provision of this Agreement shall be deemed to have
been sufficiently given or served for all purposes if (a) personally delivered,
(b) mailed by registered or certified first-class mail, prepaid with return
receipt requested, (c) sent by a nationally recognized overnight courier
service, to the recipient at the address below indicated or (d) delivered by
facsimile which is confirmed in writing by sending a copy of such facsimile to
the recipient thereof pursuant to clause (a) or (c) above:
If to the Purchaser:
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention: Vice President & General Counsel,
Textron Industrial Products
<PAGE> 9
9
If to the Seller:
c/o Hill & Barlow
One International Place
Boston, Mass. 92110
Attention: T. Mahoney, Esquire
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.
Except as otherwise provided herein, any notice under this Agreement
will be deemed to have been given (x) on the date such notice is personally
delivered or delivered by facsimile, (y) four days after the date of mailing if
sent by certified or registered mail or (z) the next succeeding business day
after the date such notice is delivered to the overnight courier service if sent
by overnight courier; provided that in each case notices received after 4:00
p.m. (local time of the recipient) shall be deemed to have been duly given on
the next business day.
4.9 Complete Agreement. This Agreement and the other documents and
writings referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and thereof.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
4.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
4.11 Publicity. The Seller and the Purchaser will consult with each
other and will mutually agree upon any publication or press release of any
nature with respect to this Agreement or the transactions contemplated hereby
and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by applicable law or by
obligations pursuant to any listing agreement with any securities exchange or
any securities exchange regulation, in which case the party proposing to issue
such publication or press release shall make all reasonable efforts to consult
in good faith with the other party or parties before issuing any such
publication or press release and shall provide a copy thereof to the other party
or parties prior to such issuance.
4.12 Headings. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
4.13 Severability. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions
<PAGE> 10
10
hereof in such jurisdiction or rendering that or any other provision of this
Agreement invalid, illegal or unenforceable in any other jurisdiction.
4.14 Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation, other than the parties hereto
and their permitted successors or assigns, any rights or remedies under or by
reason of this Agreement.
4.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE PARTIES
HERETO HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN THE AREA ENCOMPASSED BY MILWAUKEE COUNTY, WISCONSIN AND IRREVOCABLY AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES HERETO EACH ACCEPT FOR ITSELF AND
HIMSELF, AS THE CASE MAY BE, AND IN CONNECTION WITH ITS OR HIS, AS THE CASE MAY
BE, RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM
NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. THE SELLER DESIGNATES CT
CORPORATION SYSTEM AND SUCH OTHER PERSON AS MAY HEREINAFTER BE SELECTED BY THE
SELLER WHO IRREVOCABLY AGREES IN WRITING TO SO SERVE AS AGENT FOR THE SELLER TO
RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO THE PARTIES HERETO, AS PROVIDED HEREIN, EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS.
4.16 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE
PARTIES HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
<PAGE> 11
11
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY
BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS
THE CASE MAY BE, JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
[THE REMAINDER OF THIS PAGE IS INTENDED TO BE BLANK]
<PAGE> 12
IN WITNESS WHEREOF, the Seller has executed this Agreement, and the
Purchaser has caused this Agreement to be executed by its duly authorized
officer, in each case as of the day and year first above written.
/s/ P. Enoch Stiff
___________________________________
P. Enoch Stiff
Telescope Acquisition Inc.
By: /s/ Bhikhaji Maneckji
____________________________
Name: Bhikhaji Maneckji
Title: Vice President
<PAGE> 13
Exhibit 1.4
Intentionally Omitted.
<PAGE> 14
Exhibit 1.5
Intentionally Omitted.
<PAGE> 1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of
August 20, 1999, is entered into between Curtis Laetz and Linda Laetz,
(collectively, the "Seller") and Telescope Acquisition Inc., a Delaware
corporation (the "Purchaser").
WHEREAS, the Seller owns, beneficially and of record, whether or
not subject to restrictions, 84,375 shares of common stock, par value $0.01 per
share, together with the associated preferred stock purchase rights (the
"Rights"), issued pursuant to the Rights Agreement, dated as of August 21, 1998,
as amended, by and between Omniquip International, Inc., a Delaware corporation
(the "Company") and First Chicago Trust Company of New York as Rights Agent,
(the "Shares") of the Company, and options, whether vested or unvested, to
purchase 43,500 Shares of the Company at a price equal to or less than $21 per
Share pursuant to the Company's Amended and Restated 1996 Long-Term Incentive
Plan; and
WHEREAS, the Purchaser desires to purchase from the Seller, and
the Seller desires to sell to the Purchaser, 63,938 Shares owned by the Seller
(the "Seller Shares") upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants contained herein, the parties hereto agree as follows:
1. PURCHASE AND SALE OF SHARES
1.1 Transfer by Seller of Shares. Simultaneously with the
execution of this Agreement and subject to the terms and conditions set forth in
this Agreement, the Seller is selling, assigning, transferring and delivering to
the Purchaser the Seller Shares, free and clear of all options, pledges,
mortgages, security interests, liens, restrictions on voting or transfer or
other encumbrances of any nature ("Encumbrances"), other than the restrictions
imposed by Federal and state securities laws.
1.2 Consideration. Simultaneously with the execution of this
Agreement and subject to the terms and conditions set forth in this Agreement,
in reliance on the representations, warranties, covenants and agreements of the
parties contained herein and in consideration of the sale, assignment, transfer
and delivery of the Seller Shares, the Purchaser is paying the consideration set
forth in Section 1.3(b) hereof (the "Purchase Price").
1.3 The Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement is taking place at the offices of Michael, Best &
Friedrich in Milwaukee, Wisconsin, simultaneously with the execution of this
Agreement by all the parties hereto.
(a) Deliveries by Seller. At the Closing, the Seller is
delivering or causing to be delivered to the Purchaser the following:
<PAGE> 2
2
(i) certificates evidencing the Seller Shares, which certificates
are properly endorsed for transfer or accompanied by duly executed stock
powers, in either case executed in blank or in favor of the Purchaser,
and otherwise in a form acceptable for transfer on the books of the
Company; and
(ii) all other previously undelivered documents required by this
Agreement to be delivered by the Seller to the Purchaser at the Closing
in connection with the transactions contemplated hereby.
(b) Deliveries by the Purchaser. At or prior to the Closing, the
Purchaser is delivering or causing to be delivered to or for the benefit of the
Seller the following:
(i) to the Seller, as full and complete consideration for the
Seller Shares an aggregate amount equal to $1,342,698 (less (A) the
Deposit (as defined in Section 1.4) which is being delivered to the
Escrow Agent pursuant to Section 1.4 and (B) any amounts paid to Robert
W. Baird & Co., Inc. as directed by Seller), by bank check;
(ii) all other previously undelivered documents required by this
Agreement to be delivered by the Purchaser to the Seller at the Closing
in connection with the transactions contemplated hereby;
(iii) the Deposit to the Escrow Agent as set forth in Section
1.4.
1.4 Escrow Arrangements.
(a) Concurrently with the execution of this Agreement, (x) (a)
the Purchaser, the Parent, the Seller, and LaSalle Bank National Association, a
national banking corporation (the "Escrow Agent") are entering into an Escrow
Agreement in substantially the form attached hereto as Exhibit 1.4 (the "Escrow
Agreement") pursuant to which the Purchaser and the Seller are establishing an
interest-bearing escrow account (the "Escrow Account") with Escrow Agent and (b)
the Purchaser acting at the direction of the Seller (which is hereby irrevocably
given ) is depositing Three Hundred Eighty-Three Thousand Six Hundred
Twenty-Eight dollars ($383,628) from the Purchase Price (the "Deposit") into the
Escrow Account, which Deposit shall be held by the Escrow Agent pursuant to the
provisions of the Escrow Agreement. The Deposit, together with interest thereon
(it being the intent of the parties that as principal is distributed, interest
will be distributed proportionately), is referred to herein as the "Escrow
Amount". The parties agree that any losses to the principal amount on deposit in
the Escrow Account shall be shared equally and that in the event of any such
loss all payments hereunder will be reduced accordingly.
1.5 Application of Escrow Amount.
Except as set forth in Section 1.9, the Escrow Amount shall be
applied as follows:
<PAGE> 3
3
if the Cumulative Performance Benchmark is less than the Minimum Cumulative
Escrow Performance Benchmark, then the Escrow Amount shall be paid to the
Parent; or
(i) if the Cumulative Performance Benchmark equals or exceeds the
Minimum Cumulative Escrow Performance Benchmark, then the Escrow Amount
as set forth on Exhibit 1.5 against the level of Cumulative Performance
Benchmark which is the closest to the Cumulative Performance Benchmark
achieved shall be paid to Seller promptly following the Instruction
Date, and any remaining Escrow Amount shall be paid to the Parent; or
(ii) if, Purchaser fails to commence the Offer or for any reason,
or Purchaser's Offer is terminated without Shares being purchased
pursuant to the Offer for any reason other than a sale of the Company at
a price higher than Purchaser's Offer, the Escrow Amount shall be paid
to the Parent on demand (with all interest earned thereon).
1.6 Instructions to Escrow Agent. Purchaser and Seller each
hereby agrees to instruct the Escrow Agent to apply the amounts in the Escrow
Account in accordance with Section 1.5 and each acknowledges and agrees that the
Escrow Account shall only be used as provided herein and shall not be used for
any other purposes whatsoever.
1.7 Specific Performance. Each of the parties agrees that
monetary damages would be inadequate for any breach of Sections 1.5 and 1.9 and
that the other party shall be entitled to specific performance in the event of
any such breach. The fees and expenses of the Escrow Agent shall be borne by the
Purchaser.
1.8 Payment Not Compensation. It is expressly agreed that any
payment to the Seller from the Escrow Account shall not be treated as or deemed
to constitute "compensation" for any purpose, other than as required by law or
generally accepted accounting principles.
1.9 Termination of Employment.
(a) Notwithstanding any of the foregoing to the contrary, in the
event Curtis Laetz terminates his employment without good reason or is
terminated for cause (as defined in an Employment Agreement between Curtis Laetz
and the Company) at any time prior to December 31, 2002, the Seller shall
receive, from the Escrow Account, an amount equal to the lesser of (a) a pro
rata portion of the Escrow Amount that the Seller would have been entitled to
receive pursuant to Section 1.5 hereof based upon the percentage of the full
calendar months in the period from the Effective Date to December 31, 2002 (the
"Employment Term") that shall have elapsed through the date of Seller's
termination of employment, and (b) the fraction of the Escrow Amount, the
numerator of which is the number of full calendar months between the Merger Date
and the end of the month immediately prior to the date on which Curtis Laetz'
<PAGE> 4
4
employment with the Company is terminated, and the denominator of which is the
number of full calendar months in the period from the Merger Date to December
31, 2002, in either case payable when the payment pursuant to Section 1.5 would
have otherwise been payable had Curtis Laetz' employment not terminated, in each
case plus interest on such sum as earned by the Escrow Account from the date the
Curtis Laetz' employment terminated to the date of payment. The remainder shall
be paid to Parent.
(b) If Curtis Laetz' employment by the Company terminates for any
reason other than a reason described in Section 1.9(a) above, the Escrow Amount
shall be paid to the Seller.
1.10 Tax Liability Loans.
(a) If requested by the Seller not earlier than the date upon
which any taxes are due, based upon the good faith advice of the Seller's tax
advisor, the Purchaser shall provide a loan (the "Loan") to the Seller to enable
the Seller to pay any 1999 tax liability that is incurred by the Seller by
virtue of the Escrow Amount.
(b) The Loans will (i) have a scheduled maturity date of 4 years
from the date of issuance, (ii) accrue interest at the lowest permissible rate
without imputation of income, compounded annually (currently approximately
4.8%), (iii) become payable in full (together with accrued interest) upon the
earliest to occur of (A) the scheduled maturity date, (B) 30 days following the
Seller's termination of employment for any reason, and (C) upon the occurrence
of a default or insolvency or bankruptcy of either Seller and (iv) become
payable with respect to the amount of any after-tax proceeds received by the
Seller from the Escrow Amount.
1.11 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Cumulative Performance Benchmark" shall mean the cumulative
consolidated Performance Benchmark of the Company and its subsidiaries
for the period beginning on the Effective Date and ending on December
31, 2002, as reported to the Parent as part of the Company's normal
financial reporting and based on the Company's consolidated financial
statements for the period from the Effective Date through December 31,
1999, and the years ended December 31, 2000, 2001 and 2002. Such
calculation and report shall be final and binding on all parties.
"Determination Date" shall mean the date that the Chief Financial
Officer of the Parent finally determines the Cumulative Performance
Benchmark, which date shall be no more than five business days after the
Company's consolidated financial statements for the year ended December
31, 2002 have been approved by the Parent as part of its normal
financial reporting.
"Effective Date" shall mean October 1, 1999.
<PAGE> 5
5
"Employment Agreement" shall mean an Employment Agreement between
the Company and Curtis Laetz which may be entered into after the Tender
Offer Closing Date.
"Instruction Date" shall mean the date that the Seller and the
Chief Financial Officer of the Parent notify the Escrow Agent of the
amount of the Cumulative Performance Benchmark and whether or not the
Cumulative Performance Benchmark exceeded the Minimum Cumulative Escrow
Performance Benchmark.
"Merger Date" shall mean the date of the Effective Time of the
Merger (as defined in the Merger Agreement).
"Minimum Cumulative Escrow Performance Benchmark" shall mean a
Cumulative Performance Benchmark of at least $164,600,000.
"Offer" shall have the meaning assigned to such term in the
Merger Agreement.
"Performance Benchmark" shall mean, net sales less finance
charges less cost of sales less sales, general and administrative
expenses (SG&A) of the Company and its subsidiaries on a consolidated
basis. For the avoidance of doubt, Performance Benchmark shall include
acquisition goodwill amortization of the Company (including its
consolidated subsidiaries) for acquisition goodwill created prior to the
Tender Offer Closing Date of $4.152 million; and shall exclude (i)
interest expense, (ii)the Parent's corporate expenses; (iii) the
goodwill amortization of the Parent relating to the Merger and related
purchase price adjustments; (iv) additional depreciation expense
resulting from the write up of assets following the Merger; (iv)
expenses relating to the period after the Merger for environmental,
health and safety expenses, plant reorganization, product liability
insurance savings; (v) savings resulting from the elimination of the
obligation of the Company to report its financial results publicly; and
(vi) the effect of acquisitions by the Company or its subsidiaries after
the Merger Date or of the transfer by the Parent of any business or
product line to the Company or its subsidiaries.
"Tender Offer Closing Date" shall mean the date of Purchaser's
purchase of Shares pursuant to the Offer.
Should the Employment Agreement contain definitions of the
foregoing terms which are different from those set forth above, this Agreement
will be deemed to have been amended to contain such different definitions.
1.12 Further Assurances. After the Closing, each party hereto
shall from time to time, at the request of the other party and without further
cost or expense to such other party, execute and deliver such other instruments
of conveyance and transfer and take such other actions as such other party may
reasonably request in order to more effectively consummate the
<PAGE> 6
6
transactions contemplated hereby and to vest in the Purchaser good and valid
title to the Seller Shares.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and warrants to the Purchaser as
follows:
2.1 Ownership of Stock. Seller is the record and beneficial owner
of the Seller Shares. The Seller Shares are owned free and clear of all
Encumbrances, other than the restrictions imposed by Federal and state
securities laws. At the Closing, Purchaser is acquiring a title to the Seller
Shares free and clear of all Encumbrances, other than the restrictions imposed
by Federal and state securities laws and Encumbrances arising as a result of any
action taken by the Purchaser or any of its affiliates ("Affiliates") as defined
in Rule 12b-2 of the regulations promulgated pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
2.2 Authorization, Etc. Seller has full power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed by Seller
and, assuming this Agreement constitutes the legal, valid and binding agreement
of the other parties hereto, constitutes a legal, valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms, except that (i)
the enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.3 No Approvals or Conflicts. The execution, delivery and
performance by the Seller of this Agreement and the consummation by the Seller
of the transactions contemplated hereby will not (i) violate, conflict with or
result in a breach of any provision of, or constitute a default by the Seller
(or an event which, with notice or lapse of time or both, would constitute a
default) or give rise to any right of termination, cancellation or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties of the Company or on the Seller's
interest in the Seller Shares under, any note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, lease, contract, agreement or other
instrument to which any of the Seller, or any of Seller's properties may be
bound, (iii) violate or result in a breach of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority applicable to
the Seller or any of Seller's properties or (iv) require any order, consent,
approval or authorization of, or notice to, or declaration, filing, application,
qualification or registration with, any governmental or regulatory authority.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller as
follows:
<PAGE> 7
7
3.1 Organization. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.2 Authorization Etc. The Purchaser has full corporate power
and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby to be carried out by it. The execution and
delivery by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby have been duly approved and
authorized by all necessary corporate action on the part of the Purchaser, and
no other proceedings on the part of the Purchaser are necessary to approve and
authorize the execution and delivery by the Purchaser of this Agreement and the
consummation by the Purchaser of the transactions contemplated hereby. This
Agreement has been duly and validly executed by the Purchaser and, assuming this
Agreement constitutes the legal, valid and binding agreement of the other
parties hereto, constitutes a legal, valid and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except that (i) the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
3.3 No Approvals or Conflicts. The execution, delivery and
performance by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby to be consummated by it will
not (i) violate, conflict with or result in a breach by the Purchaser of any
provision of the Certificate of Incorporation or By-laws of the Purchaser, (ii)
violate, conflict with or result in a breach of any provision of, or constitute
a default by the Purchaser (or an event which, with notice or lapse of time or
both, would constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the Purchaser's properties
under, any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, lease, contract, agreement or other instrument to which the Purchaser or
any of its properties may be bound, (iii) violate or result in a breach of any
order, injunction, judgment, ruling, law or regulation of any court or
governmental authority applicable to the Purchaser or any of its properties, or
(iv) require any order, consent, approval or authorization of, or notice to, or
declaration, filing, application, qualification or registration with, any
governmental or regulatory authority.
4. MISCELLANEOUS
4.1 Transfer and Conveyance Taxes. The Seller shall be liable for
and shall pay all applicable, transfer, recording, stamp and other similar
taxes, resulting from the consummation of the transactions contemplated by this
Agreement.
4.2 Fees and Expenses. Except as otherwise provided in this
Agreement, the Seller shall bear its own expenses and the Purchaser shall bear
its own expenses in connection
<PAGE> 8
8
with the preparation and negotiation of this Agreement and the consummation of
the transactions contemplated by this Agreement. The Seller and the Purchaser
shall bear the fees and expenses of any broker or finder retained by such party
or parties and their respective affiliates in connection with the transactions
contemplated herein.
4.3 Governing Law. This Agreement shall be construed under and
governed by the laws of the State of Wisconsin.
4.4 Amendment. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement
executed by the Purchaser and the Seller.
4.5 Survival of Representations and Warranties. The
representations and warranties of the parties contained in this Agreement or in
any instrument delivered pursuant hereto will survive the Closing and remain in
full force and effect.
4.6 No Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the Purchaser, in the case of assignment by the
Seller, and the Seller, in the case of any assignment by the Purchaser; provided
that the Purchaser may assign its rights and interests under this Agreement to
any of its Affiliates.
4.7 Waiver. Any of the terms or conditions of this Agreement
which may be lawfully waived may be waived in writing at any time by each party
which is entitled to the benefits thereof. Any waiver of any of the provisions
of this Agreement by any party hereto shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure to enforce any
provision of this Agreement shall be deemed to or shall constitute a waiver of
such provision and no waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
4.8 Notices. Any notice, demand, or communication required or
permitted to be given by any provision of this Agreement shall be deemed to have
been sufficiently given or served for all purposes if (a) personally delivered,
(b) mailed by registered or certified first-class mail, prepaid with return
receipt requested, (c) sent by a nationally recognized overnight courier
service, to the recipient at the address below indicated or (d) delivered by
facsimile which is confirmed in writing by sending a copy of such facsimile to
the recipient thereof pursuant to clause (a) or (c) above:
If to the Purchaser:
<PAGE> 9
9
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention: Vice President & General Counsel,
Textron Industrial Products
If to the Seller:
c/o Hill & Barlow
One International Place
Boston, Mass 02110
Attention: T. Mahoney, Esquire
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.
Except as otherwise provided herein, any notice under this
Agreement will be deemed to have been given (x) on the date such notice is
personally delivered or delivered by facsimile, (y) four days after the date of
mailing if sent by certified or registered mail or (z) the next succeeding
business day after the date such notice is delivered to the overnight courier
service if sent by overnight courier; provided that in each case notices
received after 4:00 p.m. (local time of the recipient) shall be deemed to have
been duly given on the next business day.
4.9 Complete Agreement. This Agreement and the other documents
and writings referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and thereof.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
4.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
4.11 Publicity. The Seller and the Purchaser will consult with
each other and will mutually agree upon any publication or press release of any
nature with respect to this Agreement or the transactions contemplated hereby
and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by applicable law or by
obligations pursuant to any listing agreement with any securities exchange or
any securities exchange regulation, in which case the party proposing to issue
such publication or press release shall make all reasonable efforts to consult
in good faith with the other party or parties before issuing any such
publication or press release and shall provide a copy thereof to the other party
or parties prior to such issuance.
<PAGE> 10
10
4.12 Headings. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
4.13 Severability. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
4.14 Third Parties. Except as specifically set forth or referred
to herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation, other than the parties
hereto and their permitted successors or assigns, any rights or remedies under
or by reason of this Agreement.
4.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE PARTIES
HERETO HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN THE AREA ENCOMPASSED BY MILWAUKEE COUNTY, WISCONSIN AND IRREVOCABLY AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES HERETO EACH ACCEPT FOR ITSELF AND
HIMSELF, AS THE CASE MAY BE, AND IN CONNECTION WITH ITS OR HIS, AS THE CASE MAY
BE, RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM
NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. THE SELLER DESIGNATES CT
CORPORATION SYSTEM AND SUCH OTHER PERSON AS MAY HEREINAFTER BE SELECTED BY THE
SELLER WHO IRREVOCABLY AGREES IN WRITING TO SO SERVE AS AGENT FOR THE SELLER TO
RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO THE PARTIES HERETO, AS PROVIDED HEREIN, EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS.
4.16 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
LAW, THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE
PARTIES HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE
OF
<PAGE> 11
11
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
4.17 For all purposes pursuant to this Agreement, including the
receipt of funds, Curtis Laetz shall act on behalf of himself and Linda Laetz,
and Purchaser shall be entitled to rely thereon.
[THE REMAINDER OF THIS PAGE IS INTENDED TO BE BLANK]
<PAGE> 12
12
IN WITNESS WHEREOF, the Seller has executed this Agreement, and
the Purchaser has caused this Agreement to be executed by its duly authorized
officer, in each case as of the day and year first above written.
/s/ Curtis J. Laetz
_______________________________
Curtis Laetz
/s/ Linda M. Laetz
_______________________________
Linda Laetz
Telescope Acquisition Inc.
/s/ Bhikhaji Maneckji
By: ____________________________
Name: Bhikhaji M. Maneckji
Title: Vice President
<PAGE> 13
Exhibit 1.4
Intentionally Omitted.
<PAGE> 14
Exhibit 1.5
Intentionally Omitted.
